UK pensions

[JockPieandBeans]

Indeed. I quite agree.

I also believe that by the time I reach State Pension age, the rules will have changed so much that it will be impossible for me to claim because I will probably already be dead.

If I had not changed paths, I would have been 1 of those that paid in for 50 years. Not for me. I know a bad deal when I see one. 30 years was enough for me.

Those that have been and continue to be shafted have my sympathy.

[jpinx]

In general we all agree that the system is far from perfect. It's a folly to expect it to be a "return on the investment of your contributions" since your contributions were never invested in anything other than governments spending in the year you paid. What you get back is what the government decides it can pay you all these years later. There is a total disconnect between your contributions and your pension. It's a purely political football.

[Rajab Al Zarahni]

In general we all agree that the system is far from perfect. It's a folly to expect it to be a "return on the investment of your contributions" since your contributions were never invested in anything other than governments spending in the year you paid. What you get back is what the government decides it can pay you all these years later. There is a total disconnect between your contributions and your pension. It's a purely political football.

I recognize this as an explanation of sorts and possibly the one the government would offer but it doesn't amount to an acceptable explanation.

[JB300]

In a "Social Pot" type scheme there are always going to be inequalities in what people pay in Vs what they get out, looking at the number of years contributions is one factor there's also the total amount contributed.

E.g Fred may have paid in "X" for 40 years vs Joe's "2X" for 20, should they get the same pension? What if Joe had paid his "2X" for 30 years (& so contributed 50% more than Fred), is it fair that he gets less pension?

The problem in going down this route is that you end up with a pension like Singapore where everybody has their own pot based on their contributions, fabulous for an above average earning person, but obviously not so for people on lower/no wage & you see "Aunties & Uncles" working into their 70/80s because they don't have a liveable Pension (though part of this is a generation thing with the trend away from the traditional Chinese filial type support over the past 30 or so years... Talk about getting screwed over on your "Pension"!!!)

At the end of the day, we can have it one of 2 ways... "Social Pot" where we have to accept the fact that it's not always going to be "Fair" or "Individual Pot" where even more people are going to be struggling into their old age.

No excuse for compounding the inequality by Freezing some peoples pensions & not others though...

[jpinx]

Searching for "acceptability" or "equality" in any system of financial governance is a fool's errand. Looking at pension contributions as being "my pension" is just daft. The Government could abolish pensions tomorrow and there's not a thing you could do about it - other than vote them out at the next election. Look at Greece where pensions are simply daft - on the high side. No attempt to equate to contributions. Similarly - look at the "government servants" pensions in UK over the years. All of these bear no relation to contributions made but were political tools to gain votes.

I have told my kids to look after themselves and rely on nothing from any government in the future. Grandkids? -- I dread to think what they will be faced with......

[Craig krup]

I thought that getting more by deferring was ending, but it seems not. Deferring looks like a good idea if you're (ahem) abroad. Even under the new scheme you get 1% extra for every nine weeks you defer, which is attractive.

...................and if you live abroad, in a country where the pension increases are normally frozen, you also get the benefit of receiving these increases for the duration of the deferment period.

Crai Krup. I have been deferring my pension in the hope that what you say is correct i.e. I will get the deferral uplift when I take my pension even though I live in Thailand. Was this also your assumption or do you know it to be the case?

I think the Moneybox guy Paul Lewis said that, but I'd check.

[Craig krup]

The pension nightmare continues if you were a teacher, cop, nurse, other public sector worker or member of a large company's defined pension scheme and were (therefore) "contracted out" of SERPS. You won't get the new high (£155 a week) minimum unless you make a load of voluntary part 3 contributions. My colleague (contracted out) asked for a forecast and was told £113 a week, with 38 years of NI contributions!!!

Steve Webb, former pensions minister, talks about this at the 18 minute point below. You have to wait until 2016 to do something about it (by which point they'll have probably changed the rules again).

http://www.bbc.co.uk/programmes/b062dh75

[Craig krup]

Incidentally, as people have noted above the "minimum income guarantee" means that you can't be left destitute. The desperate bloke I met in Udon needed to scrape together £250 and get his arse momentarily back into the UK. No matter how many years they've frozen your pension provided your boracic you'll be fine.

[if by "fine" you mean fed, housed and frozen! It's been a hell of a summer].

[evadgib]

Indeed. I quite agree.

I also believe that by the time I reach State Pension age, the rules will have changed so much that it will be impossible for me to claim because I will probably already be dead.

If I had not changed paths, I would have been 1 of those that paid in for 50 years. Not for me. I know a bad deal when I see one. 30 years was enough for me.

