Many moons ago I signed up here, and spelt Ralph .... Ralph. As it was a bit like the great man himself, who never did anything right, iv let it ride, in tribute.
I have been putting into a pension for a while and whilst I have a few years to go it’s not that many. I was talking to a friend and he told me that he had been told he would need to pay tax on it all after the 25% I didn’t think this was the case but I wasn’t sure.
I have a while to go but appreciate the knowledge GA.
It may well be terminology, after the 25% it all becomes taxable when you draw it, subject to the personal allowance so depends on other income and what the prevailing personal allowance is at any given tax year. I can see the personal allowance drifting backwards, it's already gone for the higher earners.
With the state pension being over 9k now it doesn't leave much of any private pension that will remain tax free upon state pension age anyway.
According to my HMRC account, my state pension forecast is £11,940 (£995 pm). Pretty sure that's the max based on 40 years of contributions. So pretty much the existing personal allowance (I wish!).
Moving the personal allowance back to less than the state pension would be somewhat resisted I would suggest.
Depends if they get rid of the triple lock!! I can very much see it being frozen for a fair while.
You may be right, but I cannot really imagine the government (especially a tory government) would hit the state pension - too many votes at stake. Income tax rates will be raised before they remove the triple lock, or VAT increased to maybe 25 or 30%.
thanks again for all the info from all that have replied.
i must admit I have worked on the assumption I will get sod all for the state pension, anything would be a bonus. Still I expect it will be up past 70 soon!
thanks again for all the info from all that have replied.
i must admit I have worked on the assumption I will get sod all for the state pension, anything would be a bonus. Still I expect it will be up past 70 soon!
I'm currently due at 66 (3 years) - I don't expect that to remain the same and will likely go to 68 or even 70. Anyone say in their 40s now will likely never draw a state pension.
thanks again for all the info from all that have replied.
i must admit I have worked on the assumption I will get sod all for the state pension, anything would be a bonus. Still I expect it will be up past 70 soon!
I'm currently due at 66 (3 years) - I don't expect that to remain the same and will likely go to 68 or even 70. Anyone say in their 40s now will likely never draw a state pension.
I don't agree. The state pension will be around age 70 for anyone starting work now but it will never be erased. That would be political suicide.........and there are still millions of people who don't save towards a pension. Although they are compulsory for employees (and then you gave a right to opt out after 3 months) there are 5m self employed people & many dont save towards a pension.
I have been putting into a pension for a while and whilst I have a few years to go it’s not that many. I was talking to a friend and he told me that he had been told he would need to pay tax on it all after the 25% I didn’t think this was the case but I wasn’t sure.
I have a while to go but appreciate the knowledge GA.
It may well be terminology, after the 25% it all becomes taxable when you draw it, subject to the personal allowance so depends on other income and what the prevailing personal allowance is at any given tax year. I can see the personal allowance drifting backwards, it's already gone for the higher earners.
With the state pension being over 9k now it doesn't leave much of any private pension that will remain tax free upon state pension age anyway.
According to my HMRC account, my state pension forecast is £11,940 (£995 pm). Pretty sure that's the max based on 40 years of contributions. So pretty much the existing personal allowance (I wish!).
Moving the personal allowance back to less than the state pension would be somewhat resisted I would suggest.
I am very surprised at that figure & if I were you I would double check it. I've been in the industry for 30 years & not seen anyone with a state pension into 5 figures. Add into the fact that anyone that has been in a contracted out employer pension will have a certain amount deducted from the state pension on retirement.
thanks again for all the info from all that have replied.
i must admit I have worked on the assumption I will get sod all for the state pension, anything would be a bonus. Still I expect it will be up past 70 soon!
I'm currently due at 66 (3 years) - I don't expect that to remain the same and will likely go to 68 or even 70. Anyone say in their 40s now will likely never draw a state pension.
I don't agree. The state pension will be around age 70 for anyone starting work now but it will never be erased. That would be political suicide.........and there are still millions of people who don't save towards a pension. Although they are compulsory for employees (and then you gave a right to opt out after 3 months) there are 5m self employed people & many dont save towards a pension.
The auto-enrolment opt out is after 1 month. The process is repeated every 3 years.
I'm not so sure the state pension won't at some point disappear, to be replaced with compulsory insurance/investment based pension schemes that do not have an opt out.
