Changes To Uk State Pension In 2015

[briley]

The UK state pension scheme is due another major shake up as from 2015 or 2016.

The idea is to bring in a simpler system giving all OAPs the same, either a single tier system giving £140pw for everyone or a two tier system giving every one £97pw plus about £1.60pw for each year you have worked.

I think the changes are a good idea BUT whichever system they bring in will only apply to those who retire after the implementation date (probably 5th April 2016)

If your retirement age is before 5th April 2016 you will get less pension for the rest of your life. I estimate you could lose out by up to £60,000 - that is (don't laugh) 5,555 cases of Chang beer.

It is possible for you to make your views known now either using the interactive web based system at:

https://interactive.dwp.gov.uk/a-state-pension-for-the-21st-century

or, more easily, by sending your views by e-mail to:

[email protected]

Don't forget -

This will impact on all UK nationals in Thailand over the age of 60.

It is much easier to get the government to change it's plans now before white papers etc than waiting until you lose out in 2016.

Very few people respond to these things, the poll tax had 117 people make comments, so your voice will be heard - if you want.

[sms747]

I sent them an email agreeing with the changes as long as the date is not pushed back to appease the moaners. I thought the poll tax was a good idea too and would have better than the mess we have now, with so many pretending to live alone to avoid full payment.

[beano2274]

I prefer the second tier, as like most people in Thailand I have not qualified for a full state pension. I have looked at paying the difference and getting the full pension but it is such a hassle. This new tier would benefit me greatly

[beano2274]

Remember the age for women is 60 and for men 65.

[PattayaParent]

I prefer the second tier, as like most people in Thailand I have not qualified for a full state pension. I have looked at paying the difference and getting the full pension but it is such a hassle. This new tier would benefit me greatly

It's just a matter of sending them a cheque for the amount they say you owe.

[beano2274]

I prefer the second tier, as like most people in Thailand I have not qualified for a full state pension. I have looked at paying the difference and getting the full pension but it is such a hassle. This new tier would benefit me greatly

It's just a matter of sending them a cheque for the amount they say you owe.

yes I know but I owe 13 years, and it is a question of saving that money or spending it on my condos.

[ESB7]

Lets face it...the age of retirement is going to continue to be greater by changes in government policies...anyone under 50 is probably not likely to recieve anything befor their 70th birthday.......never mind, you can sleep well knowing that the extra 5 years of work and paying tax/NI are well worth the effort to build schools/hospitols in Pakistan or other better of nations than your own...its a small sacrifice to make

[beano2274]

I prefer the second tier, as like most people in Thailand I have not qualified for a full state pension. I have looked at paying the difference and getting the full pension but it is such a hassle. This new tier would benefit me greatly

It's just a matter of sending them a cheque for the amount they say you owe.

you have to pay each year by a given date, and sometimes it is over 400GBP, I have missed one deadline, and if I remember correctly you can SWIFT it as well.

[PattayaParent]

I prefer the second tier, as like most people in Thailand I have not qualified for a full state pension. I have looked at paying the difference and getting the full pension but it is such a hassle. This new tier would benefit me greatly

It's just a matter of sending them a cheque for the amount they say you owe.

you have to pay each year by a given date, and sometimes it is over 400GBP, I have missed one deadline, and if I remember correctly you can SWIFT it as well.

I backpaid 13 years in 1 go and it was about £4,400 total but didn't tell me about a SWIFT option but if you don't have a cheque book you can have someone in UK pay it for you.

[briley]

Beano - the retirement age is not 60 and 65. Women have already been increased and men get an increase soon. By 2020 it will be 66 or 67 for everyone.

Back paying for the pension was well worth it - but in the last couple of years the amount need to pay has doubled. And the number of years needed has reduced so the calculations need to be done carefully.

My complaint is I made voluntary contributions in the past getting up to 35 years and planned to make the last 5 years on retirement. Then they changed the rules to 30 years so I made 5 years of payments that I did not need to do.

PS - I also felt the poll tax was a good idea, maybe poorly implemented and used as an excuse to increase local taxes but much fairer than the old rates or even the current whatever it is called system.

[Lite Beer]

The idea is to bring in a simpler system giving all OAPs the same, either a single tier system giving £140pw for everyone .

