Omega Owners Forum
Chat Area => General Discussion Area => Topic started by: moggy on 16 May 2016, 17:58:50
-
Hi to all on OOF,before i ask for professional advice.I just wanted to ask if anyone on hear has cashed in a pension early.And what might be the good and the bad of it,to cut a long story short.Me and the wife have lost our jobs again(laid off)and are struggling to find work,so to keep a roof over our heads.I was thinking about cashing my pension in its about £26000,but i have no idea what the ramifications of this would be.Just wanted to ask if any of you guys had done this,or know if its a good idea.Any input would be appreciated,Dean :y
-
Sorry to hear of the awful position you both find yourselves in.
First and foremost, speak to your mortgage provider and explain the situation to them. Then find a local pension advisor, who'll know the ins and outs of this. You may find that they will afford you one hours advice for free.
Just be up front with creditors who need to know. Mortgage, any secured loans, other loans, Gas, leccy etc.
Good luck with it all.
-
Sorry to hear of the awful position you both find yourselves in.
First and foremost, speak to your mortgage provider and explain the situation to them. Then find a local pension advisor, who'll know the ins and outs of this. You may find that they will afford you one hours advice for free.
Just be up front with creditors who need to know. Mortgage, any secured loans, other loans, Gas, leccy etc.
Good luck with it all.
Thanks for the reply mate,much appreciated.We are renting privately so after this month,we have no money for next month.So the landlord will want us out.My thinking is if i cash the pension in i can keep the roof over our heads,until we find work again.Dean :y
-
yes do get advice it's much better regulated than it used to be (it used to be 'put your money here and I will get all of the first few years interest as commission thank you very much').
if it is a final salary pension be especially careful, probably get several lots of advice.
assuming it is instead a defined benefit scheme and you are over 55 check any transfer out fees but consider putting it into a SIPP where you can invest it as you like in funds/shares/bonds, take 25% as tax free cash and thereafter as much as you like out as cash, ideally just enough to stay below the £10K per person tax threshold so it will be tax free as well.
also if you don't pay tax now there is a nice little earner where you can pay in £2,880 each year, tax man adds £720 and you can then withdraw both sums a few weeks later - £3,600 tax free if you stay below the £10K threshold, and NI free anyway.
also check you have a full state pension coming http://www.gov.uk/check-state-pension (http://www.gov.uk/check-state-pension) if not might be worth topping up your contributions
-
yes do get advice it's much better regulated than it used to be (it used to be 'put your money here and I will get all of the first few years interest as commission thank you very much').
if it is a final salary pension be especially careful, probably get several lots of advice.
assuming it is instead a defined benefit scheme and you are over 55 check any transfer out fees but consider putting it into a SIPP where you can invest it as you like in funds/shares/bonds, take 25% as tax free cash and thereafter as much as you like out as cash, ideally just enough to stay below the £10K per person tax threshold so it will be tax free as well.
also if you don't pay tax now there is a nice little earner where you can pay in £2,880 each year, tax man adds £720 and you can then withdraw both sums a few weeks later - £3,600 tax free if you stay below the £10K threshold, and NI free anyway.
also check you have a full state pension coming http://www.gov.uk/check-state-pension (http://www.gov.uk/check-state-pension) if not might be worth topping up your contributions
Thanks for that,much appreciated.I don't know if it will make any sense but both me and the wife opted out of serps,in 1990.We have a unity personal pension plan with friends life,it used to be with with winterthur.But friends life now have the business as it was sold to them. You are right i need to seek professional advice,but as i am only 54 this may not be a viable option.Dean :y
-
under 55 you cannot access your pension (well the kind you have anyway) unless you are in pretty bad health and cannot work.
As to advice, it does not come cheap I'm afraid. but do you need advice? Advice means that someone understands your circumstances and tells you what to do. Information come for free -the best thing to do it to hit google yourself and read around. also make friends life work for you, look at their website to see what they offer, phone them up etc - they should have a helpline. A few more thoughts
1) essentially when you draw your money, 25% is tax free, 75%is taxed at your marginal tax rate. so take your £26k in one go then you'll pay income tax on it, spread it out and you might not depending on what else you earn (e.g. take it over 4 years at £6.5k pa gives £5k subject to income tax - no other income means no tax to pay
2) take an income for life and 25% tax free cash? so take £6500 as tax free cash and then buy a lifetime income for yourself, you'll get £750 per annum. not saying its a bad deal but that's the kind of number you might look at
3) also look at the charges in anything you choose. the "total expense ratio" or AMC. if you pay 1.5% per annum it does not sound much but after 10 years that's 15% of your pot.
HTH
-
Legally you cannot cash a pension before 55... So sounds like you might need other options.
Plenty of work around here if you have a driving licence :-\
-
Oh dear. There's lots of advice here, but most of it is as confusing as hell.
I hate any discussion about pensions, as most of it I fail to understand, and the other bit guarantees that sombody will take some of it like independant "advisors".
This is a tough call. I really wish I had a nice simple answer. :(
-
Legally you cannot cash a pension before 55... So sounds like you might need other options.
Plenty of work around here if you have a driving licence :-\
Hi HKT,thanks for the advice.You have all ways given me good advice and tried to help,and for that i thank you and all on OOF.So it looks like my pension option is out of the question,I have a clean license but i am a long way from you mate.I know many of you on this forum,will understand when i say.I sit hear crying about my wife and my cats future,as many of you have been through the same and worse.I suppose the old saying is true,life is shit and then you die.But i can say that all of you on this forum,are kind gentle caring human beings.I have met some people personally and they have helped,me with keeping my car on the road.Both hands on and on hear with advice and suggestions.Good luck for the future,Kind Regards Dean.
-
Oh dear. There's lots of advice here, but most of it is as confusing as hell.
I hate any discussion about pensions, as most of it I fail to understand, and the other bit guarantees that sombody will take some of it like independant "advisors".
This is a tough call. I really wish I had a nice simple answer. :(
Me to mate,but thanks for your input. :(
-
Starter for ten...
http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed :y
-
Thanks for that,much appreciated.I don't know if it will make any sense but both me and the wife opted out of serps,in 1990.We have a unity personal pension plan with friends life,it used to be with with winterthur.But friends life now have the business as it was sold to them. You are right i need to seek professional advice,but as i am only 54 this may not be a viable option.Dean :y
There is little point in seeking professional advice since you CANNOT access the money in your pension until you are 55.
A SERPS contracted out pension will be a pot of money invested in something with Friends Life. An IFA may be able to advise you on some better/cheaper investments so that the money will grow quicker, but they won't be able to help you cash it in. However, £26K is on the low side for someone aged 54, so making it cost effective may be tricky.
Although it may not seem like it now, the rules are there to stop anyone having a claim on your pension - you can go bankrupt and still keep all your pension, creditors cannot claim on them.
I'd suggest getting over to the Money Saving Expert message boards and asking for help there to make sure you're claiming all the benefits you're entitled to.
-
Starter for ten...
http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed :y
Thanks mate,but i need full time hours.We have to payout approximately £1200 per month for rent and bills.So unfortunately that wont cut it. Regards Dean :y
-
Thanks for that,much appreciated.I don't know if it will make any sense but both me and the wife opted out of serps,in 1990.We have a unity personal pension plan with friends life,it used to be with with winterthur.But friends life now have the business as it was sold to them. You are right i need to seek professional advice,but as i am only 54 this may not be a viable option.Dean :y
There is little point in seeking professional advice since you CANNOT access the money in your pension until you are 55.
A SERPS contracted out pension will be a pot of money invested in something with Friends Life. An IFA may be able to advise you on some better/cheaper investments so that the money will grow quicker, but they won't be able to help you cash it in. However, £26K is on the low side for someone aged 54, so making it cost effective may be tricky.
Although it may not seem like it now, the rules are there to stop anyone having a claim on your pension - you can go bankrupt and still keep all your pension, creditors cannot claim on them.
I'd suggest getting over to the Money Saving Expert message boards and asking for help there to make sure you're claiming all the benefits you're entitled to.
Hi mate thanks for that,but we are not claiming benefits,and we declared our self bankrupt in 2008.
