gf3 Posted June 15, 2015 Share Posted June 15, 2015 Ok I've now had a chance to look in more detail at the new pension provisions. It is not a case of simply having 35 years of not contracted out contributions but of having zero contracted out contributions. I think that will come as a shock to some people that someone with 45 years contributions with 10 contracted out will get less than someone with just 35 years contributions. On the face of it it goes against the British sense of fair play. Can you give a link to where you got this information? Quote Link to comment Share on other sites More sharing options...
davidg Posted June 15, 2015 Share Posted June 15, 2015 Oh Spectacularly favourable public sector final salary pension taken during the last hurrah of Gordon browns financial spunkfest? A little before in fact, around 1996. "Trebles all round" as my mum would say, as long as someone else is paying. Quote Link to comment Share on other sites More sharing options...
roneik Posted June 15, 2015 Share Posted June 15, 2015 Call me crazy but we are in the new phase of untruth speak. Those that are in control, like Ian Douglas Smith at the ministry of plenty will be out with sound bites better than Saddam Hussiens war spokes person.Lets face it if food sales are dramatically down and food banks are feeding millions, there has to be some that are sceptical when they hear it's just chavs taking advantage.Also we are a prosperous nation, tell that to scores of millions on low pay Quote Link to comment Share on other sites More sharing options...
roneik Posted June 15, 2015 Share Posted June 15, 2015 Strokes can happen at any age. A kid at my school had one at 14. They do, of course, become more likely as we age and the health risks build up in some people. I think you need to plan to work - in some form or another - until you are 70. Growing up in an area of high unemplotment, not working really fcks you up. The majority of people need the structure of work to ensure that they are kept engaged with the world. Without work, most people turn into dysfunctional fckheads. I had a mild stroke aged 47 , thats one of the reasons I got out. Not wanting to be specific but does not exclude you from working for yourself at your own hours and pace. Always have more than one feather in your cap . Quote Link to comment Share on other sites More sharing options...
roneik Posted June 15, 2015 Share Posted June 15, 2015 I would sooner be in a room full of dysfunctional fckheads, than be back doing repetative work and night work. Lovely sunny day here walked the dogs miles early. Been cycling, and burning rubber off the wheels of my quick mini Quote Link to comment Share on other sites More sharing options...
roneik Posted June 15, 2015 Share Posted June 15, 2015 Give me a dysfunctional fckheads.any day better than being a souless number. I reckon I amust be a defdunk sometimes, but what the F'ck do I care Quote Link to comment Share on other sites More sharing options...
council dweller Posted June 15, 2015 Share Posted June 15, 2015 Yes roneik...... I get industrial injuries disablement benefit which helps pay the rent. Quote Link to comment Share on other sites More sharing options...
roneik Posted June 15, 2015 Share Posted June 15, 2015 Yes roneik...... I get industrial injuries disablement benefit which helps pay the rent. Thats what annoys me about the system, anyone who has been through what you have should be getting enough help so that you are living at simular level to when you were working. Instead masses of people that play the system do all right.I know of a few that do very well even claim mortability allowance . Every now and then they forget to put on the disable show. Up ladders standing on porch roof. Laying under cars and pulling out beemer exhausts that weigh a hell of a lot. Quote Link to comment Share on other sites More sharing options...
council dweller Posted June 15, 2015 Share Posted June 15, 2015 Yes roneik..... I think the majority of people are honest, it`s the liars who do well. Atoz is like something out of Kafka. Quote Link to comment Share on other sites More sharing options...
davidg Posted June 15, 2015 Share Posted June 15, 2015 Indeed that is news to me too, I sort of assumed that I would make up for the contracted out periods by doing about forty years. At present I have about 26 years of not contracted out and about nine years of contracted out. I do know I have 35 years. Self employment means I will have no SERPs entitlement to make it up either. Looking into this further (the govt website is not clear) it seems that post 2016 you can build up non-contracted out contributions. It is pre 2016 contributions that are frozen. Well nothing is very clear to be honest. Quote Link to comment Share on other sites More sharing options...