The last I read it would be £155 because of inflation.

[12DrinkMore]

This will impact on all UK nationals in Thailand over the age of 60.

Unless I have misunderstood something, which is entirely possible, they will have the same system as now, the new system won't impact them at all. Only those retiring on the new system will be affected. For better or worse, probably worse, as IME, any change by the government always leaves me worse off.

I didn't realise there are two options under consideration, thanx for the link. What is not addressed is whether the buggers will sort out the inflation increments for uz lot in Thailand. The first option seems more complicated than the current system, which I thought they were trying to simplify.

Re: paying the voluntary contributions to achieve 30 years of contributions. I worked it out as follows.

For each year of contributions you gain an extra 3.3% pension. The current pension is about 97 quid/week, so under the current system around 170 Quid extra/year. Divide this figure into the amount you have to pay for an extra year (various somewhat) will give you the payback time. So if you have to pay 600 quid, then after 3.5 years of collecting a pension you will have recovered the 600 quid and be in "profit". My buy-in years were a lot less, mostly between 300 and 450 quid, so I reckoned it was worth the relatively small amount to be able to claim the full pension. If they give me the 140 quid under the new system, then it all looks a lot better.

To find out how much you can buy in, you have to write to the pension lot, or maybe the new online thingy might do the trick. Haven't tried it as I'm fully subscribed with 30 years' worth.

https://secure.thepe...ensionforecast/

You can transfer money to them via cheque, SWIFT or BACS (cheapest).

Edited May 4, 2011 by 12DrinkMore

[briley]

Tend to agree with 12drinkmore that any changes made by the government benefits them - not me.

But with this pension change those who have paid in the minimum or near that will lose out, getting around £100pw instead of £144pw (today's figures before inflation). This will apply to a lot of us who retired early to Thailand having only paid the minimum, or who made voluntary payments.

Obviously those rich bankers who had to pay lots and lots in NI contributions might (and should????) lose out.

And does anyone expect the UK government to ever give us pension increases?

PS - believe the Dutch government is going ever worse than the UK government - pensioners outside Holland will get their pensions reduced in line with the local cost of living.

[fletchsmile]

Probably only worth bothering if you're going to retire in the next 5 years, as the rules of the UK pension lottery will change again and again over coming years. They've spent so many years funding current pensions out of current NI contributions, instead of tucking money away that the problem will just get worse.

Basically they'll take any money they can get. the retirement age will continue to go higher, and the pension amount will get lower in real terms - unless of course you're one of those people who just sponges of others and the state included

[12DrinkMore]

They've spent so many years funding current pensions out of current NI contributions, instead of tucking money away that the problem will just get worse.

This is an interesting and complex topic that I have been trying to get my remaining brain cells around. At the moment, and I am open to persuasion, if the government "tucked away" money

1. it would increase the amount of taxes, or increase the deficit spending, as obviously the government is already running a massive deficit and has no extra money it can "tuck away"

2. It would therefore reduce the amount of money in the economy, sending the GDP down the tubes

3. Where on earth would the government "tuck away" the money? Government bonds? Hmm, government bonds are created to fund the deficit spending, so that would mean the national pension funds would be cycled around to fund the the deficits and then I get a headache trying to think about it could work. Or maybe funding public works or paying more public service jobsworthies? Oh gawd, not that.

The only system I can see is the current system, where current contributions (indeed all forms of taxation) get sucked into the Great Common Tax Pot and the national pensions are paid out through Great Government Expense Account, with the balancing act financed through bonds, which are then purchased by Merv the Magician, conjuring up great swathes of crispy electronic quids as buyer of last resort.

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

Edited May 4, 2011 by 12DrinkMore

[cardholder]

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

.... and you can achieve this overnight ?

Whatever anyone says, I - and many others - believe that paying National Insurance for 30 odd bought the right to use the National Health Service (which I don't do) and receive the State Pension (which I most certainly expect to do).

[cheeryble]

It's just a matter of sending them a cheque for the amount they say you owe.

I backpaid 13 years in 1 go

Maybe you were lucky.

I am led to believe the maximum you can back pay is 6 years. That's what it says in the literature and that's all they've offered that i can do.

