Pension letter re increase

Got my letter yesterday 😁

No letter.
Don’t care.
Just show me the money 😂.

No letter for me yet 😩

no news for us either, both my husband and myself still waiting for letters, it’s 29th March today….they must all be “working from home” 😎

Agreed, Susie42.

www.lcp.com/media/1150050/why-is-money-being-deducted-from-my-state-pension.pdf

When contracting out of SERPS was first introduced it was primarily for members of Defined Benefit pension schems. One important point to note at the outset is that it was the scheme as a whole which contracted out. This was not a choice made by individual members.

The way that contracting out worked was that the employer and employee were given a rebate on their NI contributions and in return the scheme promised to provide a pension at retirement at least as good as the pension the member was giving up from SERPS.

The rate of the rebate was reviewed every 4-5 years by the Government Actuary and was changed periodically to reflect changing market conditions and other factors. Table 1 shows the total NI rebates for DB pension schemes, and the split between employee and employer.

This is an important table to bear in mind. Many people are unhappy when an amount is deducted from their state pension to reflect past contracting out but they may have forgotten (or be unaware) that they saved money on their NI bills by being contracted out. To pay a full state pension without deduction to those who benefited from a contracted out rebate when they were working could well be seen as unfair to those who were not contracted out. Indeed, as we shall see later, this was an important consideration in the design of the new state pension system.

I have been disadvantaged by being contracted out because my private pension provider, Equitable Life, went belly up. EL was the pension provider chosen by many professional people.

My OH is going to pay more tax on his company pension now that his state pension is over the personal allowance. If he had been contracted in, his state pension would have been even higher.

I don’t understand why people feel they have been disadvantaged by being contacted out. Anyone choosing to be contacted in was, in effect, taking a cut in salary as the employer matched the employee’s contribution.

Both ours came today. State pension is not taxed but if you have other income I.e. private pension then the combined amount is taxed if over the £12750 allowance. That’s my understanding anyway.

Huzzah! Letter arrived today.

To be fair, apart from not understanding why I don't get the full SP (it's to do with an OP having been contracted out, I gather, but I didn't know of it at the time and I don't understand it now although kind grans have tried to explain it to me but my brain freezes) I've had no glitches since I started getting it 4 years ago. Some things seem to take a while to churn through but they get there in the end.

Nothing for me but my OH had his some time ago.

Apologies - I was looking at old figures - regardless, none of my business Susie42

Susie42 - just curious - I thought the full state pension is £10600 pa -(below the amount when income tax becomes payable), so I don’t understand how your husband will pay tax on his SP, even if he did not have a private pension.

rosie 59 My OH’s state pension has increased to more than the personal allowance so he will be paying more tax on his company pension. If he did not have a company pension he would still be paying tax as his state pension would be higher.

Susie42

Our letters came this morning from Belfast, we live in the South-east. My OH found that he now has to pay tax on his state pension despite being contacted out all his working life. Fortunately his occupational DB pension is well paid due to him paying AVCs for over 20 years.

I wonder how many pensioners are in the same situation and do not have the benefit of an occupational pension.

To be fair you only pay tax if you have the income to warrant it. Ordinarily state pension is not high enough to pay tax

Yes got two weeks ago

Should be contracted not contacted

And I had mine about five weeks ago, but of course any increase in my state pension is wiped out by the increase in council tax 🤷‍♀️

Our letters came this morning from Belfast, we live in the South-east. My OH found that he now has to pay tax on his state pension despite being contacted out all his working life. Fortunately his occupational DB pension is well paid due to him paying AVCs for over 20 years.

I wonder how many pensioners are in the same situation and do not have the benefit of an occupational pension.

We both had ours about 3 weeks ago!

My letter is dated 29th January and came from the post handling site in Wolverhampton.

Oh maybe not then!
Unless it's ladies first!

Curtaintwitcher

I think they are done alphabetically, so it depends on your name.

Don't think so, because DH hasn't received his yet and I received mine ages ago.

Aha, maybe! I'm at the top for that! (Having always been at the bottom with my maiden name. A good move there!)

I think they are done alphabetically, so it depends on your name.

I’ve never had a letter informing me of the increase in April each year, but my bank account shows I get it of course.

Mr PG always gets a letter but I assumed it was because he’s on the old pre2016 pension with additional SERPS etc which, in total, is a lot higher than my standard post2016 pension.