To be shocked if this is true . State pension and benefits …?

[Springtimesoo]

I have worked all my life apart from
4 year degree( 3 year plus prof qualification )
and
a period at home when I had 2 dc under two and we could not afford nursery fees.

have just checked my pension forcast Which says that although I have paid 35 years in full , i will not get a full pension .

it seems that to get a full pension i need to pay just over 3k .

my friend , who is by choice long term unemployed. ( long story) says that she will get a full pension as she is on benefits .

how is that fair ? Its not true is it ?

So why does iclaudine think she has to pay 40 years?

My head is exploding. I so want to believe you are right.

Universal credit claimants move on to pension credit claim. Which currently tops up your weekly income to about 180 for a single person.

Life of luxury.there.

Please feel free to fuck your job in and do what your friend is doing. Put your mouth where you ass is.

I don’t know. Maybe she’s worked for 35 years but not every year qualified

but you said earlier
“We’ve both got 35 years and it says we get the £185 each and it can’t be improved.”

I assume you took this from the government gateway? Unless you have reason to believe they have recorded your NI history incorrectly you should accept what it says. If it says your state pension forecast is £185 then that is what you will get. The COPE figure is not a deduction from the £185

The state pension is a benefit.

I actually asked my MP this, they didn't answer.

I receive an occupational pension from the NHS.

I also receive contribution based ESA, so my ESA has money taken from it because I have a pension.

So I have paid into two systems but only receive 1/2 from one of them. I'm sure the state pension will go the same way.

Although it is unfair, calculate the difference paying the three grand will make to your monthly pension. It will probably really be worth it.

Mine seems to only want 30 years of contributions, not 35. Why would that be, does anyone know?

You will get the benefit of that money in your private pension unlike others who didn't opt out of SERPS and that money has disappeared into the big pot. The only benefit to someone who didn't opt out of SERPS is that they may not need to pay the full 35 years of contributions to get a full state pension however if they are working above the NI threshold they have no choice but to continue paying into the system beyond how ever many years are required for their full pension. There are people who could pay for the best part of 50 years for no extra benefit despite being told at the time they would have a state earnings related pension scheme based on what they paid in. If you opted out think yourself lucky, you have that money elsewhere and still have the option to top up a shortfall of 3k to end up with over £200 pw from next month.

Just be glad you’re not on the old basic state pension like those who retired before 2016! DH get the full, old state pension of £141, after over 40 years of contributions. Because I have a very modest occupational pension, plus my state pittance of around £90 a week, we don’t qualify for pension credit. However, if he’d retired after 2016, we’d be £45+ better off each week, non means tested.

How is that a fair system?

Generally if you have a occupational pension opting out of SERPs was not a bad thing.

When I was in the local government scheme we all had to attend a talk about it and our advisor said it was the best thing as the momey that would have gone to SERPs was instead re routed as additional contributions in to our defined benefit scheme.

There's a few of us in this position on the thread - I think it's to do with the way the starting amount is calculated.

When they transferred over to the new state pension they calculated what entitlement you already had to basic state pension + additional state pension under the old rules. Then they calculated what your previous contributions would have earned you under the new system. Whichever was the higher value became your starting amount.

If your earned pension was higher under the old system then the gap you have to make up to reach the maximum is smaller, so takes fewer years of contributions to buy.

I think we're probably all people who didn't contract out, and for us 1 year under the scheme was worth more than 1 year under the new scheme.

Your starting amount would be lower if you were contracted out.

Think of it like this. The new state pension is a bucket that, under the new approach, takes 35 years to fill.
Those of us who had NI contributions before 2016 already had some water to pour in to that bucket. But we had different amounts. If you contracted out you have less water to pour in than someone who didn't.

So now, everyone has poured their water in and they've measured how much space is left in each bucket and worked out how long it will take to fill.

Someone who contracted out has more space to fill so will take longer, but they can still fill it.

If you hit the full state pension yeara before retirement age then you're going to better off as a result of contracting out, as you are actually seeing a benefits for your additional years of working.

I'll hit my full state pension 20 years before retirement age. I'll get no benefit from the additional 20 years of NI contributions.

It most certainly is NOT, it is a right, an agreed contract in law & is contribution based.

Unlike say UC which is there regardless of any amount contributed.

No more a benefit than my private or final salary pensions are.

I'll hit my full state pension 20 years before retirement age. I'll get no benefit from the additional 20 years of NI contributions

Yes this is unfair isn't it? i think in some countries, you can claim the state pension once you ve done the correct contributions.

