Pensions : Thu Feb 13, 2014 8:16 am  

Can anyone help.

My Final salary pension ends on April 1st and is 'contracted out', we are moving to a money purchase scheme and I received a letter yesterday saying that the new scheme will be 'contracted in' which will begin building up a second state pension for me. However, looking on various websites this is as clear as mud. If I have got this right it looks like because I already have 35 years contributions I will get the new £147 per week state pension, but all further NI contributions by me will 'not' accrue any further benefits.

The letter from my company indicates I will pay MORE national insurance, which seems a bit unfair if I get no further benefits from it.

Have I read it right.

Re: Pensions : Thu Feb 13, 2014 8:30 am  

rover49 wrote:

Can anyone help.

My Final salary pension ends on April 1st and is 'contracted out', we are moving to a money purchase scheme and I received a letter yesterday saying that the new scheme will be 'contracted in' which will begin building up a second state pension for me. However, looking on various websites this is as clear as mud. If I have got this right it looks like because I already have 35 years contributions I will get the new £147 per week state pension, but all further NI contributions by me will 'not' accrue any further benefits.

The letter from my company indicates I will pay MORE national insurance, which seems a bit unfair if I get no further benefits from it.

Have I read it right.

The 35 year rule is correct as I have received correspondence from the DSS (or whatever they call themselves this week) to confirm the same.

I can only guess that your existing contracted out pension attracted some NIS relief for you and when it ends it won't, pure guess though.

But the good news is that now you can move your pensions to an investment whoring service and watch it reduce in value year on year as they balls-up their guesswork and yet still takes fees year on year - its great fun out here in private pension land.

Re: Pensions : Thu Feb 13, 2014 8:34 am  

JerryChicken wrote:

The 35 year rule is correct as I have received correspondence from the DSS (or whatever they call themselves this week) to confirm the same.

I can only guess that your existing contracted out pension attracted some NIS relief for you and when it ends it won't, pure guess though.

But the good news is that now you can move your pensions to an investment whoring service and watch it reduce in value year on year as they balls-up their guesswork and yet still takes fees year on year - its great fun out here in private pension land.

Although its nowhere near as good as the FS scheme, the company are putting in 10.5% to my 6%, so I suppose it will beat any IAS's I could put my 6% in (which would be higher as it would be off my nett pay).

Re: Pensions : Thu Feb 13, 2014 8:56 am  

rover49 wrote:

Although its nowhere near as good as the FS scheme, the company are putting in 10.5% to my 6%, so I suppose it will beat any IAS's I could put my 6% in (which would be higher as it would be off my nett pay).

Any scheme where your company contributes like that is far and away better than anything that the rest of us who are currently swimming around in the quagmire that is private pension land will ever dream of getting, I suspect that there are a few "investment bankers" who previously worked for NatWest Pensions who are now sitting on a beach in a far distant land being wafted with palm leaves by dusky maidens whilst sipping a chilled aperitif all paid for by yours truly during the "Lets get rich, very quickly, and then run" years.

Re: Pensions : Thu Feb 13, 2014 9:17 am  

rover49 wrote:

The letter from my company indicates I will pay MORE national insurance, which seems a bit unfair if I get no further benefits from it.

Have I read it right.

Something similar at our place, to get round the increase NI we opted for a salary sacrifice scheme. Or something.

Re: Pensions : Thu Feb 13, 2014 10:26 am  

rover49 wrote:

Can anyone help.

My Final salary pension ends on April 1st and is 'contracted out', we are moving to a money purchase scheme and I received a letter yesterday saying that the new scheme will be 'contracted in' which will begin building up a second state pension for me. However, looking on various websites this is as clear as mud. If I have got this right it looks like because I already have 35 years contributions I will get the new £147 per week state pension, but all further NI contributions by me will 'not' accrue any further benefits.

The letter from my company indicates I will pay MORE national insurance, which seems a bit unfair if I get no further benefits from it.

Have I read it right.

Congratulations, you are part of the last generation who is probably going to get a decent pension without having to make sky-high contributions. You also probably benefited from free higher education and reasonable house prices.

Re: Pensions : Thu Feb 13, 2014 10:36 am  

The Video Ref wrote:

Congratulations, you are part of the last generation who is probably going to get a decent pension without having to make sky-high contributions. You also probably benefited from free higher education and reasonable house prices.

And so everything's improving now?

Re: Pensions : Thu Feb 13, 2014 10:47 am  

Mintball wrote:

And so everything's improving now?

Well, the pension issue is largely because we live longer. Final salary pensions were easy to fund when retirees only lived five more years, tougher when they live 20 more years.

Re: Pensions : Thu Feb 13, 2014 11:31 pm  

A big part of the pension problem is that during the good times many employers (and employees) took payment holidays as the funds were doing so well, without the foresight to cope with the fact that people were living longer. When thay had to start paying again the employers treated it as a new expense rather than an existing one which they avoided for a few years and rather then upping contributions killed off the final salary schemes.

Re: Pensions : Fri Feb 14, 2014 7:52 am  

Richie wrote:

Well, the pension issue is largely because we live longer. Final salary pensions were easy to fund when retirees only lived five more years, tougher when they live 20 more years.

Don't state the obvious - Sin bin's chattering classes can't deal with that!!