MSE News: Flat-rate state pension could be £155 a week

dunstonh

So thats confirmed. The £140/155 state pension will simply be made up of your the basic amount plus your existing serps/s2p to get to the magic £140/£150 amount.

And self employed and low earners will gain as they dont get Serps/S2P and have everything to gain from the universal option.

I wonder if they will backdate entitlement for self employed?
I wonder if the self employed will have the NI increased to compensate? (i would take that)

I wonder how someone who has say £150pw of contracted out benefits on say 10 years worth of employed earnings and say 30 years of self employed would be treated?

Still lots of questions. Still very few answers.

wakeupalarm

Costs will be neutral remember, with low earners gaining and high earners paying for it, those in the middle are unlikely to receive any gains. I can't see self employed or those opted out gaining anything, and they are probably more likely to be part of the paying group. This whole reform is more of a rebalancing act with the emphasis of shifting any additional pension onto self financing through personal pensions.

SnowMan

The Green Paper 'A state pension for the 21st century' is now on the DWP website at the following link

http://www.dwp.gov.uk/docs/state-pension-21st-century.pdf

margaretclare

I'm fascinated to read in that document that the only change to state pension age from 1926 was the lowering of women's pension age from 65 to 60 in 1940.

I'd really like to know why that was. It was well before the Welfare State legislation post-WWII, and Lord Beveridge hadn't yet published his 1942 report on which that post-war legislation was based. In 1940 we were fighting for our lives. Why make that change in women's pension age, and why make it just then?

Mike_J

I was one of the masses who took government advice in my early years to opt out of Serps into a private pension (wonder how the governmnet was never done over mis-selling that lot!). If everybody is going to get the same state pension, will my private opted out pension be deducted from the state element to give me the figure the government will be paying. In theory then as I will simply be getting it from one source or another...WHAT WAS THE POINT!

SnowMan

margaretclare wrote: »

I'm fascinated to read in that document that the only change to state pension age from 1926 was the lowering of women's pension age from 65 to 60 in 1940.

I'd really like to know why that was. It was well before the Welfare State legislation post-WWII, and Lord Beveridge hadn't yet published his 1942 report on which that post-war legislation was based. In 1940 we were fighting for our lives. Why make that change in women's pension age, and why make it just then?

Wasn't aware of that either. This was all I could find about it to start with

http://www.jargonfreepensions.co.uk/cartoons/15Jul10.html

Some history here but doesn't really explain it either other than to say it was an add-on to the Old Age and Widows Pensions Act 1940.

http://www.statistics.gov.uk/downloads/theme_compendia/pensiontrends2005/Pension_Trends_ch01.pdf

And this is more illuminating and seems to say it was due to campaigning by the National Spinsters' Pensions Association

http://www.historyandpolicy.org/papers/policy-paper-42.html

harz99

So its almost official then!

Having skimmed the Green Paper there is very, very little consideration given to existing pensioners at the point of the change to a new system.

There will be a two tier system with existing pensioners, many of whom do not qualify for Pension Credit or any other help by virtue of relatively modest savings and/or company pensions combined with home ownership, and often having made up to 39/44 years contributions, on a lower rate and still means tested with all the costs that entails.

Alongside, them will be those lucky enough to reach retiring age after the date of introduction, many whom will have paid less in to the pot, may well have similar savings, property and private pensions and will benefit from the new arrangements to the tune of at a rough estimate up to 30% more in state pension than an existing pensioner.

How "fair", to use a Government word bite, is that?

The system as proposed stinks, and I hope it comes back to bite its proponents in the next General Election.

margaretclare

I found this absolutely fascinating. Amazed, too, that only 13% of women qualify for full state pension in their own right. I am in that minority, although in the time of my early working life, 1950s-1960s, the so-called 'marriage bar' still applied in mainly female professions like nursing and teaching.

The low level of marriages in the 1930s and the large number of 'spinsters' was obviously down to the wholesale slaughter in WWI - the fact that the men those women should have married had died in that wholesale slaughter. This happened to Shirley Williams' mother, among many others.

I've never been very impressed with Beveridge since I read that his remarks about 'she has other duties and .....replenish the race' i.e. get back into the kitchen! However, to his eternal credit, he did envisage this as a partnership between husband and wife. I've argued this point over many years, even when the census of 1971 insisted that my husband was the 'head' of the household. I said there cannot be a head in a partnership of equals, but change is inevitably slow, and change in attitudes is much slower than legislative change.

I am not impressed by a DM headline today: http://www.dailymail.co.uk/news/article-1373384/Iain-Duncan-Smith-Couples-300-week-pensions-reform-shake-up.html

I wouldn't want us to get our pensions 'as a couple'! It won't affect us, though, thank goodness.

WillowCat

harz99 wrote: »

So its almost official then!

Alongside, them will be those lucky enough to reach retiring age after the date of introduction, many whom will have paid less in to the pot, may well have similar savings, property and private pensions and will benefit from the new arrangements to the tune of at a rough estimate up to 30% more in state pension than an existing pensioner.

Or those 'lucky' enough to reach retiring age after the date of introduction, who find their hard-earned state pension to be less than they had expected and planned for.

As I understand it the current system (assuming full contribution record) is State pension (£97 ish) PLUS serps/gmp PLUS s2p/contracted out pension.

The new system suggested appears to be £150 ish MINUS serps/gmp MINUS s2p/Contracted out pension.

In addition, particularly for the females, the pension age will be much greater than for our parents, and not all of us will live for longer.

I struggle to see how a formerly full time employed current pensioner could have managed to avoid accruing SERPS/S2P or contracted out pension and therefore only have the standard pension. The 30% increase, I think, will kick in for the self employed (who have enjoyed, in most cases, lower NI contributions than employees) and those who were on benefits as adults, or with home responsibilities and therefore had credited (free!) NI contributions.

bilbo51

WillowCat wrote: »

As I understand it the current system (assuming full contribution record) is State pension (£97 ish) PLUS serps/gmp PLUS s2p/contracted out pension.

The new system suggested appears to be £150 ish MINUS serps/gmp MINUS s2p/Contracted out pension.

That was my reading but I was struggling to put it so concisely. Thanks for the clarity!