Pension grumble

luckygirl You say "No private pension scheme would be allowed to get away with taking your subs under false pretences." I'm not sure that private pension providers are any more honourable or reliable.

When the senior partner of the small niche firm of solicitors I worked for sold the firm to a very large city firm, we were advised to freeze our pensions from the old firm and join the new firm's pension scheme. Unfortunately, that company happened to be Equitable Life which - because of a guarantee that it offered to some of its customers and on which it tried to renege - was taken to Court by a policyholders group, lost, and, in effect, went bust as a result. This had a disastrous effect on pension holders' final fund amount. Fortunately, I had only been in the scheme about 3 years and although I lost half the value, it wasn't the end of the world. For people like my friend who had her own business, and had been paying into the pension scheme for many years, it was not far off disastrous.

I've started a new thread for the petition, in News and Politics. I'm 60 with 41 years of NI payments and won't now get my State Pension (or bus pass!) till I'm 66, so this is a cause dear to my heart.

I retired a couple of years ago and am coming up to 64. Even though I only worked part time [although some days I had to do 12 hours if they were short staffed] I honestly don't think I could have carried on or; if I had done my life would have consisted of nothing but working and sleeping.

I've signed, my pension age rose from 63.5 to 64.5 in 2011.

WASPI have organised a petition to highlight the issue. The more supporters signing, the better. Come on, you Gransnetters, let's do this!

petition.parliament.uk/petitions/110776

Agree charleygirl and anya and that's why I made the point that superannuation contributions were 'hefty' by which I meant a significant proportion of a not very high salary!
I retired early at 58.5 and for 18 months (until dwp pension kicked in at 60) lived on my sppa salary, topped up by drawing on my lump sum. That way I was able to care for mum who died days after I turned 60.
I've just realised that I may be eligible to claim an income tax rebate - have paid 20% on small savings income when I perhaps should have been taxed at 10% and will also investigate my position in April 2016.
Something others may want to look at!

There has always been a strange blip in the system re Guaranteed Minimum Pension (if you have a small private pension).
If you had a small private pension they could apply GMP. The private pension forecast for years can be reduced just before you start receiving it because of Guaranteed Minimum Pension. Apparently you are supposed to get extra with your State Pension and the firm can pay a lower pension than promised originally.

It is all a minefield.

Thank you Maggiemaybe I must have missed that

I will read the article (there are other explanations but some of them leave my head feeling a bit fuzzy).

It seems that there is a real blip in the system and people are falling between the old and new systems and losing out.

joolz is correct, rosequartz. I moaned about mentioned it too, in the post directly below hers. Under the current system, opted out years count towards the basic state pension. Under the new one, they won't.

There will be no additional state pension once the new system clicks in next year. This article explains it all, at great length (apologies!). A lot of people just don't realise that they are going to get much less than the "universal" pension promises.

www.thisismoney.co.uk/money/pensions/article-2634215/Why-millions-WONT-155-new-state-pension-theyre-expecting.html

joolz54
This is because I was contracted out for most of my working life

Are you sure you have been given the correct information?
If you are contracted out surely you should still receive the full state pension (but not the *additional state pension*) if you have sufficient years?

Or do you mean that you paid the married women's stamp, which entitled people to a smaller pension based on their husband's contributions?

I worked for the AHA for a few years when I was first married - they brought round forms for us to sign, explaining that we only need pay the married women's stamp as we would get 'a full pension based on your husband's contributions' which was, of course, erroneous.

Luckily, after a gap when the children were small, I went back and paid a full stamp but was not 'contracted in' and do not receive an additional state pension.

I may be wrong, but it is worth checking.

I could have retired at 55 but I could not afford to do so. I also retired when I was 59 after 39 years work and like you Anya returned to work on a consultant basis until I broke my ankle aged 65 and had to give up work then.

Unless things have changed public sector workers don't have to wait until whatever is the current retirement age to take their work pension. Under certain circumstances you can take early retirement. I retired at 59 because I calculated I had enough superannuated payments in the kitty, as it were, and because my employers, the LEA, were under pressure to downsize.

I then returned to work for them as a consultant on a freelance basis.

I agree mcem but to receive a decent pension all teachers and public health sector workers had abysmal salaries for many years.

michael may I just point out that teachers not only pay NI at the going rates like everyone else but also make fairly hefty contributions into separate superannuation schemes. Effectively they pay for and receive 2 different pensions.
The same applies to other public sector workers.

Anyone not yet retired would be well advised to get a pension forecast and ask if it would be higher if they bought any extra years as this is usually a very good thing to do and for a relatively small amount can buy you a bigger pension.

Not all of us who got our pensions at 60 are better off. We needed 39 years of contributions rather than the 30 for some since or 35 depending when you retire. I didn't get full cover for all the time I was at home bringing up children and I also paid Married Women's Contribution as, at the time, we were told we didn't need to pay a full 'stamp' because we would get a pension on our husband's contribution. This was in the days when we were our husband's property for income tax.

I agree that the government allowed people to believe that, come what may, everyone in the new scheme would get approx. £150 which is the amount the current pensioners receive + the amount of guaranteed pension credit joolz1954.

When it come to contracted out, first they will check how many years and in which period you were contracted out. The calculation is made using a figure known as the guaranteed minimum pension which is the minimum amount a pension had to guarantee if the money was paid to them instead of the state pension.

Then they will deduct an amount from the new Single Tier Pension. However, if you are about to retire and I believe, while these opted out payments exist and are taken into account, the government has said that this calculation, which gives you your "guaranteed minimum pension" which will be used for the whole of your retirement, will not make you worse off than you would have been under the old system so there is, in fact, a floor of the current state pension.

