Jump to content
House Price Crash Forum
SarahBell

Retire When You Want, You'll Get Nothing Anyway

Recommended Posts

https://www.gov.uk/new-state-pension/how-its-calculated

You didn’t make National Insurance contributions or get National Insurance credits before 6 April 2016
Your State Pension will be calculated entirely under the new State Pension rules.

You’ll usually need at least 10 qualifying years on your National Insurance record to get any State Pension.

You’ll need 35 qualifying years to get the full new State Pension.

You’ll get a proportion of the new State Pension if you have between 10 and 35 qualifying years.

Example

You have 20 qualifying years on your National Insurance record after 6 April 2016.

You multiply 20 qualifying years by £4.44 (which is £155.65 divided by 35).

Your new State Pension will be £88.80 per week.


Your new State Pension is more likely to be calculated in this way if you were born after the year 2000 or became a resident of the UK after 2015.

(Although eligibility says:
You’ll be able to claim the new State Pension if you’re:

a man born on or after 6 April 1951
a woman born on or after 6 April 1953
)

Any qualifying years you have after 5 April 2016 won’t add more to your State Pension.

--
I suspect I'll get absolutely nothing.

Edited by SarahBell

Share this post


Link to post
Share on other sites

in a word - Pension credit!

https://www.gov.uk/pension-credit/overview

or not.

Pension Credit is an income-related benefit made up of 2 parts - Guarantee Credit and Savings Credit.

Guarantee Credit tops up your weekly income if it’s below £151.20 (for single people) or £230.85 (for couples).

Savings Credit is an extra payment for people who saved some money towards their retirement, eg a pension.

You may not be eligible for Savings Credit if you reach State Pension age on or after 6 April 2016.

So no savings credit for me.

Share this post


Link to post
Share on other sites

Running through the calculations, looks like my wife and I will get the equivalent of about £185 p/w off the state - nearly £10k,but I'll have to wait until I'm 67.

If I can use my work pension to top that up, take my lump sum at 60 and use the test to buy an annuity, I should be all right.

And that's before anything that I inherit.

Share this post


Link to post
Share on other sites

Running through the calculations, looks like my wife and I will get the equivalent of about £185 p/w off the state - nearly £10k,but I'll have to wait until I'm 67.

If I can use my work pension to top that up, take my lump sum at 60 and use the test to buy an annuity, I should be all right.

And that's before anything that I inherit.

Is that allowing for 2.5%pa increases?

Share this post


Link to post
Share on other sites

Running through the calculations, looks like my wife and I will get the equivalent of about £185 p/w off the state - nearly £10k,but I'll have to wait until I'm 67.

If I can use my work pension to top that up, take my lump sum at 60 and use the test to buy an annuity, I should be all right.

And that's before anything that I inherit.

back of envelope you'd need c £300k in savings to generate a similar £10k pension (and I may be way out).

If that's "nothing" then I think most people would take it.

Share this post


Link to post
Share on other sites

back of envelope you'd need c £300k in savings to generate a similar £10k pension (and I may be way out).

If that's "nothing" then I think most people would take it.

When I did my own research to set my 'safe' withdrawal rate in FIRE I was even more pessimistic with a 2.5% withdrawal rate. That's £400k for £10k per annum.

It's sequence of returns risk that I'm trying to protect myself against.

Share this post


Link to post
Share on other sites

Don`t worry Sarah you can come and live with me in Cambridge .

Can you live on a diet consisting only of lard ?

I can grow kale and brussel sprouts and honey.

Share this post


Link to post
Share on other sites

Well as long as you don`t mind suffering verbal abuse from my 90 year old neighbour. After 3 years I`ve had to call in the council who are putting a fence up at great expense .

Kale I`ve got, bees I can keep....

It`s just the Brussels and wife (who`s still hanging around !) that are the problem !!

Share this post


Link to post
Share on other sites

The younger you are the less you'll have paid into Graduated Pension, SERPS, State Second Pension etc. none of which will now be paid out.

Quite. Most working people don't realise how much has been stolen from them with SERPS/S2P being absorbed into the new pension. No accrued pension from them now, just disappeared into smoke.

Share this post


Link to post
Share on other sites

When I did my own research to set my 'safe' withdrawal rate in FIRE I was even more pessimistic with a 2.5% withdrawal rate. That's £400k for £10k per annum.

It's sequence of returns risk that I'm trying to protect myself against.

I have based my plans on 4% based on the magical age of 76 the point at which my parents stopped travelling further than about 25 miles, holidays too complex to organise (travel insurance) and finding driving to far pointless.

Accordingly they now don't spend much which makes attempting to index link pension payments pointless to a certain degree.

Have already started to adjust to a more frugal, wasteless lifestyle now I've hit the five-zero and come hell or high water will be sticking one finger up to HMG to retire before their stated state pension age whatever that is.

Share this post


Link to post
Share on other sites

I have based my plans on 4% based on the magical age of 76 the point at which my parents stopped travelling further than about 25 miles, holidays too complex to organise (travel insurance) and finding driving to far pointless.

Accordingly they now don't spend much which makes attempting to index link pension payments pointless to a certain degree.

