UK State Pension

[Mike PooleParticipant @mikepoole82104]

The new state pension is only paid in full to about half of claimants. We are in the changeover phase where a large percentage of people will have been contracted out for some of their career which will compromise their new state pension entitlement. After making voluntary contributions for the last five years, the best I can get out of the state pension is £11 short of the headline figure of £185.15. My National insurance record initially looks rosey with 50 full years but a substantial spell of contracted out years compromised getting the full amount.

Mike

[Tony Pratt 1Participant @tonypratt1]

Posted by DMB on 26/09/2022 19:14:37:

Us oldies are being "robbed blind" – over £43/wk (£185.15 – £141.85) just for having wrong DOB. I thought that ageism was against the law?? And a further £159 for a TV licence. Half of Europe doesn't have TV licences. One of the worst old age pensions in Europe. Lieing bastards promised the first WW conscripts a return to a land of milk n honey. Reality: mass unemployment and no dole.

I would be interested to see what happens if you stop paying your TV licence. Both my daughters haven't got licences as they don't watch live TV but all streaming services, not sure if that is legal?

Tony

Edited By Tony Pratt 1 on 27/09/2022 09:36:04

[Mike PooleParticipant @mikepoole82104]

You only need a TV licence to watch live broadcasts and the BBC iPlayer, streamed content from Netflix, Amazon etc. requires no licence. You need to be careful as the streaming services are including some live content. Youngsters watch very little live broadcast TV and I am sure they will be reluctant to buy a licence which they don’t need to anyway. I have no interest in TV but enjoy surfing the internet which has much that interests me whereas TV is unwatchable for me.

Mike

[SillyOldDufferModerator @sillyoldduffer]

Contracting out seemed a good idea at the time because having money now is more useful than having money in the future.

Unfortunately allowing people more choice over when and how their money is spent doesn't guarantee that it will be spent wisely. (Beer and fags) Or that everyone understood contracting out meant their pension would be smaller, which matters if you only have a state pension and live longer after retirement than most: UK male deaths: average 82 years, mode 87 years. (In comparison, the average US Citizen dies 5 years earlier than the average Brit. Discuss!)

The state pension is a safety-net rather than a generous reward for services rendered. In the not so distant past old folk with no money ended up in the Workhouse or died in a ditch.

Our pension contributions weren't put aside for us in the future. They were used at the time to pay the less than generous state pension we allotted to our grandparents. In the same way our state pensions are paid by current taxpayers, young people, and the amount we get depends on the current performance of the economy, not how much we think we deserve. Private pensions usually depend on the current performance of the economy too, but tend not to be supported by how much the government of the day is prepared to borrow to keep our votes.

Doesn't help that politicians like to kick unpopular reforms down the road and hide problems in the long grass in hope they will go away. In the UK politicians also have a bad habit of adding new laws without tidying up the old ones, and of not funding them properly. The result is complexity, mysterious gaps, and lack of clarity. Pensions are a case in point – the UK state system is decades of muddled patching rather than a clean design. Even simple changes are inordinately expensive and error prone, and it's difficult for anyone to understand exactly what the rules are.

Who is responsible for the mess? Ironically, it happened on our watch. As voters we failed to take a deep interest and didn't hold politicians to account for persistent poor delivery. Much easier for the average Joe to naively blame capitalism, the unions or the liberal elite than to understand how systems work, what needs to be done to fix them, how much it will cost, and who will do the work.

Dave

[Mike PooleParticipant @mikepoole82104]

Contracting out was only of the SERPS or second state pension element of National Insurance. We were still entitled to the full value of the basic state pension and the private pension you needed to be in to contract out should be at least as good as the second state pension. This was all replaced in 2016 by the New State Pension and contracting out was no longer possible. The New State Pension will be at least as good as the basic state pension which is £141.85 per week. The widely trumpeted £185.15 has a big but accompanying it at the moment as many people will not have the required NI history to collect it. I doubt that many people would be only on the basic as they probably have extra payment from the various top up schemes. Pensions should be hammered into the young as the earlier you start the more comfortable will be your retirement. Of course when you are young you never have enough money as a mortgage and family don’t leave much left for pension payments.

