New State Pension ignores partners

passinghamt

The new proposals for a single flat rate specifically exclude any pension based on one's partner's contribution, even after his/her death.

If, as a couple, you have been planning for 20-30 years on the basis that one of you would get the other's pension if he/her dies earlier than you, you have been totally let down. This is an outrageous change to make. One cannot re-rerun 20-30 years worth of life to reset your finances. I wonder if a legal challenge could be made?

In our case we have no children, but circumstances became such that my wife has not worked for 20 years, and therefore relies on getting my state pension should I die before her.

The state pension, being inflation linked for most of these years (albeit using different linkages at different times) has also been a back-stop against poverty for her if our other savings collapse due to things like stock market crashes, banks going bust, and so on. That back-stop must not be removed.

HMG seems very keen to ensure there is no financial advantage to being in a long term relationship. Why?

And finally, the document mentions marriage, but not civil partnership, which is careless to say the least. Again, why?

wakeupalarm

You don't inherit your partners state pension atm either, so there is no change there. You do inherit your partners serps/s2p at a rate of 50-100% depending on your partners birthdate, I assume this would continue.

bilbo51

wakeupalarm wrote: »

You don't inherit your partners state pension atm either, so there is no change there.

Not strictly true.
http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/Basicstatepension/DG_10026707

zagfles

wakeupalarm wrote: »

You don't inherit your partners state pension atm either, so there is no change there. You do inherit your partners serps/s2p at a rate of 50-100% depending on your partners birthdate, I assume this would continue.

You can get a pension based on your spouse's NI record, this is up to 60% of the full pension, but when they die this rises to 100%. So you can "inherit" some of the basic state pension.

zagfles

passinghamt wrote: »

The new proposals for a single flat rate specifically exclude any pension based on one's partner's contribution, even after his/her death.

If, as a couple, you have been planning for 20-30 years on the basis that one of you would get the other's pension if he/her dies earlier than you, you have been totally let down. This is an outrageous change to make. One cannot re-rerun 20-30 years worth of life to reset your finances. I wonder if a legal challenge could be made?

In our case we have no children, but circumstances became such that my wife has not worked for 20 years, and therefore relies on getting my state pension should I die before her.

The state pension, being inflation linked for most of these years (albeit using different linkages at different times) has also been a back-stop against poverty for her if our other savings collapse due to things like stock market crashes, banks going bust, and so on. That back-stop must not be removed.

HMG seems very keen to ensure there is no financial advantage to being in a long term relationship. Why?

And finally, the document mentions marriage, but not civil partnership, which is careless to say the least. Again, why?

But you now only need 30 years to get a full state pension, so 20 years not working will get you pretty close to a full pension, maybe a year off but you can pay class 3 for that year.

Besides it's a green paper - a discussion documents with options, not a statement of policy.

In any case - the pension credit will still be there for people who don't have full NI records - that is the "backstop against poverty"

passinghamt

zagfles wrote: »

But you now only need 30 years to get a full state pension, so 20 years not working will get you pretty close to a full pension, maybe a year off but you can pay class 3 for that year.

Besides it's a green paper - a discussion documents with options, not a statement of policy.

In any case - the pension credit will still be there for people who don't have full NI records - that is the "backstop against poverty"

My wife only arrived in the UK at age 30, worked around 4 years, and then not for 20. She can't make that up, and frankly why should she? We were told she could rely on a pension based on my NICs should I die before her.

Falling back on a means tested pension credit is a waste of everyone's time and effort, since it means it all gets complicated again, and results in a similar amount of money being made available. Why not keep it simple and honour what we regarded, and still regard, as a promise from the state.

margaretclare

passinghamt wrote: »

My wife only arrived in the UK at age 30, worked around 4 years, and then not for 20. She can't make that up, and frankly why should she? We were told she could rely on a pension based on my NICs should I die before her.

Falling back on a means tested pension credit is a waste of everyone's time and effort, since it means it all gets complicated again, and results in a similar amount of money being made available. Why not keep it simple and honour what we regarded, and still regard, as a promise from the state.