Have already started to adjust to a more frugal, wasteless lifestyle now I've hit the five-zero and come hell or high water will be sticking one finger up to HMG to retire before their stated state pension age whatever that is.

It sounds like you've certainly come to the right forum given your last paragraph. Welcome!

Opting out of consumerism is nearly a HPC mantra these days. I still smile at some Off Topic threads from over the years demonstrating how far posters will go and I can tell you it's a lot further than I will. Retiring before state pension age is also something that plenty of us are about also.

Share this post


Link to post
Share on other sites

I have based my plans on 4% based on the magical age of 76 the point at which my parents stopped travelling further than about 25 miles, holidays too complex to organise (travel insurance) and finding driving to far pointless.

Accordingly they now don't spend much which makes attempting to index link pension payments pointless to a certain degree.

Good point, thx. I retired last year at 55 - not altogether planned, took a package and then the reduced FS pension. I planned on general income till 82. But even mid70s is good. My major issue is always not taking advantage of opportunities. I need to push that in the next 20 years!

Share this post


Link to post
Share on other sites

The younger you are the less you'll have paid into Graduated Pension, SERPS, State Second Pension etc. none of which will now be paid out.

If your under 45 its barely worth worring about anyway.

I had many years where I opted out of SSP. I doubt it will make any difference to what I will get as I haven't been feckless and have saved.

People should save hard, live below means, then have some time to chill during working age as retirement will not come for most. Many people still look at their boomer parents thinking they will have the same lives.

Share this post


Link to post
Share on other sites

If your under 45 its barely worth worring about anyway.

I had many years where I opted out of SSP. I doubt it will make any difference to what I will get as I haven't been feckless and have saved.

I checked with gov wrt my state pension (I was contracted out).Looks like I'll get £122per week @ 66. Nice if it happens, but as UK Gov is currently borrowing £75bn per year now and I doubt I'll get anything.

(That's looking on the bright side, I would expect the Muslims to blow me up first...)

Share this post


Link to post
Share on other sites

When I did my own research to set my 'safe' withdrawal rate in FIRE I was even more pessimistic with a 2.5% withdrawal rate. That's £400k for £10k per annum.

It's sequence of returns risk that I'm trying to protect myself against.

Indeed. Indicates just how valuable state pension is. Most people (couples) will never save anywere near £400k.

If government said "Instead of paying retired couples £10,000 p.a. in basic state pension we will give them £400,000 at retirement" I suspect the reaction would be very different & nobody would say "keep it, its not worth having"

In fact, thats possibly the logical extension of Osbornes "pension freedoms" at some point. To give state pensioners the option to take a lump sum instead of an annual state pension and manage it themselves as he has done with private pensions. Effectively removing the liability (biggest chunk of "welfare") from the state & passing the risk to the punter and in the process generating oodles in fees for his mates in the city & bringing forward consumption & tax revenues.

Edited by R K

Share this post


Link to post
Share on other sites

I checked with gov wrt my state pension (I was contracted out).Looks like I'll get £122per week @ 66. Nice if it happens, but as UK Gov is currently borrowing £75bn per year now and I doubt I'll get anything.

(That's looking on the bright side, I would expect the Muslims to blow me up first...)

At least your of an age you will get something.

My mate (31) checked his retirement age on the gov uk site and is convinced he will get something in his 60s...

Share this post


Link to post
Share on other sites

I have based my plans on 4% based on the magical age of 76 the point at which my parents stopped travelling further than about 25 miles, holidays too complex to organise (travel insurance) and finding driving to far pointless.

Accordingly they now don't spend much which makes attempting to index link pension payments pointless to a certain degree.

Have already started to adjust to a more frugal, wasteless lifestyle now I've hit the five-zero and come hell or high water will be sticking one finger up to HMG to retire before their stated state pension age whatever that is.

My thinking exactly.

I bought my annuities with no escalators, flat rate only. This was some of the better advice that my accountant gave me when I retired, eight years ago in my mid 50s, front loading my private pension income for the early, active, years of retirement. Admittedly, I've been lucky with inflation but it's worked out brilliantly.

Share this post


Link to post
Share on other sites

As a historical note, when I started my first job at what was then a state owned company in 1983 I remember sitting through a pension presentation at the age of 18 and having to choose a retiremement age. The choice was 60 or 65, if you chose 60 it would cost you 50p a week from your wages, equivalent to the price of a pint, this was too much for many but the thought of doing an extra five years was too much for me so I sacraficed the pint.

How times have changed, that was a 40ths scheme to 50% of final salary, how I treasure my frozen 15/40ths now when I see how much I have to shovel in now.

Just remember who is stealing your retirement.

Share this post


Link to post
Share on other sites

My thinking exactly.

I bought my annuities with no escalators, flat rate only. This was some of the better advice that my accountant gave me when I retired, eight years ago in my mid 50s, front loading my private pension income for the early, active, years of retirement. Admittedly, I've been lucky with inflation but it's worked out brilliantly.

Yeah. OAP spend drops like a brick post-75.

Telly - which is free. Biscuits. Cat food. Tins of fish. Wethers toffees.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   94 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.