Mike

[Anonymous]

Posted by Mike Poole on 27/09/2022 10:39:20:

You only need a TV licence to watch live broadcasts and the BBC iPlayer, streamed content from Netflix, Amazon etc. requires no licence. You need to be careful as the streaming services are including some live content. Youngsters watch very little live broadcast TV and I am sure they will be reluctant to buy a licence which they don’t need to anyway. I have no interest in TV but enjoy surfing the internet which has much that interests me whereas TV is unwatchable for me.

Quite a topic drift

[Mike PooleParticipant @mikepoole82104]

It certainly is but it often happens, Andrew started the thread in the tearoom which just like a real tearoom can soon go off the original query. It happens in the other headings as well and I think I have been guilty of partaking in some of those. My last post on this thread was back on topic though.

Mike

[Swarf, Mostly!Participant @swarfmostly]

I have an observation and a query:

The State Pension is paid evey four weeks. If your designated payday is three (four? ) weeks after the date of the annual pension increase, it seems to me that you get your first weeks of the year at the old rate and miss up to three (four? ) weeks of the new rate.

My question is: is the State Pension paid in advance or in arrears? In other words, if I fall off my twig the day after payday, does my executor have to pay that payment back?

Best regards,

Swarf, Mostly!

[Stuart Smith 5Participant @stuartsmith5]

I become eligible for the state pension in November. The letter from DWP says I will get the first payment for 1 week and 1 days pension paid 7 days after my birthday. Then second payment 4 weeks after this ( for 4 weeks pension) and every 4 weeks after that.

So it is paid in arrears, but for some reason they have made it complicated!

I don’t know what happens at pension increase time.

Stuart

Edited By Stuart Smith 5 on 27/09/2022 19:56:55

[Mike PooleParticipant @mikepoole82104]

They publish the date that the April increase commences so I assume the payment will reflect that. We are paid in arrears so provided the executors get their skates on with notification to the DWP then no repayment will be necessary. When my mother passed away no payment was due either way. They will require a refund if payments are made after the date of death. The Tell Us Once service will notify many state departments and council departments which does help quite a bit. I was pleasantly surprised that many utilities and financial organisations have a bereavement department that in my experience were pleasant to deal with and avoid the long telephone queue for other business. I had to laugh that the banks release quite substantial funds with the minimum of fuss but the council make the refund of less than £200 council tax a more difficult exercise.

Mike

[EmgeeParticipant @emgee]

Posted by Mike Poole on 27/09/2022 23:23:21:

They will require a refund if payments are made after the date of death.

Mike

If you are paid 4 weekly Direct to a Bank account in arrears then the above is not true unless payment is for any period after death.

Emgee

[Anonymous]

Posted by Mike Poole on 27/09/2022 17:41:20:

…just like a real tearoom can soon go off the original query.

Provided the original question doesn't get lost I am happy with thread drift. You never know where it will lead. So it can be interesting and informative.

Andrew

[Michael GilliganParticipant @michaelgilligan61133]

Posted by Emgee on 28/09/2022 00:04:10:

Posted by Mike Poole on 27/09/2022 23:23:21:

They will require a refund if payments are made after the date of death.

Mike

If you are paid 4 weekly Direct to a Bank account in arrears then the above is not true unless payment is for any period after death.

Emgee

.

In which instance, they simply send a letter asking for a refund,

MichaelG.

[Peter G. ShawParticipant @peterg-shaw75338]

Ron Laden,

This might help your understanding of what you receive as I also get more than the Basic State Pension (BSP).

I must admit I don't really understand it either, and although I managed to check it for the first year, thereafter, well, I just gave up, doffed the cap and said "Thankyou". Anyway, after that bit of sarcasm…

I have a works pension. It's a bit of a mixup because early years were a Civil Service pension, whilst later years were not, yet we got an allownace for the CS pension. Anyway, there is (are?) various funny things going on such as Guaranteed Minimum Pension, Contracted Out Deduction, and a part of the works pension which is paid by the State. That part is itself subject to wildly varying increments, such as pension earned prior to a particular date has any increase paid by the State; between two set dates are paid partially by the State and partially by the employer, or rather the Pension Scheme; and any increments after the second date are paid according to yet another set of rules.

