Page 21 | To be shocked if this is true . State pension and benefits …?

Springtimesoo · 2023-03-01T15:22:34+00:00

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 ?

Branster · 02/03/2023 16:29

Thank you @Bchagall
That's reassuring to get clear confirmation.

DumpedinKilburn · 02/03/2023 16:32

24KaratCucumber · 02/03/2023 13:13

Bullshit.

The number of long term unemployed people in the UK is a tiny tiny percentage and amounts to around 270k people.

The myth of all those many millions of long term.i employed is a media driven propaganda to push the narrative.of benefit claimants being Scroungers and cause division between the haves and have nots.

And unlike the people.amkong wild claims, there's plenty of sources with actual figures. www.statista.com/statistics/284187/uk-unemployment-figures-by-length/#:~:text=Number%20of%20people%20unemployed%20in,2022%2C%20by%20length%20of%20unemployment&text=As%20of%20December%202022%2C%20there,for%20more%20than%20a%20year.

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Total unadulterated bollocks I'm afraid.

Aphrathestorm · 02/03/2023 17:13

'Unemployment' stats only count those actively seeking and available for work.

Most non working people don't claim whatever Jobseeker's Allowance is now that it comes under UC.

Until the 2010s mums with any DC under 16 or under 18 still in school weren't counted.

Anyone signed off sick or on ESA/old incapacity benefit isn't counted.

People supported by parents/partner arent counted.

People claiming carers allowance or carers credit arent counted.

AmandaJonah · 02/03/2023 17:22

Yep. My DH is unemployed and not counted as he is not entitled to benefits because of my earnings.

cadburyegg · 02/03/2023 17:58

I really don't get these posts.

Of course work pays. The majority of people in work will contribute to a private pension scheme which they will get on top of their state pension. For some people this amounts to thousands. People who have just been on long term benefits will just get their state pension and nothing else.

I'm confused as to how anyone who has worked all their life wouldn't be eligible for a full state pension, even if they did take a degree and a few years out to raise young kids. I have contributed 18 years already, I'm 35 and need to contribute another 18 years to be eligible, although I'll be working for at least another 30 years. You must have taken more years out than you realise

NevieSticks · 02/03/2023 18:09

Mossstitch · 02/03/2023 12:26

Could it have been because clarasita was so young that she would end up paying more than the necessary years by the time she retired anyway. Eg I had missing early years in my teens but now I'm in my 60s I have 44 qualifying years and entitled to full state pension (even with 13 years contracted out) so it would have been a waste of my money to pay those missing years previously🤷

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That is what i said - that when I spoke to them on the phone they told me exactly how many years to payback to get full pension but not to pay anymore.

Sceptic1234 · 02/03/2023 18:23

cadburyegg · 02/03/2023 17:58

I really don't get these posts.

Of course work pays. The majority of people in work will contribute to a private pension scheme which they will get on top of their state pension. For some people this amounts to thousands. People who have just been on long term benefits will just get their state pension and nothing else.

I'm confused as to how anyone who has worked all their life wouldn't be eligible for a full state pension, even if they did take a degree and a few years out to raise young kids. I have contributed 18 years already, I'm 35 and need to contribute another 18 years to be eligible, although I'll be working for at least another 30 years. You must have taken more years out than you realise

The thing to understand is that, until 2016, there was not one state pension, but two.

The basic state pension £141 a week, and a second, earnings related state pension.

If you worked in a job that had an occupational.pension, you played less NI but only built up entitlement to the basic state pension. When you retired, you would get this, and your occupational pension. You were "contracted ouf" of the second pension, but not the basic pension.

If you worked in a job that had no occupational pension, you paid more NI, but effectively got two state pensions once you retired.

Since 2016 there is only 1 state pension - the new state pension, which is worth £185 a week. The concept of being "contracted out" disappeared so people with occupation pensions started paying more national insurance.

I have just started getting my state pension. It consists of two parts. Pre 2016 I was paying contributions towards the basic state pension....£141. Post 2016 I was paying increased NI towards the new state pension.

I recieved £175 a week, which is more than I would have got under the pre 2016 scheme but less than the new state pension. So even though I had 44 years of contributions, I get less than the full pension, because I paid less NI for most of my working life. However, I also get an occupational pension which more than makes up the difference.

Sceptic1234 · 02/03/2023 18:26

Under the pre 2016 scheme someone on benefits would only get credit towards the basic state pension.

BooseysMom · 02/03/2023 20:18

Sceptic1234 · 02/03/2023 18:23

The thing to understand is that, until 2016, there was not one state pension, but two.

