For employees who elected to pay NI contributions at the higher rate to get additional pension in the past .. has this turned out to be a complete waste of money now that everyone will be getting the new flat rate pension of 155.65 per week (assuming full 35 years of contributions)?
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What election?
Never heard of one, apart from married women, please explain. For those employees not in an employer scheme they paid more but not by any sort of election.
Opting out?
Do you mean for employees that didn't contract out in order to pay a lower rate of National Insurance?
My understanding is that past contributions to the state second pension/SERPS remain a part of your pension record and will be paid out in addition to the new single tier pension once you reach the required age.
My understanding is ......
My understanding is that if you pay in for 50 years, 35 of them count, but if you've opted out back in the '80s for five years and had them send the pension money to a private pension, you'll only get 30/35 of the £155.65 (or whatever it turns out to be).
Even though you paid in for 45 years - which is more than 35.
Another Government rip-off. Why don't Trading Standards apply to HMG ?
Turning to the original question .... what do you mean ? Are we thinking married women here ?
My God DJKLthat seems staggeringly complicated but thank you for illustrating it so thoroughly.
I don't think I can begin to unravel my clients historical position but I have suggested to the client that he applies for a pension forecast and as he has now set up his own Limited Company he should make sure he is paying himself the 8,060 per annum so he keeps accruing towards the new state pension.
I thought I had read in the press somewhere a week or so ago that millions of people who had made extra contributions needn't have bothered because they were only going to get the new flat rate pension anyway; I wish I had kept the articles so I could be a bit more articulate.
Not my illustration, just a cut and paste
My God DJKLthat seems staggeringly complicated but thank you for illustrating it so thoroughly.
I don't think I can begin to unravel my clients historical position but I have suggested to the client that he applies for a pension forecast and as he has now set up his own Limited Company he should make sure he is paying himself the 8,060 per annum so he keeps accruing towards the new state pension.
I thought I had read in the press somewhere a week or so ago that millions of people who had made extra contributions needn't have bothered because they were only going to get the new flat rate pension anyway; I wish I had kept the articles so I could be a bit more articulate.
Not my illustration, just a cut and paste.
The catch with all these changes is trying to understand the impact for one's retirement planning, it is not easy.
For years my wife and I were both registered online re state pension forecasts ( I must now have about 38 years contributions at age 56 as I started paying NI when I was 16 and worked pretty much full time for all but one of my years at university) so we could see where we stood but recently we have not been within ten years of our new retirement ages so our government pension forecast accounts have not worked. However a few more weeks and we will both be within the 10 year event horizon, which I think will allow us both to receive forecasts (not sure if old registration will work again or we will need to repeat the registration process?)
unlike others on this tread I really cannot complain about the system, I am one of the lucky ones who contracted out and whose contracted out money purchase funds have performed pretty well really despite some nasties with Standard Life with-profits ,where I took the actuarial cut on the chin and moved to units and then managed to bounce back by moving the protected rights into a SIPP in October 2008; because I knew I was going to be moving to the SIPP in October I had moved to the cash fund with Standard Life pre that move, missing the 2008 market correction and enabling my SIPP to purchase at a fairly low market point- luck not skill at work, but the net result is the contracted out former protected rights will give me a pension vastly greater than any foregone SERPS/S2P top up to my state pension.
It would be nice to think that with ten years to go we will now be granted some pension stability but I somehow doubt the politicians will be able to resist interfering.
As much as that ?
I don't think I can begin to unravel my clients historical position but I have suggested to the client that he applies for a pension forecast and as he has now set up his own Limited Company he should make sure he is paying himself the £8,060 per annum so he keeps accruing towards the new state pension.
As much as £8060?
Not £5824?