Flat Rate Pension £144 P.w.

[chaptazbru]

If this does come into force in 2015/16, does this mean that if a pensioner receives more than this because of length of time paying in during working life, it will drop DOWN to £144 p.w. anyway ?

[chaptazbru]

Anybody?

I'm going now, but will check in later - thanks in advance.

[whistonian]

No I don't think it affects any graduated payments you receive.

[chelle7272]

No you keep your entitlement
Explained quite well here

http://www.telegraph.co.uk/finance/personalfinance/pensions/9802093/Flat-rate-pensions-the-changes-explained.html

[Buenchico]

The changes aren't planned to come in 'until 2017 at the earliest'. Further, only people who attain pensionable age after that date will be affected by the new rules. Existing pensioners will see no changes.

See here for how the system will work:
http://www.ageuk.org.uk/money-matters/pensions/what-the-new-state-pension-reforms-mean-for-you/
and then (importantly) click the 'Who wins and loses' link, at the foot of the page, for confirmation that the changes won't affect existing pensions.

Chris

[overthetop]

I wonder how they will calculate the Basic State Pension element for those already in receipt of their pension (and in receipt of additional payments). I've read the two links above, but I'm still not clear.

[buildersmate]

I think it is pretty clear.

It only impacts whose who reach state retirement age later than April 2017 (at the earliest - could be set a little later). All those reaching that age before the date will receive the old amount plus any SERPS, and S2P that they may have accrued.

If one reaches state retirement age after the infamous date, one gets the new amount - £144pw in today's money. If one would have been entitled to more than this amount because of additional SERPS or/and S2P elements, one still gets the enhanced amount - the point is no-one gets less than £144pw.

Those of course who lose out are those with a little bit of SERPS who now find themselves getting the same amount as those couldn't be arrised to save earlier (and end up with Mr/Ms Thrifty).

The moral of the story? - never, ever trust any Government to stick to what it said when it comes to pensions.

Me? - I just make sure I'm not putting any more (through NI contributions) into Government coffers prior to me reaching the state retirement age - as I've already got my minimum 35 necessary years, thank you very much. I can only urge others to do likewise, where they can.

[Buenchico]

>>>as I've already got my minimum 35 necessary years

35? It's only 30, Buildersmate!
https://www.gov.uk/voluntary-national-insurance-contributions/why-pay-voluntary-contributions

[craft1948]

I'm already a pensioner but am not 65 until August so a) I won't receive the enhanced tax code previously given to over 65's and b) I have no hope of achieving the same level of pension that new pensioners will in 2016.
The Tories can bugger off at the next election............

[factor-fiction]

The only thing I can add to Buildersmate's comprehensive answer is that I would expand the second sentence to say:

All those reaching that age before the date will receive the old amount plus any SERPS, and S2P that they may have accrued.... together with any pension credit entitlement

[chelle7272]

//>>>as I've already got my minimum 35 necessary years

35? It's only 30, Buildersmate! //

According to the link I posted it is increasing to 35.

[factor-fiction]

craft: " I have no hope of achieving the same level of pension that new pensioners will in 2016. " If that's the case I understand there will be an entitlement to pension credit, unless you have another source of income or savings above the threshold, but I agree that if you do have other income you'll lose out compared to those retiring later.

[craft1948]

I do have a private pension so will miss out, and that's after 38 years contributions..............

[chaptazbru]

Thank you all very much for your answers, particulalry the links. I was asking on behalf of my dear old Dad and an aunty, both of whom were concerned. Much appreciated.

[coccinelle]

My example if anyone can enlight me: I only worked in the UK 2 1/2 years but am still eligible for a state pension. Not much I must admit. No way, am I going to get £144 per week! am I??????

[Kathyan]

So basically there'll be a two tier pension system then?

[chaptazbru]

I can't help you coccinelle and kathyann. I only wanted an answer to the question I asked, but I think the links supplied answer all the questions.

[craft1948]

Correct Kathyann...........

[Kathyan]

Well that's not fair!

[factor-fiction]

It is unfair in that one person can be receiving more or less than another simply because they have a different date of birth but I suppose that's the price we have to pay for making the costs more affordable as life expectancy increases and trying to at least bring fairness between male and female retirement ages and making sure that no-one currently in receipt of a pension has their money cut.

There are so many changes coming into play that can be considered unfair that it's to be hoped they all more or less cancel each other out. So, for example, I'll benefit from the new flat rate state pension but I'll have to wait until I'm approaching 70 before I can start to claim, whereas a woman/man who retired a few years ago at age 60 or 65 got a pension much earlier than I will but may need to rely on pension credit claims to supplement their lower state pension.

I'm sure the details will all change again before I reach retirement age (70+) so for many the best bet is to focus on maximising private/works pensions through AVCs, or saving in ISAs etc, where possible to give an income in retirement and so we don't have to rely so much on an unpredictable state pension.

[craft1948]

factor I retired when I was 57 but never touched my private pension, I just lived off my savings for over 2 years. I was told by someone from the DHSS that I was silly not to claim benefits even though I wasn't looking for a job.
Having never ever claimed benefits and paying NI for 38 years I am now made to feel like a second-class citizen.