The state pension explained: how much is it worth, why is it important & what is it? We were amazed at the value of this little understood state benefit. Its made for flexible working!
thanks to Robert from RockwellFinancial.ie
– Good Morning, Justin from Talent Force Recruitment we are all about flexible jobs, flexible professional jobs to give you that work life that you’re looking for. Today, we’re very fortunate to be joined by Robert Wheeler from Rockwell.
– Robert is going to talk to us about State pensions. Explain the State pension system to me and where you think it’s going, and–
– I’m doing this in 60 seconds?
– 60 seconds.
– Exactly, so the State pension system is very simple, believe it or not. It’s all based on contributions. Your mom and dad would have called them stamps. Okay, we just call them credits today.
– Very simply, every week you work you get a credit; you accumulate these credits. When you get to a certain qualifying age at the moment at 66 if you’re between 57 and 65 it’s 67 and then it goes to 68 for anyone whose less than 57 You apply to the local social well fare office to claim your state pension.
– They then say, how many credits have you paid over your lifetime?
– So they’re keeping tabs the whole time?
– Of course they are, it’s like the revenue. They’ve got to, every time your employer or if you’re self employed, it doesn’t make a difference every time you make a peer site contribution that is logged against your PPS number.
– And does it matter how much the contribution is?
– No you have to do a minimum of eight hours per week to qualify for credit.
– Just eight hours a week. So somebody whose doing 50 hours a week is getting the same credit towards their social welfare state pensions someone who is doing eight hours a week.
– Fantastic, okay so flexible working suits.
– Absolutely suits the state pension system.
– Very good.
– There’s no drawback at all, and that’s eight hours a week over a four week period. So you can have, you can mix it up but we won’t get too complicated.
– Yeah, sure.
– Then when you come to retire it’s based on an averaging system. So it’s from the days you started to work to the age that you’re claiming the pension. So very simply, if you started working at 20 and you claim your pension at 66 they take your all peerly site contributions or the credits, the stamps so say it’s a thousand.
– You then take that–
– The number not the amount of money?
– No, it has nothing to do with the money.
– Yeah, the difference between the Irish system and say the US system, so it’s complete everyone gets the same amount, I’m sorry it’s 238 Euros a week should just state that, very important. Everyone gets exactly the same amount if they qualify for the full rate. So what they’ll do is they look at your total contributions from the days you first started working, to the date you want to claim. Then they divide that by the number of years, so say it’s 46 years working into a thousand.
– That gets you an average. That average is say 23. That equates to an amount of state pension. In order to qualify for the full state pension you need a minimum of 48 weeks average.
– Okay, if you don’t have that the next bracket down gives you 98 percent of the full rate. So 98 percent of 238 per week. It then goes in stages. So basically, the minimum requirement is an average of 10 credits per year.
– Very good.
– So you need a minimum of 520 contributions to qualify for state pension.
– So its step by prorate. So how much right now is a State pension per week and per month?
– 238 per week.
– So it’s how much a year?
– Oh, 12562 like I might be a couple Euro off.
– So 12,000. So if I were to go into the market and try and buy a product called the state pension, they would pay me 12,000 Euros a year–
– From retirement. How much would that cost you?
– Approximately 390,000 Euros.
– Really? So this is a really valuable asset.
– Absolutely, yeah and like it isn’t sold enough in terms of the government because you can literally work for eight hours a week pay contribution of maybe 30-40 Euros per month of Peer SI and still claim this 12 and a half thousand Euros a year; so if you put the same amount into a private pension, you’d be saving for a thousand years and you still wouldn’t have enough you know. So that’s a job.
– So the state pension sounds like it’s not publicized enough, how to access it.
– Definitely not. No, and even as the qualifying criteria So just because maybe you’ve been a stay at home partner or spouse there are credits there whereby you can clear the qualifying hour and claim for.
– So I actually cued a link to that at the end of this video. It’s free, if you’ve been in work for a number of years you’re allowed caring for kids or whatever reason you’re actually allowed to claim years back.
– Exactly yes.
– So these are worth, these are actually worth something.
– Robert, thank you for making that simple–
– Simple to understand. Okay, thank you very much Justin from Talent Force for Flexible Jobs and Robert from Rockwell Financial Services; I included their email address. Please check out our website for jobs or give us a call. 01-908-1514. Thanks for your time.
– Thank you.
– Take care, bye bye