State pensions should be slashed

Andy_L

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

£100k will get you about £3.6k with RPI. The pension is CPI, but then has the triple lock of inflation/wages/2.5% so its reasonable to call them the same.

Thus £5k costs about £140k

Andy_L

margaretclare wrote: »

....but these benefits are means-tested. Not all pensioners qualify for means-tested benefits e.g. if they also have work-related pensions, annuities from savings etc.

as are unemployment benefits once you've passed the time limit for contributions based JSA

seven-day-weekend

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!

Same here. My husband has a Teachers' Pension (no State Pension until January 31st) and pays tax on that every month. I have a State Pension and small amount of income from house-sitting and this year have had to pay £50 tax.

So not 'rich' by any means.

Dunroamin

margaretclare wrote: »

....but these benefits are means-tested. Not all pensioners qualify for means-tested benefits e.g. if they also have work-related pensions, annuities from savings etc.

Additional benefits for the unemployed are also means tested.

SAHD_Jim

nashly wrote: »

Why can't a single person pension be £70 per week, if non pensioners are meant to be able to survive on unemployment benefits then pensioners should not be a special case and they should stop shafting the rest of us.

Unemployment benefit is intended to be a short term benefit to survive on until you find work again. The state pension is intended to provide an income in retirement, not a means of survival. You are comparing apples with pears.

The big issue is the post industrial problem of lifelong benefits claimants that before 1980 largely didn't exist.

Jennifer_Jane

seven-day-weekend wrote: »

Same here. My husband has a Teachers' Pension (no State Pension until January 31st) and pays tax on that every month. I have a State Pension and small amount of income from house-sitting and this year have had to pay £50 tax.

So not 'rich' by any means.

Hang on - I NEVER said that only very rich people paid tax on their State Pension.


What I was indicating was that - in a way - very rich people, by paying 45% tax (from April 2014) are being "means-tested" in that their pension is obviously reduced by more than poorer people (like me) who only pay the Basic rate of tax on their pension.


I don't know why this is attracting comments which assume I was saying ONLY the very rich attract tax. I never indicated that, I didn't discuss basic rate taxpayers. I was just saying that the very rich are "penalised" by higher tax rates than others. A point which, when people are talking about means-testing the state pension, appears not to have been discussed.


Am I going mad here? It was just a little reminder, not meant to take things off-topic.

seven-day-weekend

I understood what you were saying, which was that the richer you are the more proportion of tax you pay. I was just using your illustration to demonstrate that many lower-income pensioners still pay tax because lots of people think we don't.

Sorry for any confusion.

System

Successive governments ever since the scheme began have sold us the principle that we pay our contributions so one day, if we have made enough contributions, we are entitled to draw our pensions.

They don't apply this contributions principle to other things financed by the government. We don't buy education credits, defence credits, motorway-building credits, white elephant credits. They decide to do them anyway, and we have to pay, regardless of how much we use them.
They call their exactions "taxation" which means the government is free to waste it however it likes.

But contributions to a pension are not taxation, and to treat them as such would be fraudulent. Any other pension provider attempting to confiscate their members' pension rights would be investigated for mis-selling.

CLAPTON

Clifford_Pope wrote: »

Successive governments ever since the scheme began have sold us the principle that we pay our contributions so one day, if we have made enough contributions, we are entitled to draw our pensions.

They don't apply this contributions principle to other things financed by the government. We don't buy education credits, defence credits, motorway-building credits, white elephant credits. They decide to do them anyway, and we have to pay, regardless of how much we use them.
They call their exactions "taxation" which means the government is free to waste it however it likes.

But contributions to a pension are not taxation, and to treat them as such would be fraudulent. Any other pension provider attempting to confiscate their members' pension rights would be investigated for mis-selling.

there would be little benefit for the government to move from having one bank a/c called 'debt'
to a system of having two bank a/cs
called 'enhanced debt' and 'pension pot'
as the sum of the latter two would equal the original debt.

System

CLAPTON wrote: »

there would be little benefit for the government to move from having one bank a/c called 'debt'
to a system of having two bank a/cs
called 'enhanced debt' and 'pension pot'
as the sum of the latter two would equal the original debt.

I don't understand how that has anything to do with what I was saying.

I am saying that successive govermnents have accepted contributions in return for a guarantee that in due course a pension will be paid, of a specified amount which is indexed each year.
That's a contract, by the normally accepted laws of this country. We don't make contracts with governments for other services - so much defence, so many miles of motorway, etc, but we do with our pensions, which is why our payments are called "contributions" not taxation.