Uk Pension Changes

[briley]

For those who are still paying voluntary NI contributions to get a UK state pension the changes promised on Thursday bring good news.

From 2010 all those with at least 30 years of contributions will get a full state pension. It is being touted as being 'to make things fairer for women' but it does apply to all, men and women. Current rules state men must have 44 years and women 39 years of contributions.

Also talk of a 'significant' increase in the pension before it is linked to earnings from 2012.

Disclaimer - all this is still only politicians promises so if you believe governments .........

[GuestHouse]

The government white paper has broad cross party support and all three parties have stated they will be proposing changes to the laws governing pensions in line with the White Paper within their manefestos.

The thing to be careful with is what constitutes payment and non payment. For example, it would be possible, and very likely that the 30 year rule is achieved by attaching non payment to claiming child care or carer's allowances.

This enables the government to say they are supporting carers while leaving workers still forced to pay.

The issue that TV members should be concerned with, and I might add writing to their MPs about, is the denial of pension increases from the date you leave the UK if you move to Thailand.

Get writing now.

[pschef]

My question is if you are not yet getting pension, then you back pay up to the 30 year level. Will you get full pension in lets say 7 years time? I am 58 and have only 24 years paid in. So in theory if I start to pay now for the next 7 years Im up to full pension???? Love to here your views

[briley]

PSchef - Assuming that the polititians keep their promise they your are OK - not retiring until after 2012.

24 years paid so you need (under the NEW rules) 6 more years. You can pay up to 6 years back, but if over 2 years late on the payment you pay the current years rate, not the rate for the year you owe, ie a bit more.

You can pay from now until you are 65.

You can also pay for 1996-2001 (aprox) up to 2009 at the rate for the year the liability arises due to a computer error in those years.

So you can easily pay up 30 years.

In addition if you are resident in the UK (or at least the DHS think you are) and you're not working (in the UK) you get free credits from the year you are 60 to the year you are 65, ie 5 years.

So you might be able to make up to 30 years with just 1 payment.

If the rules don't change then having 30 years means you will get 30/44 ths of the full pension.

[GuestHouse]

Pschef.

I don't think it works like that.

Firstly, the new regulations have not been ageed in Parliament nor has the law been changed yet. As I say above, I'll bet my bottom dollar that there is some catch to what constitutes a year you are exempt from paying. I'm betting it will be tied to claiming child care allowance or carer's allowance. The change is aimed at women, so I expect it to be tied to some measure of the things that hold women out of the job market.

There are also regulations with respect to how many back years you can pay, contact the Department of Work and Pensions and get a Pensions Forcast. They are extremely helpful and will tell you exactly how much you can pay and what benefit that will bring.

From my discussions with the DWP it would seem that under the current regulations you are only going to get the very basic state pension (a little over £25/week). The reason is, you are required to pay for 44 years, you can take 5 years off paying without detriment, but you loose pension for every year you do not pay between Year 6 and Year 11. If you haven't paid for more than 11 years you get the basic pension £25-ish.

Contact the Department of Work and Pensions, they can help you out.

[briley]

Guesthouse - I agree, nothing has been changed yet and between now and 2012 lots could change. I'm only talking about the promise, and the DHS website points out that changes are proposed but they do not take them into account as they only give a forcast based on the law as it is now. (Or words to that effect!)

I have read the full white paper and whilst it often refers to the changes to help women equality laws means that men must get the same rights. (Is pscheif male or female???) There is a reduction in HRA etc when looking after children as it will only be for children up to age 12 years old, currently it is until they are 18 if in full time enducation. Reducing all to 30 years contribution is partially compensated by the saving on the reduced number getting HRA.

Still a lot of water to go under the bridge before it is law.

But your calculation on pension due to Pscheif is an underestimate. With 24 years paid and ignoring the 5 years from 60-65 (only if resident in UK) pscheif will get 54% of a pension that is about £46 for a single person or £77 for a married person.

Anoyingly you can't get a pension forcast without a UK address - to register you have to have the password thingie sent to a UK address!

[albert dickinson]

Iagree with guesthouse.all of you people should be writing to your MPs,about expats frozen pensions.I came to live here over 10 years ago.My pension has been frozen from the time I left the UK.There are500,000 of us worldwide all in the same boat.Had we gone to live in the US the Philipines or Israel,our pensions would have been index linked.This same rule aplies to UKpublic servants retiring in any country in the world. Is this fair? Albert

[briley]

Albert can you clarify - I know the state pension is frozen at the rate whey you become non-resident but you infer that the civil service pension (and by extension teacher's pension) is also frozen.