For a number of years now the thinking has been moving towards: every individual should accrue their own pension provision and not depend on a partner, married or civil. For example, when I reached the then retirement age following widowhood, I was given the choice: claim state retirement pension in my own right or on my late husband's contributions, whichever was more favourable. I chose my own. Since April 1990 every individual has had his/her own personal tax allowance, all moving in this direction.

I don't think the argument of 'a promise from the state' holds much water, TBH. There are still people around who regard one of the soundbites from earlier times, 'we'll look after you from cradle to grave' as set in stone, a copper-bottomed promise. I don't think you have much of an argument.

In any case, how sure are you that you'll die first and leave your wife with this problem? The reverse might happen.

jamesd

passinghamt wrote: »

My wife only arrived in the UK at age 30, worked around 4 years, and then not for 20.

She may well be sufficiently old that the change won't affect her at all. Depends on the transition dates and plans.

passinghamt wrote: »

She can't make that up

She may well be able to make up a significant portion of that by making voluntary NI contributions. Even using the normal rules she could buy six past years to get her to ten and enough to qualify in her own right for 1/3 of the pension. Since she has many years to go until she reaches state pension age she might well be able to raise that to 24/30ths of it even if she doesn't qualify for one of the extended back years purchase deals, something she could check.

If she was staying home to look after children she'd be entitled to credits for some of those years at home and should check that she's been credited for them.

passinghamt wrote: »

frankly why should she?

Because it's a pension. You pay into pensions to get the benefits from them.

passinghamt wrote: »

We were told she could rely on a pension based on my NICs should I die before her.

That's a fair cut to what a person getting full pension would get. Still can understand you two planning on that but it's one of the risks that you were taking by relying on the rest of us to cover the cost. It may not work out for you two if the government has decided that we should no longer do that.

But she need not worry. The portion of the state pensions that she might get is probably below the level that governments have decided we need to live on, so she would be entitled to state charity in the form of means tested benefits to get her up to £120-130 a week.

passinghamt wrote: »

Falling back on a means tested pension credit is a waste of everyone's time and effort, since it means it all gets complicated again, and results in a similar amount of money being made available.

Because the system is supposed to encourage people to look after themselves, by making payments into their own pensions and knowing that they won't lose the extra money to means tests if they do.

The means tested benefits are social charity from the rest of us because we don't like to see people suffering. It's not what people are supposed to do, just us all trying to look after those who chose not to look after themselves. But we don't have to be generous about those who freely make that choice not to look after themselves. It's fine to provide only the bare minimum in such cases.

passinghamt wrote: »

Why not keep it simple and honour what we regarded, and still regard, as a promise from the state.

Have you seen any sign at all that she will not get exactly what the original undertaking was, on the same basis that applied in all those past years when you two were doing this?

She may not get an extra boon on top of what was expected but that's life sometimes, not a broken undertaking. If she's still going to get a portion of your state pension under exactly the original terms with exactly the original pension, that's all you two could expect.

There's still time for the two of you to arrange for her to benefit from this. First step is to buy those back years, next to start regularly paying into the pension each year until she reaches state retirement age.

Neither she nor you has any right to demand that the rest of us subsidise that. Something can be done about it. It's up to you two adults to decide whether you want to grumble about not getting an extra boon or to do that something to earn it instead, just as the rest of us have to. You're not kids, it's up to you to decide to pay more to get more pension or not. Just don't grumble if you decide not to and so don't get it.

margaretclare

Well said, jamesd. I couldn't have put it better myself. As a woman who earned her own pension, you can tell I feel pretty strongly about this.

catfish50

passinghamt wrote: »

In our case we have no children, but circumstances became such that my wife has not worked for 20 years, and therefore relies on getting my state pension should I die before her.

Depending on the circumstances which led to your wife not working, she might be able to get some years of NI contributions paid. For instance, if she was a carer during those years she might get Home Responsibility Protection, depending on when she reaches state pension age. See http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Caringforsomeone/DG_10018691

zzzLazyDaisy

catfish50 wrote: »

Depending on the circumstances which led to your wife not working, she might be able to get some years of NI contributions paid. For instance, if she was a carer during those years she might get Home Responsibility Protection, depending on when she reaches state pension age. See http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Caringforsomeone/DG_10018691

Same also if she became unable to work through illness or injury and was in receipt of IB