New £140 state pension proposal

Old_Slaphead

diable wrote: »

I'be just heard that you are now allowed to retire once you have passed away........

'Fraid it only applies once you've taken your seat in the House of Lords.

Old_Slaphead

If (and a big if) the rumours are correct, all those of us paying into S2P for years will get absolutely no benefit - and all those with generous final salary pensions (mainly public sector) who have been contracted out and paid lower NI - will get exactly the same.

That doesn't seem very fair.

dunstonh

but to create a two-tier pension system where many older pensioners will end up much worse off than younger pensioners isn't just unfair, it's utterly ridiculous.

As has already been said, the current system has dozen of tiers. So, it won't be creating a two tier system. It will be reducing the imbalance on what people get.

Not everyone currently claiming their state pension has managed to build up extras such as SERPS;

Exactly. At the moment you have people with and without graduated pension. With and without SERPS. With and without S2P. Those who get pension credit and those that dont.

Another thing: future couples are being given this much higher amount as a right, they don't have to disclose their savings or any other pensions, they're just given it.

Which is the whole point of changing the system as the means test is considered intrusive. However, those on current pension credits are likely to be better off than those on the new system.

All pensioners should be given a pension they can actually live on, then there'd be no need for fuel payments and bus passes

Expensive and unaffordable and not the point of the state pension.

If the country can't afford to treat its pensioners fairly then why are they ring-fencing billions in aid to other countries?

We have a moral obligation to help those that are worse off than ourselves. Our country developed to the point we are at often at the expense of many of these poor countries. However, what else would you reduce as overseas aid wouldnt come close to funding your shortfall brought on by increasing the state pension for everyone?

If (and a big if) the rumours are correct, all those of us paying into S2P for years will get absolutely no benefit - and all those with generous final salary pensions (mainly public sector) who have been contracted out and paid lower NI - will get exactly the same.

That doesn't seem very fair.

Any change to the system is going to have some that feel its unfair or fair. People starting work now pay 20% basic rate tax. Those that started work 30 years ago paid over 30% basic rate tax. Was that fair? If you want to make radical changes then you have to accept that it will create some perception of unfairness. However, when you look at the amount of the new pension and the amount of a typical basic state pension and additional pension, the figures are not much different.

wakeupalarm

Pre 2015 no change

Post 2015
I don't understand why anyone thinks that those already entitled upon retirement to more then £140 in total pension will receive a £43 pound uplift(£97>£140). They won't. This whole proposal is to lift the minimum pension that everyone receives to £140 its not to benefit those who already have "decent" pensions. Anyone receiving more than £140 in total pension are unlikely to receive anything extra.

For those over £140 any additonal pension upto £43 may simply be reclassified as basic pension, with the benefit of tripple guarantee uplift.

I'm not sure how it would work for those who are contracted out, are these pensions classed as protected rights pensions and are identifiable, in which case the pension scheme could simply pay the uplift £43 basic pension by deducting £43 from the scheme pension.

Dawni

dunstonh wrote: »

but to create a two-tier pension system where many older pensioners will end up much worse off than younger pensioners isn't just unfair, it's utterly ridiculous.

As has already been said, the current system has dozen of tiers. So, it won't be creating a two tier system. It will be reducing the imbalance on what people get.

Yes, it will be creating a two-tier system: one tier will have all the people whose basic state pension will be paid at a lower rate and the other tier will have people whose basic state pension will be paid at a much higher rate - as a right. No one is disputing that some people have additions to their BASIC state pension, because of their years of work, but for the vast majority of pensioners any SERPS, etc. earned does not bring them out of poverty. The BASIC state pension has always been the same for everyone, provided they paid their NI contributions, and don't forget that the vast majority of today's pensioners had to pay many more years NI contributions in order to qualify for a full state pension, ie 44 years for men and 39 years for women, as opposed to 30 years for all now. There is no way that raising the retirement age to 66 offsets this difference, especially for men who had to work to 65 anyway.

Not everyone currently claiming their state pension has managed to build up extras such as SERPS;

Exactly. At the moment you have people with and without graduated pension. With and without SERPS. With and without S2P. Those who get pension credit and those that dont.

See my point above. No one is given SERPS or graduated pension as an automatic right, they had to earn it. And only those whose income is below £132 per week (single) and £202 (couple) get any Pension Credit at all, ie they get it because they're poor, not as an automatic right.

Another thing: future couples are being given this much higher amount as a right, they don't have to disclose their savings or any other pensions, they're just given it.

Which is the whole point of changing the system as the means test is considered intrusive. However, those on current pension credits are likely to be better off than those on the new system.

I'm afraid I don't understand your claim that those currently on Pension Credit are likely to be better off than those on the new system. Pension Credit only brings a single person't income up to £132 and a couple up to £202 - how can that be better than £140 for a single person and £280 for a couple as is proposed under the new system? And why not stop the intrusive means testing immediately?

All pensioners should be given a pension they can actually live on, then there'd be no need for fuel payments and bus passes

Expensive and unaffordable and not the point of the state pension.

The point of the state pension was to provide sufficient income for someone to live on - if it's unaffordable to give the oldest members of society enough money to live on, then obviously the government has got its priorities wrong.

If the country can't afford to treat its pensioners fairly then why are they ring-fencing billions in aid to other countries?

We have a moral obligation to help those that are worse off than ourselves. Our country developed to the point we are at often at the expense of many of these poor countries. However, what else would you reduce as overseas aid wouldnt come close to funding your shortfall brought on by increasing the state pension for everyone?

