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New rate of pension announced

Discussion in 'Retirement' started by Lara mfl 05, Nov 21, 2015.

  1. Lara mfl 05

    Lara mfl 05 Star commenter

    Just seen this http://news.sky.com/story/1591492/george-osborne-set-to-increase-state-pension.
    It seems yet again women in my school year will be hit.

    For others like me who do not qualify for the full state pension because we haven't built up enough years - part-time or on supply not counting in those years, it won't affect me, but for many others of you who have managed to build up your 35 years to qualify, this looks potentially quite a dramatic downturn.
     
  2. Lara mfl 05

    Lara mfl 05 Star commenter

  3. heldon

    heldon Occasional commenter

    I am in a complete state of confusion about what this means- can anyone explain in very simple terms ?
     
  4. lizziescat

    lizziescat Star commenter

    Likewise!
    But I think the answer to your question is no (not even those who are introducing it)
     
  5. Lara mfl 05

    Lara mfl 05 Star commenter

    I agree even the 'powers that be' don't fully realise all the implications, but in simple terms, it means many will be worse off with no time to implement measures to restrict the impact. (It's always my school year which has been hit.:( For the past 10 years!) Yet if you're born before Apr 6th 1953 it won't affect you.
     
  6. catmother

    catmother Star commenter

    It's all very confusing. Does the article apply to just state pensions or,as the article focuses on a teacher,do they mean it affects teaching pensions?
    If it's only state pensions,is it the same issue that the new state pension when first announced seemed to imply that everyone would get about £150 a week but as it pretty soon became clear, most people (anyone opted out of SERPS) will not get? In that case, are people feeling hard done by because the headlines were misleading?
    If it's not the same issue, what is it now?
     
  7. catmother

    catmother Star commenter

    Will they really be worse off or will they get the same as they would have got in the old state pension?
     
  8. Lara mfl 05

    Lara mfl 05 Star commenter

    From my very limited understanding (they have changed things so many times during the past ten years and more so the past couple of years), it's because people who have 'good second pensions' will be e penalized in some way.Possible either by being taxed on their 'second pension' at a higher rate or will receive a 'reduced' basic pension? Anyway it seems clear that a few people are aware that many people who thoug they would be quite well off in pension years will not be. Government is keeping things very low key with announcements, because they know the uproar when more people become awar.

    Can't find the link at the moment, but even this 'new basic rate' will only now apply to women who've paid in contributions for 35 years and men for 44 years, so not everyone will get the 'basic rate'. That figure is the highest 'basic rate' not the 'lowest' which depends proportionally on how many qualifying years one has. For example in my instance; with p/t and supply not counting I have only 6 qualifying years (when I started teaching) and then my 'child-rearing years' which will count. Leaves me well short of the 35 (was only 30 before the shake-up) years needed about 60% short. When I was last notified I was told I qualify for only the bare minimum-in my case it's @ £10 a week state pension. Even with my pension from those 6 teaching years it won't be anywhere near enough to provide me with a 'basic standard of living' to pay even basic bills. So husband and I will have to apply for benefits- which they are supposedly phasing out as it won't be needed in the shake up! (?)
     
  9. Yoda-

    Yoda- Lead commenter

    A previous thread also discusses the new state pension?

    https://community.tes.com/threads/new-state-pension.725025/

    It is my understanding that we all have a guarantee that we will not get less under the new April 2016 state pension than under the current scheme, this is what is called the foundation pension.

    The NI contributions in the current scheme needed for the max amount is 30 years. This should produce a pension minimum of £ 115 pw plus this years 2.5% upgrading.

    The Guardian and Daily Mail online have had articles as to how the new pension is calculated. You may get more than £ 115 plus 2.5% in the newscheme but this is rather complicated as we paid contracted out NI contributions and you need 35 years of full contributions for the full new pension.

    I think that the new state pension will be a shock to most teachers and the general population. When it was first promoted it was very much everyone would get the equivalent of £7500 a year even if you had to wait a few more years for it. Then it was 35 rather than 30 years NI contributions. Then full NI contributions were slipped in. The thousands of pounds some people will loose because of these changes is shocking.