Those that have been and continue to be shafted have my sympathy.

Carrot: 30 years of NI cont instead of 44

Stick: The age at which pensions commence slipped in 3 month increments based on

dob from 65 years to 67.

Since then the carrot has somewhat withered, while the stick's true ID will be revealed next April. My guess is we're in for some o'this...

[Rajab Al Zarahni]

I thought that getting more by deferring was ending, but it seems not. Deferring looks like a good idea if you're (ahem) abroad. Even under the new scheme you get 1% extra for every nine weeks you defer, which is attractive.

...................and if you live abroad, in a country where the pension increases are normally frozen, you also get the benefit of receiving these increases for the duration of the deferment period.

Crai Krup. I have been deferring my pension in the hope that what you say is correct i.e. I will get the deferral uplift when I take my pension even though I live in Thailand. Was this also your assumption or do you know it to be the case?

I think the Moneybox guy Paul Lewis said that, but I'd check.

Its at Item 39 of the document entitled Deferring your State Pension of October 2014, on the GOV.UK website:

Q) Does living outside the UK affect State Pension deferral?

A) If you normally live outside the UK and you have not already claimed your State Pension, you can put off claiming when you reach State Pension age. When you finally do claim, we will work out how much pension you may get based on the amount you would have got if you had been claiming it at the time. This will include any yearly increases to the State Pension, even if you are living in a country where these increases don’t normally apply. Once you have started to get your State Pension, you will only get yearly increases to your State Pension and your extra State Pension if you are living in certain countries.

[JockPieandBeans]

Indeed. I quite agree.

I also believe that by the time I reach State Pension age, the rules will have changed so much that it will be impossible for me to claim because I will probably already be dead.

If I had not changed paths, I would have been 1 of those that paid in for 50 years. Not for me. I know a bad deal when I see one. 30 years was enough for me.

Those that have been and continue to be shafted have my sympathy.

Carrot: 30 years of NI cont instead of 44

Stick: The age at which pensions commence slipped in 3 month increments based on

dob from 65 years to 67.

Since then the carrot has somewhat withered, while the stick's true ID will be revealed next April. My guess is we're in for some o'this...

IMO you are 100% correct.

I previously stated on this thread that I seriously doubted that the state pension would exist by the time that I reach the official retirement age, which will probably be around 85

That in itself does not pose any problems for me, whatever I received in a state pension was only ever going to be nothing more than a bonus. However it will devastate people and families who were never fortunate enough to pay into a private pension.

However, it does raise serious questions for all those that were required by law to pay contributions, on the basis that it would contribute to a pension when you reached retirement age ( at that time 65 )

Talking about raising questions. This has just popped into my head.

Does anyone know what AVC's are and what they do ? I opted to pay these AVC's and the only thing I can recall is that once you opted in you could not opt out. I think I paid these for about 15 years.

Cheers

[sandyf]

I have been helping a friend claim a pension from the Republic of Ireland. She had worked there for several employers in the 60's, before the age of computers. Most of these employers, contrary to a legal requirement, either didn't make Social Insurance contributions on behalf of their employees or the Social Insurance agency has no record of them. The relevant law at that time did not require employers to provide written contracts of employment and few employers even issued letters of appointment, making it almost impossible for a claimant to even prove the fact of their employment I strongly suspect that many people have been swindled out of their pension entitlements through poor administration and record keeping.

Income tax records would show all employers, wages paid, and SS contributions.

She did pay income tax?

Thanks for your helpful suggestion. Unfortunately she no longer has any pay statements ( assuming in the first instance that they were ever issued) that would evidence any deductions. I suspect that most of her employment fell below the personal allowance threshold for income tax.

NI and income tax were separate deductions, NI as a percentage of income once above the threshold and and income tax came from a book of tables.

NI would be paid or credited even if no income tax was due.

[Rajab Al Zarahni]

jockpieandbeans: AVC's

Here is an easy reading and reliable link:

http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/workplace-pension-schemes/defined-contribution-avcs-and-fsavcs

[JetsetBkk]

jockpieandbeans: AVC's

Here is an easy reading and reliable link:

http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/workplace-pension-schemes/defined-contribution-avcs-and-fsavcs

I maximised my FSAVC contributions for the last 8 years of my working life. It was the best money making scheme available - pay in 6,000 GBP and the government gives you another 4,000 GBP (for 40% tax payers).

