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New £140 state pension proposal
Comments
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It is totally unfair to create two tiers of Pensioners; particularly as the lower tier will have more often paid in contributions for many, many more years, compared to the upper tier who in some cases will have paid nothing whatsoever in.
Its not creating two tiers. There are already dozens of tiers. You have pensioners with no state pension of any type. You have some with basic state pension only. Some with some graduated pension, some with Serps, some with S2P, Some with the whole lot. You have some who retired at 60, some at 65, some will be at 66, 67 and 68.
Self employed dont get SERPS/S2P. Employed do. So, simplification makes a lot of sense.
The problem is that some will be worse off, some better off. So, rather than change those that have already retired and know what they have and cant plan for changes, it makes sense to bring it in for those that can plan ahead.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Just like 7dw above, both my wife and I have worked hard all our lives and because we have amassed some savings - though we are by no means rich.
It's amazing how little you need to be rich these days and the 'richness' threshold seems to get lower as time passes. Maybe by the time of the next election we'll all be rich despite having less money!
Clearly working hard and saving is a means to it's own end - the last thing anyone needs is to be reliant on a Government for their financial security.
What is difficult to swallow is the lack of acknowledgement that people who do work hard and save are helping to fund those that don't. Even Radio 4 are taking this view; Evan Davis was questioning someone about the fairness of a millionaire, who didn't need, £140 a week getting the same as someone who wasn't a millionaire.
My answer would be why shouldn't the millionaire get it - for all we know this 'fat cat' has paid a ton of tax and NI into the system whilst the person who needs it is someone who's never worked, never wanted to, comes from a family that never worked and now has a whole extended family of children and grandchildren that don't work either.
Somehow there needs to be a balance between need and deserve. This Government, like the last, is telling us that it's making hard choices when it isn't. The hard choices come when they decide to do something about the undeserving poor who make no contribution financially or otherwise to our society.
Some people will think that £140/ week would make for a pretty miserable retirement (and therefore work and save hard) but there will be others who might think that this is a pretty decent amount (and therefore don't bother to work or save). The most difficult job for the Government is to convince anyone that can work that they should be part of the former group of people.0 -
Its not creating two tiers.
Sorry but it is; on the date of any implementation I will have a basic state pension of £97 odd, indexed up by whatever small amount it may be on that date, many especially women receive a significantly lower amount.
All the other add ons you quote are not available to everyone so are irrelevant for the purpose of a valid comparison.
However, under the proposals as discussed so far the person retiring at whatever age on implementation day will get a basic state pension of £140.
With the CPI/RPI tinkering that has been done there is no hope of annual increases from 2011 to 2014 (election by mid 2015 don't forget) amounting to £40 plus by implementation day (prior to 2015).
So on that basis their will be two tiers of State Pensioner in receipt of the basic state pension from implementation day.
Now I don't disagree that simplification would make a lot of sense; the simplest and fairest way would be to treat all existing State Pensioners and future State Pensioners in the same way, with a simple guarantee that existing pensioners total levels of income would be maintained on switchover to the new system.
And it still rankles that those who have put little or nothing in will get the same as, or more than, those that have contributed for many years.0 -
I think a lot of people are missing the real crux of these proposed changes. The change to a flat rate state pension/citizens pension is a replacement for the Basic State Pension AND the earnings related component.
Middle earners who are close to the upper NI thresholds stand to lose the most as it is inevitable that their earnings related state entitlement plus basic would be much more than £140 per week.
Perhaps contracting out wasnt such a bad thing after all.0 -
All the other add ons you quote are not available to everyone so are irrelevant for the purpose of a valid comparison.
The "add ons" as you call it are available to employed people. Its just the self employed that dont get them.
one of the main objectives is to get rid of all these "add ons" and have a simple solution. Any change made is going to have winners and losers. You cant have everyone as a winner.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Yes I have evidence to contradict this.
Just received my state pension forecast for July 2021 - £98.75 plus £0.42 graduated pension so total of £99.17.
I have no entitlement to SERPS/S2P as I have been contracted out.
£137 is not the normal state pension. You have to have something other than the basic entitlement.
Well here are my figures direct from the govt gateway site
Basic State Pension £97.65
Additional State Pension £35.20
Graduated Retirement Benefit £1.15
Total weekly State Pension estimated up to 5 April 2009: £134.00
As far as I recall I did not do anything to trigger the Additional State Pension or make any additional payments, but that is quite plainly the difference, I would expect anyone of my age would be getting that.
What is the Additional State Pension? Again from the gateway site:
State Pension forecast / Payable Additional Pension
The part of the customer’s pension that depends on their earnings since April 1978. It is also known as State Earnings-Related Pension Scheme (SERPS). From 6th April 2002, SERPS was reformed through State Second Pension.
So there you have it - simples!0 -
bigfreddiel wrote: »As far as I recall I did not do anything to trigger the Additional State Pension or make any additional payments, but that is quite plainly the difference, I would expect anyone of my age would be getting that.
Someone your age may be getting more or less - it's nothing to do with age.
I only get the basic state pension as I am contracted out through my teacher's pension. As you are getting some (but not the max) SERPS/S2P you have not been contracted out all of your working life. To get this additional pension you have paid more NI than I have.What is the Additional State Pension? Again from the gateway site:
State Pension forecast / Payable Additional Pension
The part of the customer’s pension that depends on their earnings since April 1978. It is also known as State Earnings-Related Pension Scheme (SERPS). From 6th April 2002, SERPS was reformed through State Second Pension.
So there you have it - simples!
It's not simple though. Anyone who is contracted out won't receive SERPS/S2P. Anyone who is self employed won't receive it either. Some will receive more than others depending on how long they worked and what they earned.0 -
Someone your age may be getting more or less - it's nothing to do with age.
I only get the basic state pension as I am contracted out through my teacher's pension. As you are getting some (but not the max) SERPS/S2P you have not been contracted out all of your working life. To get this additional pension you have paid more NI than I have.
It's not simple though. Anyone who is contracted out won't receive SERPS/S2P. Anyone who is self employed won't receive it either. Some will receive more than others depending on how long they worked and what they earned.
Ah well back to the drawing board then!!!
fj0 -
This approach is came in in New Zealand I understand several years ago. As I understand it the basis is residence in country. This removes whole swathe of checks, means testing, administration, etc and so in the long run pays. It also means that all those entitled receive the benefit. The fact that the better off will benefit also is outweighed by the greater uptake of the poorer compared to Pension Credit. Same argument applied for Child Benefit at one time so we will see no doubt.0
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givememoney wrote: »I get a full single persons pension of the £97 odd.
My husband gets £212 per week as he never opted out of SERPS.
What concerns us with this `pension fits all` would he be expected to loose the extra contributions he paid in and have to take a cut in pension?
Anyone know?
Watching with a keen interest since my current State Pension forecast predicts £70+ S2P giving me a currently forecast State pension of ~£175 per week...0
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