[rizla]

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

.... and you can achieve this overnight ?

Whatever anyone says, I - and many others - believe that paying National Insurance for 30 odd bought the right to use the National Health Service (which I don't do) and receive the State Pension (which I most certainly expect to do).

This is one for nick, R.....I`m just glad i`m on income leveling, the later they make the retirment date for me the longer i benifit...but very sad for others

[MAJIC]

Remember the age for women is 60 and for men 65.

Until 2020 when it will be the same!

[MAJIC]

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

.... and you can achieve this overnight ?

Whatever anyone says, I - and many others - believe that paying National Insurance for 30 odd bought the right to use the National Health Service (which I don't do) and receive the State Pension (which I most certainly expect to do).

The rules for claiming your 65 Year old Pension have changed,and for the better, for some,previously you needed to pay 44 years of NI Contributions to claim a full Pension,now you only need 30 Years NI contribution for a full Pension. this has been offset by changing the Retirement age for some, to be 67 years of age. Depending on your age group.

A Pension Forecast can easily be obtained,and how to go about it, by Googling "UK Pension Forecast Newcastle"

Claiming your Pension at age 65,is very simple these days and takes about 20 minutes by phone (and no paperwork necessary),provided you have all the information ready.

The DWP Website will provide all the information necessary. The UK has always introduced changes in the system gradually over a number of years,and nobody gets cut off,instantly without a lifeline! or prewarning.

And finally,by your claim of 30 years NI Contributions,and assuming you are British by Birthright, you would be able to use the National Health Service if you lived in the UK Permanently.

Even my Thai wife is entitled to National Health Treatment,and her own National Health Doctor,and Health Centre Treatment.

BTW My NI Contributions was for 40 years,and I will get a full Pension,plus a Second Pension on top ,part of which was:many years ago known as Graduated Pensions (so no they didn't cheat us out of that either) which has added about £40 pw to my forthcoming Pension.

Edited May 4, 2011 by MAJIC

[MAJIC]

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

Unfortunately 12 DrinkMore,for the Thai People,its not so much "self responsibility",more like they never had a choice!

.... and you can achieve this overnight ?

Whatever anyone says, I - and many others - believe that paying National Insurance for 30 odd bought the right to use the National Health Service (which I don't do) and receive the State Pension (which I most certainly expect to do).

Edited May 4, 2011 by MAJIC

[cardholder]

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

.... and you can achieve this overnight ?

Whatever anyone says, I - and many others - believe that paying National Insurance for 30 odd bought the right to use the National Health Service (which I don't do) and receive the State Pension (which I most certainly expect to do).

This is one for nick, R.....I`m just glad i`m on income leveling, the later they make the retirment date for me the longer i benifit...but very sad for others

......... and you have achieved a very good tax position. :jap:

[theoldgit]

To find out how much you can buy in, you have to write to the pension lot, or maybe the new online thingy might do the trick. Haven't tried it as I'm fully subscribed with 30 years' worth.

You cannot use that "new online thingy" if you live in Thailand, or indeed anywhere out of the UK, you have to either call them or post a form. I called them recently and the lady I dealt with was both efficient and friendly, I received my forecast through the post in a couple of weeks.

I talked through the possibility of deferring my pension date, my birthday is at the end of March so I thought I would put off drawing pension for a few weeks, get a small increase of my pension and get the new rate that kicks in in the new pension year. She informed me that I would get the small increase in my pension but at the old rate, the rate is fixed when you reach retirement age not when you draw it.

I will reply to their consultancy document pointing out that by living in Thailand I am actually saving them money suggesting that they honour the increases, as they do with my Civil Service Pension, but I doubt very much if the number crunchers will agree, I suspect they are more likely to work towards the new Dutch system - it's all about appeasing the electorate and I doubt if the electors will take to the streets in out cause.

[PattayaParent]

Beano - the retirement age is not 60 and 65. Women have already been increased and men get an increase soon. By 2020 it will be 66 or 67 for everyone.

Back paying for the pension was well worth it - but in the last couple of years the amount need to pay has doubled. And the number of years needed has reduced so the calculations need to be done carefully.

