The New State Pension System
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m0nkfish
I edited badly, sorry. There are two issues; opting out of child benefit system and opting out receiving the actual payments. If you don’t want the payments it's still important to stay opted in, and if need be, then turn down the money. The problem has been that some people want to turn down the money but are not filling out the forms etc in the belief that there is no difference. There is. If you are entitled to receive child benefit, you qualify for NIC to protect your state pension entitlement. If you stop your child benefit payments you will still receive NIC as long as you are entitled to claim child benefit, and as long as DWP believes it.
For instance, If DWP isn't aware that mum is a spouse to a higher earning serviceman on duty and believes she has simply moved overseas (or is likely to be away for more than 52 weeks), or if an absence is likely to be more than 8 weeks (12 if a family member is ill), then DWP can change entitlement to Child Benefit and consequently, the NIC. It could be something as simple as changing your bank or address that triggers it. If DWP contacts you with a heart sinking official form to complete because of your circumstances, the danger is that many people will think "I've opted out of payments anyway. so it doesn't matter about returning it", and chuck it in the bin. It does matter, stay opted in at all times.. don't decline child benefit simply to avoid hassle.
There will be people who have opted out of payments and who will think nothing of the implications of still needing to claim entitlement.
I edited badly, sorry. There are two issues; opting out of child benefit system and opting out receiving the actual payments. If you don’t want the payments it's still important to stay opted in, and if need be, then turn down the money. The problem has been that some people want to turn down the money but are not filling out the forms etc in the belief that there is no difference. There is. If you are entitled to receive child benefit, you qualify for NIC to protect your state pension entitlement. If you stop your child benefit payments you will still receive NIC as long as you are entitled to claim child benefit, and as long as DWP believes it.
For instance, If DWP isn't aware that mum is a spouse to a higher earning serviceman on duty and believes she has simply moved overseas (or is likely to be away for more than 52 weeks), or if an absence is likely to be more than 8 weeks (12 if a family member is ill), then DWP can change entitlement to Child Benefit and consequently, the NIC. It could be something as simple as changing your bank or address that triggers it. If DWP contacts you with a heart sinking official form to complete because of your circumstances, the danger is that many people will think "I've opted out of payments anyway. so it doesn't matter about returning it", and chuck it in the bin. It does matter, stay opted in at all times.. don't decline child benefit simply to avoid hassle.
There will be people who have opted out of payments and who will think nothing of the implications of still needing to claim entitlement.
Now I am really confused as opted to stop my child benefit payments too. I am not sure in what manner that this was achieved or how I would check as the link to NI was lost on me! Wife works full-time and pays low-rate tax; like many on here it is my pay that pulls us into the high-rate tax / child benefit cease.
Still staggered that you can pay more NI and get less state pension.
Still staggered that you can pay more NI and get less state pension.
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If who stays at home to raise your children to (youngest) age 12 is ELIGIBLE to receive child benefit but then elects to stop the payments, you will get NIC paid.
But if DWP incorrectly believes that you become not eligible (for any number of regulatory reasons) for the benefit and if you don't affirm eligibility for the benefit (even though you don't want the money or because you already turned down the payments and don't now think it's important) you won't be likely to get NIC paid.
On a general note, when you change address/go overseas, then make sure that you get in touch with DWP and make sure that although you have previously turned down the payments, you are still staking a claim to eligibility. If your wife is working, she will be paying NIC anyway.
If you want to chat one to one about it, just drop me a PM.
But if DWP incorrectly believes that you become not eligible (for any number of regulatory reasons) for the benefit and if you don't affirm eligibility for the benefit (even though you don't want the money or because you already turned down the payments and don't now think it's important) you won't be likely to get NIC paid.
On a general note, when you change address/go overseas, then make sure that you get in touch with DWP and make sure that although you have previously turned down the payments, you are still staking a claim to eligibility. If your wife is working, she will be paying NIC anyway.
If you want to chat one to one about it, just drop me a PM.
Thanks Al. So, if I understand you correctly, for someone like me with a working wife and my youngest child over the age of 12 this has no effect.
Guess I only have the state pension (and FAFPS) to worry about!
Guess I only have the state pension (and FAFPS) to worry about!
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If you have a tax paying wife (I long ago realised there was a subtle difference - stay at home mums might not pay tax but do work!), correct. If you have a child under 12 - and if your wife is either looking after them at home or works but doesn't earn enough to pay NIC - Child Benefit helps qualify for ‘credits’ which count towards your State Pension.
Who knows - you might be one of those to benefit from F-AFPS?! I wish they'd get that new calculator up and running though.
Who knows - you might be one of those to benefit from F-AFPS?! I wish they'd get that new calculator up and running though.
Funny you should say that but from what I can work out I appear to be a big winner on FAFPS, well as long as I make (or can stick it) to 55. Leaving at less than 55 seems far from ideal.
I've been selected for the calculator testing in a few weeks, ahead of the go live date.
I've been selected for the calculator testing in a few weeks, ahead of the go live date.
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Don't forget the normal pension age is 60, not 55 and the deferred pension age will be linked to State Pension Age. You'll accrue benefits at a decent rate (1/47) but if you want to take balance of the new benefits at 55, they'll be reduced.
That employer cost cap ('backstop protection to the taxpayer') is a spectre.
That employer cost cap ('backstop protection to the taxpayer') is a spectre.
Yep, that is how I understand it.
Will be interested to see how the actuarially reduced pension looks at 55, but I am sure it will look a lot better than a pension at 54. As I understand it retiring at 54 or before would leave you waiting for state pension age to see anything beyond the EDP - eeek.
Will be interested to see how the actuarially reduced pension looks at 55, but I am sure it will look a lot better than a pension at 54. As I understand it retiring at 54 or before would leave you waiting for state pension age to see anything beyond the EDP - eeek.
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If cost cap caveat includes costs incurred by 'changes to career paths' and has quite limited employer costs wriggle room of +/- 2%, you might be gone at 54 whether you like it or not. 
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.. only joking. The consequences of the cost cap being breached are limited to the accrual rate being revised, so at 54 or so I imagine you'd be glad to limp away licking your wounds with only short term limited further loss. But as the cost cap is going to be assessed 'periodically', it doesn't add much to a sense of security. The real sickener would be a decreased revised accrual rate not being applied solely prospectively although, in fairness, there are floor and ceiling levels in case the accrual rate needs to be revised upwards if costs decrease. Hmmm.. right.
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Thats the thing; ensuring that you are able to claim the benefit but concurrently reject the money (if you wish) can ringfence state pension credits. If DWP believes that you are entitled to receive Child Benefit, regardless of you subsequently rejecting payments, you can still qualify for those credits.
Thats the thing; ensuring that you are able to claim the benefit but concurrently reject the money (if you wish) can ringfence state pension credits. If DWP believes that you are entitled to receive Child Benefit, regardless of you subsequently rejecting payments, you can still qualify for those credits.
