Is it actually worth saving towards pension?

real1314

dunstonh wrote: »

The Govt is abolishing means tested pension benefits in a few years. Plus, do you really want to rely on state benefits only? They only just bring you up to the breadline.

Erm, any evidence of this?

There doesn't seem to have been any firm decisions/proposals on Pension Credit, HB, CTB etc
Universal Credit proposals only cover those below pension age. :cool:

dunstonh

real1314 wrote: »

Erm, any evidence of this?

There doesn't seem to have been any firm decisions/proposals on Pension Credit, HB, CTB etc
Universal Credit proposals only cover those below pension age. :cool:

The single state pension proposals to replace basic, s2p and pension credits.

For evidence see pretty much every media outlet over the last few weeks (and months for earlier release information) and this website which has a few threads on it.

Stargazer57

dunstonh wrote: »

The single state pension proposals to replace basic, s2p and pension credits.

But what about Housing Benefit and Council Tax Benefit? If you think they are going to be folded into a universal pension of 140/week, there would be lots of pensioners worse off. At best this seems unlikely. At worst suggesting that all means-tested benefits are going to be abolished is the sort of misinformation put about by workplace mythtellers and mischief makers.

dunstonh

Stargazer57 wrote: »

But what about Housing Benefit and Council Tax Benefit? If you think they are going to be folded into a universal pension of 140/week, there would be lots of pensioners worse off. At best this seems unlikely. At worst suggesting that all means-tested benefits are going to be abolished is the sort of misinformation put about by workplace mythtellers and mischief makers.

The proposals have stated that they will put an end to the means tested benefits. Proposals may be changed but as it stands there is no misinformation here.

"Radical plans to simplify the state pension by removing means-testing and top-ups were confirmed by the Work & Pensions Secretary"

http://www.thisismoney.co.uk/pensions/article.html?in_article_id=524897&in_page_id=6#ixzz1HNOfN6dp

Anyone planning on means tested benefits being there long term is planning on failing. If you want to risk your retirement income that way then go ahead.

Stargazer57

dunstonh wrote: »

The proposals have stated that they will put an end to the means tested benefits. Proposals may be changed but as it stands there is no misinformation here.

"Radical plans to simplify the state pension by removing means-testing and top-ups were confirmed by the Work & Pensions Secretary"

http://www.thisismoney.co.uk/pensions/article.html?in_article_id=524897&in_page_id=6#ixzz1HNOfN6dp

Anyone planning on means tested benefits being there long term is planning on failing. If you want to risk your retirement income that way then go ahead.

Ah, yes workplace mythtellers and mischief makers... and the Daily Mail, three fine sources of pension planning information.

In post #2 of this thread you wrote The Govt is abolishing means tested pension benefits in a few years.

Let's see what the BBC made of the same speech http://www.bbc.co.uk/news/uk-politics-12681393
Read the papers and you could be forgiven for thinking the government is about to make radical reforms to the state pension system. No longer would pensioners have to top up their basic state pension with a gaggle of complicated and means-tested top-ups like the pensions credit. Instead, there is to be a simpler and higher flat rate universal pension for all worth £140 a week.
Well, not quite. Not yet.

...All that happened on Tuesday is that Work and Pensions Secretary Iain Duncan Smith gave a speech making the case for reform. He believes the current system is too complex and removes any incentive for people to save for their retirement. So he called for a "debate" to look at "options for simplifying the pensions system". He said he was "working closely" with the Treasury on a new structure that would reward those who save. Chancellor George Osborne, he made clear, had been "seized of the importance of this project".

But Mr Duncan Smith did not say the new flat rate state pension will be £140 a week. He did not say how it would be paid for. He did not say when this policy may come into force.

Go on to read the speech itself http://www.dwp.gov.uk/newsroom/ministers-speeches/2011/08-03-11.shtml and you'll see that the only means-tested benefit that gets mentioned is Pension Credit, yet you paraphrase this as The Govt is abolishing means tested pension benefits in a few years.

