State pension increase fairness

MeteredOut

Eldi_Dos said:

But politicians are going to have to deal with the perception of unfairness which is only going to increase.

You think politicians will care about that? They can blame past governments for the mess now, and know they won't be around to take the blame when the future mess they're complicit in will come to fruition.

swindiff

If my boss earns twice the amount I do and we get a pay rise as a percentage increase (which is probably how most pay rises are implemented), then he will get proportionally more.  That is the way it works, why should state pension be done differently?

Cus

Is it only me that sees first ever posts by brand new members and wonders if:
A) It's a regular who doesn't want to post from their usual account
B ) it's a set up thread by someone to promote message board activity and discourse 
C) AI is getting really sophisticated and auto generates it

Yes, I'm paranoid..

p00hsticks

Grumpy_chap said:

Eldi_Dos said:

The state pension is already means tested in that tax is payable on it in relation to your income.

Is it?

State pension is currently below the standard personal allowance 

Not necessarily - as I mention above, those who have spent most of their working lives 'contracted in' under the old system may well already have a state pension amount (basic + SERPS/S2P additions) above the standard annual allowance. 

xylophone

Is it?

State Pension is taxable income.

If it is your only taxable income and is below the princely sum of (currently) around £242 a week, then you will pay no tax.

If it is over this amount, then tax is payable.

Let's take a person whose only income is his state pension and let's say that it is currently on or just under the Personal Allowance. 

 If he is on old SP, his  Basic will increase to £169.50 a week and his Additional SP to around £91 a week.

He will thus receive an increased princely sum of £261 a week and become a taxpayer once again.

SouthCoastBoy

Eldi_Dos said:

Silversence's proposal is going to gain ground as time goes on as the differential between the groups grows there will be pressure on politicians to address it.
I have no proof but feel more women than men are going to feel disadvantaged by present arrangement.

As time goes on there will be less people on the old state pension, eventually there will be nobody.

There are also a number of people getting more than the basic state pension under the old system.

Qyburn

Grumpy_chap said:

State pension is currently below the standard personal allowance and therefore paid and not taxed.

There have been at least two posts in the last few days from people whose State Pension will  exceed the Personal Allowance in the next tax year.

dealyboy

@p00hsticks said:

Grumpy_chap said:

Eldi_Dos said:

The state pension is already means tested in that tax is payable on it in relation to your income.

Is it?

State pension is currently below the standard personal allowance 

Not necessarily - as I mention above, those who have spent most of their working lives 'contracted in' under the old system may well already have a state pension amount (basic + SERPS/S2P additions) above the standard annual allowance. 

... and there are those who have extra state pension from deferment ... suffice to say state pension is taxable income taxed retrospectively.

zagfles

SouthCoastBoy said:

Eldi_Dos said:

Silversence's proposal is going to gain ground as time goes on as the differential between the groups grows there will be pressure on politicians to address it.
I have no proof but feel more women than men are going to feel disadvantaged by present arrangement.

As time goes on there will be less people on the old state pension, eventually there will be nobody.

There are also a number of people getting more than the basic state pension under the old system.

Virtually everyone on the old pre 2016 system gets more than the basic state pension, either through SERPS/S2P or a contracted out occupational pension. Main exception is the self employed.

It's unbelievable how many people still seem to think the new state pension just replaces the old basic state pension, and bang on about the discrepancy between the two. The new state pension replaces the old basic plus SERPS/S2P. For most people the old system is better.

eskbanker

zagfles said:

SouthCoastBoy said:

Eldi_Dos said:

Silversence's proposal is going to gain ground as time goes on as the differential between the groups grows there will be pressure on politicians to address it.
I have no proof but feel more women than men are going to feel disadvantaged by present arrangement.

As time goes on there will be less people on the old state pension, eventually there will be nobody.

There are also a number of people getting more than the basic state pension under the old system.

Virtually everyone on the old pre 2016 system gets more than the basic state pension, either through SERPS/S2P or a contracted out occupational pension. Main exception is the self employed.

It's unbelievable how many people still seem to think the new state pension just replaces the old basic state pension, and bang on about the discrepancy between the two. The new state pension replaces the old basic plus SERPS/S2P. For most people the old system is better.

OP not only opined that "Pre-2016 pensioners, in general, receive less than post-2016 pensioners by some margin" but also seemed to assume that realistic figures for comparison were "pre-2016 pension is £150/w and post-2016 is £240/w".  However, they also appeared to believe that the gap would widen by £728 per year after a 10% increase from those figures, which is factually incorrect....

Silversense said:

Pre-2016 pensioners, in general, receive less than post-2016 pensioners by some margin and the gap between the two groups grows (and will continue to grow if there is no change to the system).
e.g. if pre-2016 pension is £150/w and post-2016 is £240/w, then if there is a 10% increase the amount of cash received is increased by £15/w or £24/w dependent upon whether you were pre or post 2016. [a difference of £728 per year !!