Pity you could only contribute up to 15% per year (IIRC) of your salary

[JockPieandBeans]

jockpieandbeans: AVC's

Here is an easy reading and reliable link:

http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/workplace-pension-schemes/defined-contribution-avcs-and-fsavcs

Thanks Rajab

[JockPieandBeans]

jockpieandbeans: AVC's

Here is an easy reading and reliable link:

http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/workplace-pension-schemes/defined-contribution-avcs-and-fsavcs

I maximised my FSAVC contributions for the last 8 years of my working life. It was the best money making scheme available - pay in 6,000 GBP and the government gives you another 4,000 GBP (for 40% tax payers).

Pity you could only contribute up to 15% per year (IIRC) of your salary

Sounds good Jetset.

I now have some reading to do

[nong38]

There is an article in the Express today, under the FINANCE banner about the possible merging of tax and NI and who it affects and how things might work out, have a look, it rightly notes that pensioners will be the losers and how that might be addressed an talks of a special pension ISA to overcome this and also talk of a residency based calculator for the new pension coming next year.

As with all these new fangled ideas why is it I think I will always be the loser and probably will be joined by many others as well? Merging and mew ways sounds a bit like smoke and mirrors and you can see where the entitlement will be replaced by benefit and then later to become at the discretion of the HMG. It is to be hoped that this will be reviewed time and time again until it is shelved, hoped, just keep your eyes peeled and ear to the ground.

[Ricardo]

<snips for brevity>

As with all these new fangled ideas why is it I think I will always be the loser and probably will be joined by many others as well?

"why"

I suspect that would be the Voice-of-Experience, based on decades of seeing politicians break clear-commitments, and move the goalposts in the government's favour and against ours !

[evadgib]

New State Pension: if you've been contracted-out of additional State Pension

Winter Fuel Payment: policies and statements

Your new State Pension explained

State Pension fact sheets

I'm expecting some interesting debate to arise from the latter pair:)

I included the Winter Fuel link as I personally see no difference between the Cairngorms in Jan and Haad Yai in April when it comes to entitled recipients regulating their body temperature whether they're hot or cold.

[JockPieandBeans]

From your 1st link evadgib

New State Pension: if you've been contracted-out of additional State Pension

This suggests that they have records of every contribution that people have made. For the life of me I cannot see this being true. Some fudge being applied here methinks.

5. In determining a person’s new State Pension their National Insurance record will be calculated under the old and new scheme rules when the new State Pension starts in April 2016. The higher amount becomes a person’s Starting Amount.

If it is indeed the case that they do have records for everyone. As they are so keen to cut expats out of everything.

Give us / me the option of getting my contributions returned to me. No pension for me, no tax for you and we can both finally, go our separate ways.

[Rajab Al Zarahni]

From your 1st link evadgib

New State Pension: if you've been contracted-out of additional State Pension

This suggests that they have records of every contribution that people have made. For the life of me I cannot see this being true. Some fudge being applied here methinks.

5. In determining a person’s new State Pension their National Insurance record will be calculated under the old and new scheme rules when the new State Pension starts in April 2016. The higher amount becomes a person’s Starting Amount.

If it is indeed the case that they do have records for everyone. As they are so keen to cut expats out of everything.

Give us / me the option of getting my contributions returned to me. No pension for me, no tax for you and we can both finally, go our separate ways.

They may have the records but the reliability of those records may be questionable. For people who are currently retiring their record will include a period before the age of computers when people bought insurance stamps and stuck them on cards. The problem is that to challenge them you would need a better record than they have and in the majority of cases this won't apply.

[Jip99]

Apologies if this social networking piece has been posted before:-

THE ONLY THING WRONG WITH THE GOVERNMENT'S CALCULATION OF AVAILABLE PENSION IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED THEIR OLD AGE PENSION WHERE DID THAT MONEY GO?

Remember, not only did you and I contribute to your pension, but your employer did, too. It totalled 15% of your income before taxes. If you averaged as little as £15,000 over your working life, that comes close to £220,500.

Read that again….and did you see where the Government

paid in one single penny?

We are talking about the money you and your employer put into a Government bank to insure that you and I would have a

retirement pension from the money we put in, not the

Government. Now they are calling the money WE put in an

entitlement when we reach the age to take it back. If

you calculate the future investment value of £2,500 per year

(yours & your employer's contributions) at a simple 5%

interest (less than what the govt. pays on the money that it

borrows), after 49 years of working you'd have amassed

£892,919.98.

If you took out only 3% per year, you'd receive £26,787.60 per

year and it would last better than 30 years (until you are

95 if you retire at age 65) and that's with no interest paid on

that final amount on deposit! If you bought an annuity

and it paid 4% per year, you'd have a lifetime income of

£1976.40 per month.

