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THIS TRANSCRIPT IS ISSUED ON THE UNDERSTANDING THAT IT IS TAKEN FROM A LIVE PROGRAMME AS IT WAS BROADCAST. THE NATURE OF LIVE BROADCASTING MEANS THAT NEITHER THE BBC NOR THE PARTICIPANTS IN THE PROGRAMME CAN GUARANTEE THE ACCURACY OF THE INFORMATION HERE.

MONEY BOX LIVE Presenter:

PAUL LEWIS

TRANSMISSION:

15 th OCTOBER 2007

LEWIS:

Hello. Never have pensions been more important and never

3.00-3.30

RADIO 4

have they been more complicated. The state pension is changing from one set of rules which are so obscure that very few people understand them, to another set of rules which seem just as hard to grasp. Pensions at work are being cut back by many employers, often without the staff realising. Just how much will you get when you retire?

And the simplification of the tax and contribution rules for personal or

company pensions in April 2006 has led to a new set of complicated ideas to understand and choices to make. So no shortage of things to talk about in pensions and no shortage of calls either, but you can still ring with your question on 08700 100 444. With me today to answer your questions are Gill Cardy, a financial planner at Professional Partnerships; Gary Jefferies, a financial adviser with Park Row Associates; and Malcolm McLean, chief executive of the Pensions Advisory Service. And the first question is from Tim in South Somerset. Tim, your question?

TIM:

Hi there. Yes, I’m a self-employed plumber and my wife and

I have just finished building our own house into which we’ve put all our money, if you like, and all our investment. But shortly I’m going to start earning again and I wondered what should I do really? Where shall I go? What should I look for and how much of my income should I be putting aside?

LEWIS:

Well those really are the £64,000 questions, aren’t they? Gill

1

Cardy?

CARDY:

Absolutely. It’s not as simple as saying £64,000 of course.

LEWIS:

That was a month. (Laughs)

CARDY:

Oh I see. Yes, absolutely, yes … well the way things are

going. I mean the key issues really are - for anybody to think about - are how old you are, when you want to stop working and what sort of target level of income you would be aiming for. And if you can tell me that, I could perhaps crunch some numbers while the others have a chat to you about some of the other issues around investments and companies to look for.

LEWIS:

So what do you want from Tim?

CARDY:

So how old are you now, Tim?

TIM:

I’m 32.

CARDY:

32. And what’s your vision of when you think that you might

actually be hanging up your plumbing tools?

TIM:

(Laughs) Well I’d like to next week, but obviously

realistically I suppose …

CARDY:

And the realistic answer is … ?

TIM:

About … Well about 60, I would say.

CARDY:

About 60. Okay. And do you have any other existing pension

provision at the moment?

TIM:

No I don’t, no.

2

CARDY:

Okay. So what sort of level of income do you think you

would want to be living on bearing in mind that some of the liabilities perhaps around children and mortgage you know will have perhaps ceased by then? In today’s money.

TIM:

In today’s money - sort of £20,000 to £30,000, I would have

thought.

CARDY:

Okay, right.

LEWIS:

(to Gill) Is that what you need?

CARDY:

That’ll be fine. And if I hand over to the other guys while I

crunch a couple of numbers …

LEWIS:

You need five minutes.

CARDY:

… and I shall magically come up with a theory.

LEWIS:

Okay, Gary Jefferies, what do you have to add to this?

JEFFERIES:

Hello Tim. In terms of affordability, what at the moment can

you actually afford in terms of percentage of income when you go back to the new role?

TIM:

Well my wife works and we have no children, so we’re in a

good position to put you know a fair bit of money away at the moment, I should think.

JEFFERIES:

What’s your wife’s role? What does she do?

TIM:

She’s an HR professional.

JEFFERIES:

Well in terms when we’re looking at this figure of providing

£20,000, that’s going to be a figure that you can provide effectively between you 3

rather than one person alone reaching that income, one would presume. Is that right?

TIM:

Yes, yes.

JEFFERIES:

Well that gives you greater flexibility because she will

presumably have benefits in her own name. You’d both be part of the state pension scheme, I would assume?

TIM:

Yes.

JEFFERIES:

So that will actually form a build up of pension albeit that will

be, given your age, be delayed to at least 65. It could be later than that as well. I think in terms of what you’re looking to do, you may - given the fact you’re starting relatively late - need to think perhaps part retiring by the age of 65 where you would use the pension to supplement some of the income and perhaps still work after that date.

