SOCIAL SECURITY BENEFITS/PENSIONS – STATE BENEFITS
Synopsis: If you think that you can now obtain a BR19 projection based on the single state pension tier system, then think again. There may be a new booklet explaining the state pension statement, but there are no new numbers yet.
Date posted: Wednesday, May 28, 2014
You might have thought that the publication of a revised ‘Your State Pension statement explained’ (see our earlier Bulletin) by the DWP last week meant that State Pension projections (often referred to as a BR19 projection) are now incorporating single tier figures. However, that is not the case. Go to the State Pension statement website and it soon emerges that the system is currently only producing statements ‘calculated using the rules of the current State Pension scheme’, ie basic + additional pension.
Worse still, for men born between 6 April 1951 and 5 April 1955 and for women born between 6 April 1953 and 5 April 1955, there is not even a current basis statement. Instead they are told ‘You need to call the Future Pension Centre’, which will take details and ‘call you back within 7 days.’
Quite what the call back will contain is unclear. On Saturday’s Radio 4 programme ‘Money Box’ Steve Webb, the Pensions Minister, was asked about projections for those nearing State Pension Age (SPA) after 5 April 2016. He said that there was nothing available now but that his department were ‘prioritising’ the production of statements for the two million plus people who reach SPA in the first five years of the new regime (ie up to 5 April 2021). They will be able to request a statement ‘later this year’ – it will not be issued automatically.
The Money Box presenter asked the question which has probably crossed your mind – ‘Are you sure?’ – and, in the best of political traditions, Mr Webb merely repeated the ‘later this year’ mantra in his reply without saying the magic word ‘yes’. Anyone with memories of the difficult transition from SERPS to S2P in 2002 will wonder whether the DWP – or more accurately its IT contractors – will meet the target.
COMMENT
The introduction to the Steve Webb interview referred to DWP figures showing that only about 1 in 8 would receive the full flat rate pension (£148.40 in 2014/15 terms – 5p more than the standard minimum guarantee), while 6 in 10 would get less (mostly due to contracting out) and about a quarter would get more (due to S2P/SERPS). That is a useful reminder for anyone nearing retirement after the single tier pension begins not to count on £150 a week from the state.
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