The basic state pension £141 a week, and a second, earnings related state pension.

If you worked in a job that had an occupational.pension, you played less NI but only built up entitlement to the basic state pension. When you retired, you would get this, and your occupational pension. You were "contracted ouf" of the second pension, but not the basic pension.

If you worked in a job that had no occupational pension, you paid more NI, but effectively got two state pensions once you retired.

Since 2016 there is only 1 state pension - the new state pension, which is worth £185 a week. The concept of being "contracted out" disappeared so people with occupation pensions started paying more national insurance.

I have just started getting my state pension. It consists of two parts. Pre 2016 I was paying contributions towards the basic state pension....£141. Post 2016 I was paying increased NI towards the new state pension.

I recieved £175 a week, which is more than I would have got under the pre 2016 scheme but less than the new state pension. So even though I had 44 years of contributions, I get less than the full pension, because I paid less NI for most of my working life. However, I also get an occupational pension which more than makes up the difference.

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That's useful info thanks 😊

TheTeenageYears · 03/03/2023 00:55

@Sceptic1234 The only thing I would note from your explanation is no one paid any more NI in either scenario, they paid the same NI but it went to two different places depending on if you were opted out of SERPS or not.

Sceptic1234 · 03/03/2023 07:19

TheTeenageYears · 03/03/2023 00:55

@Sceptic1234 The only thing I would note from your explanation is no one paid any more NI in either scenario, they paid the same NI but it went to two different places depending on if you were opted out of SERPS or not.

Yes they did. I paid less Ni because I was contracted out. Someone who was not contracted out would have paid more NI. That means more money was taken off their pay every month.

When the rule changed in 2016 and contracted out status was abolished, my NI contributions increased. From that point on everyone paid the same.

Seymour5 · 03/03/2023 07:24

AmandaJonah · 02/03/2023 17:22

Yep. My DH is unemployed and not counted as he is not entitled to benefits because of my earnings.

Doesn’t he sign on to get his NI credit? DH did that once he was well enough to start looking for work, even though he wasn’t entitled to means tested benefits because I worked.

sashh · 03/03/2023 10:27

pissssedofff · 02/03/2023 13:46

@Ginmonkeyagain We aren't going to agree on this and perhaps there should be more of a contributions based element for higher rate tax payers, then again, they do get 40% tax relief on pension contributions.

Yes i know the NI isn't ring fenced, something people don't always realise.

For me a state benefit is something free, a safety net if you like, the state pension is something we have "paid into" to qualify (for want of a better phrase)

But a lot of benefits are only available to people who have 'paid in' and as I said earlier I paid into NI and I paid into a pension so I should get both, but I don't.

PoliticallylLost · 04/03/2023 00:41

Sceptic1234 · 03/03/2023 07:19

Yes they did. I paid less Ni because I was contracted out. Someone who was not contracted out would have paid more NI. That means more money was taken off their pay every month.

When the rule changed in 2016 and contracted out status was abolished, my NI contributions increased. From that point on everyone paid the same.

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Yep, I absolutely paid less NI. My pay statements clearly stated ‘contracted out NI’.
and then it became ‘NI D’ which indicated contracted out and in Apr 16 it changed to ‘NI A’ and my deduction increased by about £22 per month.
And I can in my NI history of hover gateway the jump when the contracted out rate changed

PoliticallylLost · 04/03/2023 00:43

Flipping typos….

I can see in my NI history on the government gateway the jump when the contracted out rate changed.

TheTeenageYears · 04/03/2023 08:33

I didn't realise contracting out of SERPS was ever an option unless it was to divert to a private pension. I didn't have a private pension when it was relevant and only ever worked for small companies so maybe it just wasn't something that was known about where I worked. I wonder how many people opted out to reduce their NI at the time and now have to make up the shortfall?

Sceptic1234 · 04/03/2023 09:53

TheTeenageYears · 04/03/2023 08:33

I didn't realise contracting out of SERPS was ever an option unless it was to divert to a private pension. I didn't have a private pension when it was relevant and only ever worked for small companies so maybe it just wasn't something that was known about where I worked. I wonder how many people opted out to reduce their NI at the time and now have to make up the shortfall?

I didnt think this was possible to be honest.

Talking to my sister yesterday....she's older than me and worked in NHS most of her life. Retired just before 2016 so shecgets NHS pension plus the old basic state pension.