LEWIS:

And what kind of investments do you think Tim should be

looking for? What kind of pension fund should he be looking for?

JEFFERIES:

At your age, you should primarily be looking for an equity

type …

LEWIS:

You’re talking about shares in the stock market …

JEFFERIES:

The stock market.

LEWIS:

… because that is over that period of time in every other

period of time that length has gone up?

JEFFERIES:

Yes. And also given your age, you’ve got a much longer

period as to when the money’s actually required.

4

LEWIS:

Tim, I can see Gill is still working out these figures, so stay on

the line and I’m going to take a completely different call from Tom who’s in Filton and we’ll come back to you, Tim, when Gill’s got some figures. Tom, you have a rather different question for us.

TOM:

Yes, it concerns the other end of the life span really. I’m 71, I

have a reasonable occupational pension. I’ve also built up though a separate personal pension sum, which is in a draw down scheme but I’ve not drawn any of it, but I have drawn the 25% tax free as a means of passing on to the family and limiting our potential inheritance tax liability. I’m left with a sum of a little over £100,000 and frankly I don’t know what to do with it - whether to draw it now, whether to leave it. And if I leave it till I’m 75, what do I have to do then?

LEWIS:

Right, these rules are rather complicated, aren’t they? Who’s

going to volunteer to explain?

JEFFERIES:

In terms of the pension fund, how dependent on it are you for

income in the future past 75 and now?

TOM:

Not at all, or at least very little.

JEFFERIES:

Well you have the option if you wish … There are limits in

terms of what you’re allowed to withdraw each year. You can if you wish, subject to income tax, take the full amount out given by your provider, which will be a set figure, which you then pay income tax on. And if you don’t want that money, you could pass that on within inheritance tax allowances to the children if you so wished … would be one option.

TOM:

Right.

JEFFERIES:

The other option would be that if anything would happen to

you before age 75, the fund could be passed back subject to taxation on the fund either to your wife or to your children, but it would reduce the value of the fund that you’ve currently got. 5

TOM:

Yeah.

LEWIS:

And in general, Malcolm McLean, there are different rules,

aren’t there, once you reach 75? Before 75 you don’t have to draw anything from your pension fund if you don’t want to, but at 75 you do have to draw something.

McLEAN:

Yes, well in the past - up till fairly recently actually - you’d no

choice in this matter whatsoever. Once you got to age 75, you had to convert the fund of money that you’d built up or at least 75% of that fund into an annuity. You had to use the money to purchase an annuity, which of course is a pension for life. Now more recently we’ve had a thing called an additionally secured pension, which is a fancy name for really saying to you, you can keep your draw down arrangement going for a while. But if you do that the government, as a sort of afterthought, introduced some fairly draconian tax laws which actually stop you passing the money onto your heirs as it were - so it is quite a hit that you would take if you were to go down that road. But you can consider that, but for most people they would tend to convert their fund into an annuity by age 75.

LEWIS:

That’s an alternatively secured pension?

McLEAN:

Alternatively secured pension. What did I say - additional?

Sorry, alternative - yes, quite right.

LEWIS:

You were thinking ahead to state pensions I think Malcolm,

which we’ll be coming onto later.

McLEAN:

Yes I was, yes.

LEWIS:

Okay, well there are some choices there, Tom. Hideously

complicated, they often are, but I hope that’s helpful to you. And I believe we now have an answer. Gill’s gone “bing” and she has an answer for Tim in South Somerset. Gill?

6

CARDY:

You have to think Carol Vorderman.

If we’re looking at

getting you an income of about £30,000 - remember that’s going to be taxed - then in round numbers at 60 you’ll need a pension fund of around half a million pounds, which means that you need to be contributing now … Actually what would come out of your bank account at the moment is £375 a month, which with tax relief, basic rate tax relief added, comes up to £480 a month. And I’ve assumed that investments would grow on average at 7% per annum, which is what illustrations and so on that the regulator gets us to provide should show.

LEWIS:

(over) Yes. They may not of course, but you hope they will.

CARDY:

Of course they may not, but you would hope that in long-term

investments that would be a reasonably conservative example.

LEWIS:

Right. How does that figure strike you, Tim? It sounds like

quite a big chunk out of your money to me.

TIM:

Yeah, I suppose it is but you know it’s just useful to know.

