State Pension Delays

[ColinJ]

As I understand the system providing that you have 35 qualifying years you will get the full New State Pension. This ignores any contracting out/in circumstances.

If you have 35 qualifying years and stop working before your State Pension age you do not have to continue making NIC's until your State Pension age to retain your full entitlement.

That is my situation. I got my 35 years in then stopped. I have it in writing that my full pension will start early in the NY.

As I said before though, my sister paid NI contributions for 48 years but will NOT get the full new state pension because contracting out meant that many of her payments don't qualify.

Yes, she does get a private pension, BUT not what she was promised. She was told that she would get an X thousand pound lump sum and Y thousand pounds a year at the age of 60. Late in the day the government announced that, sorry, no state pension until you are 66. Oh, and X will now be reduced to a fraction of that. And... Y will be a lot less too. And to get those reduced payments, kindly carry on paying your pension and NI contributions for another 6 years...

 

[PaulSB]

That is my situation. I got my 35 years in then stopped. I have it in writing that my full pension will start early in the NY.

As I said before though, my sister paid NI contributions for 48 years but will NOT get the full new state pension because contracting out meant that many of her payments don't qualify.

Yes, she does get a private pension, BUT not what she was promised. She was told that she would get an X thousand pound lump sum and Y thousand pounds a year at the age of 60. Late in the day the government announced that, sorry, no state pension until you are 66. Oh, and X will now be reduced to a fraction of that. And... Y will be a lot less too. And to get those reduced payments, kindly carry on paying your pension and NI contributions for another 6 years...

You were born after April 1953, as was I, and this is the starting point for calculating the new state pension. People born earlier have their pension calculated on the, old, basic SP. Everyone has their state pension confirmed in writing regardless of which rules it's paid under.

It might be a good idea for your sister to speak to a financial adviser because there are conflicting statements in your post. If she has written evidence of a legally promised level of pension she needs advice on how to claim it. I would say it's highly unlikely such a promise will have been made.

Your sister contracted out of SERPS not the state pension. The element which was contracted out will have been used for a private pension so should not be counted twice when calculating state pension. It may be that element has not performed well but that's a risk everyone who contracted out took. My understanding is everyone should have been offered the opportunity to "contract in" if the private pension was underperforming against the Additional SP. This is something she may need advice on. I'd be surprised if she wasn't given the option but if she can prove this she may have a case against the provider.

Your final paragraph may be confusing private and state pension. As regards the private pension a provider would not, or at least should not, promise a given amount of either lump sum or annual income. There will have been illustration of the benefits based on projected contributions and growth. The way this is presented hasn't changed in perhaps 40 years. If your sister has evidence she was promised a level of pension which is now not going to be paid she should be considering action against the provider. Your sister will be expected to continue paying the (private) pension contributions till she retires to achieve the forecast value. Private pension forecasts are automatically based on this date, it's the law. The actual, final, value of a private pension is only known when one takes the pension prior to this it's simply a pot of money which varies daily according to market forces and the level of pension this buys is determined by the market on the day the pension is taken (crystalised is I think the term).

The other aspect of the private pension on which your sister may want to take advice is how to access those funds. It's no longer a question of simply buying an annuity (pension) and she will have several options. It's her money and how she chooses to spend it is her decision alone. If I use my own case I have chosen not to purchase an annuity but to access those funds as and when I wish in cash. Prior to reaching SP age I used drawdown to take out cash equal to the Personal Tax Allowance. Now I only drawdown sufficient to bring my income, SP + drawdown, up to the PTA. This means I don't pay tax. If there is a year when I need more money I drawdown more cash and pay tax in that year only. If I had purchased an annuity I would be above the PTA and paying tax, unnecessarily, every year.

For the majority much of this is straightforward once understood. If your sister is not getting what she expected she needs professional advice to understand her entitlement and options. There are a lot of very good financial advisors out there.

The change to women's SP age was very badly handled and along with hundreds of thousands of others she has every right to be angry.

 

[Chislenko]

The change to women's SP age was very badly handled and along with hundreds of thousands of others she has every right to be angry.

Isn't that just equality that women have fought for and demanded.

My wife was one of those affected (having to wait another 4 years to get her state pension) but understands that you can't pick and choose which equality you can have.

If the 60 / 65 had continued then men would be being discriminated against.

 

[welsh dragon]

Isn't that just equality that women have fought for and demanded.

My wife was one of those affected (having to wait another 4 years to get her state pension) but understands that you can't pick and choose which equality you can have.

If the 60 / 65 had continued then men would be being discriminated against.

No one especially women have disputed that the state pension for men and women should not be the same. However it was established that out of something like 4 million women who were/are effected only about 1 million women received letters telling them about the changes. And it was a huge leap from 60 to 65 for them.

I am also one of those effected and have had to wait an extra 6 years for my pension that I will receive in the first quarter of next year. I didn't receive any notification of the changes either.

 

[Chislenko]

No one especially women have disputed that the state pension for men and women should not be the same. However it was established that out of something like 4 million women who were/are effected only about 1 million women received letters telling them about the changes. And it was a huge leap from 60 to 65 for them.

I am also one of those effected and have had to wait an extra 6 years for my pension that I will receive in the first quarter of next year. I didn't receive any notification of the changes either.

To be fair WD the changes were first discussed in 1991 and the white paper drawn up in 1993 so with a view to it being phased in between 2010 and 2020 so adequate notice was given.

As to individual letters to those involved I can't say, but none of us have had an individual letter to state NI is being raised but we all know about it so it is my opinion, fwiw, that people did know about it but perhaps put it to the back of their mind.

 

[Nebulous]

The old state pension needed 30 years of contributions and is £137.60 per week. People who hadn't contracted out could build up an additional state pension from SERPS / additional pension, which tops out at around £220 per week. That applied and still applies to people who were retirement age before April 2016.

