What\’s this Gideon has done with pensions

I\’m a little unclear as to what it is that Osborne has done with pensions.

There\’s the move to the £140 a week pension, OK, that\’s good. The lower pension topped up with credits just diminished the incentive to save.

But there\’s something about \”losing the second state pension\”?

Is he thus abolishing SERPS? All those people who paid into it, the higher NI contributions for all those years, now get nothing from having done so?

Is that what\’s he\’s done? The papers aren\’t making it clear.

Anyone know?

7 comments on “What\’s this Gideon has done with pensions

  1. Budget 1.211: “The Government will bring forward further detail in a White Paper”

    Linked to the DWP Green Paper and consultation here. From that, it does indeed look like they’ve selected “Option 2” and SERPs is dead. Exactly what transitional arrangements there will be we’ll have to wait and see.

  2. Anticipation of shenanigans like this (and that state provision overall would be minimal by the time I get to the appropriate age sometime next decade) was why I contracted out while that was an option.

    I am feeling vindicated today; not that I’m happy about that.

  3. The DWP paper I read on this a year or two back had a very long transitional period. Accrued S2P/SERPS rights are definitely honoured, and people start building up rights to the new BSP as well. It is a mess until everybody alive now has died, and then it is simple.

  4. Ah, yes, SE has the link. Yes, they will abolish SERPS/S2P to new accrual, but accrued rights are not confiscated or anything absurd like that.

    http://www.dwp.gov.uk/docs/state-pension-21st-century.pdf

    This is perhaps the relevant paragraph on p.31:

    Under single-tier, contracting out would end with the closure of the State Second Pension.
    However, it could take a significant amount of time for members of contracted-out schemes to work through the system. This means that the need to apply an offset to take account of periods spent contracted out of the State Second Pension would continue under single tier.

  5. I have a terrible feeling that Serps payments will not be uprated properly for inflation so that they wither away like the age-related allowance ( and the recipients). Can it be long before Gideon sagely decides that benefits should only be uprated by inflation in real terms?

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