THE FOLKS IN LONDON HAVE PULLED OFF A BIGGER ROBBERY THAN THE GREAT TRAIN ROBBERS EVER DID.

Entitlement!!?? My foot!! I paid cash for my pension Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or hand-out!!

Remember MP's benefits? --- free healthcare, outrageous

retirement packages, 67 days of paid holidays plus three weeks holidays, unlimited paid sick days. £15 per day for coffee/tea and biscuits allowance. A travel bureau within HoParliament to arrange first class travel. Even when they are not re-elected they get their full salary graded down over 3 years, just like a football team who get relegated! If you add all the "add-ons" they get, most will earn around £300,000 a year! Now that's welfare, and

they have the nerve to call my O A P retirement payments entitlements?

We're "broke" and the government can't help our own OAP’s ex service personnel, orphans or homeless. Yet in the past few years we have provided aid to Haiti, Chile, Turkey, Pakistan,

etc., etc., etc.Literally, BILLIONS of Pounds !!! And they can't help their own citizens!

Our retired seniors living on a 'fixed OAP receive no additional

aid nor do they get any financial breaks, while our government and religious organisations pour hundreds of billions of £££ and tons of food into foreign countries!

They call OAP an entitlement even though most of us have been

paying for it all our working lives and now, when it's time

for us to collect, the government is running out of

money. Who did the government borrow from it

in the first place? It was supposed to be in a locked

box, not part of the general fund.

[fang37]

A little bitter?

Some of us (I am not a Brit) get zilch as we relocated overseas.

[Rajab Al Zarahni]

A little bitter?

Some of us (I am not a Brit) get zilch as we relocated overseas.

Did you not have any record of employment in the UK?

[fang37]

No record of employment in UK.

[JockPieandBeans]

They may have the records but the reliability of those records may be questionable. For people who are currently retiring their record will include a period before the age of computers when people bought insurance stamps and stuck them on cards. The problem is that to challenge them you would need a better record than they have and in the majority of cases this won't apply.

Rajab.

I hear what you are saying. The Government cannot question my employment record. They paid me.

[sandyf]

From your 1st link evadgib

New State Pension: if you've been contracted-out of additional State Pension

This suggests that they have records of every contribution that people have made. For the life of me I cannot see this being true. Some fudge being applied here methinks.

5. In determining a person’s new State Pension their National Insurance record will be calculated under the old and new scheme rules when the new State Pension starts in April 2016. The higher amount becomes a person’s Starting Amount.

If it is indeed the case that they do have records for everyone. As they are so keen to cut expats out of everything.

Give us / me the option of getting my contributions returned to me. No pension for me, no tax for you and we can both finally, go our separate ways.

They may have the records but the reliability of those records may be questionable. For people who are currently retiring their record will include a period before the age of computers when people bought insurance stamps and stuck them on cards. The problem is that to challenge them you would need a better record than they have and in the majority of cases this won't apply.

I think that passed some time ago. I am nearly 68 and started work in 1963 and NI was by deduction. It was a long time after that before computers kicked in, I was still doing payroll manually in the eighties. It is not the lack of records that is likely to be an issue but the accuracy of records, which was down to the employer rather than the government. Even if you had kept all your payslips I doubt if you could work it out. I do not think that it has ever been published how the Class 1 contribution was split between the basic pension and the additional pension. Even when they allowed contracting out there were no definitive figures on the split. Probably deliberately kept vague.

There may still have been stamps for Class 2 and the reduced rate in the early 60s, but those contributions are not included in pension calculations.

[JetsetBkk]

Apologies if this social networking piece has been posted before:-

THE ONLY THING WRONG WITH THE GOVERNMENT'S CALCULATION OF AVAILABLE PENSION IS THAT THEY FORGOT TO FIGURE IN THE PEOPLE WHO DIED BEFORE THEY EVER COLLECTED THEIR OLD AGE PENSION WHERE DID THAT MONEY GO?

etc, etc, etc

<snip>

Pounds, dollars, UK, US, who cares?...

http://www.snopes.com/politics/taxes/benefit.asp

[Rajab Al Zarahni]

No record of employment in UK.

I'm intrigued. Given that to be the case do you still feel that the UK government had some kind of duty to pay you a pension ?

[Expattaff1308]

The International Consortium of British Pensioners (ICBP)

Supporter MP Yasmin Qureshi has tabled new Early Day Motion 363 on frozen pensions.

Although parliament is now in recess for summer, please write to your MP urging them to sign this.

http://www.parliament.uk/edm/2015-16/363