MSE News: Government outlines flat-rate state pension

Jaycee_Dove

But according to another thread on here it was stated today that there will be no 'cliff edge' between those on the old system and those on the new.

Yet, a self employed person with 39 years NI contributions will get £35 pw basic pension less than someone a day younger with 35 years contributions under the system as far as we understand it.

That is hard not to describe as a cliff edge.

It seems unlikely there will be any economic way in our bankcrupt environment to increase the current pension by large sums between now and when the new system arrives so that come 2017 both will be worth the same amount per week.

That would avoid any cliff edge but has no chance of happening I assume.

Paul_Herring

Jaycee_Dove wrote: »

But according to another thread on here it was stated today that there will be no 'cliff edge' between those on the old system and those on the new.

I'd like a citation for that if you can; spokesbod on last Saturday's(?) Moneybox indicated that there will be such a cliff edge. Old state pension if you turn pensionable on 5th April 2017, new state pension if you turn pensionable on 5th April 2017.

I can't see how else they can (simply) do it.

CRISPIANNE3

There has to be a cut off point between the old and new pension. No good belly aching about it. For me I am 65 in September 2015 and so will definately lose out. However thats life.

Iceweasel

Just_landed wrote: »

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I'm sure iv'e read somewhere but cannot find it at the moment that the proposal is to keep the safety net of Pension & savings credits @ the moment is about £142.00 a week.

I do hope that there is clarification on this point fairly soon as I know at least one person who is losing sleep over this.

BobQ

gadgetmind wrote: »

One assumes that those complaining about the white paper didn't ever bother to so much as read the green paper and so won't have provided constructive suggestions at the time.

In my case that assumption would be 100% incorrect.

Jaycee_Dove

Paul_Herring wrote: »

I'd like a citation for that if you can; spokesbod on last Saturday's(?) Moneybox indicated that there will be such a cliff edge. Old state pension if you turn pensionable on 5th April 2017, new state pension if you turn pensionable on 5th April 2017.

I can't see how else they can (simply) do it.

See Bazzap's post 6 on this forum thread 'The proposed new state pension' where he makes this claim. No idea how it can be true either.

treliac

twentyfour11 wrote: »

worked all my life and my reward is to get £37.50 pw less then people who are one year younger than me.

Brilliant system!!

Or possibly even only a day or two younger than you. And then, if you're female, they could be male, exactly the same age and still get the full flat rate. So they might have to work a few more months, but that hardly makes £50k to £60k extra throughout a retirement period a fair deal.

Seems the whole scheme is likely to anger people greatly, increasingly so as the time for this draws closer. They will have their say in the ballot box. Any political party who can offer a fairer transition will capitalise in 2015.

Pensioner power will be quite significant I should think.


Tables giving prospective retirement dates: http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/@over50/documents/digitalasset/dg_202348.pdf

A woman born between 6th June 1953 and 5th July 1953 reaches pensionable age on 6th March 2017 (so loses out).

A woman born between 6th July 1953 and 5th August 1953 reaches pensionable age on 6th July 2017 (so gains new higher pension).

Any man born before the 6th December 1953 reaches pensionable age at 65 years, so born in the first age slot above and even earlier will still gain the new higher pension.

BobQ

SnowMan wrote: »

I don't do politics, I argue on the basis of the merits of the proposals.

There are some who gain and some who lose but the simplicity justifies that.

If you don't like the proposal then why not be constructive and say what you would do instead to reform the state pension system.

In that case you will agree that there are winners and losers and in the short term there are more winners than losers. In the long term there will be more losers than winners. Yes its simpler than the present system and in the long term will save money in administration costs but its not as worderful as your post suggested in my view.

The thread was started to discuss the proposals not make counter proposals so I cannot see the relevance of your point. However, the main change I would make is to include all pensioners in the new system and guaratee them the £144. In the interests of affordability, if feasible, I would also stop paying the state pension to anyone who post retirement has an income above a certain level (say enough to pay higher rate tax)

An area I also feel is unfair is the automatic treatment of those paying the lower rate self employed NI. On the one hand, this seems UNfair to those who have been self employed on a low income (as one poster has said). On the other, many self employed have spent many years enjoying tax breaks that those on PAYE have not enjoyed, so have not paid their fair share of tax and have either not bothered to make adequate pension provision (and just spent the money) or have already got a significant pension in place. Just giving them pension they have not paid into seems unfair (just as it would if contracted out pensioners were treated this way).

I do commend the time you have expended explaining the system to people which I am sure is appreciated.

Southend1

Paul_Herring wrote: »

In fact, the same amount (12%) will be taken from payslips - the 1.4% is actually rebated into a pension fund some time later - the 'increase' will be experienced as a lack of rebates into said fund.

This is incorrect. What you describe may happen in some cases but certainly for me the 1.4% reduced NICs isn't paid into my pension scheme, it's an extra amount in my take home pay. So this will hit many people where it hurts... The wallet! Especially when the few remaining DB schemes are closed because employers say they can't afford to lose their contracted out employer NICs. The government is providing a handy excuse to finish off the destruction of decent workplace pension provision!

jadam_2

Both my wife and I are already pensioners. Under existing arrangements if I die before my wife (who currently gets a full state pension in her own right) she will inherit 70% of my SERPS and 50% of SSP. Does anyone know if this still be the case after 2017? I cant seem to find this information anywhere.