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New state pension

Discussion in 'Retirement' started by heldon, Nov 7, 2015.

  1. heldon

    heldon Occasional commenter

    Has anyone managed to work out how this new state pension is going to impact on teachers? Tried to read up on it a bit this afternoon and it seems rather complex. Seems that you will be given what they call a "foundation" amount as of next April. If you have 30 years your amount will be £115 or pro-rata if you have fewer years. From then on teachers still working will no longer be opted out so will pay full Nat insurance (an increase of 1.4%) and will accrue £4.32 per to their foundation amount for each year worked. I think that those who retire after the change will also be able to pay voluntary contributions(currently £770 for each year but may differ for the new arrangement), allowing them to bring their foundation amount up to the new state pension maximum. Now I may have misunderstood this - anyone else researched I t?
  2. phatsals

    phatsals Senior commenter

    That's about the flavour of it. You get the better of the two calculations as your 'foundation amount' and will continue with the new scheme from April.
    The window for paying voluntary contributions is not endless and not available to all.
  3. Lara mfl 05

    Lara mfl 05 Star commenter

    I do hope so. With the change last year making an Apr 6 1953 cut off change I now need 35 years to qualify for the full amount So I now need 10 years, rather than the previous 5, so if I can keep working in my 60s i might stand a chance at getting a reasonable pension. At present I've been told I only qualify for the absolute minimum base rate of @£10 a week!
  4. Yoda-

    Yoda- Lead commenter

    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.

    Holdington, your details about calculating any additional amount over the foundation are similar to the daily mail calculation. I am unsure as to the information about buying extra years by voluntary contributions for this new scheme and teachers paying full NI contributions in the future. I don't think that voluntary additional NI contributions rates for the new scheme have been published yet?

    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.
  5. Lara mfl 05

    Lara mfl 05 Star commenter

    Yep, I'm one of those, who was assured things would work out, but they've kept changing the rules so often for my year group. Too late to do much about making up years and contributions. Also now one is no longer covered by one's husband's pension (not that he will get a full pension either as he's has gaps too!) and must qualify on one's own contributions. Again too late notice to be able to do anything about it. I have friends in the same year group who will get their pension 2 years before I get mine- although skim-reading thro' some of those links it appears that may still be on a sliding scale? Even so I shall have to keep working - especially after doing that calculation of what one needs to live- £27000 a year. Neither my husband nor I earn that now!
  6. Yoda-

    Yoda- Lead commenter

  7. Lara mfl 05

    Lara mfl 05 Star commenter

    yoda thanks for that link-that's the one I used, but even doing the adjusted one it suggests one needs @£16 000 a year. How do we manage?;)
  8. Yoda-

    Yoda- Lead commenter

  9. Morninglover

    Morninglover Star commenter

    I retired early on ARB terms over 2 years ago, and took the maximum lump sum, meaning a smaller pension - we are living on less than £15 k pa, with no problems (no mortgage, of course).

    Just saying...
  10. pjmteach

    pjmteach New commenter

    Yes I'm one of those women
    Born in 1954. I almost retired at 59 but I'm so glad I didn't as I've now got to wait till I am 55y8m for my state pension
    My teachers pension will be app 10k pa as I had the luxury of 10 years at home looking after my kids. Have since got divorced and waved goodbye to my ex husbands pension - so I will be glad of any extra.
    WASPI - Women Against State Pension Inequality are trying to take on the government but I don't reckon that will do any good. I am following the campaign with interest.
    WASPI - Women Against State Pension Inequality Campaign
  11. Yoda-

    Yoda- Lead commenter

    I assume you meant 65 yrs 8 months pymteach?

    You and the other ladies affected were not given enough notice of the pension age change. You found yourselves five years plus worth of pension down from what you expected and no time to recover from this blow.

    Shame on all the governments for not planning the change properly or mitigating this stark unfairness.
    Lara mfl 05 likes this.
  12. kittylion

    kittylion Senior commenter

    I am in a similar situation to pjmteach - born in 1955 but I took redundancy and early retirement at 59. I have managed to get a 0.2 temporary contract but cannot claim my state pension for another 6 years (age 66). Things just kept changing - but I couldn't do anything else because there wasn't enough time - like trying to turn round an oil tanker. I worked part time from the birth of my children till they went to school, when I went full time - but it seemed to make little difference. Part time doesn't seem to count.
  13. Yoda-

    Yoda- Lead commenter

    Very unfair on you and other ladies in your situation.
    It's not even that they don't recognise the problem.
    The sliding transition for the ladies pension age change was a bad joke.
    They could have delayed the change for you as there are relatively few of you and it was their fault for the lack of notice.
    Unfortunately I am convinced they just don't care.
  14. Lara mfl 05

    Lara mfl 05 Star commenter

    The thing is. originally it was supposed to be on a sliding scale from 1950-1955, but then last year they suddenly decided there was to be a 'cut-off point'- April 6th 1953. So my particular school year if you were born Sept 52 - Apr 6 1953 you can retire at 63 but after that point it's 65- an extra2 year and 2-6 months (changes every time they notify me!) in my case. That's as of my last pension statement at least (2 years ago), but I'm fed up of them changing the goalposts so many times during the last 10 years that I can't be bothered trying tgo check as by the time I get there it will have changed again.

    Like kittylion all those years part-time or temporary won't count at all and 10 years ago when these changes started to be mooted we were assured that if we were married we would be covered. Now we aren't. :mad: And of course it's much too late to even try to start saving to pay in extra. I did enquire but there'sno way I can save what I need.
  15. jacob

    jacob Lead commenter

    I thought that "contracted out" NI contributions were removed some time ago, as NI has gone up on my payslips. I don't think it is as simple as posted by the OP. I already have 35 years NI contributions, but have little idea when I was contracted out, apart from two periods when I was definitely in a pension scheme (like TPS currently). The DWP website does not give forecasts of pension yet as the existing scheme is still "current", whether it will do so accurately after 6/4/16 remains to be seen.

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