The people who have really suffered in all this are the people who did not contract out and were relying on second state pension for retirement. The chance of building up more benefits in this were removed in 2016, and there is no way that the new pension / work place pensions will be able to make up the lost retirement income.

jackstini · 04/03/2023 13:28

@VanGoghsDog - thank you, have found an article on it now

www.aegon.co.uk/news/pension-ages.html

Says the minimum age you can take private pensions will be increased to 57 (10 years below state pension age) in 2028

I will be 55 in 2027, so will I be able to claim then?

Bad news for dh who won't be 55 by then so will have to wait 2 extra years I think?!

KatieB55 · 04/03/2023 13:55

When I logged into HMRC I found that 6 qualifying years of NI were missing. It took months for them to get records from archives. It seems a mistake was made with my NI number when I got married. Worth checking.

ancientgran · 04/03/2023 14:03

Sceptic1234 · 02/03/2023 18:23

The thing to understand is that, until 2016, there was not one state pension, but two.

The basic state pension £141 a week, and a second, earnings related state pension.

If you worked in a job that had an occupational.pension, you played less NI but only built up entitlement to the basic state pension. When you retired, you would get this, and your occupational pension. You were "contracted ouf" of the second pension, but not the basic pension.

If you worked in a job that had no occupational pension, you paid more NI, but effectively got two state pensions once you retired.

Since 2016 there is only 1 state pension - the new state pension, which is worth £185 a week. The concept of being "contracted out" disappeared so people with occupation pensions started paying more national insurance.

I have just started getting my state pension. It consists of two parts. Pre 2016 I was paying contributions towards the basic state pension....£141. Post 2016 I was paying increased NI towards the new state pension.

I recieved £175 a week, which is more than I would have got under the pre 2016 scheme but less than the new state pension. So even though I had 44 years of contributions, I get less than the full pension, because I paid less NI for most of my working life. However, I also get an occupational pension which more than makes up the difference.

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That is a great explanation, very clear. Surely everyone will understand it.

VanGoghsDog · 04/03/2023 18:35

jackstini · 04/03/2023 13:28

@VanGoghsDog - thank you, have found an article on it now

www.aegon.co.uk/news/pension-ages.html

Says the minimum age you can take private pensions will be increased to 57 (10 years below state pension age) in 2028

I will be 55 in 2027, so will I be able to claim then?

Bad news for dh who won't be 55 by then so will have to wait 2 extra years I think?!

Yes, if you're 55 before the new law you're fine.

I'm 55 this year so have been anticipating this change with bated breath! Luckily, it's not impacting me. It's been flagged by the govt for years but they kept delaying it.

For your DH, he could divert some savings to non pension to draw for the gap of two years?

I'm actually probably not going to do anything with mine for a few years but after planning for so long, reaching this milestone feels very significant!

It's a bit of a worry that an IFA told you incorrect information. But then, I saw one a few weeks ago and he asked me how come I have £90k in an ISA when the limit is £20k 🙄 very disappointing. He also clearly had no concept of the issues facing an unmarried woman with no offspring - that is, there is noone to help me when I'm old, I have noone to give power of attorney to etc, and so I need to simplify my finances earlier than probably most people would. Plus I have no second income if mine goes wrong for any reason. He just laughed and told me he had six kids (why would I care about that?). He also told me I need life insurance, which I clearly don't. I didn't waste my time bothering to see him again.

hennaoj · 04/03/2023 22:09

Mine says contracted out but I've never had a works pension?

BrigitteBond · 04/03/2023 22:14

hennaoj · 04/03/2023 22:09

Mine says contracted out but I've never had a works pension?

You were able to contract out into a personal pension as well.

MRex · 05/03/2023 07:08

hennaoj · 04/03/2023 22:09

Mine says contracted out but I've never had a works pension?

I had one from a non straight out of uni, but it was only just over a year, so I lost the pension money (contacted them many years later to check, admin fees and whatever) but it still shows on my record, 56p/wk so not a huge impact. Could yours be similar?

BooseysMom · 21/03/2023 10:28

Just checked on HMRC and it says this:

Your forecast is £185.15 a week, £805.07 a month, £9,660.86 a year

£172.28 a week
Forecast if you contribute another 3 years before 5 April 2038

£185.15 a week
£185.15 is the most you can get

BUT when you click on NI record it says this:

2014 to 2015Year is not fullHide 2014 to 2015details
You have contributions from

National Insurance credits: 38 weeks

These may have been added to your record if you were ill/disabled, unemployed, caring for someone full-time or on jury service.

Find out more about gaps in your record and how to check them.

You can make up the shortfall

Pay a voluntary contribution of £221.90 by 5 April 2023. This shortfall may increase after 18 April 2023.

So it's saying I would need to pay £221 by 18th April to make up the shortfall! What?!