I checked my state pension on the Government gateway, I'll have 51! years contributions, and it tells me the maximum is £176.58 a week or 9,182.16 per annum.
Think i'm right in saying the maximum contributions years is 35 for the state pension, so actually only 3 more years for me then doesn't matter if I work or not for the pension.
I checked my state pension on the Government gateway, I'll have 51! years contributions, and it tells me the maximum is £176.58 a week or 9,182.16 per annum.
Think i'm right in saying the maximum contributions years is 35 for the state pension, so actually only 3 more years for me then doesn't matter if I work or not for the pension.
ROBERT MUNRO
Your State Pension summary
Show your National Insurance number
You can get your State Pension on 30 May 2023.
Your forecast
is
£228.90 a week
£995.31 a month,
£11,943.68 a year
Your forecast
is not a guarantee and is based on the current law
is based on your National Insurance record up to 5 April 2020
The Gov website is confusing. It gives me a figure but says it can be lower. As I contracted out it will be but I still am not sure what the figure will be. I am not relying on it and never have.
The Gov website is confusing. It gives me a figure but says it can be lower. As I contracted out it will be but I still am not sure what the figure will be. I am not relying on it and never have.
I'm not relying on it but that's what mine says. Based on what @golfaddick and @Rob7Lee are saying mine might be an error anyway!
Bob, I think you might be the same as me. Have you been paid a good/high salary for a number of years paying a lot of tax and NI? I did for a number of years before I went over to directors loans and dividends and this has resulted in me receiving an above average state pension when I retire.
Can’t quiet bet Bobs state pension, but I’m getting paid £988.84 every 4 weeks which equate to £12854.92p / 52 weeks, like Bob I’ve earned good money, been a director etc., I was surprised when I started claiming it, that it was so much.
Bob, I think you might be the same as me. Have you been paid a good/high salary for a number of years paying a lot of tax and NI? I did for a number of years before I went over to directors loans and dividends and this has resulted in me receiving an above average state pension when I retire.
Can’t quiet bet Bobs state pension, but I’m getting paid £988.84 every 4 weeks which equate to £12854.92p / 52 weeks, like Bob I’ve earned good money, been a director etc., I was surprised when I started claiming it, that it was so much.
Ok, I stand corrected.
Funny because I deal a lot with doctors, some on incomes in excess of £150k. None of them have state pensions in excess of £9k pa.
Can’t quiet bet Bobs state pension, but I’m getting paid £988.84 every 4 weeks which equate to £12854.92p / 52 weeks, like Bob I’ve earned good money, been a director etc., I was surprised when I started claiming it, that it was so much.
Ok, I stand corrected.
Funny because I deal a lot with doctors, some on incomes in excess of £150k. None of them have state pensions in excess of £9k pa.
Could it be that I never been out of work, not even for a day and been working for just over 50 years when I drew my first state pension?
Can’t quiet bet Bobs state pension, but I’m getting paid £988.84 every 4 weeks which equate to £12854.92p / 52 weeks, like Bob I’ve earned good money, been a director etc., I was surprised when I started claiming it, that it was so much.
Ok, I stand corrected.
Funny because I deal a lot with doctors, some on incomes in excess of £150k. None of them have state pensions in excess of £9k pa.
Could it be that I never been out of work, not even for a day and been working for just over 50 years when I drew my first state pension?
Or something to do with SERPS? I know it was scrapped 2016 but I believe the government still factor it in when arriving at the final figure for those who had paid into it in the past - so it is possible to get more than the £175 a week.
Can’t quiet bet Bobs state pension, but I’m getting paid £988.84 every 4 weeks which equate to £12854.92p / 52 weeks, like Bob I’ve earned good money, been a director etc., I was surprised when I started claiming it, that it was so much.
Ok, I stand corrected.
Funny because I deal a lot with doctors, some on incomes in excess of £150k. None of them have state pensions in excess of £9k pa.
Could it be that I never been out of work, not even for a day and been working for just over 50 years when I drew my first state pension?
Or something to do with SERPS? I know it was scrapped 2016 but I believe the government still factor it in when arriving at the final figure for those who had paid into it in the past - so it is possible to get more than the £175 a week.
Was it SERPS what you opted out off, then opted in dependent upon if you had a private pension or a company pension, I know I’ve opted in and out on many occasions, I was also self employed for a period, and forgot to stop my standing order so was paying over the top NI for a couple of years.