As you will have paid the opted out amounts into a pension which had the cover of the "guaranteed minimum pension" you will not be worse off. You will not be better off either which you would have been had you received the new pension and the additional amounts from the pension the opted out amount is paid into.

It does not look as though the new government changes will effect those who currently receive a state pension and pension credit.
The damaging will done for those say under 60 at the moment.
I did look at the Gov. Pension Calculator even for the blokes the retirement age will be 66 or higher as time goes on, and both sexes will be equal as well, this also applies to the bus pass and other perks should changes not be made in between.
But I feel like tillymint states depending on a women's work experience , and those that have worked in the public sector maybe gain a better pension such as a teacher, and for someone else who as only done cleaning work to bring up a family , or even some single women fall into the same trap.
With the age related tax allowance being abolished as not helped all though they claim increasing the tax threshold releases many from paying tax.
It will be interesting to hear next months budget to see how the welfare cuts will or will not help those who are retired, or in the 50`s age groups.
Mick

Hello, not exactly new to gransnet, have posted only once when it was first created but read threads almost every day.
I'm a January 54 woman and have joined the WASPI campaign on Twitter and Facebook. There are 149 MPs so far on our side and legal people are looking into our case, so there is hope!
Maggiemaybe gave the link further up the thread, please take a look. Some women have nothing to live on and are suffering very badly. All support gratefully received.

But no, I'm not holding my breath either!

No, janea, we won't all get £150, as joolz above highlights and I said earlier. A lot of people think they will, but really need to get pension forecasts, or could be in for a nasty shock. Apparently fewer than half the population will get the full amount of the "universal" pension.

Like joolz, I more than qualify for a full pension under the old rules - £116 - with 41 years of NI contributions (you only need 30 for a full pension). But under the new rules, any contracted out years just don't count because we paid NI at a slightly lower rate during that time (this doesn't apply under the old scheme, so how were we to know it would now?). Under the new system, my forecast is for just over £90. So no, there is no compensation for missing out on 6 years of pension. And the fact that I've paid contributions for 6 years more than the 35 required matters not one jot. Some people will have paid in for much longer than me and will get even less.

But when you say Decisions have been made and there is no going back, joolz, there is a faint glimmer of hope in that the French and German governments have partially back-tracked on their pension age reforms.

Hi-just thought id share my thoughts for this thread. I was born in may 1954 so my pension age is now 66.5.
I first learnt that my pension age would change some years ago. My new retirement age was to be 62. I wasn't happy as I had hoped to retire at 60 as many of my peers were. My understanding of the situation was that this was an EU directive to begin to harmonise retirement age across Europe and between men and women. I lived with this for some time and became resigned to it. Then came another body blow. The new coalition government decided to escalate the harmonisation. My new retirement age became 66.5. I estimated I had lost somewhere in the region of £37 thousand pounds in lost pension payments. Not only that, the various perks of being in receipt of a state pension are also denied-a prime example is the free bus pass, winter fuel allowance etc
Again, I resigned myself to waiting even longer. But then came the really cruel blow. After asking for a forecast, and having far more qualifying years than actually needed, I found that my basic state pension was not the promised £150 or so. In fact, it would be just under £60 based on the new rules. Because of the transitional arrangements, I was quoted two amounts. The one based on the new rules and one based on the old. On the old rules, I will get £119. This is because I was contracted out for most of my working life. I had no choice about being contracted out. When I first started work , I worked for what was the DHSS. Then I went into nursing. There was no discussion on contracting out and what this may mean. This was what happened.
Had I been paying into a private scheme and so badly informed and treated, I could make a complaint. But there is no one to complain to when it's the state pension. My own MP voted for the changes, many mp's just shrug their shoulders and many younger people are unsympathetic as they have their own issues. But I do feel that the particular cohort of women I am part of have been harshly treated. The changes were to quick, poorly advertised and unduly harsh. And how many (not just women) understand how being contracted out could affect your state pension? How many people are blindly expecting to get the flat rate? I do believe that when the ones about to retire on the flat rate pension realise that they may not get the flat rate there will be an uproar.
Again, I have become resigned to what it to be. I can't change it. No one asked me what I thought about it. Public opinion is not sympathetic-I'm just another moaning woman whinging about being treated equally with a man for a change. The government are definitely not sympathetic. Decisions have been made and there no going back.
so hey, I'm done. just wanted to get that off my chest.

Yes, that would have been a good idea janea

We think we are paying in for our pensions into a pension pot, but it is paid out of present taxation.
And apparently many of us are living longer.

I think what would have been fairer would have been to give people a choice - work for longer and get a higher pension, or retire early and take a lower pension. It could have been incentivised so people chose to work for longer. The women affected had no choice.

This was in fact the case under the existing system - we had the choice of taking the State Pension at the pension age, or deferring it and getting a bigger pension in return.

I am not really defending this because I think women have been treated particularly badly; not because the age did not have to go up but because they knew this was going to happen for such a long time and could have smoothed it out a lot more but ...

If you had paid into a private pension - unless you were in a defined benefit one - things would work in much the same way. As the actuaries saw the life expectation going up the pension offered in one year would go down from previous years offers even though the pot of money was the same. Because the state pension needs to pay enough for those whose only pension it is to live on (just) they did not have the choice of reducing it so they started it later making the savings from the years not paid to pay out as lives go on for longer. Not brilliant but no different to private pensions other than it protects a minimum amount.

I'm another who expected my pension at 60 then it was raised to 64 and now it is at almost 66. It makes me sick to think of all the thousands I am missing out on. My husband retired two years ago but as I am only 61, I still have to wait another 4+ years. We had thought we would retire together.