I make no apologies for copying a short, but significantly important article that appeared in the Daily Telegraph. If you would like to know more give me a call or look at our website, www.makingmoneymakesense.co.uk:
Daily Telegraph, Wednesday 7th September 2011
by Rosie Murray West
A full pension but over 50s still pay. Is this You?
Employees in their fifties and sixties are wasting £32 a week each paying national insurance contributions when they have already racked up enough years of payment to get a full state pension.
A reply to a parliamentary question from Steve Webb, pensions minister, showed that the number of people reaching their qualifying state pension age with more than their qualifying years of state pension contributions has risen 70,000 to 430,000 in the tax year 2010 to 2011.
In total, 6.2 million people were still paying contributions despite achieving a full entitlement in 2008-9, the figures showed.
They paid £10.6 billion in 2008-9, in that tax year – the latest for which estimates are available. Tom McPhail, a pensions expert from Hargreaves Lansdown, said “The Government applies an employment tax which is notionally allowing you to qualify for a state pension. However, when you have paid enough to get it, you still have to pay the tax.”
Ros Altman, the director-general of Saga, said that “people would feel they are contributing jfor nothing” because they are continuing to pay up but getting no more pension for it.