State Pension Inequality?

Prism

fred246 wrote: »

I am sorry. I just thought it was interesting. Most pension payouts are linked to what you put in. Two people were discussing pensions. The payout was the same but the amount put in was massively different. I just wondered if it was fair. Obviously it must be.

Its best not to try and split NI contributions from other taxes but lump them together. I pay absolutely no NI (or income tax for that matter) either but qualify each year for my state pension. What I do pay instead is dividend tax and corporation tax.

Flugelhorn

fred246 wrote: »

I am sorry. I just thought it was interesting. Most pension payouts are linked to what you put in. Two people were discussing pensions. The payout was the same but the amount put in was massively different. I just wondered if it was fair. Obviously it must be.

DB final salary pensions aren't related to what you put in at all - just the salary you manage to get in the last few years

shropshirelady

Is it fair that the 2016 equal pension payments aren't equal for older pensioners? I worked full time (on unequal pay) for just over 50 years and paid NIS for 45 years, yet my full state pension is is under £130 per week and someone with 35 years NIC now gets £168.60 per week. Doesn't sound very fair to me.

xylophone

someone with 35 years NIC now gets £168.60 per week.

Not necessarily. They might have been contracted out for all their working life and have a high COPE deduction.

You get a full basic state pension but no Additional State Pension at all?

Even if only a basic state pension, at what age were you able to start drawing it?

shropshirelady

xylophone wrote: »

Not necessarily. They might have been contracted out for all their working life and have a high COPE deduction.

You get a full basic state pension but no Additional State Pension at all?

Even if only a basic state pension, at what age were you able to start drawing it?

I do get some additional state pension and some company pension, though one company pension is fixed for life, and was contracted out for some of that, but was contracted in for 30 odd years. I've had my state pension since I was 60, though I worked until I was a few months after 65.

lisyloo

fred246 wrote: »

Most pension payouts are linked to what you put in.

I have news for you.

Bringing up children is considered to be “putting in” by the state.

One example is pensions, but another one is divorce where the starting point is 50/50 (during the marriage period) regardless of the level of wealth.

Just a question to think about but are you implying that in your eyes only contributing in a financial context counts?
Clearly the state doesn’t think so.

Bringing up children contributes to the future workforce therefore counting those years for NI purposes does seem fair to me (under a certain age).

xylophone

I do get some additional state pension

If you were contracted in for more than thirty years it seems likely that your SP is quite a lot more than just the BSP.

I've had my state pension since I was 60,

State Pension Age is now 65+ for men and women.

though I worked until I was a few months after 65.

But paid no NI contributions on your salary after you reached SPA at 60.

The new state pension has no provision for earning additional state pension.

There are people in the transitional arrangements who will benefit more than they would have done under the old system or would do under the new - but that tends to be what happens when systems change.

woolly_wombat

shropshirelady wrote: »

I've had my state pension since I was 60

Lucky, lucky you!

dunstonh

shropshirelady wrote: »

Is it fair that the 2016 equal pension payments aren't equal for older pensioners? I worked full time (on unequal pay) for just over 50 years and paid NIS for 45 years, yet my full state pension is is under £130 per week and someone with 35 years NIC now gets £168.60 per week. Doesn't sound very fair to me.

Is it fair that you got yours at 60 whilst those retiring under the new scheme got it at 66 rising to 68 (and even 70 potentially).

Is it fair that you spent most of your working life in a lower taxation environment?

Is it fair that you had the choice to contract out whilst those today do not? So, miss out on the opportunity to get lump sums or potentially better pensions?

Is it fair that you get £130 pw from the state despite 30 odd years of contracting out?

lisyloo

dunstonh wrote: »

Is it fair that you got yours at 60 whilst those retiring under the new scheme got it at 66 rising to 68 (and even 70 potentially).

For balance

I suspect shropshirelady started work a lot younger than 22 and didn’t have a gap year and had a longer working life than many these days.
Probably didn’t get all the vaccinations youngsters so these days and possibly suffered more.

We don’t all get dealt the same hand.
That doesn’t mean it’s deliberately unfair it’s just the way it is.

However I do think discussions should be balanced and not one sided.
Older people have had certain advantages but also many disadvantages for example some of them have passed away from cancer when today they would be survivors.

Overall it seems fair to me that if we’re living longer we have to work longer and with the introduction of family planning women don’t have to have 12 kids, so the equalisation in ages is fair too.

The only way round is it to make provision for yourself not moan that it’s unfair.