Hi

After having read some of the snippets released before the pensions white paper that is due today I did find this quote quite concerning:

"Lord Turner has called for the state pension to be paid according to residency rather than based on contributions"

It will be interesting to read the whole thing today so we can make sense of this statement. I'm sure it will turn out to be something to do with immigrants to the UK???

Maybe someone else knows what it is all about.

Yvonne

At present the state pension is based on a male paying 44 years NI contributions and a female paying 39 years contributions.

The idea of changing it to ' a citizens pension' was indeed based on the notion of having a minimum 13 year residency and was touted in March of last year. I believe that his has now been dropped for a NI contribution period of around 30 years. But we shall see.

My understanding was that state pension was pro-rata the number of years of contributions and if you emigrated (to Spain) and contributed there (with a minimum of 15 years of contributions in Spain), then each member state contributed the appropriate proportion of your overall calculated entitlement based on the total contribution years in both states.

Are you saying that anything less than 44/39 years (dependent on gender) of contributions into the Uk system does not currently entitle one to a state pension? Could you please clarify?

Presumably contracted-out schemes are exempt from such rules and based solely on the value of the fund.

Yes. See also: - http://news.bbc.co.uk/1/hi/business/5015928.stm

Regards,

John.

It won't entitle you to a FULL state pension, no.
I can tell you exactly because I asked for a quote last year in view of the fact I wouldn't be working again after 52 which meant I had only 34 years.
So up to 2004 I had "earned" a pension of £78.58, whereas if I carried on until retirement it would be £96.09.

Thanks. That and the previous post now clarifies what was being said.

Thanks also to the original poster as it gave me a timely reminder to give my "kids" some advice that I wished I had had at their age and which clearly brings up points that they need to think about.

You can ring them on 0845 3000168 or write to:
Retirement Pension Forcasting Team
The Pension Service
Whitley Road
Newcastle upon Tyne
NE98 1BA

give them your NI number and they will forcast your pension for you, probably not with a crystal ball.

Another little bit of information which may affect certain people and be useful.
Under new legislation of 6th April 2006, if you have a private pension and the fund amounts to under 15k you are now able to take this as a lump sum. However I believe it will be subject to tax. This could be better than waiting until retirement and then receiving a very small amount of monthly pension.

I was about to do so Glynis, then found out you do have to be over 60.

No, I don't think that is correct, Poollounger. Suggest you contact your pension provider.

Let us know how it goes please. I'm sure there are quite a few people with a couple of "low value" pension pots littered around due to job changes throughout their career.

Certainly in my case it was over 50. It may have changed over the last two years, but I don't think so.