Thursday, 7 August 2014

In the bag - my State Pension award

That was quick!

I sent off the State Pension claim form on 24 July, and yesterday (6 August) received a letter from the Department for Work & Pensions dated 4 August telling me what my State Pension would be, and from what date I would be entitled to it.

This letter was the definitive one. In their words, it 'takes the place of anything else we may have told you about your State Pension'. I've had three previous pension forecasts from the Pension Service, in 2005, 2008 and 2012. All three of them were now shown to be slightly wrong.

My date of entitlement has been put back two days, to 8 November 2014. And the amount of the pension will be unexpectedly different. The two-day deferral is nothing much, but the change in the amount they will be paying to me is significant. It isn't bad news. It's a pleasant surprise.

Just to make matters clear, even though I have 38 years' contributions to throw at this, I am not going to get the new so-called 'flat rate' State Pension that will be payable under new rules from April 2016, and is currently worth (if you have the required 35 years' contributions, and satisfy other conditions) £155 per week. I won't get it because my 'State Pension age' occurs in November 2014, before the new-style pension starts.

Instead I'm going to get the old-style pension, which (if you have the required 30 years contributions) is currently worth only £113.10 at most. I will get that £113.10, plus a couple of additions to acknowledge various types of past contribution. But, using the last forecast I got in 2012, and uprating it for inflation, I was expecting only £117 or so.

The DWP now tell me I shall be getting £125.32 per week instead! £8 more!

It may not sound much, but £8 a week extra adds up to £416 over a year, and that will cover quite a number of household bills.

It's very welcome news, especially as I was miffed about 8 years of my 38 years' contributions being 'wasted', only 30 years now being needed for the pension I'll be receiving.

Plus the fact that buying extra old-style pension under the scheme recently cobbled together by the government - a sop to the last few hundred thousand old-style pensioners like me, who narrowly miss out on the markedly more generous new-style pension - would have entailed my paying an impossible £934 for every additional £1 per week purchased. Well, now I've got £8 more that I didn't think I would get. It would have cost me 8 x £934 = £7,472 under that purchase scheme. Pardon me for feeling better! Although, as you will see, I haven't actually got something for nothing.

What was wrong then with those past pension forecasts?

They had understated one of the components of my State Pension award, the Additional State Pension. The forecasts had estimated this at barely more than £1 per week. The figures now given to me show that my gross entitlement to ASP was in fact £94.37, less the clawback (for being 'contracted out') of £85.70, giving a net £8.67. Nearly £8 more than hitherto. The ASP is based on earnings from April 1978 to April 1997, and I can only assume that when forecasting there is no access to certain older contribution records, so that the ASP tends to get understated.

Quite possibly it is a general rule that you get not less than whatever is forecast, and you might very well get a little more. (Don't quote these words to the Pension Service or DWP though!)

Well, it's very nice to have this State Pension business done and dusted so soon. I'm into countdown mode, of course. Entitlement Day is 93 days ahead. First Payment Day is 120 days ahead. It's like a countdown to surgery, or getting married, or anything that will make an important difference to one's life.

I just wonder whether I will cope so easily with my new status.

This used to be called the 'Old Age Pension'. That's what my Mum and Dad would have called it, implying that the recipient was worn-out, doddery, forgetful, incontinent, toothless, and needed constant assistance. More dignity came when the phrase 'senior citizen' was invented. But contemporary references to the 'grey pound' or the 'grey vote' or 'silver surfers' suggest that the elderly are still generally seen as a separate species, a group that can be lumped together; the easy prey of con-men; people not worth much any longer; a bit eccentric, and almost a joke. That many pensioners are in fact super-active people living fast, busy and creative lives is brushed aside, or taken to be exceptional and newsworthy. Why does a fit seventy year old who runs the London Marathon make the news, when a fifty-nine year old will not? There is something very wrong with the common perception of older persons.

On the other hand, although I shall delight in claiming even more concessionary fares and admission fees from the end of this year - and get my bus pass just for the hell of it - I don't ever want to end up whining to somebody that 'I'm a pensioner, and deserve more consideration', or telling them (waving my stick querulously) that I fought in the War for them. Which of course would be a black lie, unless passively surviving the Cold War counts. My generation were spared the direct experience of active total war, whether abroad or on the home front. We were even spared the experience of National Service, rationing, and other 'character-building' stuff. I really mustn't pretend that I went through such things, or in any way acquired an unassailable moral authority - tempting though it may become, if faced by some idiotic young whippersnapper who needs to be put in his place!

4 comments:

  1. Happy for you Lucy but I think there is little standardisation in the way they issue pensions. I might be wrong. I 'earned' 40 years under the old scheme but I ceased paying in after that. I am currently receiving £573.16 per every four weeks which is £143 per week. I have been receiving my pension for almost nine years now. What is most annoying about the scheme is they insist on paying four weekly rather than calendar month which can upset budgeting if I am not careful. You see the payment doesn't come in at a set time in the month so you have to make allowances by always keeping the balance ahead of your debts. Some months I end up with the whole amount extra and above my needs for that month but a few months down line it changes. It would be so easier if they averaged out the payments over twelve months rather than thirteen.

    Shirley Anne x

    ReplyDelete
  2. I understand it is administratively easier to base all payments on an unvarying seven day cycle, or a multiple of it.

    The way I budget, it won't matter when in the month the State Pension gets paid. I have already seen that, during the first few years, I will get two payments in June. One of them will go into savings.

    Lucy

    ReplyDelete
  3. It works out that you get paid two days earlier than you did the previous month viz: 6th,4th, 2nd and then you end up getting paid at the end of the following month. I would have thought it far easier to pay out once a calendar month on the same date each time but what do I know? I was told when asking that question that it was more a problem of them being too lethargic and bothered to make the change! What can I say?
    Shirley Anne x

    ReplyDelete
  4. I get £131.47pw, thanks to some Graduated Pension contributions, way back when I was a rosy-cheeked apprentice, and £11.36 for Additional State Pension from 1997. As Shirley Anne says, there isn't much standardisation - it all depends on what you opted into and out of, over the years.

    ReplyDelete

This blog is public, and I expect comments from many sources and points of view. They will be welcome if sincere, well-expressed and add something worthwhile to the post. If not, they face removal.

Ideally I want to hear from bloggers, who, like myself, are knowable as real people and can be contacted. Anyone whose identity is questionable or impossible to verify may have their comments removed. Commercially-inspired comments will certainly be deleted - I do not allow free advertising.

Whoever you are, if you wish to make a private comment, rather than a public one, then do consider emailing me - see my Blogger Profile for the address.

Lucy Melford