-
Starter for ten...
http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed :y
Thanks mate,but i need full time hours.We have to payout approximately £1200 per month for rent and bills.So unfortunately that wont cut it. Regards Dean :y
Is moving an option?
https://www.ocsjobs.co.uk//templates/OCS_vetting/jobdetail/30013.aspx/Jobs/Mini-Bus-Driver-Passenger-Assistance
With both of you working, will clear £2,200 pm :y
-
Starter for ten...
http://www.tesco-careers.com/JobDetails/122188.aspx?utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed :y
Thanks mate,but i need full time hours.We have to payout approximately £1200 per month for rent and bills.So unfortunately that wont cut it. Regards Dean :y
Is moving an option?
https://www.ocsjobs.co.uk//templates/OCS_vetting/jobdetail/30013.aspx/Jobs/Mini-Bus-Driver-Passenger-Assistance
With both of you working, will clear £2,200 pm :y
Thanks mate,it looks like the kind of jobs for us.But we don't have the funds to move mate.If we did and could move back to Birmingham,there are lots jobs in electronics.Witch is our skill set but we are stuck in hartlepool.Regards Dean.
-
Not sure what else to suggest in that case :-\
Good luck though.
-
Hi mate thanks for that,but we are not claiming benefits....
Huh? I hope to god you're claiming at least JSA/Dole or whatever it's now called? It is vital that you do.
The reason is that recent changes to the state pension mean that due to you being contracted out in the past that you will probably only get about £115 per week state pension when you reach state pension age (66?). You won't get the 'new' £155 per week unless you either find a job and pay more NI contributions, or get credited with them by virtue of claiming JSA. Each extra year of NI paid/credited will add around £4.45 to your eventual state pension, so it may take 8 years to increase your entitlement from £115 to the new maximum of £155.
Also, your wife - how many years NI contributions does she have? She won't get ANY state pension unless she has at least 10 years NI credits. She can't claim a state pension based on your NI record any more.
If you fluff this up, your household state pension might be as low as £115/pw (£500 per month). If you get it right, then you could both get £155 p/w (total £1340 per month)
-
Hi mate thanks for that,but we are not claiming benefits....
Huh? I hope to god you're claiming at least JSA/Dole or whatever it's now called? It is vital that you do.
The reason is that recent changes to the state pension mean that due to you being contracted out in the past that you will probably only get about £115 per week state pension when you reach state pension age (66?). You won't get the 'new' £155 per week unless you either find a job and pay more NI contributions, or get credited with them by virtue of claiming JSA. Each extra year of NI paid/credited will add around £4.45 to your eventual state pension, so it may take 8 years to increase your entitlement from £115 to the new maximum of £155.
Also, your wife - how many years NI contributions does she have? She won't get ANY state pension unless she has at least 10 years NI credits. She can't claim a state pension based on your NI record any more.
If you fluff this up, your household state pension might be as low as £115/pw (£500 per month). If you get it right, then you could both get £155 p/w (total £1340 per month)
Very good advice that :y :y
Due to me being well behind with my stamp when the business went tits up, I have to sign on every week when i'm not working even though I don't get a penny in my hand. Only get class 1 NI paid but still have to go through the shite every 2 weeks >:( >:(
Moggy if your internets working, go onto the HMRC website and sign up for a on line tax account.
It will take you about 20 minutes and there is a bit of oppsing about with codes texts to your mobile ect to verify who you are. Once done, you can see exactly what you have paid in stamp and which years you are behind ;)
It will also tell you how much you (and your lass if she registers too) will get on retirement.
It will also show if you can top up those years that you are short if / when you sort out your finances :)
Just for the nosey gits on OOF ;D
I'm due to get a grand total of 130 quid when I retire unless I can find a way to top up some of the years i'm down ;)
It may be a case that you have paid enough stamp to gain a full pension :-\
I know my dad stopped paying full NI well before he retired due to the amount he had paid in ;)
-
Tiger, I agree with all you post, except...
It may be a case that you have paid enough stamp to gain a full pension :-\
Highly unlikely. To get the full new state pension (of £155 ish) you need 35 years of NI contributions, AND to have not been contracted out of SERPS/S2P. Moggy has £26K in his pension pot from being opted out. The govt therefore make a deduction (called the COD - Contracted Out Deduction) from the £155 to account for the fact that his SERPS NI money was paid into a different (private) plan. This dramatically reduces the amount of the new state pension - often down to only £50-£60 per week.
There is a safety net - As at 6-April-2016 the govt calculated how much you would have got under the old state pension scheme. This was made up of £115 basic (if you had 30 years NI), plus any SERPS/S2P. Assuming Moggy has 30 years NI, but little or no SERPS/S2P (due to being opted out) then the old figure will almost always be higher than the new figure. It's highly unlikely that anyone with significant opted out years will be entitled to more than £115 + a bit of SERPS.
The starting amount is the higher of the old rules and new rules as at 5/6/2016. Going forward, you get £4.45 ish added to the starting amount for every post 2016 years NI you are credited with, up to the £155 maximum. So if you start at £115, and work/are credited with 8 years @ £4.45 you'll make the £155 maximum, AND get to keep the money/income in/from your private pension plan.
I know my dad stopped paying full NI well before he retired due to the amount he had paid in ;)
You can't stop paying NI on earnings unless/until you reach state pension age. It doesn't only pay for pensions - it helps pay for the NHS amongst other things. If you continue to work past state pension age, then its true that you don't pay NI.
-
To get the full new state pension (of £155 ish) you need 35 years of NI contributions, AND to have not been contracted out of SERPS/S2P. Moggy has £26K in his pension pot from being opted out. The govt therefore make a deduction (called the COD - Contracted Out Deduction) from the £155 to account for the fact that his SERPS NI money was paid into a different (private) plan. This dramatically reduces the amount of the new state pension - often down to only £50-£60 per week.
i'm pretty sure this bit isn't right. least i hope it isn't. SERPS was earnings related extra pension, on top of the £155 you can get if you have paid enough years ni. i was contracted out and my state forecast is still £155 a week. as i mentioned you can get a forecast at https://www.tax.service.gov.uk/checkmystatepension this is what they tell me at present:
"You were contracted out
In the past you've been part of one or more contracted out pension schemes, such as workplace or personal pension schemes.
When you were contracted out:
you and your employers paid lower rate National Insurance contributions; or
some of your National Insurance contributions were paid into your private pension schemes instead
Contracted Out Pension Equivalent (COPE)
Your workplace or personal pension scheme should include an amount of pension which will, in most cases, be equal to the additional State Pension you would have been paid. We call this amount your Contracted Out Pension Equivalent (COPE). Your COPE estimate is shown below.
The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.
a week
Your State Pension forecast £155.65
Your COPE estimate £43.55
COPE added to your State Pension forecast £199.20"
-
this page explains the SERPS bit if you have a spare 1/2 hour :( https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service (https://www.gov.uk/government/publications/state-pension-fact-sheets/contracting-out-and-why-we-may-have-included-a-contracted-out-pension-equivalent-cope-amount-when-you-used-the-online-service)
-
To get the full new state pension (of £155 ish) you need 35 years of NI contributions, AND to have not been contracted out of SERPS/S2P. Moggy has £26K in his pension pot from being opted out. The govt therefore make a deduction (called the COD - Contracted Out Deduction) from the £155 to account for the fact that his SERPS NI money was paid into a different (private) plan. This dramatically reduces the amount of the new state pension - often down to only £50-£60 per week.
i'm pretty sure this bit isn't right. least i hope it isn't. SERPS was earnings related extra pension, on top of the £155 you can get if you have paid enough years ni. i was contracted out and my state forecast is still £155 a week. as i mentioned you can get a forecast at https://www.tax.service.gov.uk/checkmystatepension this is what they tell me at present:
"You were contracted out
In the past you've been part of one or more contracted out pension schemes, such as workplace or personal pension schemes.
