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MSE News: State pension system to be reformed
Comments
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There isn't a date yet. At this point there's no leglislation. The government hopes to introduce legislation during the course of this parliament. Until then, we would all be better served by waiting and seeing...I can't see a date where they are planning to introduce the £140 per week state pension across the board (or is it just me?).0 -
Excuse me........... I did not pay full NI contributions because I was raising two children and unlike many of the scroungers of today who churn out kids without any intention of keeping them themselves, I worked full time to keep mine and paid my dues. I chose not to pay full NI because I needed the money to bring up my kids.
I assume you got your married persons tax allowance and your MIRAS and enjoyed a period where houses (and therefore mortgages) were much cheaper. You also could have had free higher education with a grant and unemployment benefit paid during Christmas and Summer. Child benefit wasn't means tested back then and you got to retire at age 60 instead of the 68 (maybe later) that my wife and I will retire at. I can't see you getting much sympathy from the youth (scroungers?) of today. You had it better than they.
You chose to pay less NI in the knowledge that you would receive a lower state pension. Now live with the consequences0 -
People can see other people who haven't ever worked getting the same pension as they are - plus probably housing benefit, council tax benefit and maybe other benefits too.
That doesn't encourage people to save for their old age.
If all you want to live off in old age is £140 a week, then no need for anyone to save. Personally, I'd rather
a) have more income
b) not have the level of that income used as a political football0 -
2sides2everystory wrote: »Why would any sensible person invest any significant sums in so-called "work or personal pensions" over the last 20
Maybe because those people were actually the sensible ones and now have the private pension statements to prove it. If they'd instead spent 20 years blowing the money on ephemera, they'd be now facing the harsh fact of having to work until state pension age.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
It most significant achievement will be the (eventual) elimination of the truly pernicious pension credit system which has for too long sapped the incentive for people of modest means to provide for themslves a better standard of living in retirement.
Absolutely 100% spot on.
One does wonder how many of those criticising these changes even bothered to read the white paper? (It's called "A state pension for the 21st century" but it's now too late to respond.)I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Trouble is that it replaces it by eliminating the incentive for those on lower incomes to save for retirement. A figure of £140 a week is higher than my minimum income requirement and low earners might well decide it's not necessary to add any more to it.0
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A figure of £140 a week is higher than my minimum income requirement and low earners might well decide it's not necessary to add any more to it.
That's fine, and that's their choice.
The problem currently is that people find it *very* hard to add to it as for every £1 in income from a private pension, they lose £1 in top up to minimum income. As a result, they end up having no way to retire before state pension age and not a penny more than the minimum.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Why is none of the money available before state pension age? There's no Pension Credit means test before you're eligible for Pension Credit and you're allowed to spend every penny that you have in say a S&S ISA to help with early retirement. You can also take personal pensions from age 55 and many work pensions before state pension age.
People with low retirement savings don't lose £1 for every £1 in income from a private pension. After reaching state pension age a single person can also get up to £18.54 a week in Savings Credit, more in some circumstances, as a result of putting money away for retirement. At 3% of capital available for income, roughly assuming an RPI annuity, that's equivalent to a pension pot of £32,000. In addition the first £10,000 of savings is ignored, taking it to around £42,000 worth of retirement savings.
Those receiving Pension Guarantee credit are also eligible for Housing Benefit and probably Council Tax Benefit.
So I don't agree that allowing the value of a pot up to £42,000 to increase income is not allowing people to benefit from low levels saving for retirement.
What the change might do is make it unnecessary for people to spend a few minutes reading a web page to find out that they do benefit from putting away even amounts as big as those. They may also increase the take-up of the benefits by effectively removing the means testing element that puts some people off claiming and replacing it with something called the state pension that includes those benefits automatically.0 -
gadgetmind wrote: »That's fine, and that's their choice.
The problem currently is that people find it *very* hard to add to it as for every £1 in income from a private pension, they lose £1 in top up to minimum income. As a result, they end up having no way to retire before state pension age and not a penny more than the minimum.
I don't think that is true.If you or your partner are 65 or over you may be rewarded for saving for your retirement with Savings Credit. From 6 April 2012 this will be up to £18.54 a week if you are single and £23.73 if you have a partner. This is a cut from the £20.52 and £27.09, respectively, in the previous tax year.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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