SpectrumFX Posted June 15, 2015 Share Posted June 15, 2015 Looking into this further (the govt website is not clear) it seems that post 2016 you can build up non-contracted out contributions. It is pre 2016 contributions that are frozen. Well nothing is very clear to be honest. My understanding of it is that your pre 2016 contributions get you a "baseline" amount (which is the higher of what those contributions get you under the current system or the new system) Then the post 2016 contributions get added to that. I'm in the process of getting a pension statement which should help me get a better understanding of it. I believe that you can now get statements if you're under 55 (I'm 39) I went on their website today and registered (giving my date of birth) and they're sending me an activation code. Quote Link to comment Share on other sites More sharing options...
Starla Posted June 15, 2015 Share Posted June 15, 2015 (edited) Does this mean that if you have 26 contracted-out years you won't get *any* state pension, as the DWP site clearly says you need a minimum of 10 qualifying years to get anything? Yes it means someone with 26 years contracted out gets no state pension. The years you haven't paid full NI (contracted out) that are deducted from a maximum of 35 years (or however many you've worked below that but no more than that). You need 10 years of full NI to qualify for any state pension. 35-26=9 = stuffed. The idea is that your contracted out pension will make up for the lost state pension, which is fair if someone is a high earner in a DB pension. It's going to completely stuff up people who invested in failed funds, or were low earners who didn't amass much of a pension but contracted out for years. Edit: For example take a part-time (or full time) worker in a DB pension, say they earn 15k and are contributing at 60ths and worked contracted out for 26 years. £15,000 / 60 = £250 x 26 years = £6,500 pension. It's less than the (new flat rate) state one. Edited June 15, 2015 by Starla Quote Link to comment Share on other sites More sharing options...
SpectrumFX Posted June 15, 2015 Share Posted June 15, 2015 (edited) This is quite a nice article http://www.pensionsworld.co.uk/pw/article/pension-reform-short-changed-12334936 It seems it's all about guaranteed minimum pension (GMP) and how that replaced and is indexed differently to the state pension. In a nutshell the state currently tops up the increases pension schemes provide to GMPs in payment to full CPI inflation through the additional state pension individuals with GMPs who reach state pension age from 6 April 2016 will miss out on these state-funded increases most likely to be affected are those who will retire in the early years of the new system, who will have less opportunity to build up their state pension under the new system. Edited June 15, 2015 by SpectrumFX Quote Link to comment Share on other sites More sharing options...
houses-do-my-head-in Posted June 15, 2015 Share Posted June 15, 2015 Won't work. I'm in my 20's but I know work place ageism is absolutely rife, I know of 2 blokes being forced out (1 already gone) of my current company, both in their 60s. Management want younger, cheaper, more impressionable staff. I'm thankful I have clocked on to this ahead of time so I can least hope to build up some funds before I get the tap on the shoulder. My dad was basically forced out at 48, though fortunately for him, he had a great pension and a good pay off which meant the ride to 55 and cash in was not only pretty painless but an unforeseen benefit. Not many will have that luxury in the future. I just can't imagine being made redundant at say 65 and knowing you have anywhere from 5-10 years more work expected of you. Who the hell is going to employ to you? You'll be lucky to get a few hours in B&Q. Anybody who is made redundant in their 50's onwards does very well to find similar paid work as it is, let alone kicking the can into the 60's and maybe beyond. We don't have the jobs for life anymore so hardly like we can sit in a job from 40 to 70 and ride it out, likely you could have 5 or 6, even 10 jobs in that time period and it'll get harder and harder as you get older. my advice is look for niches. old people are trustworthy. if you have a background in sales then main dealer car salesperson fits the bill if you can cope with 60 hour weeks. some of the best salespeople i know were elderly and semi retired in their late 50s or even 60s. i am a currently a teacher and was in the motor trade, when i can't hack the classroom anymore I will go back into car sales. good money too. £30k-£40k plus company car...sure beats the part time minimum wage B and Q Saturday number. other strategy is to learn a skill on the side now. I used to be a locksmith but went into teaching 5 years ago. I still get refferals and people I know ringing me 5 years later asking me if I can fix their seized UPVC door. a neighbour of mine who's well into his 70s does gardening for cash in hand. another bloke on my street valets peoples cars for £10 a time. he must do between 1 and 2 everyday and that is just from ONE street, maybe we just need to think more creatively about how to use our skillsets rather than rely on companies to provide us with a "job". plus, more favours get done on my street and no tax man is involved...hurrah! Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 16, 2015 Share Posted June 16, 2015 (edited) Yes it means someone with 26 years contracted out gets no state pension. The years you haven't paid full NI (contracted out) that are deducted from a maximum of 35 years (or however many you've worked below that but no more than that). You need 10 years of full NI to qualify for any state pension. 35-26=9 = stuffed. The idea is that your contracted out pension will make up for the lost state pension, which is fair if someone is a high earner in a DB pension. It's going to completely stuff up people who invested in failed funds, or were low earners who didn't amass much of a pension but contracted out for years. Edit: For example take a part-time (or full time) worker in a DB pension, say they earn 15k and are contributing at 60ths and worked contracted out for 26 years. £15,000 / 60 = £250 x 26 years = £6,500 pension. It's less than the (new flat rate) state one. I'm understanding this effects huge amounts of public sector workers, sounds like a targeted ploy by the government tbh Edited June 16, 2015 by Si1 Quote Link to comment Share on other sites More sharing options...
Saver Posted June 16, 2015 Share Posted June 16, 2015 (edited) Yes it means someone with 26 years contracted out gets no state pension. The years you haven't paid full NI (contracted out) that are deducted from a maximum of 35 years (or however many you've worked below that but no more than that). You need 10 years of full NI to qualify for any state pension. 35-26=9 = stuffed. The idea is that your contracted out pension will make up for the lost state pension, which is fair if someone is a high earner in a DB pension. It's going to completely stuff up people who invested in failed funds, or were low earners who didn't amass much of a pension but contracted out for years. Edit: For example take a part-time (or full time) worker in a DB pension, say they earn 15k and are contributing at 60ths and worked contracted out for 26 years. £15,000 / 60 = £250 x 26 years = £6,500 pension. It's less than the (new flat rate) state one. So given I am 36 and have only paid full years NI since 2004, currently I am entitled to zero state pension because my employer contracted me out! Even worse once I am 61 I will still have to work and pay NI, but the NI will not be allowed to contribute to my state pension because I will have 35 years contributions. So I have no possibility to get the full pension ever it seems? Edited June 16, 2015 by Saver Quote Link to comment Share on other sites More sharing options...
winkie Posted June 16, 2015 Share Posted June 16, 2015 my advice is look for niches. old people are trustworthy. if you have a background in sales then main dealer car salesperson fits the bill if you can cope with 60 hour weeks. some of the best salespeople i know were elderly and semi retired in their late 50s or even 60s. i am a currently a teacher and was in the motor trade, when i can't hack the classroom anymore I will go back into car sales. good money too. £30k-£40k plus company car...sure beats the part time minimum wage B and Q Saturday number. other strategy is to learn a skill on the side now. I used to be a locksmith but went into teaching 5 years ago. I still get refferals and people I know ringing me 5 years later asking me if I can fix their seized UPVC door. a neighbour of mine who's well into his 70s does gardening for cash in hand. another bloke on my street valets peoples cars for £10 a time. he must do between 1 and 2 everyday and that is just from ONE street, maybe we just need to think more creatively about how to use our skillsets rather than rely on companies to provide us with a "job". plus, more favours get done on my street and no tax man is involved...hurrah! This is very true......depending on what is being sold and to who, this age bracket can be brilliant and trusted sales people, especially to older people.....not everyone will trust a young wippersnapper......great word that.. Quote Link to comment Share on other sites More sharing options...