When you were contracted out:
you and your employers paid lower rate National Insurance contributions; or
some of your National Insurance contributions were paid into your private pension schemes instead
Contracted Out Pension Equivalent (COPE)
Your workplace or personal pension scheme should include an amount of pension which will, in most cases, be equal to the additional State Pension you would have been paid. We call this amount your Contracted Out Pension Equivalent (COPE). Your COPE estimate is shown below.
The COPE amount is paid as part of your other pension schemes, not by the government. The total amount of pension paid by your workplace or personal pension scheme will depend on the scheme and on any investment choices.
a week
Your State Pension forecast £155.65
Your COPE estimate £43.55
COPE added to your State Pension forecast £199.20"
No - SERPS was earnings related extra pension, on top of the £115 basic state pension you can get if you have paid enough (30) years ni.
The COPE is an estimate of what your private pension will pay you in addition to whatever new state pension you get. The state is not going to pay you £199.20.
In effect they are saying that if you had not contracted out, then your basic+serps amount would/might/could/may have been £199.20. However, since you did contract out, your state pension will be £155, and your private contracted out scheme should pay you £43 instead. What your private pension actually does pay you depends upon what it's been invested in - it might be £43, or any amount from £0 to £squillions.
They are forecasting you will get £155 state pension when you retire - they aren't saying that you already have £155 'banked'. How old are you? Providing you have more than 8 years to go till your state pension age, AND by the time you retire you will have at least 35 years NI credits then you'll get the £155, because from now on the basic £115 will increase by £4.45 a year till you reach the new maximum of £155.
Anyone who was contracted out for long periods is very unlikely to have much more than £115 already 'banked'. I was contracted out for 20+ years, and I've currently got 31 years NI credits. My state pension estimate as of today is £120 ish. But since I've got more than 8 years till I reach state pension age, I should reach the 35years/£155 maximum. The only people that won't get £155 are those that were contracted out for a long time and reach retirement age within the next 8 years, and/or those who don't have 35 years NI credits.
-
Ah.......pensions. My wife started work as a teacher in 1993. She paid 6% of her pay into the teachers pension fund, with the promise of a good pension when she retired at 60. Many years later Gordon Brown decided that 6% wasn't really enough to keep the fund in credit so, after much negotiation with the unions, it was raised to 6.25% and Gordy said that would keep it in surplus for the foreseeable future.
Then Dave and George got into power and decided that it wasn't fair at all for public sector workers to have such a good pension. Why, they didn't even vote for the tories in the main. No sir, not fair at all.
So.....she now pays 12.5% of her wages into her pension, retires at 67 and gets less from her teachers pension. She also had to start paying an extra 1.4% NI last April because she's not contracted out any more, and probably won't get a full state pension.
Now that's more like it...much fairer.
-
Ah.......pensions. My wife started work as a teacher in 1993. She paid 6% of her pay into the teachers pension fund, with the promise of a good pension when she retired at 60. Many years later Gordon Brown decided that 6% wasn't really enough to keep the fund in credit so, after much negotiation with the unions, it was raised to 6.25% and Gordy said that would keep it in surplus for the foreseeable future.
Then Dave and George got into power and decided that it wasn't fair at all for public sector workers to have such a good pension. Why, they didn't even vote for the tories in the main. No sir, not fair at all.
So.....she now pays 12.5% of her wages into her pension, retires at 67 and gets less from her teachers pension. She also had to start paying an extra 1.4% NI last April because she's not contracted out any more, and probably won't get a full state pension.
Now that's more like it...much fairer.
You misunderstand. There is no fund. Your wife hasn't been paying into any 'fund'. There is no pot of money. The teachers pension, and most public sector schemes is unfunded. What your wife has is a promise from a long gone (communist!) government that future taxpayers will pay your wife a pension. That communist govt and others since have long since spent all the 6%/6.25%/12.5% contributions that your wife made. Now the chickens are coming home to roost, the future has arrived, and someone has to pay for these unfunded reckless promises.
The fact is that for a private sector person to accrue the benefits of most public sector schemes they would have to contribute between 20% and 30% of gross earnings to their pension plan for their entire working life. That's why the taxation on teachers/firemen/police etc pension schemes had to increase. Just be thankful that your wife had the free (well 6%) ride for so long.
Your wife is free to opt-out of the pension scheme if she wishes, and then she won't have to pay the 12.5%. It would be much better for future taxpayers and the country as a whole if she did so. However, she would be giving up a 20%-30% benefit in order to save 12.5%, so probably not in her/your interest.
Oh - and she WILL get a full/maximum state pension, providing she works for at least 8 years post 2016.
-
LC0112G is absolutely correct, and I'll quote my own figures to prove it .... I spent 38 years "contracted out" of serps whilst in the RAF and just under 4 years contracted "in" whilst working for the Courts.
I am due to start getting the State pension in September and the breakdown is as follows
Basic "contracted out" Pension " £115.00
Additional "SERPS" element £ 14.64
State Pension payable £129.64
COPE Estimate £136.60
Total Pension + COPE £266.24
As I have a "full" record of NI contributions I cannot do anything to increase either of these amounts, the good news however is that my Military Pension is actually a good deal higher than the COPE estimate.
-
Tiger, I agree with all you post, except...
It may be a case that you have paid enough stamp to gain a full pension :-\
Highly unlikely. To get the full new state pension (of £155 ish) you need 35 years of NI contributions, AND to have not been contracted out of SERPS/S2P. Moggy has £26K in his pension pot from being opted out. The govt therefore make a deduction (called the COD - Contracted Out Deduction) from the £155 to account for the fact that his SERPS NI money was paid into a different (private) plan. This dramatically reduces the amount of the new state pension - often down to only £50-£60 per week.
There is a safety net - As at 6-April-2016 the govt calculated how much you would have got under the old state pension scheme. This was made up of £115 basic (if you had 30 years NI), plus any SERPS/S2P. Assuming Moggy has 30 years NI, but little or no SERPS/S2P (due to being opted out) then the old figure will almost always be higher than the new figure. It's highly unlikely that anyone with significant opted out years will be entitled to more than £115 + a bit of SERPS.
The starting amount is the higher of the old rules and new rules as at 5/6/2016. Going forward, you get £4.45 ish added to the starting amount for every post 2016 years NI you are credited with, up to the £155 maximum. So if you start at £115, and work/are credited with 8 years @ £4.45 you'll make the £155 maximum, AND get to keep the money/income in/from your private pension plan.
I know my dad stopped paying full NI well before he retired due to the amount he had paid in ;)
You can't stop paying NI on earnings unless/until you reach state pension age. It doesn't only pay for pensions - it helps pay for the NHS amongst other things. If you continue to work past state pension age, then its true that you don't pay NI.
Not sure how the old mans pension worked :-\
I know he had a works pension which he was forced to claim on when he was only 56 due to medical problems which stopped him doing his job.
I also remember him saying something about he wasn't paying stamp or maybe full stamp due to having 35 years under his belt :-\
Well you know parents ::)
They never tell there kids the full story ::) ;D
-
Not sure how the old mans pension worked :-\
I know he had a works pension which he was forced to claim on when he was only 56 due to medical problems which stopped him doing his job.
I also remember him saying something about he wasn't paying stamp or maybe full stamp due to having 35 years under his belt :-\
Well you know parents ::)
They never tell there kids the full story ::) ;D
Many pension schemes have/had an insurance element. If you become unable to work for medical reasons then you can claim the pension early - early retirement on medical grounds. Rules vary, but some schemes top up your works pension to the full amount that you would have got if you had continued working till normal (60/65) retirement age, so it's often a good deal. Some schemes even pay you extra between when you retire, and when you reach state pension age to make up for the state pension that you aren't getting yet because you retired early. This extra stops once you do reach SP age.
You only pay NI on 'earned income'. Income from pensions isn't counted as 'earned income', so you don't pay NI on it (although you do pay income tax). However, the upshot is that if you live on only pension income you don't accrue any additional NI 'stamps' so your state pension entitlement doesn't increase. This means that if you retire early (with less than 30/35 years stamps), then you won't have enough to get a full state pension. You can pay volountary stamps in these cases to make up your 30/35 years, but if you've already got 30/35 years there is no point.
