State pension shake-up: the not-so-golden years?

you are certainly not the only one — see my post.

To answer your comment regarding the date of payment of your state pension. The ‘Pay Day’ for payment of state pension is determined by the last two numerical digits of your National Insurance Number. 00-19 (Monday) 20-39 (Tuesday) 40-59 (Wednesday) 60-79 (Thursday) and 80-99 (Friday).

But why in these days of computer systems do they even have to bother robbing 6 out of 7 pensioners of up to 6 days of their first pension payment? Surely these days they could do it more equitably or are they still on quill pens and ledgers?

Just don’t vote for Cameron next time

Not wishing to get into a political debate here Eileen, the principle of simplifying the pension system so that people know exactly what they are getting decades in advance and it doesn’t depend on qualifying years and myriad little other bits and pieces has got to be right. As I said earlier I got my actual pension notification letter just the other day and it’s gobbldygook and trying to understand all the little add on figures is mind numbing.
However I’d like to understand why the £144 is so much more than the standard amount current pensioners are getting and why they are going to be left on smaller existing amounts when the 2017 rates come into force. That’s not been explained at all and seems unfair.
As an aside I’d also like to understand why I lose 5 days of my initial pension payment when another person born on the same day gets payment from their 65th birthday just because their NI number is a few digits different. It’s only £75 or so but it seems like legalised mugging.

Agree with you,so unfair but what do you expect from this government.Just don’t vote for him

If under amount it is topped up by pension credit so someone on£114 and someone on £144 will still end up with same amount i get roughly £160 a week at present with pension credit.worked most of my life so 90% of my pension i earnt small pension credif.even if only 50p pension credit it automaticaly entitles you to loads more help.
The only difference is what your pension is if you work you still have this but lose pension credit and it is included in your taxable income.
Forgot to add get housing and council tax benefit as well so dont worry.
What i find stupid is could have paid the 60p a week married persons ins instead paid £1000,s in Ni but still end up with same amount only difference i get to keep it if work but then taxed on it.

Thank you Joyce, that’s really helpful.

I’m confused – I have been told that as I paid a married woman’s stamp I’ll never get a full pension even though I have deferred it for 5 years. I thought that from October 2014 you could top up you contributions?? if not, does that mean even though I am now 65 and want to claim my pension I can’t do anything about it? It seems so unfair that I’ve worked all my life and at the time I was told that paying the married woman’s stamp would make no difference I miss out on 10 years pension – even though I paid something for those years??? If someone has been on benefits all their lives I have been told they are entitled to a full state pension, whereas women like me are not!

Not quite: my digits are 24 and my payday is a Friday.

From what I can see existing pensioners carry on as before, even after the 2017 change. Surely that means a whole heap of bureaucracy to keep the old system going when it would be better to put all on the flat rate and forget about the complexity of previous systems?

John, I found the following which may be helpful.
“The term married couples’ allowance is something of a misnomer. A wife is entitled to a state pension on the same basis as her husband provided she has made the necessary national insurance (NI) contributions and has reached state pension age. Where a wife has a shortfall in her NI record, or no record at all, she can claim a state pension based on her husband contributions, of approximately 60% of his entitlement. This applies whether they are separated or not. Under the present rules the husband must have reached his state pension age and have claimed his state pension for this to happen. But from the 6 April 2010 it will be possible for a wife to claim a pension in this way, once her husband has reached the necessary age, regardless of whether or not her husband has claimed his pension.”
“A parent who takes time out of work to look after children will qualify for National Insurance credits so they will still be entitled to the full single tier pension. But they must claim or have claimed child benefit to qualify for the credit, even if they no longer receive it because their partner earns £60,000 or more.”
“It had been expected that the women’s state pension age would rise to 65 by 2020. It will now move to 65 by 2018 and then be hiked to 66 (same as men) by 2020.”

This may mean if your wife qualifies for a pension after 2017 she could get a full pension in her own right.

You say that a female state pension date is being moved to 65 by 2018, I will be 60 27/12/2013 but can can not get my state pesion till 2019 am I mistaken, but I have had this in writing I will be 65 and 2 months..

I don’t think anything changes as far as index linking is concerned as a result of introducing a standardised State Pension, so you’re pension should carry on just as before.

See the first post, that’s what I posted about and nobody seems to have explained why the 2017 State Pension will be so much more than the current one and why those on the current one aren’t going to have theirs increased. So I’ll be 25% worse off than if I happened to reach State Pension age in 5 years time.

Oh and the explanation as to why my Pension was payable from 11th Jan and not my 65th birthday on 6th Jan. Well it seems the government chose to spread the days from which they pay pensions, which possibly seems sensible. However the Pensions Service say that the day you get it paid depends upon the last 3 digits of your NI number. So it’s really like a lottery with the numbers allocated 40 years ago when you started work. Some people get their pension from the day of their 65th birthday and others on the following day etc, right through to some people being paid from 6 days later. Now given that peoples birthdays are probably spread fairly well throughout the calendar I would’ve thought relying on paying all from their birthday would ensure a fair spread anyway.
The thing is there’s no explanation of this in the paperwork, so 6 out of 7 people will be confused by it and will probably phone to find out why. So the Pensions Service have to have enough staff to handle all those calls when the system could easily be made simpler and fairer to avoid the issue completely and even if it wasn’t changed an explanation in the paperwork would reduce the potential for queries enormously.

This does appear to be the case if you qualify just for the basic state pension. If you have not contributed to S2P then you may have benefits from an employers pension scheme. However, you are no worse off than before this scheme – it just means some are better off I think.

malcolm r

thanks

if i become a pensioner the day before the change and my next door neighbour becomes one the day after the change – he/she will get some £25 more than me – for nothing .

i will feel a lot worse off and very hard done by.

this anomaly will affect a VERY large number of people .

why is there no press comment – a D notice perhaps ?

what is the reasoning/logic behind it – has the pensions minister explaied?

As I recall, providing you have enough years of contributions and you’re over 50 you won’t get any more State Pension by buying missing years. You would just be wasting your money.

However that’s under the ‘old’ rules and with these new 2017 proposals things may be about to change. It’s probably best to check it out by asking for a forecast of your State Pension. I believe that’s requestable online from the Pensions Service.

BTW the £144 is todays money, so by 2017 it’ll have been increased by inflation and by the time you get it in 2022 it’ll have increased further. And of course intervening Governments could have fiddled with it even more in the interim too.

Thanks Streamdrive Nandy, but its not quite the answer I need.

I have enough years to get a full pension even under the new 35 year rule. I don’t therefore need to by any added years.

My main question is whether I’ll get the full £144 (or whatever its value is by then) or it will be reduced because my NI contributions have been at the lower contracted out rate.

If a lower rate what is this rate likely to be (at current levels)?

Will the new system allow me to pay a top up so i can get the higher rate?

I fully agree with you Sophie Dog. Lets hope all oap’s will not vote for a party that is so so unfair.I will have worked for over 35 years before 2017 and retire in 2016 and I will be getting the lower old pension rate.How can this be Fair?

i cant imagine that would be allowed.

however the whole concept of this cliff changeover is a nonsense .

we must all make our voices heard to get it changed.

i’m struggling to get my head around the logic of this argument.

so you say someone who retires in changeoverdate minus one day isnt losing anything .

another – having identical circumstances – who retires on changeoverdate plus one day is some £1300 indexed linked better off for life – for what ??.

i for one do not accept unfairness in any shape or form.

for the many pensioners – myself included – with full contribution records and not qualifed for pension credit , being born more than a day too soon means you get £1300 a year less – for life.

that is not fair or just .

it is astonishing that this blatant nonsense has not been explained and not raised any press comment.

i for one will not be just rolling over and accepting this change as ” thats the way the cookie crumbles”

Not pretending to be expert in this – just passing on what I’ve seen. But I assume in 2016 with 30 years NI you qualify for the full standard pension (and presumably any S2P if you are not contracted out). The 35 years I believe applies to the new pension 2017 on; i think you can purchase additional NI years that are needed and that it is cost effective.

Thanks Malcolm. Having had a quick look through the information available, I think you are right.

I think they’re trying to get away from a lot of highly bureaucratic ‘add-ons’ like Pension Credit’ and stuff so that administering the system becomes less confusing, less costly and more transparent. Presumably, but it’s not been explained, the larger amount sort of ‘spreads’ the add-ons across all State Pensioners from 2017. That’s all very well but it probably means that those that would’ve got the add-ons will receive less than pre 2017 pensioners and those pre 2017 that don’t get add-ons will get less than their younger brethren in exactly the same situation. The trouble is that it’s a helluva lot less at £1300 a year.
I guess that bringing all pre 2017 pensioners up the post 2017 amount would blow the whole thing out of the water financially and making the standard post 2017 pension the same as currently would bring a huge outcry from the people who get Pension Credit and other add-ons at moment.
Maybe moving everybody to somewhere between £117 and £144 a week might be the answer.

“Maybe moving everybody to somewhere between £117 and £144 a week might be the answer.”

PRECISELY — thats what has to be done – and it cant be beyond the wit of the admin people to achieve it.

The maximum state pension is £107.45 a week, but Pension Credit ensures that no single pensioner will get less than £142.70 a week total income.
No one can I believe opt out of paying the full National insurance contribution under the new scheme, whereas now you pay less NI if you a contributor to a private pension scheme.

malcolm

not clear on this.

do you mean single as in unmarried ??

my brother is single and gets £107 – he doesnt get pension credit.

i am married and also get £107 – i dont get pension credit.

we both paid full contributions and have no other pensions.

malcolm

my point was i dont see how single/married comes into it.

i have savings which preclude pensions credit.

you said ” but Pension Credit ensures that no single pensioner will get less than £142.70 ”

i dont understand that.

malcolm

thanks

i do actually know that i am not eligible for any pension credit .

your statement ” but Pension Credit ensures that no single pensioner will get less than £142.70 ”
should be qualified with ” assuming they are entitled to maximum pension credit”.

so i and many others like me will continue to get £107 for life while new pensioners after changedate will get £144 for life – on a like for like basis ignoring inflation.

i wont actually get less but those retiring after changedate will get a great deal more for life – for no reason.

do you see that as fair and just? and why does it have to be like that?

i am asking because it sounds to me – could be wrong – that you have some inside knowldege on this.

many thanks again

malcolm

thanks

but again private income/ savings is not relevant –

the fortunate retiree after changedate will still get £144 even if he/she has their own income or savings of millions .

the same person before gets £107.

Paul Clark, don’t panic – the Daily Telegraph says the following:
“Will those retiring after 2017 receive their Serps or S2P pension benefits, or is the Government going to whittle them down over time?
If you have built up an entitlement to these additional pensions you will still receive it in full. However, those who remain in the workplace after 2017 won’t earn any further benefit from the top-up schemes after this date. This means that many higher earners are likely to end up with a smaller state pension overall as a result of the changes.”
You won’t lose out.