LEWIS:

That gives you a sense of the size of it and I think people often

are surprised how much they have to save to have a decent income in retirement. Anyway, thanks for your call Tim. We’re going to… Just before we do that, we mentioned annuities, so why don’t I do this now? We had two emails about annuities, people saying they’ve been quoted an amount… This is Ann, says she’s been quoted an amount for a pension with a fund of £140,000. She’s been quoted £4,300 per annum and it’ll take her nearly 40 years to get the amount back in her pension fund. Just remind us of the rules here, Gill, because there is this thing called the open market option. You’re free to go where you like, aren’t you, which a lot of people don’t realize? I’ve had a few emails from people saying the annuity I’m being offered on what seems to them a lot of money is really rubbish.

CARDY:

It may well be. Just as with most other financial products, not

all companies offer the best rates. Sometimes the rates that they quote automatically on illustrations includes things like a spouse’s pension and inflation proofing, which 7

are not necessarily suitable and which make an annuity a very expensive thing. But in reality what you will do is you have a pot of money and you can go shopping with it and you can take that money to whichever annuity provider is going to give you the best rate. The FSA has comparative tables on their website and there’s a number of other annuity providers who’ll be able to help you choose. On the face of it, that is very low, but you can also find the best rate and find a rate that’s tailored to what your circumstances really are.

LEWIS:

Yes and if you’ve got ill health or if you smoke or anything

like that, then that can boost the annuity you get, can’t it? Strangely… Well not strangely, but that’s the position.

CARDY:

In exactly the same way as if you’re ill, life insurance costs

more. If you’re ill, you can get higher rates of annuity. So do be open and honest about whether you smoke, whether you’re overweight, any sorts of health issues you’ve had in terms of high blood pressure, diabetes, treatment for cancer and so on.

LEWIS:

Time to stop denying these things when you claim an annuity.

CARDY

Absolutely, yes. (Laughs)

LEWIS:

And Malcolm McLean, I know the Chancellor said something

about this open market option in his pre-Budget and I think doing some work with your organisation about it.

McLEAN:

Yes. At the Pensions Advisory Service, we are actually going

to produce a web tool to enable people to actually learn more about the open market option and work out for themselves perhaps what is the right thing for them to do. There has been a lot of concern about the fact that people tend not to exercise their open market option and just simply accept the pension that’s offered to them by the provider, which they don’t have to do.

And it can make a terrific difference,

particularly if you’ve got what is known as an impaired life prospect - i.e. you suffer from diabetes or you’re a heavy smoker or something like that. By shopping around, you can actually get a much better annuity and I think we all want to encourage 8

people to do that.

LEWIS:

Because strangely most people don’t, do they …

McLEAN:

Absolutely.

LEWIS:

… and they give themselves a lower pension for life? So the

three words to remember when you reach your pension age is open market option. Go and look for the best deal.

McLEAN:

I mean I think it’s 5 years ago now that the Financial Services

Authority made it a requirement on pension providers to draw people’s attention to the open market option and since then the figures have hardly moved.

LEWIS:

No, but the trouble is they’re not going to draw attention to it

by saying we’ll give you this much, but by the way if you went to such and such a company down the road they’ll give you 10% more.

McLEAN:

Absolutely.

LEWIS:

They’re just not going to do that, are they?

McLEAN:

That’s right.

LEWIS:

Okay, we’ll take one more call from Deborah before we move

onto state pensions. Deborah from Flintshire.

DEBORAH:

Yeah, thank you.

LEWIS:

Your question, Deborah?

DEBORAH:

Until fairly recently I was working for a large corporation and

was contributing to their company scheme. The division that I’m working for has been sold off and now it means that I’m working for a company that’s solely based in 9

the USA, so I’m not going to have the provision to contribute to a company scheme any more. It was actually written into my employment contract that I have that option.

And because I’ve taken it up, it means that they’re going to have to

compensate me for the loss of being able to contribute to the company scheme, but I really don’t know what sort of compensation I should be looking for. At the moment my employer contributes 6%, so that’s very straightforward, but I wondered if there was any difference in management charges and those sorts of things that I should think about?

LEWIS:

Right, so if you get some compensation, would it be your

intention to put it into a pension?

DEBORAH:

It would be, yes. I would rather just end up in the same

position as I would have been had I still been contributing to this company scheme.

LEWIS:

Yes. Gary?

JEFFERIES:

So at the moment you’ve got a scheme which presumably is

frozen and that’s being left and you’ve been written to with your options on that scheme as well, I presume, have you?

DEBORAH:

Not at the moment.

