State pensions should be slashed

uknick

prowla wrote: »

What a stupid post; people pay into the state pension, and if there is a shortfall then it is down to the mismanagement of consecutive governments.

Pensioners aren't spongers, they are people who have earned the right to be taken care of in their latter years and have invested in the system to do that.

(In my case, I hope to work til I die, so it's possibly academic for me!)

People pay into ALL benefits. Nobody pays into a "pension" fund, apart from their SERPS and S2P, or whatever its going to be called until 2015 when it's scrapped. Even then , there's no fund specifically allocated to an individual, just an entitlement.

Any shortfall is not due to government mismanagement, unless it is their fault people are living longer. It is down to the government having higher priorities elsewhere for the taxes raised.

But, for the OP to try to equate unemployment to time spent being a pensioner does worry me as to where some people think this country is going. Should they also make PIP, ESA, DLA the same as JSA? I think not as they are designed for different purposes.

margaretclare

Jennifer_Jane wrote: »

Just to add that the very rich are "means-tested" in a way. The State Pension is taxable and the tax regime reduces tax allowances so that ultimately the very rich are paying the same tax as anyone else.


https://www.gov.uk/income-tax-rates

You don't have to be 'very rich' to still be a taxpayer. DH and I are still taxpayers and will be taxpayers until we depart this mortal coil. We'd call ourselves 'comfortable', that means not poor but not rich. Very definitely, not very rich!

Jennifer_Jane

margaretclare wrote: »

You don't have to be 'very rich' to still be a taxpayer. DH and I are still taxpayers and will be taxpayers until we depart this mortal coil. We'd call ourselves 'comfortable', that means not poor but not rich. Very definitely, not very rich!

I did not say this, and I apologise if this is what you understood from my post.


I am a 67 year old on part of the BSP with a small company pension. I fully understand the tax payable. My point is that whilst people may or may not be aware that the State Pension is taxable, the point about means-testing is covered by the fact that the very rich have to pay MORE tax in the way that all higher earners do.


I apologise if my post was confusing. I thought I was clear.

margaretclare

Jennifer_Jane wrote: »

I did not say this, and I apologise if this is what you understood from my post.


I am a 67 year old on part of the BSP with a small company pension. I fully understand the tax payable. My point is that whilst people may or may not be aware that the State Pension is taxable, the point about means-testing is covered by the fact that the very rich have to pay MORE tax in the way that all higher earners do.


I apologise if my post was confusing. I thought I was clear.

No, I didn't misunderstand, Jennifer, and thank you for your post. State pension is totalled together with other pensions, SERPS/S2P, occupational pensions, annuities, and the total is set against personal tax allowances which everyone has.

Jennifer_Jane

uknick wrote: »

People pay into ALL benefits. Nobody pays into a "pension" fund, apart from their SERPS and S2P, or whatever its going to be called until 2015 when it's scrapped. Even then , there's no fund specifically allocated to an individual, just an entitlement.

Any shortfall is not due to government mismanagement, unless it is their fault people are living longer. It is down to the government having higher priorities elsewhere for the taxes raised.

But, for the OP to try to equate unemployment to time spent being a pensioner does worry me as to where some people think this country is going. Should they also make PIP, ESA, DLA the same as JSA? I think not as they are designed for different purposes.

I disagree with your point, as evidenced by the need to achieve qualifying years to get any pension at all. As I previously said, I get part of the State Pension because that's all I've qualified (ie paid NI contributions) for.


Pensioners have paid what was required of them - they've done what they had to do - in my case that was a specific choice I made as it seemed a good idea to "invest" my money in this way. As it happened, I returned to the UK, and am glad I made that decision.


PS agree with your last paragraph.

mark55man

For a pensioner retiring today (ie on today's state pension) and assuming no second pension, widows pension or SERPS what size pot would they have to have to buy the current today's pension - ie 5K per year index linked on the open market


Now assuming someone has been working all their life 20 - 65 say and paying NI contributions at the minimum level - what size of pot would that stream of invesments yield had it been invested (eg in a typical lifestyling type fund) - I know there are multiple answers but there must be some average statistics somewhere


My expectation is that although people claim to have earned their pensions many are getting benefits beyond what they paid for, and some are getting benefits way less than they paid for.
I strongly disagree with the OP, but I think it would shock some people as to the amount needed to "earn" the pension in purely investment terms

Now the fact is I support universal benefit in this case so please don't flame me (I also understand that the state pensions are being paid not out of investments but out of annual taxation income - a point which is entirely the government's fault and not the pensioners or pensioners to be)

Jennifer_Jane

margaretclare wrote: »

No, I didn't misunderstand, Jennifer, and thank you for your post. State pension is totalled together with other pensions, SERPS/S2P, occupational pensions, annuities, and the total is set against personal tax allowances which everyone has.

Well, it's always worth repeating that the State Pension is taxable, and since it's a complicated area, certainly worth showing how it's taxed.

---

Going off-topic for a moment, and not for you, margaretclare, I keep a spreadsheet with the calculation on and friends have been grateful for me to check their tax payments, as HMRC appear to often get things wrong. I can't remember the exact figures, but at one stage HMRC assumed I was receiving almost double what I had been on and tax was deducted accordingly. This happened to a friend too.


Always worth checking that HMRC are using the correct assumptions.

Dippypud

somethingcorporate wrote: »

Nice strawman there - because the alternative to giving people money is letting them starve? I wasn't aware that consuming fivers was part of a healthy diet.

Not heard of food vouchers or food banks? I don't see many people in this country starving and plenty of them don't have an income for one reason or another.

Getting food out of a food bank is limited to 3 times PER YEAR and can only be referred by care professionals such as social workers or police officers.

CLAPTON

mark88man wrote: »

For a pensioner retiring today (ie on today's state pension) and assuming no second pension, widows pension or SERPS what size pot would they have to have to buy the current today's pension - ie 5K per year index linked on the open market


Now assuming someone has been working all their life 20 - 65 say and paying NI contributions at the minimum level - what size of pot would that stream of invesments yield had it been invested (eg in a typical lifestyling type fund) - I know there are multiple answers but there must be some average statistics somewhere


My expectation is that although people claim to have earned their pensions many are getting benefits beyond what they paid for, and some are getting benefits way less than they paid for.
I strongly disagree with the OP, but I think it would shock some people as to the amount needed to "earn" the pension in purely investment terms

Now the fact is I support universal benefit in this case so please don't flame me (I also understand that the state pensions are being paid not out of investments but out of annual taxation income - a point which is entirely the government's fault and not the pensioners or pensioners to be)

order of magnitude is that 5k per annum indexed linked from 65 would cost about 170,000

if you worked for 45 years then in today's terms, you would have needed to pay about 3,700 per annum or 310 per month: you would need a salary of over 3,000 per month to pay that amount of NI

obviously there would be 'investment' growth but it gives a feel for what is needed to fund the basis state pension.

taktikback

I don't like the word "benefit" being used to describe the state pension. It's a scheme I've paid into, and I expect to get a payout. The fact that the government has chosen not to create a pot of money for it is by the way. I've paid for it, and I expect to get it, just as I've paid into a private scheme and expect to get that.

I would much prefer that the word "benefit" only be used for discretionary payments that haven't been earned - and are the result of goodwill by either governments or individuals.

A simplistic view I know, but there seems to be a trend to merge the language used for schemes and benefits to make everyone feel guilty about taking anything from the government - rather than making a clear distinction between those that contribute and those that don't...