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Another Pension Q

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Another Pension Q

Old 24th Aug 2017, 08:33
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Another Pension Q

Hi all

I've seen this link doing the rounds on social media this morning regarding state pensions of military personnel being reduced due to some of our past NI contributions being treated as opted out. Please can someone shine any light on whether it's fact or fiction?

https://www.change.org/p/all-veteran...-contributions
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Old 24th Aug 2017, 08:38
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It's true, we were opted out and for instance 22 yrs service does not equal 22 years of NI contributions.
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Old 24th Aug 2017, 08:48
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If you have an HMRC Self Assessment account it actually has a function where you can check your NI contributions to see if you are short or not.

As annoying as the 'contracted out' thing is it will really only affect you if you want to retire early. If you are able to retire early then you probably don't care about state pension.

For most people who start working at 18 and retire in your 60s you will still have a full state pension. For some of us it won't kick in until we're 68 though.

BV
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Old 24th Aug 2017, 08:53
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'tis true. I have been left a bit stunned at how light my State Pension will be. You can check it by starting off here:

https://www.gov.uk/check-state-pension
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Old 24th Aug 2017, 09:22
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Thanks for the prompt responses and the reassurance. I suspect I will be okay, I left at 40 and have paid contributions since but how does it effect the guys that stay until 55. I also feel I need to take a chunk out of whoever was responsible for the underhand manner in which this was done.
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Old 24th Aug 2017, 10:54
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This was previously discussed in the thread below.

http://www.pprune.org/military-aviat...+contributions
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Old 24th Aug 2017, 23:41
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Originally Posted by Bob Viking View Post
As annoying as the 'contracted out' thing is it will really only affect you if you want to retire early.

For most people who start working at 18 and retire in your 60s you will still have a full state pension.
BV
Not if all of that working life was contracted out. I have 33+ 'full' years but, because they were contracted out, I will get about 36 per week less in my state pension than I would have done if I had been contacted in. However, my service pension is better off by over 100 pw - because we were contracted out.

Are those who sign the petition, in the hope of gaining back that 36pw, going to give back the extra 100pw from their workplace pension?
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Old 25th Aug 2017, 00:10
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Thanks BN.

Anyone shocked at not getting a full state pension due to contracting out should be aware that they are on a better deal, I repeat A BETTER DEAL.

So go on, sign a petition, get your state pension, then wonder why your afps gets actuarily reduced, leaving you MUCH worse off. This needs to be nipped in the bud quickly. If the govt realises that they can reduce their UTTERLY MASSIVE pension liabilty to the armed forces (and other govt employees) by some stupid contracting out re-adjustment then they will take it.

I suggest we all keep our heads down and, ahem, STFU!!!!!!!

Ferchrissakes stop this stupidity.
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Old 25th Aug 2017, 00:29
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Whilst contracted out, you paid a lower rate of NIC. Although promulgated, the dissemination was shocking.
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Old 25th Aug 2017, 01:10
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Al R, timely and just when you need him!!

Al, this thread scares me. Do you have any kind of calculation to show how much better off afps members are, after say, 20 years service contracted out vice full contribution? This would be interesting.

I was in the crewroom a couple of days ago with an old and damn fine senior MACr who was complaining about the state pension issue. I was dumbfounded that he was unaware that he was contracted out. At castel cranditz on day one we were told this fact, and that we were better off.
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Old 25th Aug 2017, 01:20
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I worry that some t##t in whitehall will see this and we'll be screwed.
My point is that those realising that their state pension is not 100% will scream and shout, sacrificing 000's pounds a year to get fifty quid a week. " moan moan moan I didn't realise i was contracted out, not fair, not fair, not fair boohoohoo"

Those on afps are inexorably better off contracted out: STOP ROCKING THE BOAT!!!
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Old 25th Aug 2017, 08:51
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Background Noise.

Please re-read my post and do some quick maths. If you start work/full time education at 18 and work into your 60s you will have made over 40 years of contributions and will almost certainly receive a full state pension.

It would appear that you were one of the few I referred to that were able to retire early.

Lucky bugger.

BV

BV
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Old 25th Aug 2017, 10:24
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BV

I have 40 years of full contributions but, most of them were contracted-out during RAF service. So, my pension forecast is about 122 out of a theoretical 154. I will not pay extra years to get the extra 32 because:
They will change the rules again.
They will means-test payments.
The extra falls into 40% tax.
They will increase the taxation levels.
I will die before making a profit.
The money is better spent on my Wife's pension.
They will change the rules again.


OAP
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Old 25th Aug 2017, 11:29
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OAP

I think you're probably right.

BV
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Old 25th Aug 2017, 11:34
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Onceapilot

If you continue working after April 2016, your state pension will increase by over 4.50 per week for every extra year that you paid NI, since contracting out ceased in 2006. So if you work for another 7 years+ you will have made up the difference and will get the full state pension of 159. That said, you make good points about potential rule changes versus additional voluntary NI contributions. However, you have to plan on current rules - note that state pension changes are not supposed to occur within 10 years of retirement date ("trust me I'm a politician"!!).

As others have said, public sector pensioners have a huge advantage over most private sector money purchase scheme recipients, so I would suck it up and enjoy the index linked pension!

F.O.D
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Old 25th Aug 2017, 11:39
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F.O.D

That would explain why my HMRC forecast was for a full state pension. Good gouge.

I just need to make it to 68.

BV
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Old 25th Aug 2017, 12:32
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I'm with you OAP - it will all change! We will spend our kids inheritance and re-mortgage the house too - but then thats me, one of the baby boomers intent on flocking up the younger generation
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Old 25th Aug 2017, 14:28
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FOD
Thanks. Yes, I understand the possibilities. However, pension means-testing has already been proposed by the chancellor and, if the economy does not sky rocket, I expect it will come (actually, I know it will come! ).

OAP
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Old 25th Aug 2017, 16:49
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Originally Posted by Bob Viking View Post
F.O.D

That would explain why my HMRC forecast was for a full state pension. Good gouge.


BV
Me too, as long as I continue to pay NI until I'm 68. Guess I'll have to get a job when I retire at 60.
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Old 25th Aug 2017, 17:23
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In my current job there are a number of old chaps in similar positions. What is worrying is that there seems to be no consistent application of the value or otherwise of the contracted out years. Equally at what point does one start getting proper credit as it were? I believe that the system doesn't actually know-so as an experiment I wrote to the pension office and challenged their figures. Unsurprisingly I have yet to get a reply.
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