State Pension Changes

I have to agree with Jack (again!) - my mum did the right thing and took out a pension with her workplace, and even consulted a financial advisor whilst doing so. Come the time she needed to retire (ill health), she again sought advice from a financial advisor who told her it was better to reinvest a large proportion of her fund (on the basis that she retired early) to see her right in later years.

Suffice to say, that was just before the crash in 2007 or thereabouts, and when that crash came the value of her fund was decimated - I'm not sure of the exact figures, but it ended up close enough to nil not to matter a hell of a lot.

The best of it is - the financial advisor, and the pension funds were all with the company that my mum worked for - Standard Life. So, if someone working for a pension company can get royally shafted, what chance do the rest of us have?

From my point of view, I don't have a pension, and doubt I ever will have; I opted out of SERPS years ago (with Standard Life) - I have absolutely no idea what the status of that is now, nor what will happen to it with regard to the proposals.

More recently (within the last decade ) I had the opportunity to join a workplace pension scheme - however, I only got one chance which was on my fifth anniversary of joining the company, and at that time our daughter was newborn and I simply could not afford the £100 a week that they required (still couldn't afford it now, truth be told).

Besides anything else, even if I were to start lashing hundreds of pounds into a pension now, and assuming that the funds came out roughly even, I would end up with a private pension that would go almost directly to a private landlord in rent payments; whereas, if I don't bother and I get to my old age with only the basic state pension, I will get housing benefit, and have my state pension on top.

Either way I am going to be financially stuffed, so I may as well use my money myself now rather than letting it be used to buy some so called financial expert their next Bentley.

 

I guess that I too am one of the lucky ones who's company pensions are enough to make me "comfortable". I have been dragged out of retirement for the next year or two but to be honest what I have to pay in taxes makes me wonder why I allowed myself to be taken out of the field But I've paid off the Mortgage and have only a few regular bills so I can't complain. However, I do think the State Pension is really inadequate for anyone to survive on.

 

It is harsh, Clueless, but true. Which is why the basic pension will never be one that leaves the recipient feeling happy with. We have to kick up a stink about it so that instead of Landlords receiving vast amounts of money for huge rents charged to Councils for those on benefits [and I'm not attacking those on benefits but the Landlords for charging such high rates], in, say, the London and other high rental areas. We seem to be giving huge amounts of money away in areas where it should be controlled and restricted.

 

Same for me pete, it looks like the extra we paid for graduated penion/SERPS/S2P is being 'lost'. Also I was opted out of NI whilst in a company defined benefit scheme, it looks like I will have to pay the difference in NI now to make up for that too. I can see my losing both ways.

This keeps changing. Only 4 years ago they lowered the threshold from 40 years NI to 30. This caught out Mrs JWK, she had paid extra NI contributions to make up her shortfall to get to 40. Then they suddenly lowered it without warning, so we had a fight with them trying to get back her voluntary additional contributions, which we lost. Well now I suppose she will be OK again, although they have upped her retirement age to 66 in the meantime to get her back. I will retire a year before her even though I am a year older, that doesn't make any sense nor is it fair. My sister-in-law is only a few years older than Mrs JWK and she has retired on full state pension at age 60, good for her but not fair again.

What a total farce, you just don't know what to do from one year to the next.

 

We have staggered from change to change and with every change people have commented that it wasn't fair to this person or that person, JWK. Every change will leave me, you and others saying that every time. None of the changes are meant to be fair just a way of spending less money and keeping more for the Government.

 

By "keeping for the Government" I meant that the money "saved" is in fact lost in the morass of bean counting/mind deadening/total confusion of the theoretical Coffers of the Government system where nothing can be really traced or followed.

 

Jack will correct me if I'm wrong but the required number of years of 'pension credits' used to be 44. They've messed this around in recent years and made it more confusing.

Now, I'm going back to the end of the last century with all this. If you were out of work and 'signed on' you would automatically get your pension credits. If you decided to retire early you could still get the credits if you 'signed on' or if you didn't 'sign on' but were over 60 (they didn't want you on the 'unemployment' list). But if you were self-employed this last rule didn't apply. According to their rules, if you were self-employed you weren't entitled to the pension credits over the age of 60!

I started to look into this for one of my customers who was told he wasn't entitled to it and, with a lot of difficulty, obtained a copy of the full rules. The person at the DHSS (in those days) was completely correct in what he said - but I decided there was another interpretation.

I wrote a letter to the DHSS to say that he was no longer self-employed (quite correct as he had retired) and demanded his pension credits. I told them that they could check with the Inland Revenue that he had told them he was no longer self-employed (I'd written to them as well) and they found that they couldn't weasel out of it.

They have probably altered the rules now to get round it.