From your experience is this true?

Incidentally it is not terribly difficult to get the DHS to believe you are UK resident .............................

[ThaiPauly]

This is a very interesting topic, thanks for posting it.

As I currently understand it from a thread about UK Pensions last year on this very forum.if you leave the UK you can pay 100 pounds a year and qualify for a full pension.

From what I have read here now it would seem that since I have made full contributions for 33 consecutive years without making any support claims at all I will qualify for a full pension when I am 65 . if this Bill goes through. I quit the UK 3 years ago.

Am I right or wrong?

TP

Cheers

Edited June 5, 2006 by ThaiPauly

[albert dickinson]

BRILEY .to answer your question.All MPs & public sector workers receive full UK pensions.'they are index linked' this aplies to any country they choose to retire to

PAULY.you spend all your working until you are 65 You have paid all your NI contributions during that period.If then you choose to live abroad tour pension will be frozen from the time you leave the UK.The only exceptions to this are countries they have reciprocal arrengements

Thre are ones i have mentioned in previous postings Albert

[GuestHouse]

ThaiPauly,

I think you have been missinformed.

With respect to Thailand, your state pension will be frozen and remain at the value it is from the day you leave the country. There is no mechanism to pay GBP100 to secure a full indexed linked pension.

With respect to 33 years contribution, there is no answer until the White Paper has been debated in parliament and the laws on pensions changed.

But do not hold your breath: As I say above, I fully expect the laws to change the regulations on what constitutes a year you need to pay and a year you need not. I expect that to be based on childcare or care of a sick/old relative.

Before stopping NI Payments you should contact the Department of Work and Pensions and get a pension forcast.

My view is that I shall continue to pay NI until I see black and white regulations that say I have paid enough to get my full pension.

Meanwhile I frequently write to my MP and the press to protest the feazing of overseas pensions.

[soap]

ThaiPauly,

I think you have been missinformed.

With respect to Thailand, your state pension will be frozen and remain at the value it is from the day you leave the country. There is no mechanism to pay GBP100 to secure a full indexed linked pension.

With respect to 33 years contribution, there is no answer until the White Paper has been debated in parliament and the laws on pensions changed.

But do not hold your breath: As I say above, I fully expect the laws to change the regulations on what constitutes a year you need to pay and a year you need not. I expect that to be based on childcare or care of a sick/old relative.

Before stopping NI Payments you should contact the Department of Work and Pensions and get a pension forcast.

My view is that I shall continue to pay NI until I see black and white regulations that say I have paid enough to get my full pension.

Meanwhile I frequently write to my MP and the press to protest the feazing of overseas pensions.

hello guest house

i would not pay them until i knew what time limit do i have before payment is due,

i also have paid 33 years contributions, now they say that i owe 325 pound from the1998-1999year

i just dont know if this is correct or not, but its like knocking your head against a brick wall trying to get a straight answer from them,but they have said that i have untill 5th april 2009 to pay without penalty,also they remind me that for the year 2006-2007 the amount due will be 392.60 but i have till the 5th april 2009 to pay without penalty and the final time limit is 5th april 2013.

so no way am i paying another penny till we see whats going on

[GuestHouse]

now they say that i owe 325 pound from the1998-1999year

i just dont know if this is correct or not, but its like knocking your head against a brick wall trying to get a straight answer from them

My experience has been that the DWP have been very helpful and provided comprehensive information. One thing they catogorically state is that unpaid NI is not a debt, so the good news is you don't owe anything.

While I accept it probably is financially sound to pay as late as possible, there are merits in paying when you can, we non of us know what the future brings. So I pay as I go on the basis that I might need to break payment later for reasons beyond my control.

I also take the view that the NI payments have a great rate of return, so I pay... quite happily.

Edited June 5, 2006 by GuestHouse

[briley]

Small correction to Albert?

AFAIK your pension is frozen from the date you become non-resident if you are recieving a pension.

If you become non-resident before you are retirement age (65 or whatever) then it is frozen at the rate due when you reach retirement age.

But I would point out again that it is reasonably easy to convince the DHS that you live in the UK with all the benefits that that entails.

(Incidentally I am not yet getting my UK state pension so you can't tell tales on me!)