MSE News: State pension system to be reformed

jamesd

JWhite wrote: »

How can this be fair ?

It's not fair.

Why on earth would you expect a pension in your own right when you deliberately chose more cash in hand instead of accumulating your own state pension entitlement? Now you seem to want the benefit of the higher payment and also to keep the benefit of the extra cash you were getting. Having your cake and eating it has long been accepted as not possible. Nor should it be. If you regret your choice, that's fine, it was your choice to make and hopefully you found good value in the extra money you were getting over the years.

You'll probably be covered by some form of transitional protection that will prevent you from getting any less than you get now. It's too soon to worry about such things, just wait until the plans are announced and we can see how they handle things. It's just not worth being upset by it until there's some idea of how it'll affect you.

Leodogger

Dunroamin wrote: »

Surely pensions, by their very nature, are age related?

That is exactly the point, everyone receives their state pension at a certain age and everyone received the same amount, but now the government are saying even though you can be the same age you will receive a different lower amount of state pension than someone who takes their pension a few years from now. What the government are now saying is that when you retire in 2015 or 16, and you are entitled to your state pension at say 65 you will receive £140 whereas my husband retired at 65 last year and will NOT be getting £140 when the new state pension comes in even though he will have paid in NI contributions for 44 years far more than many people who will only have contributed 30 yrs. This is a very unfair two tier system which discriminates against 2 different people purely on the date when they reached 65 or whatever age you are entitled to get your state pension. This new system is not based on how much you pay into the system either so whereas some people will have paid more into their S2P, if this takes them over £140 per week when it is introduced, they will lose the excess as it will be taken off them to pay to people who haven't paid in a penny piece as all pension credits will be abolished.

I can't wait to see who will be the first ones to take this to the ECHR as discrimination against a certain section of people of the same age receiving a reduced pension.

How many MP's would put up with this if it were them being disadvantaged !! (Big Joke !).

Leodogger

jamesd wrote: »

It's not fair.

Why on earth would you expect a pension in your own right when you deliberately chose more cash in hand instead of accumulating your own state pension entitlement? Now you seem to want the benefit of the higher payment and also to keep the benefit of the extra cash you were getting. Having your cake and eating it has long been accepted as not possible. Nor should it be. If you regret your choice, that's fine, it was your choice to make and hopefully you found good value in the extra money you were getting over the years.

You'll probably be covered by some form of transitional protection that will prevent you from getting any less than you get now. It's too soon to worry about such things, just wait until the plans are announced and we can see how they handle things. It's just not worth being upset by it until there's some idea of how it'll affect you.

Excuse me........... I did not pay full NI contributions because I was raising two children and unlike many of the scroungers of today who churn out kids without any intention of keeping them themselves, I worked full time to keep mine and paid my dues. I chose not to pay full NI because I needed the money to bring up my kids. I then qualified for 60% pension based on my husband's contributions and am not getting anything I am not entitled to. What extra cash ? I do not receive any extra cash, only £65 per week !!!!

Far too many people these days are getting plenty they are NOT entitled to so I don't have to feel guilty about getting what my husband has paid in for. We did everything a responsible state expects us to do, worked hard all our lives, got married and raised two kids without any help from the state and paid taxes and NI all our lives. Also I am not expecting to receive money I am not entitled to. What I am worried about is the fact that if my husband dies before me, i will be living on approx. £65 per week with no access to pension credit as it is being abolished.

Yes we do know what the payment will be and who will be entitled to it and we do know that pension credits are being abolished, so I can safely say that benefit claimants will continue to receive their benefits, be they newly arrived or lived here for 50 years without working a day in their lives. Meanwhile as usual pensioners are being expected to make cuts in their poverty income and fend for themselves when our state pension is one of the worst if not THE worst in Europe !
:mad:

xylophone

I am not entitled to. What I am worried about is the fact that if my husband dies before me, i will be living on approx. £65 per week with no access to pension credit as it is being abolished.

http://www.pensionsadvisoryservice.org.uk/state-pensions/death-benefits
"Basic state pension

Your widow, widower or surviving civil partner may be entitled to some basic state pension based on your National Insurance (NI) contributions, but only if they have not already built up a full basic state pension on their own NI contributions record.

When you die, your partner can apply for your NI record to be used instead of their own, so this will only help them if your record is more complete than theirs.

You may have contributed towards an additional state pension - also known as the State Earnings-Related Pension Scheme (SERPS) or state second pension.

If you die, your spouse or civil partner may be able to inherit some of this additional state pension.

To see how much additional state pension can be inherited, click here."

jamesd

JWhite wrote: »

What I am worried about is the fact that if my husband dies before me, i will be living on approx. £65 per week with no access to pension credit as it is being abolished.

There will probably be some transitional protection and if not there surely will be some additional safety net to catch you. I hope that there is.

Meanwhile you do have a higher income than benefit level and could be putting some away to help to provide for yourself it that happens. If you bought a property while younger you could sell that and invest that money to provide yourself with an income, perhaps moving to a cheaper part of the country and exploiting the way benefits are set at fixed levels but housing and other living costs are much cheaper in some areas than others.

JWhite wrote: »

I did not pay full NI contributions because I was raising two children ... I worked full time to keep mine and paid my dues.

As did my single mother of four children. Sometimes money can be short and those were most definitely hard times in many ways.

JWhite wrote: »

I chose not to pay full NI because I needed the money to bring up my kids. I then qualified for 60% pension based on my husband's contributions and am not getting anything I am not entitled to.

