Pension I am a wondering......

Kernowshep

NoMore said:

Yes the loss of NI will have to be recovered somehow, but there is currently no intention to totally scrap the SP as the OP seems to think.

Agreed, IMHO scrapping the SP would be political suicide.

badmemory

xylophone said:

Do you know how many there are less than 15 years off state pension who have not had private pensions accessible to them until recently & certainly no DB pensions.

Not so sure about that.

If we take a person aged 50 now,  he could have started work  around 1990.

There were certainly DB pensions around then - public service schemes of course, the big banks,  big oil, utilities, transport, supermarket chains  - Sainsbury for example didn't close its DB scheme to new entrants until around the beginning of this century.

And from 1988,  the launch of the personal pension opened up the retirement savings market.

With regard to the state pension, there was SERPS to 2002 and S2P to 2016 which enabled most workers to improve retirement provision over and above the basic state pension.

Automatic enrolment started in 2012.

I worked at a university in the 60s & 70s.  No DB pension there & I certainly didn't opt out.  The first scheme I was in was in the mid 1990s onwards.  The problem with auto enrolment is 8% of very little especially with the many exceptions is not a lot at all.  If they are trying to reduce dependency on the state pension that will have to be addressed by whatever government.

Albermarle

Kernowshep said:

NoMore said:

Yes the loss of NI will have to be recovered somehow, but there is currently no intention to totally scrap the SP as the OP seems to think.

Agreed, IMHO scrapping the SP would be political suicide.

Because of the political implications, they in fact want to keep improving it rather than scrapping it !
Triple lock for pensions to be in Tory manifesto - Jeremy Hunt says - BBC News

xylophone

I worked at a university in the 60s & 70s.

Some information about the University Teachers' scheme above.

https://www.hepi.ac.uk/wp-content/uploads/2019/02/HEPI-The-USS-How-did-it-come-to-this-Report-115-07_02_19-Screen.pdf

Major changes can emerge from unexpected places. So it was with the establishment of the Universities Superannuation Scheme (USS) in 1975.

A Federated Superannuation System for Universities (FSSU) had been established just before the First World War. But it was a defined contribution rather than a defined benefit scheme. This means the investment risk was on members, that is university staff, not university employers. It seemed to some people inferior to pensions in other sectors and appeared increasingly out of date over time. 

Grumpy_chap

xylophone said:

Have you checked your state pension forecast?

https://www.gov.uk/check-state-pension

From 8 April, a full new state pension will be  over £11,500 a year.

I just did that check and it shows my forecast is a bit below £11.5k:



For reasons that I do not understand, it says I did not have a full year of contributions for 2021-22.  I can make up the shortfall, but the above would seem to suggest there is no reason to do so.  I will check anyway why I do not have a full year as I was working the full year.

Andy_L

badmemory said:

There is one reason they reduced NI rather than general tax & it has only one thing to do with the state pension.  That is to ensure that state pensioners DID NOT get a reduction in their tax as they do not pay NI.  I fully expect this to eventually go down to 2% just as a qualifier nothing else.  Do you know how many there are less than 15 years off state pension who have not had private pensions accessible to them until recently & certainly no DB pensions.  They want to stop benefit claimants not increase them.  This is of course ignoring the fact that they call state pension a benefit.

Stakeholder pensions started in 2001, so someone who's 15y from SPA will have had ~37 years of access to them.

"Ordinary" Private pensions were available long before then

handful

I  believe that future governments will reduce NI and increase income tax and thereby be able to claim they are fully committed to the triple lock whilst recovering their expenditure by taking the money back through income tax and keeping the PA lower than inflation,aka fiscal drag. It's all smoke and mirrors and disingenuous to say the least!

penners324

Why do you think the state pension will disappear because NI has reduced?

There's no real link between the amount of NI paid in and pensions paid out.

HotDog2020

penners324 said:

Why do you think the state pension will disappear because NI has reduced?

There's no real link between the amount of NI paid in and pensions paid out.

Because I thought the money to pay for pensions was in the NI and if they cut that down to zero - where will the money come from to pay for the pension...However people here had said it will come from income tax, I can't see the point myself. Unless they are trying to get us to pay more overall sneakily, which is probably what they will do. 

xylophone

I just did that check and it shows my forecast is a bit below £11.5k:

Was  this the "ESTIMATE AT 5/4/23"?

If so, then you had already accrued a full New State Pension (£203.85 a week in 2023/4) plus a "protected payment" of  £12.33 a week) at that date.

The weekly  full NSP will increase to £221.20 a week  from 8th April while your "protected payment" will  increase to around £13.16 a week.

A person who has a protected payment had a "starting amount" in excess of a new state pension at 6/4/16.

This meant that although (if under state pension age and earning the relevant amount) he would have to continue to pay NI up to SPA,  this would NOT improve his state pension.

The "starting amount" would revalue each year , the amount equal to full NSP under the Triple Lock and the excess the "protected payment" by CPI.

https://www.gov.uk/new-state-pension/what-youll-get