Saturday, March 09, 2013

Holding Back the Years

Subtitle: The UK British State Pension

Quick Fact:   Marcus and Agata count on receiving a grand total of 0.00 GB Pounds of British State Pension per month when retirement finally comes. The System you see is bankrupt.

However Marcus has contributed throughout his life, and so what are the rules, and what should he be receiving and when?

What Pension?
The UK State Pension is the government scheme that you contribute to receive a Government pension and is totally separate from your Employers pension.

When to Retire
The Government has less and less money to pay your future pension.  In fact money from your own contributions today is not saved up for your pension, rather it is used for current pensions.

Thus in the future because less people are working in the UK and more are claiming Pension or Unemployment benefit, well, can you see the disastrous problem.

Current Ages:  65 men, 60 women
BUT (with new laws)
If born after April 1961, then retirement age 67

Currently pending legislation changing the ages and how much you must contribute to receive a full pension.  This will be implemented. You will need to contribute 35 years in future (and retire at 67)

Checking Your Contributions
If you currently work in the UK, you must pay contributions there is no choice.

If you don't live in the UK anymore you should liaise with the Centre for Non residents +44 191 2037010.

You will also need to call the forecast centre +44 191 218 3600 to determine current years paid.

Topping Up
You can go back and pay upto 6 years of missed contributions from the current date. In other words from year 2007-2008 right upto 2012-2013 you can catch up now.

The cost is about 700 GBP per year

How much should I get?
Iff you paid ALL the necessary contributions: The current rate is about 140 GBP per week.  That is about 7K GBP per year.

Learning Points

  • The UK state pension even at current rates is not enough to live on in the UK
  • In the future the government will have less money to pay more people
  • As a consequence they are raising the retirement age to 67 for men and women
  • And they will ask you to contribute 35 (not 30) years of National Insurance Pension contributions
  • You can call the Forecast centre +44 191 218 3600  and check your contributions
  • You can back pay upto 6 years at about 700GBP per year to get you towards your necessary 35 year total
  • The legislation upping the years and ages is still not passed yet
  • As government funds dwindle you can expect a further downward revision of the pension and requests for even more contributions.

And now, back again to Simply Red.  Keep holding on everyone!