For me, i'm £154 short of NI payments, meaning i get just £1 a week less, i have until March 2024 to make good this shortfall.... only £1 but a no brainer & i ve retired, so it works out about right.

I'll hit my full state pension 20 years before retirement age. I'll get no benefit from the additional 20 years of NI contributions

I'm the same. It's really annoying!

It seems sensible to credit those in receipt of benefits with NI/pension contributions. People have to have money to live on in old age. Surely it makes more sense to do it that way rather than a series of pension top up/subsistence payments?

For SAHMs watch there was a catch when the law was changed around 2010/11 where you only get NI credits until your youngest is 12 rather than 16 as it had been previously.

Also you only get it for full tax years you claim child benefit so if your dc was born in May you won't get it until the next April and when they turn 12/16 you won't get it for the April until their birthday.

The 'complete year' thing is crazy.

For people who don't get the full state pension they will get pension credit instead, unless they have a high income partner/lots of savings (it's just an older people's UC).

Also there's an 80+ pension everyone gets.

There won't be homeless older people because of this!

@pissssedofff umm the state pension absolutely is a benefit, indeed it is the biggest share of the overall benefits bill.

If it is a "contract in law" where is the contract you signed? Where is your agreement?

The state pension can and is changed at will by government, when I started working at 16 my age of qualification was 60, it's now 68. No contract change or consultation with me needed. Just a change in how I qualify for a state benefit.

I think this is the whole problem .... young people are not interested in pensions, but have to make decisions about them.

I was in same situation..... contracted out of SERPS but had occupational pension based on final salary.

The important thing is that nobody contracted out of the basic state pension. People contracted out of SERPS because they had a final salary, occupational pension which was guaranteed to pay them more. This was then replaced with the second state pension. You could still contract out of this.

Finally, in 2016, the "second state pensions" were abolished. The amount you get in the state pension depends on how many years service you had in the various old schemes.

In 1988 (google) people were allowed to contract out of the second pension and pay into a private pension, which did not guarantee an income. This was to encourage people to shift away from state pensions to the private sector. At the time the sector was very poorly regulated, and huge commissions fees were paid. Some of these people were clearly misold crap products on the basis of very poor advice. These are the only people who incurred a financial loss by contracting out. There have been court cases/ settlements over this. I think the decision to allow people to opt out in this way was one of the worst things thatcher ever did.

IMO abolishing SERPS was the real source of current pension issues. If you worked 44 years (men) then you would get the "old age pension", as it was known, and 25% of the difference between the pension and your final salary (there was an upper limit). This meant that ordinary people could actually afford to retire without involving private companies. However, you could only get SERPS if you worked. People on benefits, women at home on child benefit etc. got credits towards the basic pension but nothing else.

There is now only one pension, which is more generous as the "old age pension" .... the government highlights this bit. However, it's a lot less generous than pension plus SERPS, which they say less about!

@Fredoraly the NI you pay does not go into a separate pot for your pension, it is all just tax. All the NI you have paid will have been long spent by the time you retire.

And thar is why we have an issue. The generation retiring now are much much larger than the generations below, especially Gens X and Y (eg those born beyween 1965 and 1995), and Gens X and Y need to pay the state pensions of those retiring now. It's known as the dependency ratio and it is beginning to get a little hairy.

@Sceptic1234 although the the SERPs gap should be covered by the new compulsary NEST scheme.

National insurance is that... insurance. It is not just a pension contribution. If you become critically ill or had a serious accident, then you will be able to receive benefits,

So you are getting something for your continued contribution. Benefits may not be generous, but look into how much you'd have to pay an insurance company for critical illness cover and it starts to look like good value.

How? it is not universal and yes there is a contract, the law of the land (contracts don't always need to be signed)
If we vote in parties that then change the law (voting them in again and again...) who exactly is that on?

Yes pensions are lumped in with "benefits" but that just suits the Govt narrative, don't assist them.

Unlike paying salaries, the business must be making a profit (after tax) in order to pay dividends. Because there is no national insurance on investment income it's usually a more tax efficient way to extract money from your business, rather than taking a salary.

So you 'earn' with dividends, but you don't pay into the ni system? (As you're paid under the threshold) How is this more deserving of a pension than someone on benefits?

No....its just spent like a tax. This is the big difference between us and Northern Europe....they keep national insurance equivalent as a separate fund. This is one reason why their schemes are so much more generous.