The corporation’s been very good

because officially I’m still employed by them until they work out a solution for how this US company is going to actually employ me in the UK as a single person. But it is going to come about very soon and one of the things that is certain is that there won’t be the company scheme to be able to contribute to, so that pension will be paid up.

JEFFERIES:

Are they prepared going forward for it to be based on the same

rights and provisions as you currently have?

DEBORAH:

I think legally they have to because it’s actually written into

my employment contract that I had the option to take up the company scheme; and because I did, in changing from one employer to another they can’t actually change 10

the rights that I currently have.

LEWIS:

So could we deal with this by saying somebody in Deborah’s

position - she’s got 6% being paid in for her into a pension scheme… Deborah, you may put in some yourself I imagine as well?

DEBORAH:

I do, yeah.

LEWIS:

So how much do you put in altogether with the employer’s

contribution?

DEBORAH:

10%.

LEWIS:

10%. Somebody’s got 10% of their pay. It’s not going into a

company scheme any more. Where should it go?

JEFFERIES:

Was that previously a final salary scheme?

DEBORAH:

It was, yeah.

JEFFERIES:

Then in terms of the calculation, what would have to happen is

you’d have to calculate what the benefits are likely to be, based on salary at a normal retirement date.

DEBORAH:

Okay.

JEFFERIES:

The contribution levels will not be on the levels the employer

was paying before. They would go up from those levels and we would have to make an assumption or you would have to make an assumption on a growth rate, normally around 7% on the funds being invested, to be somewhere along the lines that you were providing. It’s not an exact science. It would provide a guestimate very close to where you were looking to provide those benefits on the assumption of, one, investment rate return and, two, the annuity when you come to retire. That would be the nearest you could get. 11

LEWIS:

Okay. Gill briefly.

CARDY:

I think the issue here is that none of us are lawyers and what is

immediately screaming at me is that you’ve already referred to continuation of your rights as an employee, which sounds like an issue around the transfer of undertakings. And if you have a final salary scheme then the calculation is very complicated and I think this is one when I would actually suggest that you invest a couple of hundred pounds in actually seeing a pensions lawyer who would actually be able to put some standard calculations to you, so that you can actually argue the case, because I would be very concerned that you would think that something that they offer you looks reasonable but in fact you would be entitled to very much more. I think if you’re in a final salary scheme, you’re giving up a huge amount.

LEWIS:

10% to pay for a final salary pension sounds very little to me.

CARDY:

It’s very little.

LEWIS:

… So I think some advice from a lawyer, Deborah. That

would be a good investment because you do seem to have these rights and they could be potentially very valuable. I’m going to move onto some issues with state pensions because a week ago on Saturday we did a story about married women and state pensions on Money Box. These are married women in their 60s who don’t get a state pension but could get one if they paid extra contributions, and there’s an estimated something like half a million women in that position. Since we did the story, many of them have been contacting us saying they’ve rung the Department for Work and Pensions or the contributions helplines and have been told they can’t pay back contributions and get a pension. These are women in their 60s with no pension who’ve paid back contributions. Malcolm McLean, explain who can do this because I know you’ve been looking into this over the last week.

McLEAN:

Yeah, this is one of these areas which has had a fair amount of

publicity but not to the extent that we would have liked because many people are unclear about this and many people may not have heard anything at all about it. But 12

basically the normal rules require people who want to enhance their state pension or want to qualify for a state pension who don’t otherwise do so, allow them to backdate voluntary national insurance contributions back over 6 tax years. Now because there was a problem between 1996 and 2002 when the Revenue & Customs didn’t send out what are known as deficiency notices - that’s letters telling people they had a shortfall in their national insurance contributions for the years in question - because of that, the Revenue has since said that people can make backdated contributions spanning the last 10 years. And we know that there are many women, for example, in their early 60s who could benefit from that quite substantially by paying a relatively small amount - say between £300 and £400 for one year’s lot of contributions - and that might be sufficient to enable them to satisfy the qualifying conditions for at least a partial pension, which might be £1,000 a year. So people have been urged to sort of enquire about this, find out what their position is and see whether in fact they can gain from it.

LEWIS:

One of the crucial issues Malcolm of course is the question of

this pension being backdated. Normally when you claim a pension, it can only be backdated 12 months; but these pensions, as we understand it, can be backdated to the woman’s 60th birthday in most circumstances.

McLEAN:

Yes.