I'd paraphrase this as the Government will shortly publish a Green Paper outlining plans to increase the basic state pension and reduce means-tested benefits, but even if this comes into force, it will take many years

dunstonh

In post #2 of this thread you wrote The Govt is abolishing means tested pension benefits in a few years.

Exactly. means tested PENSION benefits. Not housing benefits, carers allowances etc. I said pension.

Ah, yes workplace mythtellers and mischief makers... and the Daily Mail, three fine sources of pension planning information.

I could have picked any paper. That was just top of google.

Let's see what the BBC made of the same speech

You mean what Peston says.

I'd paraphrase this as the Government will shortly publish a Green Paper outlining plans to increase the basic state pension and reduce means-tested benefits, but even if this comes into force, it will take many years

The OP is 31. Even if it takes many years, it is not likely to take more than 37 years. The problem is that many of the "details" have come from Govt insiders and not via official sources. Not uncommon when making policy. Leak the idea, see how it goes down in the media and then decide whether to tweak it, deny it or make it formal. Proposals are subject to change and things will almost certainly be tweaked or changed before it comes in. However, you can only go on what is known so far. The rhetoric has been to remove means tested top ups. Pension credit being the target. It is possible the tiny number of other benefits could stay but you are looking at them being applicable at very low levels of income. You would have to be a fool to plan to rely on those benefits as the suggested £140 figure is higher than the pension credit figure.

A couple both getting the proposed state pension would be well through the current means tested levels and not stand a hope of any pensions means tested benefits, even if they still existed in the current form.

The OP is aged 31 and has a cracking pension scheme. To plan to fail and live on the breadline at around £7280 a year (and maybe have the council tax paid) for another 20 or 30 years of life after retirement would be silly.

Andy7856

aagie wrote: »

In addition, I heard that having an extra income (i.e. additional pension) would make me not eligible for government benefits should I ever need it when I'm old.

I feel exactly like that, having seem family members be refused any kind of benefit for simply having a few extra pound in the company pension that takes them over the threshold. And people who have pee-ed up they money all their lives instead of paying into a pension get benefits handed out left right and centre.

That said, can you be sure there will be benefits for you when you retire?

Also I think you need to be a bit canny with retirement provsions (nb: i did not use the word pensions), eg I am paying into an ISA to boost my retirement provision, this will be seperate from my own company pension income so in theory could be spent to bring my income levels down to qualify for any possible benefits. or even stuck under the floor boards!!

Stargazer57

dunstonh wrote: »

Exactly. means tested PENSION benefits. Not housing benefits, carers allowances etc. I said pension.

2.7 million pensioners claim pension credit. 2.2 million pensioners claim council tax benefit. 1.2 million pensioners claim housing benefit.
http://research.dwp.gov.uk/asd/asd1/stats_summary/stats_summary_mar2011.pdf?x=1

If you meant just Pension Credit would be abolished if the Green Paper comes to fruition it would have been simpler to say so. If you say means-tested pension benefits most people would take this to mean benefits paid to pensioners that are dependant on their income, not just those with pension in their name.

So to summarise, you think it is likely that pension credit will be abolished, so a saver shouldn't count on it being available by the time they come to retire. I say that even if pension credit is abolished, council tax benefit and housing benefit would still be paid to pensioners. Some savers may, quite rationally, take that into account.

Bigsmak

OK we have gone slightly off topic again..

Lets all just agree that the state pension is not and will not be enough for people to live on and everyone should actively save for their own retirement. Pensions are a good way of doing this.

Also - If your company puts Freeeee Money into your pension pot then this is a good thing!

End of thread!

Stargazer57

So on this thread we have one IFA (dunstonh) saying that the Government are going to abolish means-tested benefits for pensioners, and another (Bigsmak) whose considered summary of whether it is worth saving towards a pension is not to mention means-tested benefits at all.

Anyone would think they get in the way of the sales process.