I don't have the full figures to hand (sorry) but I did read that the government is giving approximately £9 billion in foreign aid, and that they say to give all pensioners £140 per week would cost approx £9 billion. While I certainly understand that people in some developing countries are poorer than the pensioners and others here in the UK, I cannot understand how this massive figure can be justified.

(And to whoever said they were offended by my thoughts on this - sorry but I am equally offended by your remark about people not putting money aside for their old age. Do you honestly think that today's pensioners all earned enough money to put some aside for their future? If so, you're sadly out of touch with reality; many, many of today's pensioners worked for a pittance and spent their money on the necessities of life for their families; they saw it as the decent thing to manage as best they could on a small wage without asking the government for a penny and without running up debt. Now, when they need government help, they're told they're not as worthy of it as younger pensioners. I have no argument with helping others, but charity really does begin at home. Britain simply doesn't have the money to give £9 billion in aid to other countries, perhaps it's time the government faced reality too.)

If (and a big if) the rumours are correct, all those of us paying into S2P for years will get absolutely no benefit - and all those with generous final salary pensions (mainly public sector) who have been contracted out and paid lower NI - will get exactly the same.
That doesn't seem very fair.
(NB above point not made by me)


Any change to the system is going to have some that feel its unfair or fair. People starting work now pay 20% basic rate tax. Those that started work 30 years ago paid over 30% basic rate tax. Was that fair? If you want to make radical changes then you have to accept that it will create some perception of unfairness. However, when you look at the amount of the new pension and the amount of a typical basic state pension and additional pension, the figures are not much different.

There is no fairness in keeping older pensioners poorer than younger ones. I have already said, most pensioners do not get SERPS, etc. of a sufficient amount to lift them out of poverty. There is a big difference for a couple in £202 Pension Credit ceiling and £280 state pension as of right. AND taking the older people's savings, etc. into account while ignoring that of the younger. No system is ever totally fair, I grant you that, but this is blatantly unfair. To penalise the oldest in society in the name of efficiency is just plain wrong, spin it whatever way the government tries. It's particularly ridiculous to propose a system which if adopted will mean keeping the Pension Credit system running for another 30 years or so, thus ensuring means testing will continue for decades. So, no efficiency and no fairness = no sense at all. And probably many lost votes for the parties of the coalition next time round, because as I said before - pensioners have the vote and they use it.

Old_Slaphead

dunstonh wrote: »

Any change to the system is going to have some that feel its unfair or fair. People starting work now pay 20% basic rate tax. Those that started work 30 years ago paid over 30% basic rate tax. Was that fair? If you want to make radical changes then you have to accept that it will create some perception of unfairness. However, when you look at the amount of the new pension and the amount of a typical basic state pension and additional pension, the figures are not much different.

Of course any change doesn't have to have fair/unfair connotations. All you have to do is crystallise, as one sum of money, each person's entitlement at the date of changeover then credit them with that supplement (appropriately indexed) when they take their pension.

Some people may have accrued up to £150pw in S2P of which they may lose £110pw if contributions to scheme are disregarded in the future pension regime.

If public sector pension schemes change, it is said that all accrued benefits will be preserved - imagine what would happen if they were just cancelled !

Rainmaker_uk

Dawni wrote: »

(And to whoever said they were offended by my thoughts on this - sorry but I am equally offended by your remark about people not putting money aside for their old age. Do you honestly think that today's pensioners all earned enough money to put some aside for their future?

I have no argument with helping others, but charity really does begin at home. Britain simply doesn't have the money to give £9 billion in aid to other countries, perhaps it's time the government faced reality too.)

My comment was that they are indeed lucky that there is a state pension to look after them if they ahve not provided for themselves - this is true they are lucky.

With regards to your opinion that we should cut overseas aid/charity - this is a very brave thing for someone from Northern Ireland to suggest considering you are a net benificiary of 'overseas aid' from Britain. :rotfl:

wary

I've read this thread with interest. Now I have to decide whether to contract out for the remaining months for which we have a secondary state pension.

I brought the subject up a few months ago with my IFA, and he advised me not to then. This was because the rebates of NI are based on earnings between the lower and upper NI limits, and so those on modest earnings should not Contract–Out, although he did explain that he can't give advise "officially" on the topic because as we now have seen, the government can move the goal posts.

He has also highlighted that it is just a proposal and there is still a lot of water to flow under the bridge yet, although if it does happen then on the face of it, any extra pension is a bonus.

What's the consensus of opinion? Although nothing is certain, would it be wise to contract out ASAP?

seven-day-weekend

My £104 a week will not change, other than the usual index-linking. I will never get £140 a week State Pension. I have no SERPS to speak of (usually due to not earning much) and am not entitled to Pension Credit. I also had to contribute for 39 years. I WAS however, one of the last to draw my pension at age 60 and I do have a small (£40 -ish a week) Local Government Pension waiting for me in 2014. (Although this is irrelevant as the ones getting £140 may well have private pensions also).

Swings and a few roundabouts I suppose, although how someone can say it is not creating a two-tier system defeats me.

ceridwen

Soz - but not read the thread thru yet....has anyone spotted anything re whether this £140 will STILL be worth £140 in 2015 - ie is that proposed amount going to get uprated annually in line with inflation during period 2010-2015 inclusive? (otherwise it would turn out to be worth no more than State Pension + Pension Credit - and might turn out to be worth less than that even....).