We’ve been given a certain amount of information

which suggests that one way or another, that backdating advantage can be given. In most situations it will simply be a case of the increased pension being brought into payment as though it was made on the person’s 60th birthday and that would certainly be the case for somebody who claimed their pension at that point in time. There may be a slightly different way of doing it, I understand, for people who didn’t actually claim at the time.

LEWIS:

They may get a higher pension rather than the backdating to

the age of 60.

McLEAN:

Absolutely.

LEWIS:

Now this is the point that a lot of women have got stuck on 13

with the helpline when they’ve been ringing it, and they’ve been told that what we said was wrong. I should say that we have checked all this very carefully with the Department for Work and Pensions. I was on the phone to them just before we came on air, in fact. And what we were told on Friday was “We’re not… “ - this is the DWP - “We’re not disagreeing with the substance of what you said about people with one of these deficiency notice claims” that Malcolm mentioned.

“It’s more

complicated, but we’re happy that the substance of what was said was correct.” So in a short item - and this has been another one, I’m afraid Malcolm - we can’t do all the fiddly bits. We should warn some women though, shouldn’t we, that even if they get this far other things might just stop them taking advantage of this?

McLEAN:

Yes indeed. People need to be very careful on this one. If, for

example, you are claiming or receiving pensions credit or other types of means tested benefits, then it may well be that any increase you get on the basic state pension will simply be offset against the means tested benefit in which case you won’t gain from it. And another area to watch out for is that you may not be actually able to make contributions for a period when you were registered as it were for what is known as the married woman’s rate of national insurance contributions. This is a throwback to the past when women had a choice of paying a reduced rate national insurance contribution instead of the full rate. So there are one or two areas to watch out for. Another one of course is if there’s a 5 year gap between your and your husband’s ages, then it may well be that because you can claim 60% of your husband’s pensions on his contributions, it won’t be worth doing. So watch out for those things.

LEWIS:

Okay. Well if we’ve done nothing else, you’ve learned it is

hideously complicated. Thank you very much for that explanation, Malcolm. And I think the message we’re getting both from the department and from Malcolm’s organisation is - ring the helpline, see if it applies to you; and if you’re told no, don’t believe it the first time, but keep pursuing it because there are an awful lot of people not getting what they’re entitled to. And there’s full details of all of that on our website, bbc.co.uk/moneybox, and I’ll give you more details, and of course you can download a transcript of this programme with all this information in it in a couple of days when we’ve had to type it all out. Now we’re going to move onto Stephen who’s calling us from Esher in Surrey. Stephen, your question? 14

STEPHEN:

Yes, my question is about self invested pension schemes. I’m

61 and I’ve had a number of bits and pieces of pension invested with various companies. Recently I’ve tried drawing these together with one company and it’s turned into a bit of a nightmare and I don’t have confidence in their administration or indeed their ability to operate and control my money, so I’m wondering whether a self-administered scheme may be a means of being able to administer it more effectively and have better control over my own funds?

LEWIS:

Right, well that’s what people say.

SIPPs - self invested

pension schemes. Gill Cardy, these are very fashionable now.

CARDY:

They’ve become very trendy.

LEWIS:

Explain what they are and then answer Stephen’s question.

CARDY:

Effectively when you have a pension scheme, you’ve got a jar,

which is the pension, and then you’ve got the investments that are inside it. And typically in the past, the jar was with an insurance company, pension provider, and you could only really choose their investments. With a self invested pension scheme, you still have to have the jar but you can have a much broader access to the investments that you put inside it, so you’re much less constrained.

LEWIS:

Hence, self invested, because you make the decisions about

what’s in it rather than the insurance company.

CARDY:

Absolutely.

LEWIS:

Of course, like with any pension jar, there’s a little hole in the

bottom, isn’t there, where money drips out to pay the fees ..

CARDY:

Absolutely.

LEWIS:

… and that can be quite big with some pensions, can’t it? 15

CARDY:

With some. You need to do an awful lot of shopping around

to find the best value contract that you have. As a day to day practitioner, I have to say - and this might sound incredibly depressing - but your experience about administration is probably not going to be limited to the company that you’re talking about.

A lot of companies, including some SIPP providers, do have poor

administration, so I wouldn’t expect to take your money somewhere else and automatically find a cure for your admin issues.

STEPHEN:

Oh dear.

LEWIS:

Gary?

JEFFERIES:

The point really is what are you actually looking to achieve by

moving all the funds under one umbrella because you don’t necessarily reduce costs by doing that?

STEPHEN:

Mostly to actually simplify it. I had funds with about half a

dozen different companies and I’ve consolidated three of them, and really as time goes on I’d rather like to make life a lot more simple and easier to control.