    A particularly small group of women have had a very short notice of their change in pension date. They have been treated in a very shoddy way as they have been give insufficient time to make additional provision to mitigate the change. If they are teachers as well they will get a double whammy as they won't get the full new pension as well due to not paying full NI contributions.

    Most teachers initially will not get the full new pension.


    And all the roads jam up with credit
    And there's nothing you can do
    It's all just pieces of paper flying away from you
    Oh look out world, take a good look
    What comes down here
    You must learn this lesson fast and learn it well
    This ain't no upwardly mobile freeway
    Oh no, this is the road
    Said this is the road
    This is the road to hell

    We still have Chris Rhea.
    Imagine George Osborne singing this...
     
  10. catmother

    catmother Star commenter

    Only if they did not read pass the £150 headline.
     
  11. Lara mfl 05

    Lara mfl 05 Star commenter

    The thing is many people just hear 'guaranteed' . . . and assume. o_O
     
  12. catmother

    catmother Star commenter

    I tend to never believe a word that comes from a Torry Government!
     
  13. Yoda-

    Yoda- Lead commenter

    The new "Universal Flat rate" pension is neither universal or paid out at a flat rate to everyone. The title contains two lies. ...[
     
  14. lizziescat

    lizziescat Star commenter

    This is my confusion too. The articles don't distinguish clearly between the two.
    Likewise the need to make 35 years non contracted out isn't new (though admittedly not publicised by Cameron etc) but I'm reading Lara's post as meaning that there will be a new reduction on the (old) state pension already earned and/or the teachers pension (already paid). Is this what you meant @Lara mfl 05 ?
     
  15. Yoda-

    Yoda- Lead commenter

    The two articles are about different things.

    The first article is about the increase in the current state pension.
    The second is about the new state pension being introduced next year.

    There is no new reduction on the old (current) state pension. It is being increased by 2.5%.

    You will get a minimum of what you have already reached under the old (current) scheme when the new scheme is introduced.
     
  16. lizziescat

    lizziescat Star commenter

    That has always been my understanding from soon after the new pension arrangements were announced (i.e. re contracted out pensions) but Lara seemed to be suggesting another subsequent change for those born in the mid 50s who are not yet eligible for their state pension.
    There are many unfairnesses in this changeover but 'getting the amount you expected' doesn't appear to be a major one.

    I'm not sure I understand the bit about part of the pension not being increased with inflation though.
    Hence my query.
     
  17. Yoda-

    Yoda- Lead commenter

    SMALL ERROR

    The pension increase is 2.9% for 2016/17 from April not 2.5%

    It is increasing with the rise in the average rate of earnings which is one of the so called triple lock conditions on the state pension.
     
  18. lizziescat

    lizziescat Star commenter

    Have just found this on another site

    "This year my state pension goes up by £3.50 a week BUT my NHS pension has just been lowered by £8 a week due to them changing GMP rate. so £4.50 a week worse off."

    and

    "Anyone who was contracted out simply paid a lower NI contribution, qualified for the old basic State Pension, and they will get what their basic State Pension would have been if the old system had continued. Where they WILL lose out is with regard to the component of their contracted out occupational pension called Guaranteed Minimum Pension. Under the current system the Government pays for the annual increase in inflation for part of the GMP. Under the new system the Government will not pay for an increase in inflation for this part of the GMP for new state pensioners after 6 April 2016, so this component of the GMP in effect will be frozen. It is the absence of inflation increases on the frozen GMP which represents the loss for contracted out pensioners, and how much each pensioner loses depends on how long they live. Government officials have refused to answer questions about this.

    I am retired, and I qualify for the basic state pension in July next year. I still don't know how much of my occupational pension will count as GMP and how much of my GMP will be frozen. When it happens I will just put up with it because I know I am lucky to have a final salary, somewhat inflation-linked pension anyway."


    Explains it a bit,but significantly points out that as an individual I can't find out by how much my occupational pension will be reduced when I receive state pension,
     
  19. heldon

    heldon Occasional commenter

    I am still lost? If I retire when I am 55 (two years yet) and take my teachers pension it will rise by cpi each year. When I hit state pension age , when I will have 33 years Nat insurance under old pension system and possibly 2 under the new system , what will happen? H e l p?????
     
  20. heldon

    heldon Occasional commenter

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