Can’t quiet bet Bobs state pension, but I’m getting paid £988.84 every 4 weeks which equate to £12854.92p / 52 weeks, like Bob I’ve earned good money, been a director etc., I was surprised when I started claiming it, that it was so much.
Ok, I stand corrected.
Funny because I deal a lot with doctors, some on incomes in excess of £150k. None of them have state pensions in excess of £9k pa.
Could it be that I never been out of work, not even for a day and been working for just over 50 years when I drew my first state pension?
Or something to do with SERPS? I know it was scrapped 2016 but I believe the government still factor it in when arriving at the final figure for those who had paid into it in the past - so it is possible to get more than the £175 a week.
Was it SERPS what you opted out off, then opted in dependent upon if you had a private pension or a company pension, I know I’ve opted in and out on many occasions, I was also self employed for a period, and forgot to stop my standing order so was paying over the top NI for a couple of years.
I can't remember the mechanics but I do remember being in it for a period.
Hard to think of any other reason why my forecast is so high - yes I'm a high earner but I can't find anything that says the more tax/NI you pay the higher the State Pension.
Bob, I think you might be the same as me. Have you been paid a good/high salary for a number of years paying a lot of tax and NI? I did for a number of years before I went over to directors loans and dividends and this has resulted in me receiving an above average state pension when I retire.
Yes, I'm very fortunate to be in that position.
That may explain it.
I am 100% sure that will be it. When my original business partner retired in 2002 he was shocked at his state pension forcast, he asked the reason why and they explained it was due to the fact he had been on a very high PAYE salary for 12 years (since 1990). And it was not just the tax that contributed to the high pension figure but also the National Insurance payments he had made.
I am in the same boat as we only went over to directors loans & dividend payments in 2003 onwards so happy days.
This has got me wondering I’ve, therefore I’ve looked at my latest pension statement which break down there payments into 2 lines firstly the basic state pension of £175.20p with a further protected payment of £71.91p.
And some people can get more. Under the previous state pension rules, workers were able to build up what's known as the additional state pension (also called the second state pension, S2P, or SERPS) – a top-up to the former basic state pension. Although the current rules have now scrapped this top-up, the Government has allowed many workers in their 40s, 50s and early-60s to keep their existing entitlement.
This is part of the Government's pledge that people who worked to build up a healthy state pension under the previous rules shouldn't lose out under the new ones.
To make it work – and it is fiendishly complicated – what you'll get depends on a so-called 'starting sum' calculation. This compares what you'd have been entitled to under the old and new regimes – and, in a nutshell, you'll get the higher of the two.
This extra money is known as your 'protected payment' and will be highlighted on your state pension statement
And some people can get more. Under the previous state pension rules, workers were able to build up what's known as the additional state pension (also called the second state pension, S2P, or SERPS) – a top-up to the former basic state pension. Although the current rules have now scrapped this top-up, the Government has allowed many workers in their 40s, 50s and early-60s to keep their existing entitlement.
This is part of the Government's pledge that people who worked to build up a healthy state pension under the previous rules shouldn't lose out under the new ones.
To make it work – and it is fiendishly complicated – what you'll get depends on a so-called 'starting sum' calculation. This compares what you'd have been entitled to under the old and new regimes – and, in a nutshell, you'll get the higher of the two.
This extra money is known as your 'protected payment' and will be highlighted on your state pension statement
This has got me wondering I’ve, therefore I’ve looked at my latest pension statement which break down there payments into 2 lines firstly the basic state pension of £175.20p with a further protected payment of £71.91p.
Solved......it will be your SERPS then. Sorry, but I had assumed everyone had opted out of SERPS in the late 80's early 90's. I know when I starred working for at the Prudential in 1991 that was the easy sell......and we got £15 per case IIRC.
I've come back to add as it seems I can't edit my previous post.......
Interesting to note that when the original decision to opt out of SERPS the money receive (basically a NI rebate) could only be taken as income upon retirement. Then in 2006 Gordon Brown simplified pensions & from then on all pension plans (including SERPS, AVC's & FSAVC's) were deemed to be one & the same, meaning that they all counted as part of your DC pot.
The upshot if that is.......your extra "protecred" pension is now deemed to be income & therefore taxable, but if it was part of your DC pot you could take 25% as a tax free lump sum.