My complaint is I made voluntary contributions in the past getting up to 35 years and planned to make the last 5 years on retirement. Then they changed the rules to 30 years so I made 5 years of payments that I did not need to do.

PS - I also felt the poll tax was a good idea, maybe poorly implemented and used as an excuse to increase local taxes but much fairer than the old rates or even the current whatever it is called system.

You can claim back any overpayment on voluntary constributions.

[PattayaParent]

It's just a matter of sending them a cheque for the amount they say you owe.

I backpaid 13 years in 1 go

Maybe you were lucky.

I am led to believe the maximum you can back pay is 6 years. That's what it says in the literature and that's all they've offered that i can do.

You're right, I was lucky, I was just able to get in before a deadline of 5 April 2009 after which I would not have been able to backpay as many missed years.

[cardholder]

I talked through the possibility of deferring my pension date, my birthday is at the end of March so I thought I would put off drawing pension for a few weeks, get a small increase of my pension and get the new rate that kicks in in the new pension year. She informed me that I would get the small increase in my pension but at the old rate, the rate is fixed when you reach retirement age not when you draw it.

O.G. - are sure this correct ? I read it differently:-

More choice when deferring your State Pension

Now that people are living longer and healthier lives, it makes sense to make it easier to work flexibly after State Pension age.

Since 6 April 2005, if you put off claiming your State Pension, (whether you are working or not) you can choose one of the following options when you do claim.

Extra State Pension

If you put off claiming your State Pension for at least five weeks you can earn an increase to your State Pension. The increase will be one per cent for every five weeks you put off claiming.

Once you claim your State Pension, any extra State Pension you have built up will usually increase each year. For 2011 this will be in line with price inflation.

• Extra State Pension

Claiming a lump sum payment

If you put off claiming your State Pension continuously for at least 12 months, which must all have fallen after 5 April 2005, you can choose to receive a one-off lump sum payment and your State Pension paid at the normal rate.

• Claiming a lump sum payment

[fletchsmile]

They've spent so many years funding current pensions out of current NI contributions, instead of tucking money away that the problem will just get worse.

This is an interesting and complex topic that I have been trying to get my remaining brain cells around. At the moment, and I am open to persuasion, if the government "tucked away" money

1. it would increase the amount of taxes, or increase the deficit spending, as obviously the government is already running a massive deficit and has no extra money it can "tuck away"

2. It would therefore reduce the amount of money in the economy, sending the GDP down the tubes

3. Where on earth would the government "tuck away" the money? Government bonds? Hmm, government bonds are created to fund the deficit spending, so that would mean the national pension funds would be cycled around to fund the the deficits and then I get a headache trying to think about it could work. Or maybe funding public works or paying more public service jobsworthies? Oh gawd, not that.

The only system I can see is the current system, where current contributions (indeed all forms of taxation) get sucked into the Great Common Tax Pot and the national pensions are paid out through Great Government Expense Account, with the balancing act financed through bonds, which are then purchased by Merv the Magician, conjuring up great swathes of crispy electronic quids as buyer of last resort.

Or the national pension is dropped entirely, with a corresponding reduction in taxes, forcing the Great British Debtors to actually save and be responsible for their future. As the level of self-responsibility in the UK has dropped to almost zero (unlike Thailand where it is almost 100%) and everybody expects to suck on the UK State Nanny's Nipple, this simply ain't gonna work.

The problem as you highlight is "at the moment" or where we are now. The governments in the past should have been tucking the money away for many years, in years where there were surpluses or sales from privatisations back in the 80's etc. Instead they've been overspending for too long. Not unlike the local thirty baht in forty baht out mentality of many people here.

Compounded by people are living longer. The number of workers funding the retirees on a current basis continues to dwindle, while the number of people who are retired increases.

At the moment it's difficult to do much following so many years of mismanagement highlighted by the global financial crisis. At some point they need to start tucking away part of today's contributions for the same people in the future. Perhaps segregating the pots by year to start with.

There are plenty of successful sovereign wealth funds in the world. Look at Singapore for example. The government could even channel money into industries with temporary problems, or make strategic investments - other than banking of course Imagine say allocating part of their portfolio to invest in SMEs or as venture capital. In addition taking investments in solid blue chip British companies so at least the UK still owns something.

