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UK Legislation

UK pension changes

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UK pension changes

Postby Kay » Mon 7 Mar 2016 12:55 GMT

This is all a bit worrying but has always seemed a bit complicated to me. However, The Guardian has an article which explains it fairly well.
http://www.theguardian.com/money/2016/m ... y-surprise

I think I'm probably one of the women who will end up with nothing on the basis of not enough years of contributions. Oh well, I never really trusted pension schemes, especially when they're liable to changes such as the government proposes. I'm not surprised a lot of people invest in property and other assets.
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Re: UK pension changes

Postby ruggie » Tue 8 Mar 2016 11:08 GMT

How times have changed. I can remember, 40-odd years ago, one of my first-line managers saying he saw no point in joining the company's contributory pension schemes. "The government keeps increasing pensions, and even reducing the retirement age. If I buy extra pensions, they'll provide more than I need and I'll probably have to pay higher tax when I collect them." Wonder what he thinks now...

Most people don't understand (and neither government nor private pension providers make any effort to inform them) that pensions are actually paid mostly out of current workers' contributions - a bit like a pyramid selling scheme. With the average lifespan increasing, and more people starting to earn later in their lives, we have a serious demographic problem.

I'm not good at following my own advice, so I am not now the owner of a million-pound house. Even if I were, I'd find that downsizing was more difficult than it should be. Stamp duty is effectively a sales tax, and the lenders haven't bothered to change their rules or use a bit of discretion when property-rich older people would like to take out tiny mortgages on new property rather than using up all the equity in their old place.
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Re: UK pension changes

Postby Kay » Tue 8 Mar 2016 12:01 GMT

Good points, Mike. I especially like your analogy with pyramid schemes.

Dave will at least get a pension of some sort and we'll be able to downsize out of commuter land to somewhere cheaper. But I feel sorry for those who don't have the same options. Plus we've no one to leave our money to so we won't feel guilty about not leaving an inheritance to anyone who expects it as their right. :twisted: I reckon we should spend every penny - in which case annuities may be the way to go when the time comes.
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Re: UK pension changes

Postby gozomark » Wed 9 Mar 2016 09:18 GMT

Kay - I think you can buy extra years of contributions, at least you could a few years ago, to take you up to the 10 years minimum
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Re: UK pension changes

Postby gozomark » Wed 9 Mar 2016 09:19 GMT

"You can fill in up to six years’ worth of gaps in your national insurance contribution record. If, say, you had nine years’ of national insurance contributions you can boost this to 10 or more to get some entitlement under the new state pension. “Potentially this is definitely worth doing – rather than not getting any money it makes sense to benefit from those years of contributions already made,” says Tom McPhail, pensions expert at Hargreaves Lansdown."
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Re: UK pension changes

Postby Kay » Wed 9 Mar 2016 14:09 GMT

Thanks, Mark. I'll need to look into it in more detail but I have very few years of paid contributions. I had a couple of years of work, then I was at Uni (and couldn't afford to opt in), then a couple of years work, and then overseas. I probably wouldn't have more than five or six qualifying years in total in the UK. I suppose I always expected that the future would take care of itself. And even now I don't have much faith in government pensions, especially when they keep changing the goal posts.

I should have been able to retire in a couple of years but that's been pushed back. I expect to be dead before I reach the official retirement age the way things are going. IMO, the powers-that-be have made an awful mess of how pensions are dealt with so I'd be wary of any of their schemes. Still worth looking into, though. :)
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Re: UK pension changes

Postby gozomark » Wed 9 Mar 2016 15:01 GMT

one reason to get the 10 years - if you decide to live in another EU country, upon retirement you can transfer your health care rights to the new country once at retirement age. If you dont have the 10 years you wont have any rights to transfer (unless its as a dependent of Dave) Of course this assumes UK is still in the EU
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Re: UK pension changes

Postby Kay » Wed 9 Mar 2016 16:01 GMT

Good stuff, Mark. I can probably scrape the 10 years you suggest (even if I have to pay for it). And you've picked up on an important reason to do it.

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I hope the UK doesn't leave the EU.
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