UK Pension & Voluntary Payments Questions

[kuma]

However, the UK scheme is currently better funded than the Japanese one: https://www.ft.com/content/431a5030-71a ... 0fdae72044

Ben, is there any chance of pasting an excerpt / short summary of that article as it's under a paywall? Sounds interesting. Or a blog post?!

[RetireJapan]

You can get past the paywall of the FT by Googling the specific article name and answering a short survey.

Here are bits of the text (from 2015):

Denmark and the Netherlands are the only two countries with pension systems that could be regarded as “first class”, according to a comprehensive global pensions study.

The two countries rank first and second in the Melbourne Mercer Global Pension Index, which measures the health of the pension systems in 25 countries to assess whether they will be able to deliver adequate future provision.

The report, produced jointly by Mercer, the consultancy, and the Australian Centre for Financial Studies in Melbourne, says that big reforms are required to improve the pension systems of some of the world’s most populous countries, including China, India, Indonesia and Japan.

Japan, Austria and Italy score poorly in the report. They have high levels of government debt, inadequate pension assets and ageing populations, finds the study.

Pension systems in other advanced economies including the US, Germany, France and Ireland were also found to face large risks that could endanger their long-term health.

The UK’s score was marked down following the recent removal of the requirement for retirees to buy an annuity that would provide a guaranteed income until death. Even Australia’s highly regarded pension system, ranked third in the report, could be improved by requiring part of any retirement benefit to be taken as an income stream, rather than a single lump sum, the report finds.

The report shows average years in retirement have risen from 16.6 in 2009 to 18.4 in 2015. Mercer forecasts this will increase to 19.2 by 2035.

Only Australia, Germany, Japan, Singapore and the UK have raised their state pension age to counteract increases in life expectancy.

[kuma]

Thanks for posting excerpts from the article and explaining how to access the original for free. Very interesting reading.

[ricardo]

So the article isn’t about state pensions, it’s about pension provision/“systems” [sic] in general. Because it says: “The UK’s score was marked down following the recent removal of the requirement for retirees to buy an annuity that would provide a guaranteed income until death.”

The so-called ‘pensions freedom’ law has nothing whatsoever so do with the UK state pension. It’s about how people can access their company/private pension funds.

They should mark it UP for this, not down....

I’ve got a feeling they don’t know what they’re talking about.

[RetireJapan]

They seem to be looking at each country's overall pension provision, not just the state pension.

There must be some kind of state pension comparison somewhere online. Can anyone find one?

[ricardo]

I guess common sense dictates that the state pension schemes of Japan and the UK are stronger than those of Indonesia or India.

Actually, in the UK i don’t think there’s such a thing as a state pension fund put aside by the government. Historically National Insurance was intended to fund it (and health care) but I think these days it just comes out of general taxation. I think this is different from Japan, where there really is a fund which is actively invested. Maybe this makes the UK scheme ‘safer’ but I don’t see any circumstances where the Japanese government won’t fund the scheme to meet its obligations. But I can see them raising the retirement age or cutting the pensions payable for future claimants. However, given that we pay a set amount per month isn’t there therefore a contract with the government which obliges them to pay the agreed amount in the future? It might be legally questionable whether they could cut benefits for existing contributors.

Anyway, bottom line is don’t rely on either scheme. Regard what you might get as a bonus for discretionary spending.

[Moneymatters]

Mindless curiosity on my part.

Has anyone had their online HMRC Pension Record /forecast updated for 2022-2023 April yet?

Mine still shows record up to 5th April 2022..

[Beaglehound]

Mindless curiosity on my part.

Has anyone had their online HMRC Pension Record /forecast updated for 2022-2023 April yet?

Mine still shows record up to 5th April 2022..

Haven’t checked yet as I only paid 2022-23 six weeks ago and I am not sufficiently optimistic to check before autumn.

[Gareth]

Mindless curiosity on my part.

Has anyone had their online HMRC Pension Record /forecast updated for 2022-2023 April yet?

Mine still shows record up to 5th April 2022..

If you are paying by direct debit, all of the payments haven’t been taken yet. I’m on the six-monthly direct debit plan and the second payment for the 2022-2023 tax year will be taken on the second Friday in July 2023.

Payments for the 2023-2024 tax year will be taken in January 2024 and July 2024 if on the six-monthly plan.

It’s worth remembering this when you are getting towards your 35 years so you don’t accidentally stop paying too early.

[northSaver]

Mindless curiosity on my part.

Has anyone had their online HMRC Pension Record /forecast updated for 2022-2023 April yet?

Mine still shows record up to 5th April 2022..

I paid mine and my wife's in mid-April by bank transfer, and wasn't going to check it until at least mid-July based on past processing times. But we got a letter in early June about my wife's payment, which said it had been processed and asked what they should do with the extra money (I tried to be clever by paying 2023-24 for her at the same time, but it just confused them so I won't try that again ). Anyway, I logged on to Gateway to see if anything had changed and, lo and behold, both our 2022-23 payments were included. That's pretty quick for them! They wrote the letter less than a month after we had paid.

So MM, when did you actually send them the money? And did you send them a letter explaining that you had sent it? This part is crucial in my experience. You'd have thought that since the exact money required has arrived in the bank account they specified, with the unique NI number of the payee as a reference, then they'd know what it was for. But no, they don't seem to do anything with it until you explicitly tell them. So I always send a letter with lots of details on the day I make the payment, which seems to do the trick. Good luck!