Latest Moan From You and Me 2025

It's not the cliff edge that you think. People retiring in 2016 after the new pension came in didn't necessarily get the new value.

If you'd been contracted out all your working life, and hence earned no SERPS, you would just get the old basic state pension value.

If you'd never been contracted out, or contracted out for part of the time, they would calculate the higher of old basic + SERPS and new basic (minus an adjustment for the amount of time you were contracted out, which is where COPE comes in). This is what was known as "Transitional Rules". For many people who had good SERPS, getting the new flat rate pension value would have been a downgrade!

I was in the position where I'd always been contracted out, hence no SERPS, but was young enough to be able to work and contribute enough NI to make my state pension up to the maximum value. That took more than 7 years of contributions.

 

Well I paid for 50 yrs so it doesn't only apply to younger people, most of them dont start working until around 18 now or even 20 so it really isn't anything new even though they have been increasing the retirement age.
The over payment that most people make is not something any government is likely to change.

 

My state pension, which I've been getting for almost 2 years now, was reduced by the COPE. So under the New State Pension rules I was able to pay voluntary Class 3 NI contributions for 7 years so that I am now only about 50p short of the full pension. Each year cost about £800 and I worked out that you get your money back in just under 3 years. In effect I bought back the amount lost by the COPE deduction. The Gov has also been promoting a scheme to get people to top up their State Pensions in this manner.

 

I think allowing top-ups is shortsighted by the gov. As you calculate, @cactus_girl, it only takes about 3 yrs to be quids in, which means anyone living past 70 will make a net gain from purchased yrs ... but the gov will have to pay that extra. So, they get a little money in now, but have to pay out more down the line. It only makes sense for the gov to do this if it takes people out of the Pension Credit zone, but for most buying additional yrs, they would not have qualified for pension credit anyway.

 

It's taken a little time to find the relevant paperwork. I got the massive sumf of £9 per week over the basic State Pension.

 

My wife retired five years after me, so after the change came in. She get the full amount of the 'new' State pension.

 

So either you were a very low earner, or were contracted out for a lot of your working life. If you worked somewhere like the NHS which has a pension scheme, you would have been contracted out.

 

Presumably she wasn't contracted out then. If I had achieved state pension age that year I wouldn't have got the full amount. I wouldn't have been much short though, because I would have had 5 extra years of NI contributions to make it up (higher than the ones I was making before 2016).

 

I definitely wasn't a low earner, at least for most of my life. To the best of my knowledge I wouldn't have been in any contracted out situation until around age 30. I certainly wouldn't have been contracted out for at least 5 years at various points after that.

 

The state pension is a pittance, end of.

Why should we have to rely on a separate handout like the winter fuel payment anyway.
If it was a livable pension it wouldn't be needed.

 

OK, so your earnings before 30 and for an odd 5 years after that would likely account for your extra £9 in SERPS.

If you'd retired in the year the new pension started, you'd have got the better of old state pension + SERPS and new state pension - contracted out adjustment. It likely wouldn't have worked out much different.

By the time your wife retired, even if she was contracted out then the extra years of NI payment post 2016 would have cancelled out most of the contracted out adjustment. Contracting out was abolished in 2016 and those of us who were previously contracted out saw a rise in our NI payments.

 

@Escarpment Thanks for the clarification, even if there seems to be no logic in expected one person on a pension to survive on £200 per month less than another.

 

So I started work at 15 paying tax & Ins and I paid less into the pot
than someone who started work some few years later, but gets more
pension. Sorry I can't get my head around it at all.

 

I'm not 100% sure but I think our state pension is about the lowest in Europe.
Our retirement age was,or maybe still is?, higher than some of them as well.