Is the State Pension a benefit?

dealyboy

@Universidad said:

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norsefox said:

 many people take the view that the State Pension is theirs by virtue of having 'paid for it'. 

Those people are correct. Not in the sense of getting out what they put in, sure. But in the sense of having bought an entitlement to something? Absolutely they did, and the government all but states this outright when you look up your entitlement.

Many people have made voluntary contributions to fill in missing years. How could one argue they haven't paid for an entitlement to pension? For such people, having any part of their state pension taken away would be nothing less than fraud.

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... and when a person gets their State Pension forecast there's often a line which states or implies that you need to work n more years to get a full pension, as in my case.

And just to argue against those youngsters who don't like their taxes paying for today's pensioners, isn't that just what we did?

marlot

>> And just to argue against those youngsters who don't like their taxes paying for today's pensioners, isn't that just what we did?

To be fair to the youngsters, they have to pay student loans, which we never did.  And there were far fewer pensioners per worker when we were young.

My pre-retirement modelling had the risk that the state pension could be means tested.  I still regard it as a risk. 

GibbsRule_No3.

marlot said:

My pre-retirement modelling had the risk that the state pension could be means tested.  I still regard it as a risk. 

As a single person, who has worked for 53 years, granted now just two days a week, with my own pensions and state pension in payment, to some degree I have always looked at it as being means tested now.  I know that due to the pensions I have, I would never be able to claim any extra benefits, so I happily accept my £10.00 Christmas "treat", the WFA be it the usual £200 or past 2 years £500 and my freedom pass (I live in London and don't own a car).  Free or very cheap access to certain things, eg Kew Gardens would be a nice bonus if I did have access to Pension Credit.  By still working the Government manage to get £4500 from me in tax still.  I really need to work out how much I should be paying into a Stakeholder Pension to save some of that tax!!  Has National Insurance once retired to pay for the NHS shortfall been scraped altogether now?

Linton

marlot said:

>> And just to argue against those youngsters who don't like their taxes paying for today's pensioners, isn't that just what we did?

To be fair to the youngsters, they have to pay student loans, which we never did.  And there were far fewer pensioners per worker when we were young.

My pre-retirement modelling had the risk that the state pension could be means tested.  I still regard it as a risk. 

About 90% of today's pensioners never had the option of full time post 18 education.

I dont believe that SP will be means tested.  The admin would be a major issue and bringing it in would be problematic.   The goverment are not likely to stop paying SP to those already receiving it having planned retirement on the understanding that sufficient years would entitle them to SP. .  Consider that the current "new" SP won't be fully implemented for decades.     Hence having SP means tested would be a blow to the youngsters far more than to current pensioners.

A far easier way of achieving a similar objective is to change the balance through the tax system.  As a pensioner I dont see why I should not be paying my full share for the NHS and for those who need state support. .Better in my view to cut NI substantially and move the load to the taxes for which everyone could be liable - income tax, CGT, VAT, IHT 

xylophone

I really need to work out how much I should be paying into a Stakeholder Pension to save some of that tax!! 

It seems that you are under age 75 so could still contribute to a personal pension (doesn't have to be a stakeholder} and receive tax relief on the contribution.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100#xd_co_f=OWIyNmE4MzUtMzQxMi00YWJhLTlkMDUtNzk0NmFmYzU1ZGFm~

Even if you had no relevant earnings (see above), you could make a net payment of up to £2880 to a personal pension and receive tax relief of up to £720.

It appears that you may  have relevant earnings from your  part time job.

Let's suppose that you earn £10,000 a year and you  start a pension with one of the DIY  SIPP providers like Hargreaves Lansdown or Fidelity or AJ Bell etc.

You could make a contribution of up to £8000 per annum and receive tax relief of up to £2000.

If your total income makes you a higher rate tax payer, you could be eligible for higher rate relief - are you in self assessment?



 

GibbsRule_No3.

xylophone said:

I really need to work out how much I should be paying into a Stakeholder Pension to save some of that tax!! 

It seems that you are under age 75 so could still contribute to a personal pension (doesn't have to be a stakeholder} and receive tax relief on the contribution.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100#xd_co_f=OWIyNmE4MzUtMzQxMi00YWJhLTlkMDUtNzk0NmFmYzU1ZGFm~

Even if you had no relevant earnings (see above), you could make a net payment of up to £2880 to a personal pension and receive tax relief of up to £720.

It appears that you may  have relevant earnings from your  part time job.

Let's suppose that you earn £10,000 a year and you  start a pension with one of the DIY  SIPP providers like Hargreaves Lansdown or Fidelity or AJ Bell etc.

You could make a contribution of up to £8000 per annum and receive tax relief of up to £2000.

If your total income makes you a higher rate tax payer, you could be eligible for higher rate relief - are you in self assessment?



 

What I should have said was I need to work out how much % more I should pay into the Stakeholder Pension that I am now paying into. When I reached SP age 3 1/2 years ago I was not expecting to still be working, so I opted for 13% but have put off upping it, as I wasn't sure when I'd be told they'd like me to go!!  Be just my luck if I did ask to up it, they will ask me to go.

Silvertabby

Linton said:

marlot said:

>> And just to argue against those youngsters who don't like their taxes paying for today's pensioners, isn't that just what we did?

To be fair to the youngsters, they have to pay student loans, which we never did.  And there were far fewer pensioners per worker when we were young.

My pre-retirement modelling had the risk that the state pension could be means tested.  I still regard it as a risk. 

About 90% of today's pensioners never had the option of full time post 18 education.

I dont believe that SP will be means tested.  The admin would be a major issue and bringing it in would be problematic.   The goverment are not likely to stop paying SP to those already receiving it having planned retirement on the understanding that sufficient years would entitle them to SP. .  Consider that the current "new" SP won't be fully implemented for decades.     Hence having SP means tested would be a blow to the youngsters far more than to current pensioners.

A far easier way of achieving a similar objective is to change the balance through the tax system.  As a pensioner I dont see why I should not be paying my full share for the NHS and for those who need state support. .Better in my view to cut NI substantially and move the load to the taxes for which everyone could be liable - income tax, CGT, VAT, IHT 

University education may have been 'free' but it certainly wasn't freely available to all.  Only one of my schoolmates (a GP's daughter) went to uni.  The rest of us had no choice but to leave school at the earliest opportunity, so we could bring money into the house.

Mutton_Geoff

The scheme more closely resembles a Ponzi scheme where newcomers fund those that came into the game earlier and now want out. Let's hope we don't run out of new entrants ;-)

https://en.wikipedia.org/wiki/Ponzi_scheme

MeteredOut

flaneurs_lobster said:

Don't really care if it's called a Benefit, Earnings or a gift from the Magic Money Elf.

There is a real point in the article about attitudes towards people who receive state benefits and not wanting state pensions to be seen in the same way.

Full-on prejudice is what I'd call it. It's a benefit, get over it.

If it helps to normalise/de-stigmatise the phase, I'm fine with people referring to it as a benefit.

Thumbs_Up

Mutton_Geoff said:

The scheme more closely resembles a Ponzi scheme where newcomers fund those that came into the game earlier and now want out. Let's hope we don't run out of new entrants ;-)

https://en.wikipedia.org/wiki/Ponzi_scheme

The worlds population is 8 billion people and counting, so it's very easy to keep the so called "ponzi scheme" running. The only problem is, and fill free to add comment is,......