-
Ah.......pensions. My wife started work as a teacher in 1993. She paid 6% of her pay into the teachers pension fund, with the promise of a good pension when she retired at 60. Many years later Gordon Brown decided that 6% wasn't really enough to keep the fund in credit so, after much negotiation with the unions, it was raised to 6.25% and Gordy said that would keep it in surplus for the foreseeable future.
Then Dave and George got into power and decided that it wasn't fair at all for public sector workers to have such a good pension. Why, they didn't even vote for the tories in the main. No sir, not fair at all.
So.....she now pays 12.5% of her wages into her pension, retires at 67 and gets less from her teachers pension. She also had to start paying an extra 1.4% NI last April because she's not contracted out any more, and probably won't get a full state pension.
Now that's more like it...much fairer.
You misunderstand. There is no fund. Your wife hasn't been paying into any 'fund'. There is no pot of money. The teachers pension, and most public sector schemes is unfunded. What your wife has is a promise from a long gone (communist!) government that future taxpayers will pay your wife a pension. That communist govt and others since have long since spent all the 6%/6.25%/12.5% contributions that your wife made. Now the chickens are coming home to roost, the future has arrived, and someone has to pay for these unfunded reckless promises.
The fact is that for a private sector person to accrue the benefits of most public sector schemes they would have to contribute between 20% and 30% of gross earnings to their pension plan for their entire working life. That's why the taxation on teachers/firemen/police etc pension schemes had to increase. Just be thankful that your wife had the free (well 6%) ride for so long.
Your wife is free to opt-out of the pension scheme if she wishes, and then she won't have to pay the 12.5%. It would be much better for future taxpayers and the country as a whole if she did so. However, she would be giving up a 20%-30% benefit in order to save 12.5%, so probably not in her/your interest.
Oh - and she WILL get a full/maximum state pension, providing she works for at least 8 years post 2016.
I would have advised her to move as soon as the new 'career average' pension kicked in but........she gets tax relief at 40% on her contributions and her employer puts in a further 13%.
I also feel quite smug about my state pension. I will get the full whack in two years when I reach 65, and the last 12 years of my NI contributions were paid for me because I was named on the child benefit. (Something else that Dave and George took away). So at least I got something from them.
-
I would have advised her to move as soon as the new 'career average' pension kicked in but........she gets tax relief at 40% on her contributions and her employer puts in a further 13%.
It's true the new career average scheme isn't as generous as the old final salary one, but its still a cracking deal and much better than she would find outside of the public sector. And the employer 13% is smoke and mirrors - one part of govt paying another. They aren't putting anything 'in' since there isn't anything to put it 'in' to. There is no pot.
I also feel quite smug about my state pension. I will get the full whack in two years when I reach 65,
The full whack under the old (pre 2016) scheme was up to £276 p/w (£115 basic and £160 SERPS/S2P)
http://www.which.co.uk/money/retirement/guides/state-pension-explained/state-second-pension-and-serps/
and the last 12 years of my NI contributions were paid for me because I was named on the child benefit. (Something else that Dave and George took away). So at least I got something from them.
The govt hasn't stopped NI credits for those who qualify for Child Benefit, so you can/would still get NI years added if/while the kids are/were young enough. What the govt have stopped is the monetary payments for those where one partner is earning >£50K.
Someone earning almost £1K a week complaining about losing £20.70pw (plus £13.70 for additional sprogs)? I think STEMO doeth protest too much.
-
I decided to stay in SERPS when my company went from final salary to money purchase, (or whatever it,s called now). I,m glad i did as i got the maximum from my Serps plus a small amount from my private pension. I also paid NI contributions for all my working life, 49yrs. Have i paid too much? I know this no help to you Dean but i hope you get something sorted out soon mate.
-
The only reason I protest is that two people earning 40K each could still get it. Apparently, the government
couldn't be arsed said it would be too expensive to trawl through people's details to see what couples earn.
Sorry...should have 'quoted'.....child benefit I'm on about.
-
Oh....and my wife earns much more than £1K a week.
-
I know this no help to you Dean but i hope you get something sorted out soon mate.
Agree. Moggie, get yourself down the job centre and sign on if you haven't already. Then off to Citizens advice and see if you can claim any other benefits. It's what your previous years NI and tax payments have entitled you to.
Have i paid too much?
No. NI is not optional. If you work, are less than SP age, and earn more than £156 p/w then your employer must deduct NI from your salary. You may wind up paying 49 years of NI stamps when only 30/35 were/are required for a full SP, but there is/was never an option to not pay NI.
I decided to stay in SERPS when my company went from final salary to money purchase, (or whatever it,s called now). I,m glad i did as i got the maximum from my Serps plus a small amount from my private pension.
99.99999% of the time it is best to join a company pension scheme, whether final salary or money purchase, because the company makes contributions in addition to your own - thus often at least doubling your money. It's free money - daft to turn it down. Most (all?) final salary schemes were contracted out of SERPS. Money purchase schemes could be either, but there usually wasn't a choice of whether to opt in/out of SERPS - if you wanted to join a company scheme of whatever type you had to opt out if it was an opted out scheme. Regardless, it was best to accept the companies 'free money' even if you did have to give up SERPS.
For people without access to any company pension, you could chose to stay contracted in and build up SERPS, or to contract out, and have the SERPS bit of your NI paid into a private pension plan. There was a review a few years back which concluded that it was best to be contracted out if you were 45 or less, but contracted back in if you were >45.
The point is mute now though - All private pensions were forced to contract back into SERPS in 2012, and all company pensions were forced to contract back in last year. And this year, SERPS is abolished entirely and rolled up into the new state pension.
-
Thanks for that info LCO112G :y
-
No - SERPS was earnings related extra pension, on top of the £115 basic state pension you can get if you have paid enough (30) years ni.
The COPE is an estimate of what your private pension will pay you in addition to whatever new state pension you get. The state is not going to pay you £199.20.
In effect they are saying that if you had not contracted out, then your basic+serps amount would/might/could/may have been £199.20. However, since you did contract out, your state pension will be £155, and your private contracted out scheme should pay you £43 instead. What your private pension actually does pay you depends upon what it's been invested in - it might be £43, or any amount from £0 to £squillions.
They are forecasting you will get £155 state pension when you retire - they aren't saying that you already have £155 'banked'. How old are you? Providing you have more than 8 years to go till your state pension age, AND by the time you retire you will have at least 35 years NI credits then you'll get the £155, because from now on the basic £115 will increase by £4.45 a year till you reach the new maximum of £155.
Anyone who was contracted out for long periods is very unlikely to have much more than £115 already 'banked'. I was contracted out for 20+ years, and I've currently got 31 years NI credits. My state pension estimate as of today is £120 ish. But since I've got more than 8 years till I reach state pension age, I should reach the 35years/£155 maximum. The only people that won't get £155 are those that were contracted out for a long time and reach retirement age within the next 8 years, and/or those who don't have 35 years NI credits.
i think maybe we're discussing at cross purposes and it is complicated by the new pension. i have 35 years NI as at april this year, i was contracted out from SERPS for probably 10 years of those years, but i will get the new state pension of £155 at current prices (because of my 35 full years). agreed i won't get more than £155 from the state because i was contracted out of SERPS which was for additional pension above £155. i don't plan on paying anymore NI and i don't retire for another 9 years.
my statement is ambiguous though, they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
-
they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
My understanding is you will always pay NI, subject to earnings etc, as it covers more than just pension. Think of it also including your "health insurance" (ie, NHS), which you have to pay whilst earning.
-
they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
My understanding is you will always pay NI, subject to earnings etc, as it covers more than just pension. Think of it also including your "health insurance" (ie, NHS), which you have to pay whilst earning.
not if you're self employed and stay below the earnings limit. also no ni on any non state pension payments you are already receiving, which you can take from age 55 (was 50) although they are of course taxable.
-
i think maybe we're discussing at cross purposes and it is complicated by the new pension. i have 35 years NI as at april this year, i was contracted out from SERPS for probably 10 years of those years, but i will get the new state pension of £155 at current prices (because of my 35 full years). agreed i won't get more than £155 from the state because i was contracted out of SERPS which was for additional pension above £155. i don't plan on paying anymore NI and i don't retire for another 9 years.
my statement is ambiguous though, they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
The statement isn't ambiguous - you just haven't understood what they're telling you and you are in for a shock. 35 Years of NI does not get you £155 if you have been contracted out at any time in the past. It works like this....
Firstly, the govt calculate your "starting amount" as at 5/4/2016 based on the new and old rules.
Under the old rules, your starting amount is 30/30ths of the basic £115, plus some SERPS/S2P. From the figures you've posted we can calculate that if you had not been contracted out, then under the old rules you would've got SERPS of (£199.20-£115) = £84.20. However, you have been contracted out so your old rules starting amount will be very close to £115. It may be a bit more than £115 because of years you were opted in, but probably not by very much.
Under the new rules, your starting amount is 35/35ths of the 'flat rate' £155 minus the COPE amount of £43.55, which is £111.45.
So under old rules your starting amount as is £115 ish, and under the new rules the starting amount is £111 ish. Your actual starting amount is whichever is the higher of these two figures, which in your case is the old rules amount of £115 ish. Therefore as of 5/4/2014 you have 'banked' £115 of state pension.
It matters not if you have 35, 40, 45 or 50 years now - as things stand you will only get your starting amount. In order to get more state pension you need to either earn, be credited with, or pay for some additional post 2016 NI 'stamps'. Each additional post 2016 year will add £4.55 to your starting amount, so you are likely to need several (up to 8 ) years of additional stamps to qualify for the full £155 new state pension.
However - since you have 8 years till pension age, and you are continuing to work, you should reach the £155 target - but you're not there yet.
...they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
You can't stop paying NI even if you have reached full 35 years. It's not optional, and there is no way to opt out. You must pay it, even if it gives you no benefit.
-
i think maybe we're discussing at cross purposes and it is complicated by the new pension. i have 35 years NI as at april this year, i was contracted out from SERPS for probably 10 years of those years, but i will get the new state pension of £155 at current prices (because of my 35 full years). agreed i won't get more than £155 from the state because i was contracted out of SERPS which was for additional pension above £155. i don't plan on paying anymore NI and i don't retire for another 9 years.
my statement is ambiguous though, they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
The statement isn't ambiguous - you just haven't understood what they're telling you and you are in for a shock. 35 Years of NI does not get you £155 if you have been contracted out at any time in the past. It works like this....
Firstly, the govt calculate your "starting amount" as at 5/4/2016 based on the new and old rules.
Under the old rules, your starting amount is 30/30ths of the basic £115, plus some SERPS/S2P. From the figures you've posted we can calculate that if you had not been contracted out, then under the old rules you would've got SERPS of (£199.20-£115) = £84.20. However, you have been contracted out so your old rules starting amount will be very close to £115. It may be a bit more than £115 because of years you were opted in, but probably not by very much.
Under the new rules, your starting amount is 35/35ths of the 'flat rate' £155 minus the COPE amount of £43.55, which is £111.45.
So under old rules your starting amount as is £115 ish, and under the new rules the starting amount is £111 ish. Your actual starting amount is whichever is the higher of these two figures, which in your case is the old rules amount of £115 ish. Therefore as of 5/4/2014 you have 'banked' £115 of state pension.
It matters not if you have 35, 40, 45 or 50 years now - as things stand you will only get your starting amount. In order to get more state pension you need to either earn, be credited with, or pay for some additional post 2016 NI 'stamps'. Each additional post 2016 year will add £4.55 to your starting amount, so you are likely to need several (up to 8 ) years of additional stamps to qualify for the full £155 new state pension.
However - since you have 8 years till pension age, and you are continuing to work, you should reach the £155 target - but you're not there yet.
...they seem to think i will keep paying ni but i don't see any need since i already have the 35 years....
You can't stop paying NI even if you have reached full 35 years. It's not optional, and there is no way to opt out. You must pay it, even if it gives you no benefit.
thanks this is helpful but i definitely don't pay ni nor do they bill me it.
also my statement says
"Your State Pension forecast £155.65
Your COPE estimate £43.55
COPE added to your State Pension forecast £199.20"
it says COPE is added (although by my pension provider) not deducted.
also to assist here is an example from them:
"Example – the amount under the new scheme rules is higher
On 6 April 2016, Jim has 32 qualifying years on his NI contribution
record. He has been self-employed for long periods of his working
life.
Using the new State Pension scheme rules, Jim would get £135.68
a week (£148.40 [now £155.65]x 32/35ths).
Using the existing scheme rules, Jim would get £126.50 a week
(basic State Pension of £113.10 and £13.40 additional State
Pension).
Jim’s starting amount will be the higher of these two amounts,
which is £135.68 a week."
-
I decided to stay in SERPS when my company went from final salary to money purchase, (or whatever it,s called now). I,m glad i did as i got the maximum from my Serps plus a small amount from my private pension. I also paid NI contributions for all my working life, 49yrs. Have i paid too much? I know this no help to you Dean but i hope you get something sorted out soon mate.
Thanks for your concern mate,much appreciated.Dean :y
-
As an employee, Class one exemption threshold is £112 per week... less than this and you don't pay, between £155 pw and £827 pw and generally you pay 12%
As here... https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2016-to-2017
Self employed, you pay £2.80 pw Class 2 if you clear £5965 profit, plus a profit related 9% on anything from £8060 to £43000.
As here... https://www.gov.uk/self-employed-national-insurance-rates
This also might be useful reading... https://www.gov.uk/voluntary-national-insurance-contributions/why-pay-voluntary-contributions
Can be a trawl to find it, but lots of information there :y
-
I know this no help to you Dean but i hope you get something sorted out soon mate.
Agree. Moggie, get yourself down the job centre and sign on if you haven't already. Then off to Citizens advice and see if you can claim any other benefits. It's what your previous years NI and tax payments have entitled you to.
Have i paid too much?
No. NI is not optional. If you work, are less than SP age, and earn more than £156 p/w then your employer must deduct NI from your salary. You may wind up paying 49 years of NI stamps when only 30/35 were/are required for a full SP, but there is/was never an option to not pay NI.
I decided to stay in SERPS when my company went from final salary to money purchase, (or whatever it,s called now). I,m glad i did as i got the maximum from my Serps plus a small amount from my private pension.
99.99999% of the time it is best to join a company pension scheme, whether final salary or money purchase, because the company makes contributions in addition to your own - thus often at least doubling your money. It's free money - daft to turn it down. Most (all?) final salary schemes were contracted out of SERPS. Money purchase schemes could be either, but there usually wasn't a choice of whether to opt in/out of SERPS - if you wanted to join a company scheme of whatever type you had to opt out if it was an opted out scheme. Regardless, it was best to accept the companies 'free money' even if you did have to give up SERPS.
For people without access to any company pension, you could chose to stay contracted in and build up SERPS, or to contract out, and have the SERPS bit of your NI paid into a private pension plan. There was a review a few years back which concluded that it was best to be contracted out if you were 45 or less, but contracted back in if you were >45.
The point is mute now though - All private pensions were forced to contract back into SERPS in 2012, and all company pensions were forced to contract back in last year. And this year, SERPS is abolished entirely and rolled up into the new state pension.
I will get myself down to the jobcentre,and the cab.But there are a few problems ie the landlord will not accept housing benefit payments.Also we both have a loan and a credit card,with the bank.So if they are not being paid the bank will just close our accounts,and then take recovery action.On top of which all our other bills wont be paid gas,electric,car insurance etc.So unless we can find work we are up shit creek without a paddle,we have signed up with 10 agency's.And i have lost track of how many cvs i have sent out,but still no work i will just have to keep trying.Until we have no money left of cause.Dean :( :'(
-
:y
As an employee, Class one exemption threshold is £112 per week... less than this and you don't pay, between £155 pw and £827 pw and generally you pay 12%
As here... https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2016-to-2017
Self employed, you pay £2.80 pw Class 2 if you clear £5965 profit, plus a profit related 9% on anything from £8060 to £43000.
As here... https://www.gov.uk/self-employed-national-insurance-rates
This also might be useful reading... https://www.gov.uk/voluntary-national-insurance-contributions/why-pay-voluntary-contributions
Can be a trawl to find it, but lots of information there :y
Thanks mate,i will have a read through it :yDean. :y
-
Speak to Stepchange re your debts.
Would strongly recommend ringing them first thing :y
http://www.stepchange.org/
Pension side of things is currently irrelevant to you, but thread was side tracked...
Have a look at that link, fill in the online review (Debt Remedy) for your basic options, then ring them in the morning to discuss them :y
-
thanks this is helpful but i definitely don't pay ni nor do they bill me it.
Ok - I didn't realise you are now self employed. If you're self employed then you would normally get billed. However, if you contrive to keep your earnings/profits under about £115 p/w then it's true you can avoid Class 2 and Class 4 NI. However it also means you don't add another years stamp to your NI record.
https://www.gov.uk/self-employed-national-insurance-rates
Class 2 is being abolished, and since I maintain you're going to need a few (up to 8 ) more stamps to get the full state pension, you're probably going to have to pay some future class 4.
https://www.gov.uk/government/consultations/consultation-on-abolishing-class-2-national-insurance-and-introducing-a-contributory-benefit-test-to-class-4-national-insurance-for-the-self-employed/the-abolition-of-class-2-national-insurance-introducing-a-benefit-test-into-class-4-national-insurance-for-the-self-employed
also my statement says
"Your State Pension forecast £155.65
Your COPE estimate £43.55
COPE added to your State Pension forecast £199.20"
it says COPE is added (although by my pension provider) not deducted.
You need to contact DWP and get them to provide a WRITTEN statement of what your starting amount is, and how it's been calculated. The online systems don't provide that figure. Anecdotal evidence from those that have got written statements is that the starting amount for people who have ever opted out is somewhere close to the higher of either the old basic SP of £115, or the new SP of £155 minus their COPE amount.
also to assist here is an example from them:
"Example – the amount under the new scheme rules is higher
On 6 April 2016, Jim has 32 qualifying years on his NI contribution
record. He has been self-employed for long periods of his working
life.
Using the new State Pension scheme rules, Jim would get £135.68
a week (£148.40 [now £155.65]x 32/35ths).
Using the existing scheme rules, Jim would get £126.50 a week
(basic State Pension of £113.10 and £13.40 additional State
Pension).
Jim’s starting amount will be the higher of these two amounts,
which is £135.68 a week."
Jim in your example doesn't have a COD/COPE deduction since he was never contracted out of SERPS.
-
Speak to Stepchange re your debts.
Would strongly recommend ringing them first thing :y
http://www.stepchange.org/
Pension side of things is currently irrelevant to you, but thread was side tracked...
Have a look at that link, fill in the online review (Debt Remedy) for your basic options, then ring them in the morning to discuss them :y
Will do mate,thanks to all on OOF for your help and advice.Regards Dean,wife,and Rodney the cat. :)
-
But there are a few problems ie the landlord will not accept housing benefit payments.
The landlord doesn't need to know you're on Housing Benefit. It is paid to you. Even if he does find out, he can't just turf you out. You presumably have a tenancy contract and that still stands. He cannot even start the eviction process till the contract expires, or you're 2 months behind on the rent. If you keep paying the rent he's unlikely to even try and evict. Even if he does, then it'll take 3-6 months for him to get the courts to issue the eviction order. If/Once you are evicted, then the council will have to find you a home.
So - apply for housing benefit, now, or sooner if possible.
And I agree with Harris K.
-
But there are a few problems ie the landlord will not accept housing benefit payments.
The landlord doesn't need to know you're on Housing Benefit. It is paid to you. Even if he does find out, he can't just turf you out. You presumably have a tenancy contract and that still stands. He cannot even start the eviction process till the contract expires, or you're 2 months behind on the rent. If you keep paying the rent he's unlikely to even try and evict. Even if he does, then it'll take 3-6 months for him to get the courts to issue the eviction order. If/Once you are evicted, then the council will have to find you a home.
So - apply for housing benefit, now, or sooner if possible.
And I agree with Harris K.
Hi mate,thanks for that.My wife pays the rent through her bank account,to a lettings agency.They pass it on to him as he lives in London,but if the bank pulls the plug how do we pay the rent.Also why would the council be obliged to find us somewhere as we are private tenants.We have just signed a new tenancy with a new lettings agency,as the old one was ripping off the landlords.Does this help in any way.Dean. :y
-
As said by others Dean, your first port of call has to be Stepchange. Don,t go for these agencies that offer to sort your debts out, they are only after fees from you. My youngest had some great help from Stepchange and it,s free as they are a charity. Also the Citizens Advice Bureau (CAB) are a very good source of information, but it,s Stepchange you really need to get in contact ASAP. Best of luck mate. :y
-
Hi mate,thanks for that.My wife pays the rent through her bank account,to a lettings agency.They pass it on to him as he lives in London,but if the bank pulls the plug how do we pay the rent.Also why would the council be obliged to find us somewhere as we are private tenants.We have just signed a new tenancy with a new lettings agency,as the old one was ripping off the landlords.Does this help in any way.Dean. :y
Believe it or not, this is very good news. The minimum fixed term for a tenancy is 6 months, so you are secure for at least 6 months from the date you signed the contract. The landlord cannot even start eviction till that 6 months is up. Once the 6 months is up, realistically, it'll take at least further 3 months to evict you, so you're secure for the next 9 months at least provided you keep paying the rent (don't fall 2 months behind). Providing you keep paying the rent, the landlord won't want to evict because it's a lot of aggro and possibly expense to do it.
As for the bank - see what Stepchange say, but I'd be tempted to open a new basic bank account with a bank that you don't currently have any dealings or debts with. Then start paying the rent out of that bank account. If/when your current bank pulls the plug you can still keep paying the rent. The lettings agency won't care where the money comes from, as long as it does come.
The council have an obligation under law to house the homeless. This is true providing you don't make yourself intentionally homeless (by deliberately not paying the rent). If you are evicted by the landlord through no fault of your own then by law the council must find you somewhere to live. Don't expect a mansion though - council houses are in short supply and you might end up in a room in a B&B - but you won't end up out on the street.
Finally - don't be shy about asking for help. Sign on, visit CAB, claim all the benefits you are entitled to and talk to Stepchange. I'd also suggest asking for help over on the MoneySavingExpert boards - probably on the The Budgeting & Bank Accounts Board to start with : http://forums.moneysavingexpert.com/forumdisplay.php?f=20
-
As said by others Dean, your first port of call has to be Stepchange. Don,t go for these agencies that offer to sort your debts out, they are only after fees from you. My youngest had some great help from Stepchange and it,s free as they are a charity. Also the Citizens Advice Bureau (CAB) are a very good source of information, but it,s Stepchange you really need to get in contact ASAP. Best of luck mate. :y
Thanks mate,i am very great full for your advice and concern.Dean.
-
Hi mate,thanks for that.My wife pays the rent through her bank account,to a lettings agency.They pass it on to him as he lives in London,but if the bank pulls the plug how do we pay the rent.Also why would the council be obliged to find us somewhere as we are private tenants.We have just signed a new tenancy with a new lettings agency,as the old one was ripping off the landlords.Does this help in any way.Dean. :y
Believe it or not, this is very good news. The minimum fixed term for a tenancy is 6 months, so you are secure for at least 6 months from the date you signed the contract. The landlord cannot even start eviction till that 6 months is up. Once the 6 months is up, realistically, it'll take at least further 3 months to evict you, so you're secure for the next 9 months at least provided you keep paying the rent (don't fall 2 months behind). Providing you keep paying the rent, the landlord won't want to evict because it's a lot of aggro and possibly expense to do it.
As for the bank - see what Stepchange say, but I'd be tempted to open a new basic bank account with a bank that you don't currently have any dealings or debts with. Then start paying the rent out of that bank account. If/when your current bank pulls the plug you can still keep paying the rent. The lettings agency won't care where the money comes from, as long as it does come.
The council have an obligation under law to house the homeless. This is true providing you don't make yourself intentionally homeless (by deliberately not paying the rent). If you are evicted by the landlord through no fault of your own then by law the council must find you somewhere to live. Don't expect a mansion though - council houses are in short supply and you might end up in a room in a B&B - but you won't end up out on the street.
Finally - don't be shy about asking for help. Sign on, visit CAB, claim all the benefits you are entitled to and talk to Stepchange. I'd also suggest asking for help over on the MoneySavingExpert boards - probably on the The Budgeting & Bank Accounts Board to start with : http://forums.moneysavingexpert.com/forumdisplay.php?f=20
LCO112G,thank you for the time out of your life,to help and advise me.Its so much appreciated,as compassion and understanding is a rare thing in this day and age.Especially from someone who does not know me from adam,i will get my finger out and start making inquirers.But like you i have always tried to pay my way in life,and have never had to rely on handouts.But now it may be the time to get back what i have put in,Kind Regards Dean.
-
Dare I say stepchage could be a bad idea at this point?
My thinking is, I beleive they will want to freeze your debts and start an agreed low repayment process.
However if your not earning, and relying on this credit, it will leave you with no funds?
Once youve an income, yes, way to go, but 'could' it make things worse in this case?
No definiate idea, but consider the option...
-
Dare I say stepchage could be a bad idea at this point?
My thinking is, I beleive they will want to freeze your debts and start an agreed low repayment process.
However if your not earning, and relying on this credit, it will leave you with no funds?
Once youve an income, yes, way to go, but 'could' it make things worse in this case?
No definiate idea, but consider the option...
Sorry Jimbob, but that is misinformed...
You fill in your details as honestly as you can and they then give you options based on what suits your current position.
Certainly a Debt Management Plan is an option, unlike an IVA it is free and flexible, bankruptcy is another option...
BUT, as said the advice they give is based entirely on individual circumstances and therefore anything else we might say is purely conjecture ;)
From personal experience, talking to them and establishing options is a welcome relief in its own right as it's often impossible to see the wood for the trees when you're in the middle of it all :y
-
Happy to be wrong, based on heresay. just thought it may be worth chucking in.
End of they day, i beleive its advice, and you can walk away with no action if thats the course you want....
-
Happy to be wrong, based on heresay. just thought it may be worth chucking in.
End of they day, i beleive its advice, and you can walk away with no action if thats the course you want....
They are dealing with my situation, so speak as I find :y
-
Dare I say stepchage could be a bad idea at this point?
My thinking is, I beleive they will want to freeze your debts and start an agreed low repayment process.
However if your not earning, and relying on this credit, it will leave you with no funds?
Once youve an income, yes, way to go, but 'could' it make things worse in this case?
No definiate idea, but consider the option...
Thanks for the input Jim bob,much appreciated.Dean.
-
Happy to be wrong, based on heresay. just thought it may be worth chucking in.
End of they day, i beleive its advice, and you can walk away with no action if thats the course you want....
They are dealing with my situation, so speak as I find :y
Hi HKT,may i ask if you are in a similar situation to me.Regards Dean.
-
Happy to be wrong, based on heresay. just thought it may be worth chucking in.
End of they day, i beleive its advice, and you can walk away with no action if thats the course you want....
They are dealing with my situation, so speak as I find :y
Hi HKT,may i ask if you are in a similar situation to me.Regards Dean.
The only common ground is that we have debts that we cannot meet at the contracted amounts...
In your case, your unlikely to be able to pay anything towards them, especially with no income... debt repayment, with the exception of court imposed fines, is considered non essential when compared with housing and food.
Have you completed the online debt remedy? If not, I strongly urge you to do it before you ring them... it gives both them and yourselves a clearer picture of your specific situation. :y
In any case the last thing you want, or need, is for your creditors to be hounding you on a daily basis. Dealing with this aspect of your situation will relieve you from a burden of worry.
-
Happy to be wrong, based on heresay. just thought it may be worth chucking in.
End of they day, i beleive its advice, and you can walk away with no action if thats the course you want....
They are dealing with my situation, so speak as I find :y
Hi HKT,may i ask if you are in a similar situation to me.Regards Dean.
The only common ground is that we have debts that we cannot meet at the contracted amounts...
In your case, your unlikely to be able to pay anything towards them, especially with no income... debt repayment, with the exception of court imposed fines, is considered non essential when compared with housing and food.
Have you completed the online debt remedy? If not, I strongly urge you to do it before you ring them... it gives both them and yourselves a clearer picture of your specific situation. :y
In any case the last thing you want, or need, is for your creditors to be hounding you on a daily basis. Dealing with this aspect of your situation will relieve you from a burden of worry.
Hi mate can you but that part,in more layman's terms for me please.Regards Dean.
-
In your case, your unlikely to be able to pay anything towards them, especially with no income... debt repayment, with the exception of court imposed fines, is considered non essential when compared with housing and food.
In any case the last thing you want, or need, is for your creditors to be hounding you on a daily basis. Dealing with this aspect of your situation will relieve you from a burden of worry.
Hi mate can you but that part,in more layman's terms for me please.Regards Dean.
He means you need to prioritise any money you do have and how you spend it.
Priority 1 is putting food on the table, and keeping a roof over your head
Priority 2 is court imposed fines
Priority 3 is everything else
Trouble is, the creditors in Priority 3 know this, so may try and harass you into paying their bills in preference to all the others.
-
In your case, your unlikely to be able to pay anything towards them, especially with no income... debt repayment, with the exception of court imposed fines, is considered non essential when compared with housing and food.
In any case the last thing you want, or need, is for your creditors to be hounding you on a daily basis. Dealing with this aspect of your situation will relieve you from a burden of worry.
Hi mate can you but that part,in more layman's terms for me please.Regards Dean.
He means you need to prioritise any money you do have and how you spend it.
Priority 1 is putting food on the table, and keeping a roof over your head
Priority 2 is court imposed fines
Priority 3 is everything else
Trouble is, the creditors in Priority 3 know this, so may try and harass you into paying their bills in preference to all the others.
Dean please, please follow this link...
http://www.stepchange.org/DebtRemedy.aspx
Completing it will give you a much clearer understanding of what is what re your finances and therefore your options. Those options are far more detailed than I have the eloquence to explain...
The council can help with housing and the job centre with benefits/work aspects,
-
In your case, your unlikely to be able to pay anything towards them, especially with no income... debt repayment, with the exception of court imposed fines, is considered non essential when compared with housing and food.
In any case the last thing you want, or need, is for your creditors to be hounding you on a daily basis. Dealing with this aspect of your situation will relieve you from a burden of worry.
Hi mate can you but that part,in more layman's terms for me please.Regards Dean.
He means you need to prioritise any money you do have and how you spend it.
Priority 1 is putting food on the table, and keeping a roof over your head
Priority 2 is court imposed fines
Priority 3 is everything else
Trouble is, the creditors in Priority 3 know this, so may try and harass you into paying their bills in preference to all the others.
Dean please, please follow this link...
http://www.stepchange.org/DebtRemedy.aspx
Completing it will give you a much clearer understanding of what is what re your finances and therefore your options. Those options are far more detailed than I have the eloquence to explain...
The council can help with housing and the job centre with benefits/work aspects,
Ok mate i will, i am just so worried what will happen to my wife and the cat.I don't really care about myself,but there future.
-
Sit down with your wife, complete the debt remedy, then go and see the council and the job centre together.
Make all your decisions as a couple, that way you both know exactly what your plan of action is moving forwards. Also she will add a broader perspective to the problems you are both facing :y
At risk of sounding blunt/harsh, moping around worrying will acheive nothing, so get getting.
1. Sort the creditor items first, then you can put them on the back burner.
2. Go and see council housing officer/department.
3. Go to Job centre to sign on/see what support you are entitled to.
Steps 2 and 3 might need repeating a couple of times as I suspect how each place deals with you will probably have a bearing on what the other can do and vice versa.
In any case, this all needs to be done BEFORE you miss your rent.
-
For everyone elses benefit...
The Stepchange Debt Remedy is basically a thorough and detailed income/expenditure assessment which takes 20 mins or so to complete and is free and impartial.
Even if an alternative course to those suggested is taken, it forces you to look at your household budget and see where every pound is going.
-
Hi HKT,went on the step change web site and filled in the form.They advised me to stop my sky tv as it is to expensive,also for both of us to stop smoking.They also pointed out that i pay out £1322 per month but have no income, so said to phone them to discuss it in more detail.So i will do that tomorrow.I have a job interview tomorrow don't know if i will get it,but even if i do.I need to get my wife back into work to be able to cover all the bills.So unfortunately its not looking good Dean.
-
Hi HKT,went on the step change web site and filled in the form.They advised me to stop my sky tv as it is to expensive,also for both of us to stop smoking.They also pointed out that i pay out £1322 per month but have no income, so said to phone them to discuss it in more detail.So i will do that tomorrow.I have a job interview tomorrow don't know if i will get it,but even if i do.I need to get my wife back into work to be able to cover all the bills.So unfortunately its not looking good Dean.
Good luck with the interview :y
But please consider that you're unlikely to be paid before end of June, even if you start on Monday... Not trying to put a downer on it, but you need to start helping yourselves... Losing the sky and stopping smoking will probably take £200 off your bills without even trying... Whatever route you take regarding your debts, Stepchange will act as a single point of contact for your creditors, removing the immediate pressure there.
Did you both go to the Council and Jobcentre today? If not, why not?
-
LC0112G thanks very much for explaining the COPE deduction i thought i had my head round the new pension but obviously i didn't. not helped by hmrc hiding cope deductions behind assumed future years ni contributions. as you suggest i will request a written statement.
anyway i will have to buy more years, i had already paid £400 for 3 more years of class2 to bring me up to 35 years. i didn't contrive to keep my self employment profits below the limit, they just are. there are 2 more years of class 2 i could purchase (2014-16), presumably i should do that as class 4s are a lot more expensive. Or is it too late for those class2s to count?
i see class 2s will continue until at least april 2017 so I could increase up to 38 years but i have no idea how much further that would get me towards the £155 a week final state pension, if at all.
-
LC0112G thanks very much for explaining the COPE deduction i thought i had my head round the new pension but obviously i didn't. not helped by hmrc hiding cope deductions behind assumed future years ni contributions. as you suggest i will request a written statement.
anyway i will have to buy more years, i had already paid £400 for 3 more years of class2 to bring me up to 35 years. i didn't contrive to keep my self employment profits below the limit, they just are. there are 2 more years of class 2 i could purchase (2014-16), presumably i should do that as class 4s are a lot more expensive. Or is it too late for those class2s to count?
i see class 2s will continue until at least april 2017 so I could increase up to 38 years but i have no idea how much further that would get me towards the £155 a week final state pension, if at all.
The inland revenue links should explain what you can and need to do :y
-
Not getting involved in the whole pension discussions but...
Speak with Stepchange. I had to when my business went tits up last month. OK, I was lucky because I knew something was lined up but there was a month's gap. The advice given to me was to speak to the companies, which I did - Mortgage company gave a 2 month zero payment agreement, bank froze all payments to them, fees and interest, including on a loan, for 4 months. All I did was be honest with them all.
As for JSA, Housing Benefit etc... Claim it! You are entitled so get yourselves down there TODAY! There's a waiting period before they start paying and it took 3 weeks before I saw any money. In the end I got just under £200 JSA for the month but it's better than nothing ;)
Most of all, don't ignore the situation (which you aren't by the sounds) and just bury your head. Talk with people and they will work with you :y Chin up :D
-
Hi all just a quick update.First i got the job £8.50ph plus lots of overtime,but the wife is still unemployed.So i rang hartlepool council to ask about help if we are made homeless,we have an appointment Monday.Also contacted the job center about what we can claim,ie housing benefit,working tax credits and anything else.As the wife is not working we may get something,don't know what until our appointment Monday.I will also speak to step change next week personally,to see what options they advise.As you all say i need to find out what help,i can or cant get.Thanks for all your comments and advice,Dean.
-
Not getting involved in the whole pension discussions but...
Speak with Stepchange. I had to when my business went tits up last month. OK, I was lucky because I knew something was lined up but there was a month's gap. The advice given to me was to speak to the companies, which I did - Mortgage company gave a 2 month zero payment agreement, bank froze all payments to them, fees and interest, including on a loan, for 4 months. All I did was be honest with them all.
As for JSA, Housing Benefit etc... Claim it! You are entitled so get yourselves down there TODAY! There's a waiting period before they start paying and it took 3 weeks before I saw any money. In the end I got just under £200 JSA for the month but it's better than nothing ;)
Most of all, don't ignore the situation (which you aren't by the sounds) and just bury your head. Talk with people and they will work with you :y Chin up :D
Cheers mate kind words.Dean.
-
Congrats on the job, but dissappointed that you are only just taking steps... that said, it sounds like your are starting to get the ball rolling, which can only be a good thing :y
-
Sorry I cant help with the financial advice (other than lose the non essentials like Sky, and fags if you can), not something I know enough about...
BUT...
I will also speak to step change next week personally
...why didn't you get this done days ago. Stop delaying, they are there to help, and I'm sure the relief following the initial conversation will be like passing a bowling ball. Do it!
-
Sorry I cant help with the financial advice (other than lose the non essentials like Sky, and fags if you can), not something I know enough about...
BUT...
I will also speak to step change next week personally
...why didn't you get this done days ago. Stop delaying, they are there to help, and I'm sure the relief following the initial conversation will be like passing a bowling ball. Do it!
This :)
Dean, for the record mate, I used to be a total cock when it came down to money.
I lived the dream for years on credit until it turned to shit :(
I've done the replacing 1 loan with another loan :-[
I've done the "sticking my head in the sand" bit :-[
I've done the denial thing :-[
I've done the running away thing too :-[ :-[
I affectively lost a business and very very nearly my sanity and my family because I wouldn't face upto it and kept running away :-[
Trouble is, it WILL get you in the end unless you sort this out once and for all :)
Be honest with them no matter what because believe me, these people have sorted out bigger oppsups then you have made :)
Just think of Monday 23rd May 2016 as the first day of your new life because that's what it will feel like when the worries fade away and you wake up with a smile of your face :)
-
LC0112G thanks very much for explaining the COPE deduction i thought i had my head round the new pension but obviously i didn't. not helped by hmrc hiding cope deductions behind assumed future years ni contributions. as you suggest i will request a written statement.
anyway i will have to buy more years, i had already paid £400 for 3 more years of class2 to bring me up to 35 years. i didn't contrive to keep my self employment profits below the limit, they just are. there are 2 more years of class 2 i could purchase (2014-16), presumably i should do that as class 4s are a lot more expensive. Or is it too late for those class2s to count?
i see class 2s will continue until at least april 2017 so I could increase up to 38 years but i have no idea how much further that would get me towards the £155 a week final state pension, if at all.
The inland revenue links should explain what you can and need to do :y
yes they should. they don't, hence my post ::)
-
Sorry I cant help with the financial advice (other than lose the non essentials like Sky, and fags if you can), not something I know enough about...
BUT...
I will also speak to step change next week personally
...why didn't you get this done days ago. Stop delaying, they are there to help, and I'm sure the relief following the initial conversation will be like passing a bowling ball. Do it!
This :)
Dean, for the record mate, I used to be a total cock when it came down to money.
I lived the dream for years on credit until it turned to shit :(
I've done the replacing 1 loan with another loan :-[
I've done the "sticking my head in the sand" bit :-[
I've done the denial thing :-[
I've done the running away thing too :-[ :-[
I affectively lost a business and very very nearly my sanity and my family because I wouldn't face upto it and kept running away :-[
Trouble is, it WILL get you in the end unless you sort this out once and for all :)
Be honest with them no matter what because believe me, these people have sorted out bigger oppsups then you have made :)
Just think of Monday 23rd May 2016 as the first day of your new life because that's what it will feel like when the worries fade away and you wake up with a smile of your face :)
Just a quick update,not going in to details.But step change were not that helpful i will have to sort this out myself.Dean.