New State Pension ignores partners

jamesd

I'm glad that your wife survived and that you have had more years together. I think that as plans are developed you'll find that she will actually get your pension under a form of transitional protection. That certainly seems fair to me. Not the new higher one, perhaps, but the old deal. Since this is a paper asking for feedback I suggest that you give feedback.

The current expectation is individuals but if a couple chooses to have one not work, it's expected that they will arrange to pay the NI and any additional personal pension contributions. The personal contributions are useful in part because each individual gets a non-transferable personal allowance so it's tax efficient: there's tax relief on up to £3,600 going into the pension a year but no income tax on the way out up to the personal allowance.

I hope that there is transitional protection long enough to handle your case but you're relaying on a model of couple living that's not the accepted one today. No problem with couples choosing to have one not working but the NIC contribution part is then expected. With the new proposal that'll be even more important because it delivers substantial extra value in exchange for those NIC payments. It really is worth your giving serious consideration to paying them so that your wife can get most of the £140 in her own right and twice between you while you're till both alive. It's not cheap for six years at once but there are instalment schemes available and you don't have to do all six years at the same time. It wouldn't be a good idea to do all six anyway, best to do no more than required before their deadline until the plans are final.

seven-day-weekend

I can quite understand that passingham and his wife may have made a decision betwen themselves that she should not work. She claimed no State Benefits for this. I myself did low-paid work, or none at all, for fifteen years because it suited our family, for me to do so and I have a lower State Pension because of it.

However, I don't quite see why he should expect anything out for his wife when she has paid nothing in! As far as I can see from the following link she can still get 60% based on his pension, I think this is very generous personally.
http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/DG_183784

margaretclare

The OP talks about what was promised in years gone by. My understanding is that there was always an assumption that what was paid as a 'right' i.e. state pension, was in return for contributions paid in. 'A contributory insurance scheme' was what Beveridge called it IIRC.

It is possible to 'work together as a couple' even if you are two individuals who make up that couple! My second husband and I both receive full state pensions, SERPS and pensions derived from our previous jobs and we both contribute to the household. In the case of my first husband, we were able to 'work together as a couple' because, although unfit for a job, he was able to do things at home which enabled me to carry on with my career. That career disappeared with redundancy coincidental with his death.

My younger daughter considered pension provision so important that it was the very first thing she organised on her first day at work. While a full-time student she thought it so important that she signed on at the JobCentre just to get her NI contribution credited. She could do this although not available for work.

I used to know a woman many years ago, in the days when NI stamps were sold at the post office, who used to buy hers weekly. She wasn't at work and was married, but she used to tell me she 'wanted her own money, didn't want to get her pension through the old man'.

margaretclare

...and incidentally, the unexpected can and does happen. My younger daughter was 10 years younger than her husband, so it might have been assumed that he would die first. In fact she didn't survive to see her 40th birthday. Because of the provisions she had made, he found himself with a mortgage paid off and a payment from her occupational pension.

So, the OP can't assume that his wife will survive him.

bilbo51

Aye lad.

Them was t’days. We all had muck under t’fingernails and no coal on t’fire. But was we ‘appy? Aye. Ah’ll tell thee lad.

An’ there wor no social. If tha didn’t have t’brass, that wor it. Tha’d ate what tha wor gi’en or what tha could scrounge. Or nick.

Spuds if tha wor lucky. Peelings an 'all. An’ none o’ this bottle o’ Coke this, bottle o’ Coke that. We ‘ad corporation pop an’ if tha didn’t lahk that then tha could lump it.

An’ don’ go gi'in' me any o’ this National Health nonsense. If tha went t’see t’doctor it wor cash in hand or no tratement and no arguin’.


An’ th’owd codgers. Dost know what they got? Five bob a week an’ good luck to ‘em. An’ if tha wor lucky tha made it to t’second year after tha’d packed in work.

Bloody soft these young ‘uns if tha want’s my opinion.

Breadline? They don’t know t’meanin’ o’ t’word.

Aye.

catfish50

margaretclare wrote: »

The OP talks about what was promised in years gone by. My understanding is that there was always an assumption that what was paid as a 'right' i.e. state pension, was in return for contributions paid in. 'A contributory insurance scheme' was what Beveridge called it IIRC.

I think you're right that that was the intention, but the state pension is not self-financing, and I don't see how it ever could have been, even in Beveridge's day. Because the state pension is open-ended, it's guaranteed for life, as long as a certain number of contributions have been paid. As people live longer, more and more has to be paid out. In addition, there also needs to be some provision for those who genuinely have been unable to provide for themselves, and even for those who've chosen not to do so. What isn't covered by employer/employee contributions has to be met by general taxation.

So it's a contributory pension, but it's also subsidized by current taxpayers. Hence the concern about the increased strain on the system as the workers of the post-war population bulge retire, and present-day taxpayers have to bear the cost of their pensions.

It's really a very thorny situation.