SpectrumFX Posted June 16, 2015 Share Posted June 16, 2015 So given I am 36 and have only paid full years NI since 2004, currently I am entitled to zero state pension because my employer contracted me out! Even worse once I am 61 I will still have to work and pay NI, but the NI will not be allowed to contribute to my state pension because I will have 35 years contributions. So I have no possibility to get the full pension ever it seems? As part of the contracting out deal your contracted out pension provider is obliged to give you a guaranteed minimumm pension. So that will have to be factored in somehow. From the link I posted earlier in the thread it seems that the GMP isn't guaranteed to be indexed as favourably as the standard state pension, but I don't think it's as bad as it first appears (at least I hope it's not) Quote Link to comment Share on other sites More sharing options...
Starla Posted June 16, 2015 Share Posted June 16, 2015 I can't get multi-quote to work on this laptop. Si1: It effects pretty much all public sector workers. I'm all for it in the scenario of a fat earner, with a massive pension having no state pension entitlement. There needs to be fair means testing. I'm not all for it when it's the people on moderate/low incomes with not much provision, possibly less than the state pension, but needing that as a top up. It'll take a lot of private sector workers down too. Saver: As I understand it, and I've been getting my head round this for a while now, if you're 36 and so far you have only built up 9 years contracted out, then from April 2016 everyone (including DB) will be contracted back in, it may have started in 2012 for non DB (final salary) pensions. You need to check with your employer/scheme. This means increased NI payments. You've still got another 26 years of your 35 years left to build up your state pension. Works out at about £4.24pw for every year of full NI paid. ... but they'll probably have changed it again by then etc. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 16, 2015 Share Posted June 16, 2015 Another, er, issue is that of you were contracted INTO the state second pension (common under a lot of private sector pension scheme) then all that happens is you achieve your ceiling contributions for the full pension earlier, which you would have likely achieved anyway eventually given a full working life, so you basically lose the benefit of the contracted in payments. Quote Link to comment Share on other sites More sharing options...
SpectrumFX Posted June 16, 2015 Share Posted June 16, 2015 I've found this calculator that works out your entitlement under the current rules; https://www.gov.uk/calculate-state-pension So my understanding is that your Starting Amount (what they were calling the Foundation Amount) is the higher of that figure, or what they calculate for your contributions to date under the new rules. You then get an additional 1/35th of the new standard weekly pension amount for each additional year you work under the new scheme. Presuming that my entitlement under the current rules is my starting amount, then for me that works out at me getting enough contributions to get the full state pension by the time i'm in my mid 50's Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 16, 2015 Share Posted June 16, 2015 I've found this calculator that works out your entitlement under the current rules; https://www.gov.uk/calculate-state-pension So my understanding is that your Starting Amount (what they were calling the Foundation Amount) is the higher of that figure, or what they calculate for your contributions to date under the new rules. You then get an additional 1/35th of the new standard weekly pension amount for each additional year you work under the new scheme. Presuming that my entitlement under the current rules is my starting amount, then for me that works out at me getting enough contributions to get the full state pension by the time i'm in my mid 50's So you'll be paying ni for no additional pension between 55 and 70 meaning your state second pension contributions are wasted Quote Link to comment Share on other sites More sharing options...
SpectrumFX Posted June 16, 2015 Share Posted June 16, 2015 So you'll be paying ni for no additional pension between 55 and 70 meaning your state second pension contributions are wasted If I understand it correctly then yes. Or I could presumably go and work abroad (unlikely, if i'm honest), or just quit the rat race and live off savings (if I have them). Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 16, 2015 Share Posted June 16, 2015 If I understand it correctly then yes. Or I could presumably go and work abroad (unlikely, if i'm honest), or just quit the rat race and live off savings (if I have them). It affects me too , it looks like people are going to lose out over various facets of the new pension system, but then again we always knew the govt had to claw money back somewhere as the books don't balance Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted June 16, 2015 Share Posted June 16, 2015 (edited) You'll get 26/35 of 113 quid a week I think. So in summary, if you have 35 years you get the old state pension. If you have some years of not contracted out, in my case say 20, then this counts as 20/35 of the difference between the £113 and £155 or £42 x 20/35 = £24. Entitlement is £113 + £24 = £135. £20 shorfall made up after 2016 by 5 years of nic.......£155/ 35 x 5 years = more than £20 ???? Edited June 16, 2015 by crashmonitor Quote Link to comment Share on other sites More sharing options...
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