Have you got your pension forecast?

JohnD said:
You pay tax on your taxable income above your personal allowance.
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Ok but based on comments by you 1 assume some one receiving say a SERPS pension gets their full tax allowance.

However I was unaware of this. I thought it could be at a more realistic level. That used to cost circa 15% of salary for 40years and 60% final salary with companies paying 1/2. Private schemes just did not compete.

When SERPS was originally introduced, the maximum benefit under the scheme was 25% of your earnings. In 1988 the benefit calculations changed, and the maximum benefit was reduced to 20% of average earnings. Employees could choose whether to opt in or opt out of SERPS.

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Contracted out people with a private pension who from financial advice contracted back in are likely to be higher earners.

In my case which started as a standard 2/3 of income at retirement age company scheme my contribution were tax free so tax is applied when I draw on it. The company also paid an equal amount. Property investment led to pension holidays for companies which is why funds now turn up that can't meet their obligations. Due to company sell offs my pension was simply moved to an insurance company. This sort of option isn't available now thanks to dear old Gordon Brown. Seems there was scope for abuse so once the taxation laws on fund value were changed companies that offered new employees the chance to join the scheme closed that option off.

So I assume that state pension payments are not made tax free neither are NI contributions. So why pay tax on income from them? Pass on if they are tax exempt or not.

It seems that all employed by the state still have a traditional pension scheme and there are traditional funds to provide the income. ;) Make me wonder if certain actions taken by the BofE during a financial crisis relate to these funds.
 
ajohn said:
Ok but based on comments by you 1 assume some one receiving say a SERPS pension gets their full tax allowance.
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Everybody gets a tax allowance

(In some cases it may be reduced, for example to collect back tax from previous years).

The allowance is deducted from their taxable income and tax is due on the remainder.

A SERPS pension is a part of the state pension. Some people have it.
 
£203.85 is the most you can get

Sounds like it is reducing!
 
True. My wife is healthier than me, she might get it? Although, maybe only if she hasn't already got a full pension?
 
I get £994 plus a few coppers, per month on my state pension plus a private pension of nearly £200 per month.
Paid 49 years contributions. Get a rise each year in line with the CPI, or whatever it is these days.
 
JP_ said:
£203.85 is less.
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£203.85 is nominally the "flat rate" if you have 35 years or more.

It isn't really flat. I heard that hardly anybody gets that figure. I don't. At different stages of my working life I was paying SERPS, or contracted out. Some people may have paid Graduated Pension or State Second Pension.. As time goes by more people will retire without those in their history, and getting the flat rate. I am credited with more than 35 years contribs so nothing more I can do, though I was lucky enough to contribute to a private scheme, and am still allowed to contribute £2880 p.a. if I want to and can afford it. It gets grossed up to £3600 by tax rebate.
 
JohnD said:
Mottie may know how his was calculated. He mentioned that he will get £240.
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I have no idea how it is worked out. I got my first payment last week - £515 - I think that was for 15 days.

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JohnD said:
If you got a forecast it should have told you.
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Cant find the forecast anymore because I’m already getting it but I do remember it said that it couldn't be improved. It says I have 48 years of full contributions and 2 years when I did not pay enough (when I was in South Africa). Weirdly, for 2022/2023 it says I have a shortfall of £824.20 and I have until 5th April 2029 to voluntarily make up that shortfall. It also says that shortfall may increase after 5th April 2025. I might give them a call to see what I will get if I pay that voluntary contribution (or what I will lose if I don’t).

Just checked Mrs Motties and she is forecast at £203.83 a week but she wont get that until 2028.
 
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Mottie said:
Just checked Mrs Motties and she is forecast at £203.83 a week but she wont get that until 2028.
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Maybe that SERPS limit I found is a weekly figure. It makes sense as state pensions may use that method and even offer to pay it in weekly. My wife was given the choice for some reason. Mine just went in monthly and it is monthly not every 4 weeks. She also receives a teachers pension. That had a cash lump sum when she started drawing it. Seemed to be a no choice one. I have wondered if there are penalties associated with that. She did have some contracted in state payment which has increase her income from that to more than mine.

There is a view of pensioners that still hangs around a bit. They go to the post office weekly and draw some money out. This applied to my mothers social care payments. An assumption that she wouldn't have a bank account. After some shouting at the council I soon fixed that.
 
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