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[STEMO]

In reality it is a 9% tax on earnings of £21000 or over. If you  earn less than £21000 you pay nothing. Debt lasts 30 years.

Almost exactly correct, except now they wait until you reach 70 to write it off. I'm counting down - 9 more months and I'll be free of it. For the record, I don't begrudge paying it in the slightest, but the extra £400pcm will be most welcome!

All a far cry from the days of student grants and claiming unemployment benefit in the holidays, which some on here will doubtless remember

Plan 2 loans are written off after 30 years.

[LC0112G]

It's not a company pension scheme and, as Malcolm stated, it is ringfenced. The teachers pension scheme is administered by the Prudential, but they certainly can't 'dip into it'.

The Pru couldn't dip into the Teachers pension "fund" even if they wanted to, because there is no "fund". The TPS is simply a promise by the government to pay teachers a pension in the future, and the govt and and will simply tax people to meet that commitment. The same goes for all public sector pensions (Police/Forces/Firemen/NHS/Teachers). These are the so called un-funded public sector schemes. The only exception is the public sector AFAIK is the Local Government Pension Scheme (LGPS) which is "funded" and does have a "pot" of money.

And yes - NSP is £164 p/m from April. Thanks for the correction.

[Mister Rog]

I've just had my Tax Code notice, and once again I am wondering why, after having paid tax all of my working life on my salary, do the robbing sons-of-bachelors tax me AGAIN on my State Pension?
I know that theres F all I can do about it - they make the rules - but why? 

Ron.

I'm in exactly the same boat. My tax code reduced to 2??? something or other. Grrrrr   

[STEMO]

It's not a company pension scheme and, as Malcolm stated, it is ringfenced. The teachers pension scheme is administered by the Prudential, but they certainly can't 'dip into it'.

The Pru couldn't dip into the Teachers pension "fund" even if they wanted to, because there is no "fund". The TPS is simply a promise by the government to pay teachers a pension in the future, and the govt and and will simply tax people to meet that commitment. The same goes for all public sector pensions (Police/Forces/Firemen/NHS/Teachers). These are the so called un-funded public sector schemes. The only exception is the public sector AFAIK is the Local Government Pension Scheme (LGPS) which is "funded" and does have a "pot" of money.

And yes - NSP is £164 p/m from April. Thanks for the correction.

Ah, yes...you've told me that before but, being near pension age and all, I must have forgotten. 

[aaronjb]

I'm in exactly the same boat. My tax code reduced to 2??? something or other. Grrrrr   

Mine starts with a K.. I'm definitely paying for several people's state pensions at this point

[STEMO]

I'm in exactly the same boat. My tax code reduced to 2??? something or other. Grrrrr   

Mine starts with a K.. I'm definitely paying for several people's state pensions at this point

Thanks, mate 

[LC0112G]

STEMO, is that a typo?  I have had my paperwork and it is £146. . I thought thatwas the max. If it isntmabe Ineed to query it.........

Varche  - are you due to reach UK SPA soon? If yes, and if your entitlement is less than the maximum (£159.55 p/w) then you should take a good look at your NI record as you may be able to buy extra years.

For example have you paid NI for 2016-17, or 2017-2018? If not these cost about £735 per year to "buy", and each will boost your pension by about £4.50 p/w (£235 p/a) per year of credit, so it'll only take about 4-5 years to break even.

If your current forecast is £146 then buying 2016-17 and 2017-2018 will boost that to about £155. If your SP date is after 5 April 2019 then you can also buy 2018-19 (rate not published yet but will likely be £750-£800), and add another £4.50 ish p/w taking you up to the current maximum of £159 p/w.

You can also buy pre 2016 years if required, but that can be a minefield depending on your NI contribution record (do you already have 30+ years prior to 2016?) so best ask for qualified advice if that's the case.

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

[ronnyd]

I,m certainly glad that i stayed in SERPS when the idiots who ran my companies pension scheme "advised" me otherwise.
When i finally retired 10 years later my state pension was more than my salary on retirement, (albeit working for a different company). But this did take my state pension over the tax due threshold but that,s life. Coupled with my smallish company pension my tax bill now,to me seems excessive but is ,dammit, correct.
 

[Varche]

Thanks for that link.

Yes I am "middle aged" as my 91 year old father calls it, later this month. I saw you could make extra contributions but thought I was getting the maximum. I think I had 33 years when I calculated it. Somewhat surprisingly, I didn't receive the pack you are supposed to get a few months before so I think I had better have a phone call to pensions . It might be because I was contracted out while I worked for a Blue Chip company. I asked for my S1 at the same time and that hasn't arrived yet( A DVD bought on UK ebay on 11th Jan turned up today........)   

[Lizzie Zoom]

I am surprised there is tax topay on a UK statepension. I believe it is 70thin the world in amount. Behind the likes ofMexico. Worst in Europe.. Thanks tosuccessive governments.. Cheapskates.

There is no tax to pay on a state pension. You only pay tax if the value of your state pension plus any occupational pension takes you over the tax threshold.
I will get a full state pension in May, £164 a week, but I won't pay any tax on it.

I have had a DWP letter this morning STEMO stating this has gone up by £13 per week to £177

[LC0112G]

Thanks for that link.