Essentially the governments and their overspending are effectively bankrupting the country , instead of saving for the future they are spending now and praying something will change to turn them around

[theoldgit]

O.G. - are sure this correct ? I read it differently:-

I talked it through with a young lady in Newcastle a couple of weeks ago , I think we are actually both right.

She explained, as you have pointed out, that if you defer collecting your pension then yes it increases.

But as I am living in Thailand it is frozen at the rate when I am elegible to collect, I can still defer and I will receive a percentage increase on the rate I would be paid at pension age. I reach pension age in the second half of March 2012, it was my intention to defer it for the minimum period, which I think is five weeks, I assumed that I would collect the rate that kicked in after April, but as I was advised I would be be paid the current rate of about £102 plus a small percentage increase for the deferment - does that make sense?

I am assuming that the information she gave me was correct.

Edited May 5, 2011 by theoldgit

[12DrinkMore]

This deferring your pension for a year is absolute bullshit.

http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensiondeferral/DG_179966

For every five weeks you put off claiming you can earn an increase to your State Pension of one per cent. This is equivalent to about 10.4 per cent extra for every full year you put off claiming. You can benefit by putting off claiming your State Pension for as little as five weeks.

By deferring your pension one year, ie collecting nothing, they will give you ten percent extra in subsequent years. On the face of it this sounds great. But what it means is that.

1. It will take you about 8 years to claw back that year you missed claiming. So if you retire at 66 and put it off to you are 67, then you will be 75 before that deferred year has been paid to you. And if you defer two years, then plan on waiting until you are 83 before the money has been paid to you.

2. Presumably if you are thinking about deferring it then you don't need the cash at the moment, so why not simply take it now and put it on deposit in YOUR bank account? Interest rates surely cannot continue at the current piss-poor level (note the Ayudaya bank will currently give you 2.7% annualised interest on a nine month deposit).

I simply cannot see any point in deferring collecting our pension for a single second. The bastards are relying on pensioners being stupid and financially incompetent, a term which should more fairly be applied to the UK government and banking industry.

[12DrinkMore]

The problem as you highlight is "at the moment" or where we are now. The governments in the past should have been tucking the money away for many years, in years where there were surpluses or sales from privatisations back in the 80's etc. Instead they've been overspending for too long. Not unlike the local thirty baht in forty baht out mentality of many people here.

Compounded by people are living longer. The number of workers funding the retirees on a current basis continues to dwindle, while the number of people who are retired increases.

At the moment it's difficult to do much following so many years of mismanagement highlighted by the global financial crisis. At some point they need to start tucking away part of today's contributions for the same people in the future. Perhaps segregating the pots by year to start with.

There are plenty of successful sovereign wealth funds in the world. Look at Singapore for example. The government could even channel money into industries with temporary problems, or make strategic investments - other than banking of course Imagine say allocating part of their portfolio to invest in SMEs or as venture capital. In addition taking investments in solid blue chip British companies so at least the UK still owns something.

Essentially the governments and their overspending are effectively bankrupting the country , instead of saving for the future they are spending now and praying something will change to turn them around

The government does not segregate any pots. It is all one big pot. Maybe it would make sense to try and separate out road taxes, NI contributions, death taxes, "pleasure" taxes (fags and booze, etc and try to match them against the corresponding expenditure. Won't happen though, too much transparency would only serve to highlight the gross inefficiencies of the humongous state apparatus, which is now responsible for over 50% of GDP.

The sovereign wealth funds generally originate from exported commodities, such as oil, or countries which have a trading surplus, as your example Singapore. The UK has long since burned it's gas and oil and is running a huge deficit.

The concept of the UK building up a Sovereign fund is impossible. The government is spending far more than the income it can tax from the inmates of the UK. To put any money aside for the future is impossible, as, as I mentioned before, either the deficit would have to increase, meaning that more bonds would have to be issued by Osborne, with the tax payer paying the interest to whoever buys up the bonds, or the tax revenues would have to be increased, further strangling any potential recovery by reducing the amount of post-tax income in the UK populations' pocket.

Yes, tiz a right 'ol mess.