Opt out of state pension?

zagfles

bostonerimus wrote: »

"From each according to his ability, to each according to his needs." This doesn't need to be followed throughout the economy, but it's a very good principle to use when providing things like social insurance, education and the delivery of healthcare. Having to pay a lot of tax or NI is a problem many people would like to have...

NI and the benefits of NI credits are nothing like that quote of (I think) Karl Marx.

NI is not paid according to ability. Those on high incomes pay a lower overall % of NI, as it drops from 12% to 2% once over the HRT threshold.

The state pension is not paid according to need but according to your contributions record. Those in most need often don't have a full record (there are other means tested benefits like pension credit, housing benefit etc but they bear no relation to NI records).

zagfles

MEM62 wrote: »

The payment of NI entitles you to a grange of benefits provided by the state. It is a 'package' and they are not paid for separately in terms of taxation so, no, you don't get to pick and choose those that you do and do not want.

We all make use of the benefits in different ways as our circumstances and needs dictate. We do not all use all of facilities available to us all the time and some will certainly use more than others. As you cannot predict which of these you may need at any point in life then you would not be able to pick and choose anyway. However, you will be very grateful that they are there when you are in need of them. Perhaps the term 'National Insurance' is very apt.

You cannot compare any of this with a private pension. A private pension is a financial product. It is an investment that you make to provide for your future self. National Insurance is not.

No "National Insurance" is not apt at all. That's what causes the confusion, calling it an "insurance". That's why people ask if they can "opt out", as most insurance is optional.

It's a tax, and should be called a tax, then people won't get confused. The contributory principle has been so heavily watered down over the decades, with various changes whereby you can get credits without paying, where you can be forced to pay and not get credits, where there are means tested alternatives which pay the same or more etc. NI is a tax in all but name.

bostonerimus

zagfles wrote: »

NI and the benefits of NI credits are nothing like that quote of (I think) Karl Marx.

NI is not paid according to ability. Those on high incomes pay a lower overall % of NI, as it drops from 12% to 2% once over the HRT threshold.

The state pension is not paid according to need but according to your contributions record. Those in most need often don't have a full record (there are other means tested benefits like pension credit, housing benefit etc but they bear no relation to NI records).

I was not endorsing the the current system in the UK. You make good points about how NI payments taper off for those with high incomes, and the self-employed and expats get a very good deal, but the introduction of the flat rate pension has reduced the state pension of higher paid workers while not practically increasing the benefit of lower paid workers. The ability to get years of credits from activities like caring is a good thing, but many older women have suffered under the new scheme. It's an impossible thing to get right as there are so many different opinions and needs. I was just suggesting a principle that might guide the system.

zagfles

bostonerimus wrote: »

I was not endorsing the the current system in the UK. You make good points about how NI payments taper off for those with high incomes, and the self-employed and expats get a very good deal, but the introduction of the flat rate pension has reduced the state pension of higher paid workers while not practically increasing the benefit of lower paid workers. The ability to get years of credits from activities like caring is a good thing, but many older women have suffered under the new scheme. It's an impossible thing to get right as there are so many different opinions and needs. I was just suggesting a principle that might guide the system.

It does sort of guide most means tested benefits. But not NI and contributory benefits. Which is why it's not at all stupid, or even selfish, to ask about opting out of a contributory benefit.

Like I said in another thread this board is getting far too judgemental.

Nick_C

Smb3088 wrote: »

I asked too, if it was possible of opting out of contribution towards a pension and not receiving it. Council tax, tax etc was not my question, so comments above (Nick-C) is uncalled for.
Thank you for the information everyone bar a few

National Insurance is a type of tax.

You didn't understand that taxes are not optional.

I thought an analogy might help you to understand the issue. I make no apology for my "uncalled for" comments.

zagfles

Nick_C wrote: »

National Insurance is a type of tax.

Which was obviously the thing the OP didn't understand

You didn't understand that taxes are not optional.

No, the OP didn't understand it is a tax. Which makes your patronising little analogies about other taxes totally irrelavent.

hyubh

Come on everyone, calm down and be nice to each other.... over the actual answer to the original question, you are all in agreement...!

bostonerimus

hyubh wrote: »

Come on everyone, calm down and be nice to each other.... over the actual answer to the original question, you are all in agreement...!

Agreed..a little bit of Zen goes a long way...OM

atush

Personally I will not reach retirement age, fact.

I am very sorry to hear this. But at least you have access to the NHS.

margaretx9

westv wrote: »

Why would anybody be so stupid?

Perhaps because if they are in their 20s they might well not trust the government to pay them a pension when they are 70. Its called the demographic time bomb! The qualifying age keeps going up - and up. It depends if you trust that the government sitting on a £2 trillion national debt with ever increasing numbers of retired vs working age people is going to be paying a non means tested universal state pension to all in 30 or 40 years time!