government looking after those without?...

james3333

hi all,
just wondering opinion here. im 35, been paying into a pension since i was 20. whats the likleyhood that when i get to retirement age the government will take on the stance of : you have loads of money in a pension so you wont recieve anything from us
and the people who have never bothered to pay into one will get a nice handout

thoughts?

CLAPTON

james3333 wrote: »

hi all,
just wondering opinion here. im 35, been paying into a pension since i was 20. whats the likleyhood that when i get to retirement age the government will take on the stance of : you have loads of money in a pension so you wont recieve anything from us
and the people who have never bothered to pay into one will get a nice handout

thoughts?

depends upon how you vote

richbeth

james3333 wrote: »

hi all,
just wondering opinion here. im 35, been paying into a pension since i was 20. whats the likleyhood that when i get to retirement age the government will take on the stance of : you have loads of money in a pension so you wont recieve anything from us
and the people who have never bothered to pay into one will get a nice handout

thoughts?

I think it's a sacred cow and pensioners have too much voting power for this to happen. However do expect the age at which the state pension is given to keep increasing along with life expectancy.

If you keep paying into your pension and review payments regularly and you may be able to retire before the statuatory retirment age and your destiny will be in your own hands. Don't and you could well be working into your 70s.

Richard

atush

I expect you are more likely to vote, so little chance IMHO.

redbuzzard

I would say almost anything is possible, when you are looking 30 years into the future.

The Fabian Society 'think tank' has mooted taxing pensioners in the same way as everybody else, and even says (as reported by BBC News)

"In the meantime, [the Fabian Society] suggests the government should consider taking national insurance from earnings after state pension age and ending tax-free lump sums on private pensions.

It also argues for more taxes on property, such as a land value tax or a reformed council tax, to suppress rises in house prices.

On top of this, the paper suggests scrapping current rules that guarantee that the state pension "will rise annually by an average of 0.26% more than earnings" and restricting universal benefits to pensioners, such as winter fuel allowance, free TV licences and free bus travel."

http://www.bbc.co.uk/news/education-22220345

That doesn't mean it's likely, or imminent...but it might be tempting for a chancellor to starting fiddling at the edges with a few percent here and there, once that happens it tends to grow. VAT started at 10% standard rate.

zygurat789

redbuzzard wrote: »

.

The Fabian Society 'think tank' has mooted taxing pensioners in the same way as everybody else, and even says (as reported by BBC News)

.

The BBC said that the better off pensioners should be taxed at the same rate as younger people.

They always have been, as far as I can remeber and they are taxed on the same amount as "younger" people.

rpc

redbuzzard wrote: »

The Fabian Society 'think tank' has mooted taxing pensioners in the same way as everybody else, and even says (as reported by BBC News)

It is possible, although the Fabian Society is hardly politically neutral. I think if Labour ever took up most of their proposals, they would not get voted in for a long time.

With the end to universal child benefit, I can easily see that there will be no universal benefits beyond the state pension though.

zygurat789 wrote: »

The BBC said that the better off pensioners should be taxed at the same rate as younger people.

They always have been, as far as I can remeber and they are taxed on the same amount as "younger" people.

Well that depends on whether you consider NI to be a tax.

mgdavid

james3333 wrote: »

.......and the people who have never bothered to pay into one will get a nice handout

thoughts?

the state pension plus any other benefits claimable from the state still only add up to a pittance; most retirees who have not made their own provision live in relative poverty.

martinsurrey

zygurat789 wrote: »

The BBC said that the better off pensioners should be taxed at the same rate as younger people.

They always have been, as far as I can remeber and they are taxed on the same amount as "younger" people.

wrong

http://www.hmrc.gov.uk/rates/it.htm

older people have higher personal allowances

http://www.hmrc.gov.uk/ni/intro/basics.htm

older people pay no national insurance.

these 2 differences mean

in 2012/13 a 75 year old with £20k of income had £18,132 after tax

a 21 year old on £20k had £16,131 after tax

Meaning the 75 year old paid £1,868 of tax while the 21 year old paid £3,869, or 107% more tax.

grey_gym_sock

are you on a very low income? if you are, you might be happy to live on the "nice handout" for ppl with no pension provision of their own. if you're used to spending a higher income, you'd probably find it a bit of a shock.

actually, recent and proposed policies seem to be aiming at less mean-testing for pensioners. automatic enrollment will give more low earners some private pension provision. the flat-rate pension will give a higher basic state pension to ppl with gaps (or part-time work) in their earnings record. so there may be less need for means-tested top-ups for the basic state pension.

CLAPTON

martinsurrey wrote: »

wrong

http://www.hmrc.gov.uk/rates/it.htm

older people have higher personal allowances

http://www.hmrc.gov.uk/ni/intro/basics.htm

older people pay no national insurance.

these 2 differences mean

in 2012/13 a 75 year old with £20k of income had £18,132 after tax

a 21 year old on £20k had £16,131 after tax

Meaning the 75 year old paid £1,868 of tax while the 21 year old paid £3,869, or 107% more tax.

yes that is so but the age allowance is now frozen at 10,500 or 10,660 (over 75)
new pensioners do not get them so there value will decline rapidly

the NI issue is a really difference
but of course people earning a wage can qualify for WTC
so the situation is a bit complicated