The new state pension applies from April 2016 and requires 35 post 2016 years. It is currently £179.60 per week.

Most people are under transitional rules - they have a bit of both systems. In 2016 a calculation was done for everyone under both systems and they were given the one that was most advantageous.

If you had more than the starting point for the new pension already, then that is protected and you cannot increase what you had at April 2016. Paying more years is not necessary.

If you have less than the £179.60 you have the chance to increase it by buying extra years if you have missing ones. You should take advice first, because some, particularly pre-2016 years may not be worth buying.

Contracting out meant you paid less national insurance, on the basis that you would not require the additional pension because you had made your own arrangements. What many people who were contracted out and are not due to get the £179.60 per week do not understand is that if they are going to get over the £137.60 they are likely to be better off under the new system than they would have been on the old. People with a lengthy period contracted out are the big winners under the new system.

 

[PaulSB]

Isn't that just equality that women have fought for and demanded.

My wife was one of those affected (having to wait another 4 years to get her state pension) but understands that you can't pick and choose which equality you can have.

If the 60 / 65 had continued then men would be being discriminated against.

You're correct it is a part of the equality women have fought for and demanded and the rough has to be taken with the smooth. Like @welsh dragon my wife didn't receive any notification of this but as you say she knew about it years in advance. The question of notification is a difficult one but on balance I feel the government/DWP could have saved an awful lot of grief for both themselves and those women concerned by sending out those letters. A few million letters at a very low cost would have been a far better option than relying on the media.

I do think though these women have been very poorly treated and believe these changes should have been phased in so the very real financial pain for some would be lessened. A method of making the change over 5 years rather than one could and should have been found. When my wife receives her state pension next autumn she will have waited six years longer than she would have expected.

 

[welsh dragon]

To be fair WD the changes were first discussed in 1991 and the white paper drawn up in 1993 so with a view to it being phased in between 2010 and 2020 so adequate notice was given.

As to individual letters to those involved I can't say, but none of us have had an individual letter to state NI is being raised but we all know about it so it is my opinion, fwiw, that people did know about it but perhaps put it to the back of their mind.

I do agree . However It has been established that successive governments handled the whole thing badly .

Personally I don't think anything will come of the WASPI community as at the end of the day we are all responsible for making sure we have all the facts. And as they say ignorance is no excuse. I do feel sorry for those women who A didn't know about the changes for whatever reason and B are in bad health.

I do know of some men who sadly reached personable age only to die 6 months later.

There are lots of its and buts, but I should have looked into my pension sooner than I did so can't blame anyone accept myself. Luckily I was in a better position financially than some.

 

[Chislenko]

@welsh dragon

I think we had best leave this here as we will get the thread shunted off to NACA.

At least both of us have something to look forward to next spring 😄

Happy spending when it does come 😊

 

[ColinJ]

For the majority much of this is straightforward once understood. If your sister is not getting what she expected she needs professional advice to understand her entitlement and options. There are a lot of very good financial advisors out there.

She knows all about that and has been through it - she worked in benefits/advice!

She did explain to me exactly what happened but I have a memory like a sieve these days so I can't remember all of the details. Let's just say that she was very unhappy about how things turned out, but she didn't feel that it could be taken further!

As for women's pension age... She was kicking off about that one time and I mentioned equality. She immediately responded with a statement that women had been doing the same jobs as men for less pay, and with much less chance of promotion. Then they typically took time out to rear kids, which further damaged their careers/financial prospects. The one perk they had was an earlier retirement age. Obviously, the ages had to be equalised, as did the pay, as did the promotion prospects, and men had to start helping more with child-rearing. The problem was switching from one system to the other so suddenly. Even if a woman had known in advance that it was going to happen, she often would still have been at a financial disadvantage compared to a man of the same age.

 

[The Central Scrutinizer]

I don't know about the weekly or fortnightly options but SP is not paid monthly it's paid four-weekly. The other point is as far as I'm aware the need to purchase extra years is not as a result of contracting out. My wife worked for the NHS and was contracted out but also retired at 60. The reason she has to purchase additional is because she will not have worked or made contributions for 6 years prior to reaching state pension age. It's not a question of having worked for "x" years but of having contributed up to state pension age.

Spoke to my wife and she said the NHS and her previous job before that had opted out of SERPS so that she paid less NI and the NHS paid more to the private pension.When you opt in I suppose it’s the opposite.
You are right about the SP being four weekly instead of monthly.That will be paid that way automatically unless you contact them.
I decided to be paid weekly as that what I was used to when I was working.

 

[Chislenko]

Have to say despite the scare stories in the media my application looks to be going rather smoothly.

Got my initial letter last week with a code to claim. Went on line to do it and a few days later my letter came through confirming £179.60 per week and my first payment date of March 5th.

Let's hope it continues to be as plain sailing as it has been so far.

 

[welsh dragon]

Have to say despite the scare stories in the media my application looks to be going rather smoothly.

Got my initial letter last week with a code to claim. Went on line to do it and a few days later my letter came through confirming £179.60 per week and my first payment date of March 5th.

Let's hope it continues to be as plain sailing as it has been so far.

Good news. I am expecting my letter within a couple of weeks as I will also start to receive my pension at the end of March.

I heard in the news that they have now sorted out the pensions for all those who have been waiting months to receive it. Let's hope that is the case.

 

[Nebulous]

Good news. I am expecting my letter within a couple of weeks as I will also start to receive my pension at the end of March.

I heard in the news that they have now sorted out the pensions for all those who have been waiting months to receive it. Let's hope that is the case.

5000 people still waiting apparently.

 

[welsh dragon]

5000 people still waiting apparently.

That's the problem with news. Eveyrone tells you different things