Old State Pension v New State Pension

PW100VP

I am on the old state pension which is obviously less than the new state pension due in some part due to later retirement ages. What I find annoying is that pension increases are done on a percentage basis which means every year the gap in pension income Between the old and the new pension increases so I have less to spend. Is it just me or does anyone else think this needs changing and pension increase should be on a lump sum to keep the status quo ?.

TadleyBaggie

No I don’t agree

PW100VP said:

I am on the old state pension which is obviously less than the new state pension

My state pension is based on the "old" scheme and I get considerably more than the maximum under the "new" scheme. So your basic premise is flawed.

molerat

The subject was done to death a while back.  With a percentage increase the pension buys exactly the same as it did before for each side.  A lump sum does not keep the status quo.

dunstonh

No I don’t agree

I am on the old state pension which is obviously less than the new state pension due in some part due to later retirement ages. 

That statement is incorrect.   You are probably making the mistake of just comparing the basic state pension without the additional state pensions with the single state pension.  i.e. not like-for-like.    Plus, the old state pensions could pay far more than the single state pension.

What I find annoying is that pension increases are done on a percentage basis which means every year the gap in pension income Between the old and the new pension increases so I have less to spend. 

The relative difference remains the same.

 Is it just me or does anyone else think this needs changing and pension increase should be on a lump sum to keep the status quo ?.

Its just you and possibly others that make the same mistake you have.

GibbsRule_No3.

I thought the new one was so that they don't have to pay as much Pension Credit to new OAP's going forward.

p00hsticks

No I don’t agree

The topic has already been discussed here
Why is new state pension higher than old? — MoneySavingExpert Forum
As I said there, you basic premise that the majority of those on the old scheme only get the basic state pension, and that all those on the new get the £185.15 is fundamentally flawed. 

Merlin139

No I don’t agree

Under the old scheme you could have received a maximum of:

£141.85 Basic State Pension
£185.90 Additional State Pension

Total £327.75 Per Week

So that says to me the old scheme is better.

bostonerimus

No I don’t agree

Like so much in politics and economics you can tell any story you want with a certain set of facts.
The new flat rate pension is indeed more than the old basic state pension, but very few people just got the basic pension. They would have S2P or SERPs or other benefits that would increase the amount, so for many people they will get less under the new system.

FYI as an expat paying voluntary Class 2 NI under the old system I could only get the basic state pension and so I'm one of a small number of people who definitely get more under the new flat rate pension system.

pleaseadvise_2

I get basic old state pension, and a tiny amount of SERPs, there is no way I get anywhere near what the "new" state pensioners, including my younger siblings both get.  I cannot claim any benefits as I do have some savings in excess of what is allowed.  I was of the age group that didn't realise that working for a private sector company, I would not have a pension contributed to (unlike the public sector) and didn't earn enough to pay into a private pension.  In those days private sector employers were not obliged to organise pensions for their employees, and when they were (well into my 50s), if it was a company with less than 5 employees they still didn't have to, so I have lost out in all ways.  Added to which, all over 70s now have to pay for their TV licence when almost up to my retirement they didn't have to and also apparently it is going up by £10.50 next year.  People tell me that I was lucky as I was "able" to retire at 60, (I couldn't afford to and so continued working full time till I was 62  and then part-time till I was 71.  I also agree that because of the percentage increase on both the new and old state pensions, the gap increases year by year.  This is so unfair but it is my belief that the Government are of the opinion that most of us "oldies" have not even realised and we will be dead soon enough anyway, so they dont need to worry.

hugheskevi

No I don’t agree

pleaseadvise_2 said:

I get basic old state pension, and a tiny amount of SERPs, there is no way I get anywhere near what the "new" state pensioners, including my younger siblings both get.  

Population statistics are more reliable than individual anecdote.

DWP statistics show that the males in receipt of new State Pension receive an average of £175.54 p/w, and females £170.61. In comparison, males in receipt of old State Pension receive an average of £178.67 and females receive £152.90.

So the new State Pension appears to have been very positive for women, but not for men. Although note that these figures do not tell us what men would have had under the old system, so cannot be seen as a definitive comparison of the systems. Nonetheless, this is what would have been expected, as the new State Pension essentially moves most pensioners to getting the same, capped, amount so those who would have done well under the old system do worse under the new system and vice-versa. Given men tend to have higher earnings and greater labour market attachment, they should on average be the losers from such a change.

pleaseadvise_2 said:

I was of the age group that didn't realise that working for a private sector company, I would not have a pension contributed to (unlike the public sector) and didn't earn enough to pay into a private pension.  In those days private sector employers were not obliged to organise pensions for their employees, and when they were (well into my 50s), if it was a company with less than 5 employees they still didn't have to, so I have lost out in all ways.  

Over an extended period before the introduction of automatic enrolment, around 50% of employees were contributing to an occupational pension (including group personal pensions under the occupational banner here). Many of these were in the private sector. This figure was surprisingly consistent, despite significant change in the workforce and particularly the role and expectations for female workers. 

From around 1995 onwards, concerted attempts to increase private pension participation in the workplace had little or no effect, resulting in automatic enrolment.

pleaseadvise_2 said:

Added to which, all over 70s now have to pay for their TV licence when almost up to my retirement they didn't have to and also apparently it is going up by £10.50 next year.  

It was over 75s who received a free TV licence, and over 75s in receipt of Pension Credit still get a free licence.

pleaseadvise_2 said:

I also agree that because of the percentage increase on both the new and old state pensions, the gap increases year by year.  This is so unfair but it is my belief that the Government are of the opinion that most of us "oldies" have not even realised and we will be dead soon enough anyway, so they dont need to worry.

So the 10.1% increase you received wasn't enough and should have been more?

molerat

pleaseadvise_2 said:

......... there is no way I get anywhere near what the "new" state pensioners, including my younger siblings both get. 

I reached SPA post 2016 and do not, and could not, get the full new pension so not everyone gets that amount.  MrsM on the other hand had very little paid employment and is receiving the full amount, "housewives" can be one of the main winners.  

If, as many have wanted, the new pension was awarded to all existing pensioners there would likely be far more losers than those who would receive more.