MSE News: Government outlines flat-rate state pension

CLAPTON

hyubh wrote: »

'Vast majority' in term of schemes, not in terms of overall membership numbers (e.g., while teachers at a school will be in a 'pay as you go' scheme, teaching assistants, school cooks and cleaners etc. will be in a funded one). Even then, why would moving (say) the TPS to a funded basis be especially difficult? If there's the will, the government could just close the existing scheme to new members and start afresh with a new scheme.

It's not quite the same situation, but if Canadian states could do it not so long ago, I don't see why the UK can't.

it would seem from your link that the scheme was always a funded scheme;
the change was that, formally the funds were held only in government bonds whereas now they invest where ever they like.

maybe not such a major change?


in any event, some considerable study of economics would show that there is little difference between fully funded schemes than pay-as-you-go schemes in terms of the 'burden' on future generations.

JezR

Dave_save wrote: »

I paid in over 40 years NI, the qualifying years are 30. So does this mean I get an additional amount over the basic state pension? Of course not. It only works one way.

Yet another slight of hand by slippery Dave and his able assistant Cleggy!

The last lot were responsible for creating that situation for the basic state pension, when the required contributions were cut from the previous 44 years for men. However the additional pensions are still related more closely to the years of contributions, and the amount paid.

DFW2

I wonder if they will now change the rules on topping up NI contributions for years where you haven't met the criteria? I am currently too late for a year I was short on but at the time I wasn't unduly concerned as I was forecast a full state pension.

DeeWren

It seems to me as if all we've done is swap one complicated pension scheme with another. Maybe it's me, but I just don't get it.

From my point of view we hear mothers who have taken time out to look after their children would benefit, but now we hear if you haven't built up 35 years of NI contributions then you get nothing?

I started full time employment in August 1970 and paid full NI contributions. I left work in April 1979 for the birth of my eldest son and didn't return to work until 1993 when my youngest son started junior school. I worked part time, 14 hours a week. I left work again in 2002 to care for my elderly mother who had health issues, although I didn't claim carers allowance as I was glad to care for her and enjoyed doing it. Mum passed away in 2011 and I haven't returned to work mainly because jobs are hard to find at a young age, let alone 58, although I am not adverse to doing so.

So, my question is do I qualify for the the new £144 a week state pension when I reach pensionable age (66 in 2020) or not? And if not do my meagre 9+ years full contributions and another 9+ half contributions add up to anything at all? It's bad enough expecting to retire at the age of 60, albeit on a small state pension which is understandable and acceptable considering the comparable small contributions I have made over the years, only to have it snatched away from me at the last minute and being told I can't retire until I'm 66, let alone to now hear I may not be eligible for anything at all?

Dee:(

Paul_Herring

DeeWren wrote: »

From my point of view we hear mothers who have taken time out to look after their children would benefit, but now we hear if you haven't built up 35 years of NI contributions then you get nothing?

No. If you haven't built up 10 years of NI contributions you get nothing. Between 10 and 35, you get an incrementally larger amount up to £144.

Years you're eligible for Child Benefit (regardless of whether you actually claim it or not) or claim carers allowance (and a few other groups) will be included in that total.

StevieJ

njm123 wrote: »

It won't be a nightmare for the schemes - most companies will simply close them and wind them up - they won't pay the additional NI.

The nightmare will be for the employees.

The schemes have stated that they will change the qualifying years, e.g. if it was 40/60 previously to get a full pension (i.e.two thirds), it may be 40/65 in the future.

Froglet

Supposing the next government is voted in a Labour one.Could they completely disregard this confusing mess and either return to how it was or develop their own system?.Or will it be set in stone that it will go through regardless?

Paul_Herring

Froglet wrote: »

Supposing the next government is voted in a Labour one.Could they completely disregard this confusing mess and either return to how it was or develop their own system?.Or will it be set in stone that it will go through regardless?

I wouldn't put it past a future Conservative/Coalition government to mess around with the pensions next parliament. Again.

Doesn't matter who you vote for - the government still gets in.

In short, the answer to your questions are, I believe, yes to the first, no to the second.

chris_m

Froglet wrote: »

Supposing the next government is voted in a Labour one.Could they completely disregard this confusing mess and either return to how it was or develop their own system?.Or will it be set in stone that it will go through regardless?

A government can legislate whatever it likes, provided it gets majority votes in both Houses of Parliament.

SnowMan

Having taken the time to read the white paper it is clear this is an extraordarily well thought out proposal. It was well worth the wait.

It really is massively simplifying the system. Everyone earns the same amount of pension each year - couldn't be simpler or fairer.

It will make it very easy for people to plan for their futures and will keep most people out of means testing.

They are also protecting the rights that people have built up before 2017.

I like the way they have thought through the practical issues and will in 2017 send a statement to everyone telling them what rights they have built up and how much pension they will build up each year subsequently. There is an example statement in the white paper itself.

It is going to be a pretty big job producing those statements. But once they've done that the saving in administrative costs to run the system must be massive.

I am not a fan of the coalition (understatement of the year) but Steve Webb has to be given credit also for the very clear, open and non-political way he has announced this.

I just hope it gets all party support. Because low paid workers accrue the same entitlement as high paid workers it is surely something that the labour party should support.