State pension increase fairness

Eldi_Dos

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.

I am sure the many people who see amounts of raise and not percentages will take comfort knowing that their numbers may be diminishing as time goes on.

p00hsticks

There is an interesting article by Which magazine that contains the following info

Figures from the Department for Work and Pensions now show how much people are getting under the new state pension compared to the old system (accurate to August 2022, figures published in February 2023).

• £163.17 - Average payout under the old system
• £173.71 - Average payout under the new system
• £175.84 - Average new state pension payout for men, around £3 less a week than under the old system
• £170.52 - Average new state pension payout for women, around £18 more a week than under the old system

Certain groups are better off under the new system, whereas some will lose out from the changes.

Better off under new state pension

• women, carers and the low paid who haven't built up additional state pension
• self-employed people who didn't qualify for state second pension
• people who were contracted out and can access their private pensions at age 55
• workers contracted out who have time to build up years of full NI contributions.

Worse off, or no better off under new state pension

• people with less than 10 years of NI qualifying years
• people with more than 35 years' worth of full NI contributions
• high earners who won't be able to build up more additional state pension (ASP)
• younger employees who will no longer be able to build up ASP
• spouses, civil partners, widows and widowers who will no longer be able to claim or inherit a state pension based on a partner's NI contributions
• those already drawing the state pension won't be affected

Source:
How much state pension will I get? - Which? 

Eldi_Dos

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.

While that is true for myself and I am sure many others on this board I believe there will large swathes of pensioners for whom it is not their reality.
They see it as a raise in pounds and pence and compare it as so, hence the sense of grievance felt.

zagfles

Eldi_Dos said:

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.

While that is true for myself and I am sure many others on this board I believe there will large swathes of pensioners for whom it is not their reality.
They see it as a raise in pounds and pence and compare it as so, hence the sense of grievance felt.

Like who? The self employed are just about the only significant group who'd get no SERPS/S2P. Even carers and SAH parents claiming child ben for young children got S2P post 2002. Every employee who earned enough to qualify for the basic state pension got a decent S2P accrual post 2002 because they got it based on earnings at the "low earnings threshold" (not the LEL), see https://en.wikipedia.org/wiki/State_Second_Pension

Some people will have a contracted out equivalent, so paid by the occupational scheme instead. But that also applies to post 2016 retirees who get a deduction in the NSP because they were contracted out.

The old state pension accrual, at least post 2002, was more generous for nearly everyone than the new. The old was less generous for low paid and carers etc pre 2002. But the low paid would have got some. 

There are foibles and exceptions but there seem to be a lot of clueless people who simply compare the old BASIC state pension to the new state pension and really think that's all there is to it. The new state pension replace BOTH the old basic and SERPS/S2P. This seems to go over some peoples' head. Or they don't understand that their contracted out occupational pension replaces part of the state pension and was paid for by NI rebates.

Eldi_Dos

zagfles said:

Eldi_Dos said:

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.

While that is true for myself and I am sure many others on this board I believe there will large swathes of pensioners for whom it is not their reality.
They see it as a raise in pounds and pence and compare it as so, hence the sense of grievance felt.

Like who? 

The group,mainly women,who worked a few years then gave up work to raise a family and when it came time to go back to work found that carers responsibilities interfered with the employment they could take on and looked mainly for part time work fit round that.This led to many having a lower pension when reaching pension age.
When the increase letters arrive in February they see their pension go up by a certain amount and others with a larger pension getting a bigger rise.This leads to a feeling of unfairness which is only going to grow as the differentials grow.
The heterodoxy proposed by Silversense would go some way to ease that.It may even appeal to the Treasury as a way to distance itself from the triple lock and the built in increases that entail's.

dunstonh

Figures from the Department for Work and Pensions now show how much people are getting under the new state pension compared to the old system (accurate to August 2022, figures published in February 2023).

• £163.17 - Average payout under the old system

• £173.71 - Average payout under the new system

• £175.84 - Average new state pension payout for men, around £3 less a week than under the old system

• £170.52 - Average new state pension payout for women, around £18 more a week than under the old system

Certain groups are better off under the new system, whereas some will lose out from the changes.

