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So just checked my online state pension forecast.
I'm 51, my state pension age will currently be 67. I only need 3 more years to end up with maximum contributions, at which point however long I continue to work and however much more I pay in, the amount of pension I get won't increase (presumably beyond whatever the fixed maximum may be increased to).
Am I right in assuming that this is just the way it is, and I will just have to bask in the knowledge that my superfluous contributions to the national kitty will be being used for the good of others by the regime of the day - I can't divert some somehow to a private pension?
Yes, I know I should get a long overdue proper pension review....
Am I right in assuming that this is just the way it is, and I will just have to bask in the knowledge that my superfluous contributions to the national kitty will be being used for the good of others by the regime of the day – I can’t divert some somehow to a private pension?
Your contributions are already being used for everyone else. Then when you retire and take the pension you will be using the contributions of the people then paying. You are not paying into a pot so even if you curl divert it doesn't work like that.
State pensions are 'unfunded' so there isn't a chunk of your salary being invested on your behalf which you could divert. They just pay pensions out of each years tax takings...
Looking at it slightly differently, if in 3 years time you are unable to continue to work you will still get the full state pension.
See. https://www.pensionwise.gov.uk/en. It’s free
I did it, imho the bloke I got knew his onions (& pensions)
Stupid me, forgot the state pension was a pyramid scheme.
Turns out I can claim one of my old pensions in full at 60, seems little incentive to work full time after that 😎
You know you have to deduct your contracted out years from the 37 max, very few people will qualify for the new max rate.
I have 3 left to buy, less say my 15 contracted out years so my max rate will be (37-15)/37 x 150 or so. Its actually more complicated as theres a floor of the old max rate, c 120 or so. As the new regime wont make anyone worse off.
Sorry I don't have the actual numbers as I don't think there will be a non means tested state pension by the time I get there.
Contracted out? I really know nothing about pensions. Similarly, I'm not expecting there to be a state pension in 20 years after paying all my working life towards it.
Yes get a gov forecast, a contracted out year is 1 where you did exactly that, took a private alternative from an employer. To get the full higher rate state pension you need 37 paying in years to the govt, not a private alternative.
You can top up any gap years you have missed by inactivity. Also, you qualify for a years pension by being a student, mother of kids up to 18. Check your records mine had loads of mistakes, now corrected.
Contracted out?
There used to be two state schemes, a basic and an enhanced. You could opt to not pay into the enhanced scheme and divert some of those NI payments into a private scheme, assuming the private scheme would do better than the enhanced state scheme (not always the case).
Been gone many years now.
Contracted out?
You can choose to divert a chunk of your 'contributions' into a private pension scheme. Was a good idea before the banking crisis*, but any decent provider would have recommended you to opt back in years ago.
*I think that was the trigger.
Edit - yeah, what they said. I didn't realise the option had actually been withdrawn now though.
Turns out I can claim one of my old pensions in full at 60
That'll be 55 under the pension flexibility legislation.
20% lump sum, the rest at your rate of tax, or switch on drawdown, or leave it invested.
Pensions arent a 'pyramid scheme' and you're not 'paying in'. You pay taxes, some of which is used to fund pension payments for those of pensionable age.
I could equally be annoyed that my taxes fund education, of which I have no kids to benefit from. But that's how it works, you can't choose how your taxes are spent - that's what your vote it for.
Just been to check. A whopping £175.40 a week after another 6 years of contributions. Should be able to manage that over the next 21 years.😒
No idea if I ever contracted out or not.
175 is the max rate for 37 qualifying years, if you don't know if you ever contracted out how do u know u qualify for 175 pw. 175 is a target v few people will qualify for it.
Just went in through the government gateway and had s look on there.
About £145 a week right now, but 6 years will get £175. Guess that means I didn't opt out at any time.
Worked 4 years in local authority prior to 2016 so that had the potential to be an opt out period I guess.
I was contracted out via work pension but continued to pay NI through additional work. You can pay additional NI to make up the shortfall
Just remembered what the 2nd pension thing was called SERPS, Second Earnings Related Pension Scheme....
Yep, never contracted out, so full pension in 3 years time.
Hmmm....im 50, contracted out for a bit and have already qualified for the full pension. Am mildly confused and elated tbh.