Hi All a question for all the financial wizards out there.
I started my Uk State Pension last Dec and comparing notes with friends out here. I am getting £185.15 which is the number given on the UK gov website. Friends here seem to be getting quite a bit less £141.85 thé Basic State Pension.
After Googling it I have determined that it is due to their date of birth, but I cannot find any explanation for this. any ideas?
Secondly my wife was opted out of the state NI and she is having to pay extra years to get the full pension. We have been looking but cannot work out what opted out meant and what if any advantages that gave her. Again anyone have a simple explanation for this?
It is to do with your date/year of birth I think. I missed out qualifying last year and will start mine in Feb 23. The french pension you can take very early but not worth it unless you have enough trimestres so I am leaving that one for another year and will get nearly four times more than if I take it next Feb! Also your friends who are already getting their pension will not have contributed as many years as you most likely is the reason.
But maybe your friends weren’t eligible for the full basic state pension? After 2010 the tories also quietly increased number of qualifying years needed for a full pension and some people got a vary nasty surprise.
Unfortunately I cannot do that because the CAF are threatening me with ASPA if I continue to claim RSA and what I will be getting in pensions is greater that the RSA which I have lived with for the past 11years as an accident de vie.
I’m not sure that Labour hadn’t decreased the number of years previously and it is now still less than it originally was, will have to check. Yes it was originally 44 for men and 39 for women, it was reduced to 30 for both and then increased to 35 in 2016.
The (maximum) pension rate depends on your retirement age. Since retirement age has changed over recent years, the rate of pension is only loosely linked to date of birth.
It has always been the case that the rate an individual gets is related to the number of years s/he contributed.
Before 2016, you and your employer could pay a reduced rate of National Insurance contribution if your employer had its own pension scheme (eg civil servants, local government employees, staff at large companies like ICI). There was a two-tier pension rate to reflect that.
For people retiring after April 2016, the system was unified and only one pension rate has applied. That is currently at the figure you mention.
Which is sort of irrelevant. If you were told in 2010 that 30 years gave you a full pension, then if you had 30 years it was natural to stop contributing. But all those people coming up to retirement in that period were never told it had changed, so arrived at their retirement date with insufficient years. By when of course it was too late to top up.
The new state pension is £185.15 per week. However if your contributions were made before the new pension came into being it can be different. I claimed my pension this week, it is due in early 2023. All my contributions were made under the old state pension. During my working life there was a thing called the additional state pension, and also the 2nd state pension, the more you earned the more pension you got. In this situation they look at whether you would be better off under the old system or the new one, If you would have been better off under the old system then that is what you get. It’s called “the protected payment”. I for instance will, after 42 years of contributions will get £195.12 per week. Eventually this will work through the system until only those who have contributed through the new state pension will
remain and every one will get the same ie the equivalent of todays £185.15
But people don’t normally stop contributing when they reach that threshold, if they are still working they still contribute. And anyone retiring between 2010 and 2016 only needed 30 years contributions to get their pension. Anyone getting a pension after 2016 gets the higher rate presumably because of the extra qualifying years. I’m not making a judgment on the fairness of it just pointing out that the number of years required now is less than originally and considerably less in the case of men.
I was self-employed, so chose to take the exemption as I didn’t think I needed to carry on. And as a struggling self employed person every pound counted. And no I stopped working a while back, but when I finally get my state pension I won’t get the extra rate as I don’t have the years.
Anyone who had done 30 years before, I think, 5th April 2016, gets the full state pension, whenever they get their pension. So some people won’t get their pension till they are 66 or 67. But if they had done 30 years fully in the state system (not contracted out years) then whenever they did get old enough to get a pension, it would be at full rate if they had done 30 years by 2016.
Apparently something was brought in whereby what people would get under new state pension rules would be compared with what they would have got under the old state pension rules and if old rules (30 years by 2016) would have got better then an extra payment is made (often pennies).
I wish they hadn’t messed around with it so much as to pay for it, I & many other people suddenly got told at practically zero notice we would not qualify at the pension date we’d always been told and would not get this for another 5 years, this later somehow became 6 years. Even if we would fulfill the criteria of number of years already, we’d have to keep contributing in the extra years added on before it would be paid, as well.
I don’t know all the rules but I’ve got to wait until 66 years 8 months to get mine and should get the basic new pension. OH gets his at 66 and should get about 30 pounds more but the forecast site always points out that the rates aren’t guaranteed!