Are there any gaps in your state pension contributions?

Enable’s IFA’s are keen to help anyone with their pension planning and despite the fact that a state pension may not be all you want to be relying on it is certainly a useful element of your retirement plan. But there have been changes in state pension provision and under the new “flat-rate” state pension you are required to have 35 years of full rate National Insurance contributions to receive the top rate, currently £155.65 a week.

It has recently come to light that thousands of people however would l not get the full amount if they have at some point been contracted out and paid a reduced rate of National Insurance. This set of circumstances is affecting s workplace “final salary” schemes and public sector workers such as teachers and nurses. But by filling in gaps in National Insurance records, you can dramatically boost state pension

But by making voluntary or “Class 3” lump sum payments you can fill in any missing years in your National Insurance record. It may mean you have to spend £4,000 to boost your state pension by £23,000 but hundreds of thousands of people are being urged to use a generous Government scheme to do just that. This guide published by Royal London, Britain’s biggest mutual company, explains how a single year of National Insurance can be purchased for around a lump sum of £733. This will boost state pension payments by around £230 a year for the rest of your life, totalling £4,600 in extra income over a typical 20-year retirement. Filing in five missing years using Class 3 contributions would cost you under £4,000 but generate nearly six times the outlay in extra state pension.

http://www.telegraph.co.uk/pensions-retirement/financial-planning/spend-4000-to-boost-your-state-pension-by-23000---heres-how/


Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

The real new state pension gap

The current pension system as Enable’s IFAs in Bishops Stortford agree, has been far too complex, for far too long and its replacement by a simpler, although still complicated system has many benefits.  But it has also thrown up numerous anomalies and sources of unfairness and the disparity gap in the basic entitlement is perhaps one of the worst.

 

The Chancellor announced in the recent spending review that the basic state pension paid to current pensioners would rise by £3.35 to £119.30 a week in April. The “single-tier” pension paid to those who retire after that date will be £155.65 a week, he said.  So the difference between the amounts paid by the two systems will be £36.35 a week, or just under £1,900 a year.  This difference between the new and old state pension is finally clear and amounts to a significant about of money that is different in the basic entitlement.

Malcolm McLean, a former head of the Pensions Advisory Service said pensioners were waking up to the fact that only those who reached state pension age after the introduction of the flat rate in 2016 would receive it. Anyone who reaches retirement age before then will receive the existing state pension for the rest of their life. Ros Altmann, the pensions minister, said back in 2012: 'I would call on the Government to consider extending the flat-rate system to those who have already retired' but she has not been forthcoming yet. Rather than be wholly dependent on a state pension make sure you start saving as early as you can. Enable’s IFAs can help you look into the right kind of saving plan for you.

Source: The telegraph


Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
 • Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE