PSE

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Age 62, took pension at 60, still working for Royal Mail length of service 17years, Still contributing to RMPP. I have no other pension, only State Pension when eligable, should I opt out of PSE.Would appreciate a bit of advice.Thanks

[RobertT]

I can't think of any reason why you would want to opt out, unless you actively want to pay more National Insurance.

[cloherty1976]

I can't think of any reason why you would want to opt out, unless you actively want to pay more National Insurance.

Does this pse reduce your life cover as I believe it's 4 times your pensionable salary?

[TrueBlueTerrier]

I can't think of any reason why you would want to opt out, unless you actively want to pay more National Insurance.

Does this pse reduce your life cover as I believe it's 4 times your pensionable salary?

If you death in service benefit - no - thats specifically covered in the literature.

[envelope]

I have sent for a pension forcast as I am not sure if I would qualifyfor the new amount of State Pension £155 When I reach retiring age. Am I right to think that if I opt out of PSE and pay more N.I. I would then get about another £4.30 a week added to my state pension, would that be better than PSE as I have already taken Pension and only a very small amount to come when retire.

[RobertT]

I have sent for a pension forcast as I am not sure if I would qualifyfor the new amount of State Pension £155 When I reach retiring age.

At your age I would imagine you would have at least enough qualifying years to get the level of the current Basic State Pension, which is about £116. Whether you are entitled to anything more than that will depend on your working history and how many of those years were spent contracted in or out of the State Second Pension. You are doing exactly the correct thing in getting a State Pension Forecast as it will be specific to you and your individual work/NI record.

Am I right to think that if I opt out of PSE and pay more N.I. I would then get about another £4.30 a week added to my state pension

No.

would that be better than PSE as I have already taken Pension and only a very small amount to come when retire.

All members of the RMPP, so everyone who joined the RM pension before April 2008, are currently contracted out of the State Second Pension and so pay a reduced rate of NIC’s. From April 2016 contracting out is stopping and NIC’s will increase. A product of that increase is that we will begin to accrue more state pension at the rate of 1/35th of whatever the new state pension rate is. Based on a rate of £150, that would be about £4.30 per week more.

PSE is just a way of reducing the effect of that increase in NIC’s and does not affect your state pension either way.

[nataddick]

Totally agree with Robert T - NIC's will be going up from April 2016 whether you opt in or out of PSE, to fund the new flat rate State Pension. It has to be funded somehow and is not a Government freebie for the deserving !

The upside is 1/35th of the higher flat rate (estimated to be £155 p.w.) is 'earned' for each contribution year from inception until State Retirement Age. The entitlement to this accrual rate will not change as a result of the introduction of PSE.

There is a lot of negative comment around the workplace and these forums due to a lack of understanding. It is a complex subject and I understand why employees are sceptical but the facts are, that PSE is a positive step to improve the remuneration package of RM employees and hopefully preserve the RMPP beyond 2018.

Entitlement to the new flat rate State Pension accrual from April 2016 is unaffected by the decision to opt in or out of PSE, so do not let it cloud your judgement on participation.

[cloherty1976]

I can't think of any reason why you would want to opt out, unless you actively want to pay more National Insurance.

Currently I pay £300 a month national insurance so I take it when it goes up to 12% I'll pay £350. Would this be correct ?

[RobertT]

I can't think of any reason why you would want to opt out, unless you actively want to pay more National Insurance.

Currently I pay £300 a month national insurance so I take it when it goes up to 12% I'll pay £350. Would this be correct ?

If i've worked it correctly it would be just under £340. Although that is based on a 20% tax payer. Any earnings over about £42,000 only incur 2% NIC's.

[arnold cheshire]

I can't think of any reason why you would want to opt out, unless you actively want to pay more National Insurance.

Currently I pay £300 a month national insurance so I take it when it goes up to 12% I'll pay £350. Would this be correct ?

thats a lot of national insurance contributions

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thank you all for your replies, it has made. P.S.E. much clearer. very grateful to you all. state pension forecast £144-99. very grateful to you all.