Yes I am "middle aged" as my 91 year old father calls it, later this month. I saw you could make extra contributions but thought I was getting the maximum. I think I had 33 years when I calculated it. Somewhat surprisingly, I didn't receive the pack you are supposed to get a few months before so I think I had better have a phone call to pensions . It might be because I was contracted out while I worked for a Blue Chip company. I asked for my S1 at the same time and that hasn't arrived yet( A DVD bought on UK ebay on 11th Jan turned up today........)

If you have 30 or more pre 2016 NI years then there is absolutely no point in trying to buy more pre 2016 years because you are already at the maximum of 30 years. DWP will happily take the money if you attempt to pay, but it won't increase your entitlement, and they won't refund it when you realise your mistake.

Buying post 2016 years is generally worth it though. They add 1/35th of the full amount per year purchased, so £4.56 per week (£237 p/a). You should be able to buy 2016-17. You cannot buy the year you actually reach SPA though, so if you reach SPA before 6/4/2018 you cannot buy 2017-18. If your birthday is on/after 6/4/2018 you can buy 2017-18 as well, which will add another £4.56 per week.

If you live to the same age as your father you'll get and extra 1352 payments ((91-65)*52) of £4.56 in that period, which is over £6K, for a cost of £735 ish.

[Varche]

A dice worth throwing. If you die within five years then it is the least of your worries. I have a sneaky feeling I cannot match my Dad's lifestyle (no alcohol, excess food though I do get exercise etc). So maybe 80 is achievable.

[LC0112G]

I,m certainly glad that i stayed in SERPS when the idiots who ran my companies pension scheme "advised" me otherwise.

I'm certainly glad I did opt out of SERPS, and I wish I'd opted out for longer. I'm on target for the full state pension of entitlement £159.55, and have an opted out pot of £76K+ which I can start to take in 2 years if I want. So as things turned out that's £76K of free money.

From memory the FSA did some research and found that fewer than 5% of people would be worse off because they had contracted out of SERPS. Hence there are virtually no successful "Ambulance Chasing" companies suing pension co's for mis-selling SERPS opt-outs (unlike PPI claims). So whilst it's possible you are in that 5%, it is vastly more likely someone would be worse off because they had opted out of the company pension scheme (AKA turning down free money).

[ronnyd]

I,m certainly glad that i stayed in SERPS when the idiots who ran my companies pension scheme "advised" me otherwise.

I'm certainly glad I did opt out of SERPS, and I wish I'd opted out for longer. I'm on target for the full state pension of entitlement £159.55, and have an opted out pot of £76K+ which I can start to take in 2 years if I want. So as things turned out that's £76K of free money.

From memory the FSA did some research and found that fewer than 5% of people would be worse off because they had contracted out of SERPS. Hence there are virtually no successful "Ambulance Chasing" companies suing pension co's for mis-selling SERPS opt-outs (unlike PPI claims). So whilst it's possible you are in that 5%, it is vastly more likely someone would be worse off because they had opted out of the company pension scheme (AKA turning down free money).

Must add that i was subsequently advised to remain in SERPS by another adviser when i queried the first ones advice. I then still had a pot of over 80k from my company pension on retirement. This was even after the pension being dormant for about 5 years after leaving the company and the firm i went to had a crap scheme so didn,t bother to join. In fact it made more when it was dormant than when i was making contrubutions. Must say that the the tax free lump sum was a godsend at the time too

[LC0112G]

I,m certainly glad that i stayed in SERPS when the idiots who ran my companies pension scheme "advised" me otherwise.

I'm certainly glad I did opt out of SERPS, and I wish I'd opted out for longer. I'm on target for the full state pension of entitlement £159.55, and have an opted out pot of £76K+ which I can start to take in 2 years if I want. So as things turned out that's £76K of free money.

From memory the FSA did some research and found that fewer than 5% of people would be worse off because they had contracted out of SERPS. Hence there are virtually no successful "Ambulance Chasing" companies suing pension co's for mis-selling SERPS opt-outs (unlike PPI claims). So whilst it's possible you are in that 5%, it is vastly more likely someone would be worse off because they had opted out of the company pension scheme (AKA turning down free money).

Must add that i was subsequently advised to remain in SERPS by another adviser when i queried the first ones advice. I then still had a pot of over 80k from my company pension on retirement. This was even after the pension being dormant for about 5 years after leaving the company and the firm i went to had a crap scheme so didn,t bother to join. In fact it made more when it was dormant than when i was making contrubutions. Must say that the the tax free lump sum was a godsend at the time too

In the early noughties, the advice (for men) was usually to contract back into SERPS at around age 43. However this advice only applied to private pension plans. Many (most?) company pension plans were also opted out, and in order to join the company pension schemes you had to opt out. Even if the company pension was "carp" it was still free money, so joining the scheme (and thus opting out of SERPS) still usually made sense. Contracting out into private pension plans ended in 2012, and into company schemes in 2016.

The FSA research was actually 1.5% (not 5%) were worse off by opting out. And since that research the change to the new state pension means that virtually everyone whose SPA is after 2022 will be better off if they had contracted out - although that is said with hindsight. IFA's couldn't possibly have known in the early noughties that the govt were going to change the state pension rules in 2016.