JEFFERIES:

How old are some of those funds?

STEPHEN:

They go back about 20 years.

JEFFERIES:

You do have to be very careful with older policies,

particularly retirement annuity contracts. There’s no guaranteed annuity rates in those policies.

LEWIS:

What you’re saying is they may have guaranteed annuities that

you could not get in the market now and if you give them up, if you move them, you give up those guarantees to high annuity rates.

JEFFERIES:

You have to be very careful of that fact. 16

STEPHEN:

Right.

JEFFERIES:

Because in instances you might get a return, let’s say a 10%

annuity, whereas today it might be a 6% annuity. So that’s very important. The other point would be, what’s your long-term goal? Are you looking to take an income by way of a draw down from this or actually buy an annuity at a point in the future?

STEPHEN:

Well initially certainly to go for a draw down and it’s the

ability then to be able to control that rate of draw down until such time as I take an annuity.

JEFFERIES:

That’s another big area, which we haven’t got time to really

go into today, but that really depends upon your personal circumstances as to whether that is viable.

LEWIS:

Stephen, we’ve suggested to other callers that they do spend a

few hundred pounds on an adviser, a good financial planner who can guide you through this because there’s so much information here that I think we can’t really give you any more general advice than that. But if people want advice, go to a good financial planner who specialises in pensions and my view is pay them a fee rather than commission and get the advice from them because it could well save you a great deal of money in the long run. Let’s move onto Richard now who’s calling from Reading. Richard, if you could be brief. We’ve got a lot of people waiting.

RICHARD:

Okay, very briefly you should get Stephen to call me. I’ve

just done what he’s trying to do and it took me 10 months.

LEWIS:

Okay, we’ll try and put you in touch after the programme. But

Richard …

RICHARD:

I transferred my pension fund to a self invested personal

pension and I’m very pleased with the performance: it’s grown 14% since February. But I was shocked and embarrassed to discover that about 22% of my total fund was 17

called ‘protected rights’ and I wasn’t allowed to transfer it to a SIPP and I discovered that I have to put it into an annuity and fund my wife’s pension after my death and she’s very rich and doesn’t need this money. I’m a bit miffed about it.

LEWIS:

Okay, we’ve come across yet another term that has to be

explained. Who’s going to explain protected rights? Gary?

JEFFERIES:

Well in terms of protected rights, that’s a fund that’s built up

that in general terms replaces what benefits you would have got under the State Earnings Related Pension Scheme.

In many schemes, it’s known as guaranteed

minimum pension, but when it’s transferred to a personal pension it’s called protected rights. And up until 2006 you didn’t have the ability to transfer these funds across and take the tax free lump sum; and in view of that many providers - not all - have the situation where they won’t take protected rights into a SIPP or a draw down arrangement because they don’t have the facility to do it. There are now a handful of groups that will take it, so if your provider wasn’t in a position to take it you could move it to another provider. But on that figure, in terms of how much you have there, it may be problematic because it’s relatively low for SIPP funds.

LEWIS:

Okay, so protected rights you should be able to do what you

like with. But we’ve had an email about this, someone with 30% of their fund with AXA, and they won’t let them take a tax free lump sum from the protected rights. But, Malcolm, they should be able to, shouldn’t they?

McLEAN:

Yes, absolutely, no problem at all.

LEWIS:

Some providers don’t let you do it. We are beginning to run

out of time. I’m just going to not put Keith on the phone, Keith - I’m sorry - but just let me put your question to Malcolm. Malcolm, Keith wanted to know about the changes in 2010 which relate to only needing 30 years contributions to get a state pension and he says what about people who have paid more than 30 years? He’s 60 years old.

McLEAN:

Well we’re going to find more and more that over a working 18

life, which if you start work at 16 and work till 65 spans 49 years, you’re going to find more and more people are actually going to pay more than 30 years. But that’s what national insurance is - you have to pay. The only exception to that is if you’ve made voluntary contributions since May 2006 and they’re unnecessary, you can get a refund.

LEWIS:

Okay. Malcolm, thank you very much indeed. There’s more

information on all of those things on our website. Thanks to Malcolm McLean, Gary Jefferies and Gill Cardy. You can find out more from the Action Line - 0800 044 044; our website, bbc.co.uk/moneybox; listen again; download a podcast; read a transcript.

Back at noon on Saturday with Money Box and to take more of your calls on Money Box Live next Monday afternoon.

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