Huge row over pensions report

Milarky

Dora wrote:

Can anyone explain why the state pension isn't taxed so that those with loadsamoney don't get any of it and those who rely on it solely get all of it? Or is that solution too simple?

Actually it is of course. Although less than the personal allowance for a person of 60[woman today] or 65[men now, men & women after 2020] the state pension simply reduces that allowance pound for pound. The result is that nearly all additional income [second pension, interest on savings etc] comes under tax. [If you get substantial second pensions - like some people going through SERPS in the early years and retiring after twenty years- it is possible that the state pension and SERPS combined would exceed that personal allowance. I'm not sure, but I think that no tax is taken anyway in that case. Anyone else know about this?]

There's been no mention of S2P [state second pension - which replaced SERPS in 2002] in the press coverage of the Turner report, I wonder why that is given that a large part of the 'affordability' in moving to a higher basic [flat rate] pension depends on its removal.

djohn2002uk

Dora_the_Explorer wrote:

I guess the thing that infuriates me most about this is the lack of respect shown by the government towards retired people, but I'm afraid it was ever thus and even though we have at the moment a so called socialist government I have no expectation of it behaving in anything like a socialist way.

In fact Dora, although it's hard to believe, this government is acting in a socialist way, or at least the way they've acted since the 50s.

I'm still searching around for a document I read a couple of years ago that showed all the State Pension increases over the years and the Tories are way ahead. There was one increase that sticks in my mind of something like 15%.

There have been some high inflation levels in the past and some of these inherited from failed Labour governments and some not, that have necessitated such rises but it is strange that then as now Labour seems loath to follow any socialist principles.

Dora_the_Explorer_5

Amounts/increases for the last 27 years are here http://www.seniorsnetwork.co.uk/pensions/penslvl.htm
and they make very scary reading.

EdInvestor

Dora_the_Explorer wrote:

That's interesting Ed - and a fat lot of use to women who paid the small stamp and/or stayed at home to look after children or elderly parents which is the position many of today's female pensioners find themselves in.....eg me

Quite agree, the vast majority of pensioners in poverty are elderly women and the married women's stamp is a major cause.It's a scandal and women should campaign to get credited for a proper NI contribution for all the years they paid the stamp IMHO.

djohn2002uk

EdInvestor wrote:

Quite agree, the vast majority of pensioners in poverty are elderly women and the married women's stamp is a major cause.It's a scandal and women should campaign to get credited for a proper NI contribution for all the years they paid the stamp IMHO.

I'll vote for that. My wife would get more then. :beer::T


And Dora did you notice this at the bottom? Shame on Labour.
Average annual increase under Tories 5.91% Average annual increase under Labour 3.34%

deemy2004

djohn2002uk wrote:

I'll vote for that. My wife would get more then. :beer::T


And Dora did you notice this at the bottom? Shame on Labour.
Average annual increase under Tories 5.91% Average annual increase under Labour 3.34%

That is so much grey vote propoganda... :rotfl:

Its a fact ! Pensions have risen more under labour in real terms than they did over the lifetime of tory regime. Far more !

But the number of pensioners is nearly double that of the 1970's.... And likely over the next 40 years it will double again ! The money just won't be there to pay state pensions !

People will have to do what they have always done i.e. in the past that is do 'some' work in their retirement / old age.

EdInvestor

Shame on Labour. Average annual increase under Tories 5.91% Average annual increase under Labour 3.34%

I think that's probably because inflation has been much lower in recent years.

Most pensioners will welcome that, as although their state pension may be index linked, often their other income is not and inflation is their main enemy because it reduces spending power.

margaretclare

EdInvestor wrote:

Quite agree, the vast majority of pensioners in poverty are elderly women and the married women's stamp is a major cause.It's a scandal and women should campaign to get credited for a proper NI contribution for all the years they paid the stamp IMHO.

OK. Acting as devil's advocate here, but...paying the 'married women's stamp' was a CHOICE. It wasn't forced on women, although some will say that they 'had to' pay it rather than the full contribution - the fact remains that many women are now retiring into poverty because they chose not to pay the full contribution. We always had the choice. I made the choice to pay full NI contributions and therefore I have full SRP in my own right. I also have a small amount of SERPS for the years I worked but wasn't in the NHS pension scheme. For the time I was in the NHS scheme I also get annuities based on those 20 or so years of contributions into that scheme.

By contrast, my husband never had the opportunity to pay into an employer's scheme like the NHS. He gets full SERPS though - as someone else mentioned, it doubles his SRP. We do very nicely between us, although when we talked about the £200 payment a few weeks ago, he said: 'Oh well, I've just had to tax the car, it will cover that'.

I worked with many women who laughed at me, told me I was a fool to pay into the NHS scheme. They deliberately kept their hours below full-time in order to stay out of the scheme. I know several who are now looking at retiring into poverty.

I think it was iniquitous that there was ever the choice not to pay into pension schemes. When the married women's contribution option stopped in 1978 it should have stopped altogether even for those paying it at the time. When you think of it, a woman who married in e.g. 1977 is still working but if she has continued to pay smaller contributions all those years then she is looking at retiring into poverty.

(Retreats putting tin hat on....)

Aunty Margaret

EdInvestor

I hear what you say Margaret.

But I'm not sure all women realised just what the choice involved at the time.There has also been considerable social change over the past 40 years or so, especially in terms of divorce and such, which couldn't have been foreseen. In addition there has never been equal pay. There's startling inequality between women and men on pensions,for a range of reasons, but a lot of it boils down to caring for children or elderly parents.

A more liberal regime on claiming Home Responsibilities Protection and/or buying back years might be another way of dealing with it. I haven't looked at the issue in great detail, but the discrepancy is immediately glaring when you look at the figures.

The other big inequality is public versus private sector pensions of course ( retreats grabbing tin hat...

margaretclare

EdInvestor wrote:

But I'm not sure all women realised just what the choice involved at the time.There has also been considerable social change over the past 40 years or so, especially in terms of divorce and such, which couldn't have been foreseen. In addition there has never been equal pay. There's startling inequality between women and men on pensions,for a range of reasons, but a lot of it boils down to caring for children or elderly parents.

I think you're right - I was acting as devil's advocate after all. I've been told by some women that they 'didn't realise they had a choice, they were told that they had to pay the smaller contribution'. And I have no doubt that those women believe what they say, and probably at the time they didn't think too deeply into it, certainly a young bride hardly looks forward as far as her retirement, does she? And there was this culture about, not to take women's jobs seriously, if she worked then it wasn't regarded as a main part of the family budget, not even when she was paying for the groceries or the children's shoes!!! We were meant to rely on husbands for future provision...I must be a bit of an awkward cuss, have always valued my own independence! I discovered at the age of about 3 that I had no one to rely on but myself. My mum was a single mum and because she had me, a disabled sister and (until his death) my grandad, she could only work part-time doing menial domestic jobs. I can see her now, buying those NI stamps every week and carefully sticking them on her card...sadly, she didn't live long to enjoy retirement. She died in her early 60s.

Why did seeing her stick those stamps on impress on me the idea that it was a worthwhile thing to do, because I know another woman who's not yet retired, says her mother did exactly the same as mine and died without enjoying many years of retirement, and it has given her exactly the opposite thought - that paying full NI contributions was a complete waste. A lot of women also have said they preferred to have their money now, to cover present needs, rather than towards their future.

A more liberal regime on claiming Home Responsibilities Protection and/or buying back years might be another way of dealing with it. I haven't looked at the issue in great detail, but the discrepancy is immediately glaring when you look at the figures.

I think you have a good point there. Certainly it would be better than relying on means-testing.

Aunty Margaret