[size=85:f60wr0nj]Sourse Confused.com 28 Jan, 2013

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The government has finally announced details of its plans to reform the state pension system. But who will lose and who will gain from it?

The coalition says that from 2017, everyone who retires will receive a flat-rate pension worth £144 a week in today’s money.

The new, simpler set-up signals the end of the means-tested pension credit, which is currently available to those on low incomes.

And it also means that the state second pension (S2P – previously known as Serps), which allows higher earners to accrue extra pension, is being phased out.

The flat-rate pension means that those approaching retirement will have a much clearer picture of how much money they will get from the state.

This is in stark contrast to the current, hideously complicated system.
Qualifying for the new pension

Although the new pension has been described as universal, this is not exactly the case.

You will only get the full £144 a week (this figure will be increased in line with inflation every year) if you have managed to make at least 35 years’ national insurance (NI) contributions.

At present, the requirement is just 30 years.

Under the new system, those who have between 10 and 34 years’ NI will receive a proportionate amount of state pension.

Those with fewer than 10 years will get nothing.
Good news for carers &
self-employed

At the moment, the only way to accrue a year’s NI contributions for state pension purposes is to work.

But this is changing. From 2017, people who spend time out of the workforce looking after children or other relatives will also be credited with NI.

And under the current system, self-employed workers cannot build up extra pension entitlement through S2P.

But the reforms mean that this group will be eligible for the full weekly payment when it is introduced.
Who will miss out?

The £144-a-week new pension is clearly much more generous than the current rate of just over £107 a week.

But the bad news for anyone who has already reached state retirement, or who will do so before 6 April 2017, is that they are stuck with the present system.

They will continue to be able to claim pension credit if necessary, and they will retain any current basic and S2P pension entitlement.

So none of this group will be worse off, but it will be no surprise if they feel some envy towards those who qualify for the new system.
When will I retire?

The state pension ages for men and women are changing at the moment.

Women’s pension age was 60 until 2010, but over the course of this decade it is being raised to 66.

Men’s pension age, which is currently 65, is also being increased – between 2018 and 2020 – to 66.

If you’re unsure when you’re going to retire, check this government website.

The government is planning a further increase, to 67, in 2028.

After that, rises in the state pension age will be linked to increases in longevity in the UK population
Are these changes good or bad?

In terms of simplifying the system, the changes have been broadly welcomed.

Some higher earners may end up worse off than they otherwise might have been in future because of the scrapping of S2P.

But this appears to be a price ministers are happy to pay to see the end of means-testing.

The problem with the means-testing of pension benefits is that it can act as a deterrent to saving.

Under the current system, for some people who are within a few years of retirement, it can be a better idea to spend now rather than save for their old age.

This is because any pension they build up might simply result in them getting less pension credit.

Now that these changes have been announced, however, the message is clear: if you are retiring after April 2017, you will not be penalised in this way for saving.

With annuity rates reaching new lows recently, this is an ideal time for the government to stress the importance of saving for old age.

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The Government are making a big song and dance of their new £144 pension in 2017, but if you work it out that is less than 3% at a compound rate per year. Thanks Cameron for pulling the wool over everybody's eyes yet again, never trust a politician, their pensions are far in excess of this amount!!!

The government of the day (70s) encouraged people to join surps, pay more into and get a better pension. :Great:the government of today has said you cannot have it now ( not yet retired ) you will get the same as everyone else. are you a loser no i think you are a victim of crime. Robin hood has changed sides.

I think its safe to say that unless your in Dave's club you will be a loser, I'm afraid I'm not in his club so I'll have to make my own arrangements because I'm sure that by the time I'm ready to retire there will be no pension at all.

oddball wrote:

[size=85:e8bvq8qk]Sourse Confused.com 28 Jan, 2013

[You must be registered and logged in to see this link.] ... ter28Jan13
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The problem with the means-testing of pension benefits is that it can act as a deterrent to saving.

Under the current system, for some people who are within a few years of retirement, it can be a better idea to spend now rather than save for their old age.

This is because any pension they build up might simply result in them getting less pension credit.

Now that these changes have been announced, however, the message is clear: if you are retiring after April 2017, you will not be penalised in this way for saving.

With annuity rates reaching new lows recently, this is an ideal time for the government to stress the importance of saving for old age.

Read more: [You must be registered and logged in to see this link.] ... z2JLUjWEfu

But that is of course providing the government do not do a U turn and decide to re-introduce the means test, then all those people who have saved and probably declared their savings will not be happy bunnies.

Obviously not declaring ones savings when asked is a punishable offence, but I can well see a lot of people prepared to take that chance, even if it means paying tax at source on their investment/s, when at present they could declare the interest as none tax payers and not pay the tax.

I have never known a Government in my life change so much in so little a time in power. They have done several U turns but everything they do seems to affect ordinary hardworking persons. These will have to work longer, pay more and probably get less in their retirement. The Government appear to be setting the rich against the poor, the private sector against the public sector and the north against the south. They won't be satisfied until everyone is at everyone else's throat. I believe their aim is to divide and rule, perhaps they have some ulterior motive for their actions but it's completely beyond my comprehension because all they appear to be doing is undermining the morale of this once fine country and to think Cameron on election to Prime Minister was seeking a happiness survey. The ordinary man in the street is paying for the financial crisis time and time again. As they have put your pension back by one year that costs you £8060 and that’s not including everything else they have put up or are going to do away with. This latest scam is to streamline and save money, but the money IS OURS we have paid in the NI so it`s not yours to spend elsewhere. The other reason why they have shifted the retirement age around is to catch as many people in their net to exclude them from the new system and the £155. I doubt that this will be the end of it as if they fail to make inroads on the deficit they will be back to fleece us again and then there will be no money left and no time left for pensioners to enjoy it.

The United Kingdom are still the 4th worst of all the European countries on how much they pay in pensions on a pro rota basis. Shameful disgrace from the 5th richest country in the world. As far as individuals are concerned it depends whether you are one of the higher echelons or one of the minions in our "
equal"
society.

I am in the 1952 - 1953 age range - I have already lost 3.5 years of my state pension even although I have paid contributions for 39 years. I have just started working again as the implications of my pension loss are really sinking in. My mother's modest inheritance remains untouched - it is exactly the amount I have had stolen from me from the governments.The disparity in pensions between friends and families due to these changes are causing friction as a younger sibling or friend or even spouse looks on enviously at those slightly older comfortably off enjoying leisurely retirement not for a year or two but for ever. These new changes will lose me even more money and my wife who is younger will lose her additional pension. Why have we worked all of our lives ? Why are women who choose not to work, therefore leading to additional family welfare benefits being required, now to be handed a more generous pension than me ?