Over the years I have transferred all my pension schemes into one......including a couple of old final salary schemes (hardly worth talking about - 3 years in one & 8 years in another) as well as an FSAVC. All that money now sits in my SIPP, which I have control of & can invest whenever & wherever I like.....with the advantage of planning the date of my retirement & accessing parts of my pension as I see fit.
For what it's worth: I reached retirement age for state pension at 62 years 11 months and 12 days! I claimed it from age 64 years and 2 months.
Weekly pension per week, this year from April Is: Basic: £134.25, Pre 97 additional state pension £22.77 less contracted out deduction (COD) of £0.07, Post 97 additional state pension £23.13, Extra - basic state pension £16.02 Extra Additional state Pension £5.69, Graduated Retirement Benefit Benefit £3.57.
This gives a weekly total of £205.36 , so annual pension of £10678.72
Comments
You may be right, but I cannot really imagine the government (especially a tory government) would hit the state pension - too many votes at stake. Income tax rates will be raised before they remove the triple lock, or VAT increased to maybe 25 or 30%.
i must admit I have worked on the assumption I will get sod all for the state pension, anything would be a bonus. Still I expect it will be up past 70 soon!
I'm currently due at 66 (3 years) - I don't expect that to remain the same and will likely go to 68 or even 70. Anyone say in their 40s now will likely never draw a state pension.
Think i'm right in saying the maximum contributions years is 35 for the state pension, so actually only 3 more years for me then doesn't matter if I work or not for the pension.
Your State Pension summary
You can get your State Pension on 30 May 2023. Your forecast is
£228.90 a week
£995.31 a month, £11,943.68 a year
Your forecast
£228.90 is the most you can get
You cannot improve your forecast any more.
I'm not relying on it but that's what mine says. Based on what @golfaddick and @Rob7Lee are saying mine might be an error anyway!
I did for a number of years before I went over to directors loans and dividends and this has resulted in me receiving an above average state pension when I retire.
Funny because I deal a lot with doctors, some on incomes in excess of £150k. None of them have state pensions in excess of £9k pa.
Or something to do with SERPS? I know it was scrapped 2016 but I believe the government still factor it in when arriving at the final figure for those who had paid into it in the past - so it is possible to get more than the £175 a week.
I am in the same boat as we only went over to directors loans & dividend payments in 2003 onwards so happy days.
And some people can get more. Under the previous state pension rules, workers were able to build up what's known as the additional state pension (also called the second state pension, S2P, or SERPS) – a top-up to the former basic state pension. Although the current rules have now scrapped this top-up, the Government has allowed many workers in their 40s, 50s and early-60s to keep their existing entitlement.
This is part of the Government's pledge that people who worked to build up a healthy state pension under the previous rules shouldn't lose out under the new ones.
To make it work – and it is fiendishly complicated – what you'll get depends on a so-called 'starting sum' calculation. This compares what you'd have been entitled to under the old and new regimes – and, in a nutshell, you'll get the higher of the two.
This extra money is known as your 'protected payment' and will be highlighted on your state pension statement
Mystery solved.
Interesting to note that when the original decision to opt out of SERPS the money receive (basically a NI rebate) could only be taken as income upon retirement. Then in 2006 Gordon Brown simplified pensions & from then on all pension plans (including SERPS, AVC's & FSAVC's) were deemed to be one & the same, meaning that they all counted as part of your DC pot.
The upshot if that is.......your extra "protecred" pension is now deemed to be income & therefore taxable, but if it was part of your DC pot you could take 25% as a tax free lump sum.
Over the years I have transferred all my pension schemes into one......including a couple of old final salary schemes (hardly worth talking about - 3 years in one & 8 years in another) as well as an FSAVC. All that money now sits in my SIPP, which I have control of & can invest whenever & wherever I like.....with the advantage of planning the date of my retirement & accessing parts of my pension as I see fit.
I reached retirement age for state pension at 62 years 11 months and 12 days! I claimed it from age 64 years and 2 months.
Weekly pension per week, this year from April Is: Basic: £134.25, Pre 97 additional state pension £22.77 less contracted out deduction (COD) of £0.07, Post 97 additional state pension £23.13, Extra - basic state pension £16.02 Extra Additional state Pension £5.69, Graduated Retirement Benefit Benefit £3.57.
This gives a weekly total of £205.36 , so annual pension of £10678.72
I started work in 1971.