You made the choice to have extra money while raising the children. That's entirely fine, it was your choice to make. Chances are that the children wouldn't have missed it, other things matter more.

JWhite wrote: »

What extra cash ? I do not receive any extra cash, only £65 per week !!!!

You appeared to be looking for the full £140 in your own name that those who paid the full stamp may end up getting. Even though you took the money while you were working instead.

JWhite wrote: »

Far too many people these days are getting plenty they are NOT entitled to so I don't have to feel guilty about getting what my husband has paid in for.

You shouldn't feel at all guilty about it and I'm glad that you don't.

JWhite wrote: »

We did everything a responsible state expects us to do, worked hard all our lives, got married and raised two kids without any help from the state and paid taxes and NI all our lives.

No, you didn't do what a responsible state expects responsible adults to do and you most certainly received very considerable help from the other tax payers via the state:

1. The British state expects people to top up the state pensions with their own work or personal pensions and other retirement income. You chose to do so little of that that you're near to benefit levels. That's OK, it was your choice and you're free to make it, but it's not what people are expected to do.
2. You didn't pay the part of NI that would have got you a full state pension in your own right. Your choice, fine that you made it, but don't expect to now get that full pension.
3. You probably received child benefit. And NHS care for yourself and the children. And education for them that you weren't paying for directly. And police protection. And... all sorts of other things. It's very unlikely in your specific case that you and your husband will end up paying more in taxes than you receive. That's not something to be concerned about. It applies to more than half of the population because of the way taxes here are arranged. But it is perhaps good for you to recognise and accept that you are net receivers, not net payers, of things paid for by taxes.

A responsible person is expected to provide a sufficient income for themselves in retirement. You seem to think that you don't have enough, suggesting that you failed to meet at least that obligation.

JWhite wrote: »

our state pension is one of the worst if not THE worst in Europe !
:mad:

The British system is that the state pensions are not supposed to be the only retirement income, people are supposed to be topping them up with their own and work pensions. Instead of being forced to pay in at more than the basic level people get the choice to decide how much they want to put away for the future.

The system is an excellent one, one of the best in Europe for the flexibility it gives people to choose what their own individual priorities are. Yours were having more income while you were younger and less now. That's fine, it's a choice that you get here.

Dunroamin

JWhite wrote: »

That is exactly the point, everyone receives their state pension at a certain age and everyone received the same amount, but now the government are saying even though you can be the same age you will receive a different lower amount of state pension than someone who takes their pension a few years from now. .

But we don't have that situation now.

Women born before April 1950 collected their pension on their 60th birthday, women born after that date will get their pensions at a variety of ages. People born before that date needed 39 or 44 years' contributions for a full pension, whereas people born after that date only needed 30 years.

Pensions in the UK are going through a period of changes and people born within a couple of days of each other will be on totally different amounts of pension.

xylophone

As well as being able to claim on your husband's contributions record, would you not also receive a widow's pension from his private pension?
Assuming that you were left alone in your house you'd also qualify for a discount on council tax?
As far as anyone knows at the moment existing pensioners would carry on as before when the new flat rate pension comes in so one may suppose that pension credits etc would remain for this group?

jamesd

2sides2everystory wrote: »

Your posts in response to JWhite seem to me woefully sarcastic. Was that your intention?

No. I really do hope that there is a system that will catch her if her husband dies first, think that she should claim all of the benefits that taxpayers provide via the pension and benefits systems and that she and her husband were and should be free to make the choices that they made.

I also don't think that she and he should be free of the consequences of those decisions, except at the safety net level, whatever that is set to.

2sides2everystory wrote: »

Why would any sensible person invest any significant sums in so-called "work or personal pensions" over the last 20 years at least when such devices have fared about as well as your most prized possessions might be expected to do if you left them day and night outside your back door?

They haven't done as badly as that suggests. Final salary work pensions that a large number of people had access to do have in general done an excellent job, though with some failures. Things like buying bigger houses than needed or investing in other ways have also worked well in general. A diversified mixture could normally have done quite well, though there have been a few exceptions.

People can choose to try to provide for themselves or not. That's their prerogative. The proposed changes and the ones that we've seen under the last government will help future retires avoid being in quite their situation. No married women's stamp, counting years even with no contributions paid if child benefit was being received, 30 years to count for a full basic state pension and such.

oldvicar

This is probably the best change to state pension provision since .... the introduction of the state pension.

It most significant achievement will be the (eventual) elimination of the truly pernicious pension credit system which has for too long sapped the incentive for people of modest means to provide for themslves a better standard of living in retirement. It replaces a system which leaves a vast swathe of a generation with the horrible and unfair prospect of subsisting on barely more than the poverty line no matter how hard they may have tried to provide for a slightly better future.

Pollycat

I can't see a date where they are planning to introduce the £140 per week state pension across the board (or is it just me?).

From the article:

The reforms follow concerns that people are not being encouraged to save enough for their old age as they are being put off by the current system, which is too complex.

I'm not sure I agree that people are being put off saving for their old age by the current system because it's too complex.

People can see other people who haven't ever worked getting the same pension as they are - plus probably housing benefit, council tax benefit and maybe other benefits too.

That doesn't encourage people to save for their old age.

My parents worked hard, lived frugally, saved as much as they could.
My widowed Mum is now living in a warden-controlled council owned senior person's flat. She has her state pension & small occupational widow's pension and pays full rent & full (75%) council tax.
All the people around her get HB, CTB & Guarantee Pension Credit (and all the additional benefits that come with GPC).

She says she wishes they'd spent all their money whilst they could enjoy it.