The end result is that I receive my works pension from the Pension Scheme, whilst I also receive a State Pension made up of the Basic State Pension plus this extra bit. In my case this amounts to about £172 p.w. My wife, who as stated earlier, receives the Basic State Pension plus a few pennies amounting to about £142 p.w. so in effect, I receive £30 p.w more than she does due to this convoluted system.

To other people,

My State Pension is untaxed, well it's not, but you know what I mean. In other words I receive it gross. It is, though, added to my works pension and is thus taxed that way.

One other point. Throughout my fully employed time, I paid a little bit towards a Widows & Orphans pension, even though I wasn't married in the early years. As of now, when I pop my clogs, my wife will receive 50% of my current works pension together with an increase in her Basic State Pension, about a 27.5% increase as far as I can tell. I believe this is due to the complicated arrangements associated with my Works Pension,

It's a most complicated subject, and I feel just like an ex-colleague, who, when I asked him how he checked the figures were correct, smiled sadly and said "I've no idea, I just receive it and say thankyou!"

Cheers,

Peter G. Shaw

[Nicholas FarrParticipant @nicholasfarr14254]

Hi, I can't remember all the details about the pension that I get from my old employment, but when I first joined the company, they didn't have a scheme in place, but I was paying graduated pension, however this was stopped in the first half of 1970, and I think you could get all contributions paid into a pension scheme. In 1974 the company set up a Superannuation scheme, which I think qualified for receiving graduated contributions, this scheme was superseded by a final salary scheme in 1994 and the Superannuation scheme was frozen. After many years, we had the option of consolidating the Superannuation scheme into our final salary scheme, and we had a consultation on site with someone who explained all the ins and outs of the process, along with it might or might not be financially beneficial to us as individuals, but they could not give us any advice whatsoever about consolidating it or not (not even a hint came forward) but I did consolidate mine anyway as I believed that I stood more to gain than I would lose and the amounts were comparatively small. When I was able to draw my pension from my old employer, I was given some options as to how I would receive it, but there were only two that I needed to consider, and they were to take a low lump sum and get a high monthly pension or take the maximum lump sum and a smaller monthly pension, or something in between was an offshoot of those two options. I had a good study of the figures and with the sums involved at the time, concluded that I would start losing out be taking the maximum lump sum, but that loss wouldn't start until I reached the age of 82, and my old employment pension is index linked to inflation, so I took the maximum lump sum and invested it in a long-term bank scheme, which has already probably pushed losing out into my 90's, but of course I have to reach 82 to start with, so to me taking the lump sum was my best bet. I only pay tax on my pension from my old employment, while no tax is deducted from my state pension, and I have no other income to worry about.

Regards Nick.

Edited By Nicholas Farr on 28/09/2022 12:08:11

[Mike PooleParticipant @mikepoole82104]

Posted by Emgee on 28/09/2022 00:04:10:

Posted by Mike Poole on 27/09/2022 23:23:21:

They will require a refund if payments are made after the date of death.

Mike

If you are paid 4 weekly Direct to a Bank account in arrears then the above is not true unless payment is for any period after death.

Emgee

I will rewrite that line so that it says what I meant.

They will require a refund if payments are made for a period after the date of death.

Mike

[Anonymous]

Update: Rather to my surprise I got a letter from the DWP today telling me what my state pension would be, every four weeks. It is exactly four times the forecast value on the HMRC website. As a result I am now 100% confident that the COPS estimate on the HMRC website does not affect the forecast pension value, thus neatly answering my original question.

Once I have sorted out a disagreement with my accountant over my capital gains liability I will be paying the NI due for the tax year that ended in April 2022. That will give me an extra £5.29p a week on the state pension.

Thank you to those who have taken the trouble to reply to my original posting. It's been interesting to read, if pensions can be said to be interesting, important, yes, but interesting?

Andrew

[vic francisParticipant @vicfrancis]

An interesting topic Andrew; lets hope you do actually receive your State Pension!, with the increasing likelihood of A Nuclear exchange between east and west I am not so confident about the Future sadly.

Err can I have it as a lump sum now?

vic

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