The problem with looking at that in isolation is contracted out benefits would have been higher under the old system but are going to diminish each year under the new system until eventually fully out of the system.

So, that £163.17 average payout should also include an average contracted out element on top of that to give a more accurate comparison. 

zagfles

Eldi_Dos said:

zagfles said:

Eldi_Dos said:

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.

While that is true for myself and I am sure many others on this board I believe there will large swathes of pensioners for whom it is not their reality.
They see it as a raise in pounds and pence and compare it as so, hence the sense of grievance felt.

Like who? 

The group,mainly women,who worked a few years then gave up work to raise a family and when it came time to go back to work found that carers responsibilities interfered with the employment they could take on and looked mainly for part time work fit round that.This led to many having a lower pension when reaching pension age.

Post 2002 carers were treated exactly the same as employees earning at the low earnings threshold and would have built S2P. Those in part time work earning at least the LEL (£123 in today's terms) would accrue S2P. Under the old rules women could get a state pension based on husband's contributions and inherit SERPS/S2P.

There are not "large swathes" of people who get zero above the basic state pension, other than the self employed. There will be a few in niche circumstances.

Eldi_Dos

Marcon said:

Silversense said:

If ALL state pensioners received a FLAT rate cash amount of increase in pension instead of a percentage increase, regardless of when our state pension began, then that, I suggest would be the fairest way of looking after all retirees.

Really? What about people who only worked for 10 years and thus earned a small proportion of the full state pension - why would they get a bumper increase when they've contributed so little to the system over the years?

That was my initial reaction as well but would it really matter.If someone found themselves in that position with no private provision in all likelihood they will be receiving benefits of some kind,so any raise in the pension would see a reduction in whatever benefits where being paid.

Eldi_Dos

zagfles said:

Eldi_Dos said:

zagfles said:

Eldi_Dos said:

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.

While that is true for myself and I am sure many others on this board I believe there will large swathes of pensioners for whom it is not their reality.
They see it as a raise in pounds and pence and compare it as so, hence the sense of grievance felt.

Like who? 

The group,mainly women,who worked a few years then gave up work to raise a family and when it came time to go back to work found that carers responsibilities interfered with the employment they could take on and looked mainly for part time work fit round that.This led to many having a lower pension when reaching pension age.

Post 2002 carers were treated exactly the same as employees earning at the low earnings threshold and would have built S2P. Those in part time work earning at least the LEL (£123 in today's terms) would accrue S2P. Under the old rules women could get a state pension based on husband's contributions and inherit SERPS/S2P.

There are not "large swathes" of people who get zero above the basic state pension, other than the self employed. There will be a few in niche circumstances.

Pre 2002 covers quite a big area for people who have been in receipt of the pension for a while, so maybe not as niche as you suggest.

zagfles

Eldi_Dos said:

zagfles said:

Eldi_Dos said:

zagfles said:

Eldi_Dos said:

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.

While that is true for myself and I am sure many others on this board I believe there will large swathes of pensioners for whom it is not their reality.
They see it as a raise in pounds and pence and compare it as so, hence the sense of grievance felt.

Like who? 

The group,mainly women,who worked a few years then gave up work to raise a family and when it came time to go back to work found that carers responsibilities interfered with the employment they could take on and looked mainly for part time work fit round that.This led to many having a lower pension when reaching pension age.

Post 2002 carers were treated exactly the same as employees earning at the low earnings threshold and would have built S2P. Those in part time work earning at least the LEL (£123 in today's terms) would accrue S2P. Under the old rules women could get a state pension based on husband's contributions and inherit SERPS/S2P.

There are not "large swathes" of people who get zero above the basic state pension, other than the self employed. There will be a few in niche circumstances.

Pre 2002 covers quite a big area for people who have been in receipt of the pension for a while, so maybe not as niche as you suggest.

Only the first sentence applies to post 2002. Read the rest. Anyone who ever had paid employment after 1978 earning above the LEL (about £6400 a year in today's terms) would have accrued some SERPS/S2P. 
Instead of me constantly rabbitting the rules and you trying to pick holes in them, perhaps you could explain who these "large swathes" are. Maybe give a concrete example of circumstances that would apply to a "large swathe" of people. Self employed I've already stated as an exception.