Winter Fuel Allowance under discussion by Martin.

woolly_wombat

Silvertabby said:

westv said:

I imagine the WFA would be just a bit of loose change for most on here. 

But that doesn't stop us from caring about the ones for whom the WFA is crucial.

Quite right Silvertabby.

There are I believe around 880,000 pensioners eligible to receive Pension Credit who do not currently claim.

These are the group who are going to be in the most desperate need of the WFA, so perhaps it is incumbent on each one of us to reach out to help family/friends/neighbours when they complain about the loss of WHA to see if we can help them to enquire about and/or apply for Pension Credit.

hugheskevi

FatFred66 said:

How can it be right that someone who either has a full contribution record or a small personal pension can end up with a lower total income than someone who's never paid NI or saved?

One solution, and easier to administer than any other suggestions I've seen, would be to have a second Pension Credit threshold set at some point above the current one, which wouldn't result in a higher Pension Credit payment but would enable the rest of the benefit package. The means testing system for that is already there, it just needs a £0 award between the two thresholds.

That sounds very similar to the Pension Credit Savings Guarantee, removed for those reaching State Pension in 2016. The Savings Guarantee was introduced in the early 2000s to ensure those that had saved a little in excess of the Basic State Pension saw a benefit from it, compared to those who had saved nothing and got the same total income as those who has due to the Pension Credit Guarantee component.

The problem is that it spreads means-testing up the income spectrum, increasing the number in receipt of means-tested benefits (or passported benefits, which is effectively the same thing) with consequential incentive to save  problems. It also makes the system more complex, leading to calls for simplicity - usually the most complex areas of pensions are the result of a series of well-intentioned tweaks, with each one perhaps having merit, but which collectively eventually lead to a system people can't comprehend without a detailed knowledge of the area.

Silvertabby

woolly_wombat said:

Silvertabby said:

westv said:

I imagine the WFA would be just a bit of loose change for most on here. 

But that doesn't stop us from caring about the ones for whom the WFA is crucial.

Quite right Silvertabby.

There are I believe around 880,000 pensioners eligible to receive Pension Credit who do not currently claim.

These are the group who are going to be in the most desperate need of the WFA, so perhaps it is incumbent on each one of us to reach out to help family/friends/neighbours when they complain about the loss of WHA to see if we can help them to enquire about and/or apply for Pension Credit.

Yes, indeed.  But according to Age concern, there are a further 2 million who don't qualify for pension credit because they are just a few £s over the means test limit. 

FatFred66

hugheskevi said:

The problem is that it spreads means-testing up the income spectrum, increasing the number in receipt of means-tested benefits (or passported benefits, which is effectively the same thing) with consequential incentive to save  problems. It also makes the system more complex, leading to calls for simplicity - usually the most complex areas of pensions are the result of a series of well-intentioned tweaks, with each one perhaps having merit, but which collectively eventually lead to a system people can't comprehend without a detailed knowledge of the area.

I see your point but I can't say I agree. It's no more complex than making a claim for Pension Credit is currently.

There has to be some way of creating a level playing field here doesn't there? It's simply not right to claim that the WFA is now going to be means-tested and will only go to the 'poorest pensioners' when it's not means-tested at all and it's being withdrawn from the actual poorest pensioners.

hugheskevi

FatFred66 said:

hugheskevi said:

The problem is that it spreads means-testing up the income spectrum, increasing the number in receipt of means-tested benefits (or passported benefits, which is effectively the same thing) with consequential incentive to save  problems. It also makes the system more complex, leading to calls for simplicity - usually the most complex areas of pensions are the result of a series of well-intentioned tweaks, with each one perhaps having merit, but which collectively eventually lead to a system people can't comprehend without a detailed knowledge of the area.

I see your point but I can't say I agree. It's no more complex than making a claim for Pension Credit is currently.

There has to be some way of creating a level playing field here doesn't there? It's simply not right to claim that the WFA is now going to be means-tested and will only go to the 'poorest pensioners' when it's not means-tested at all and it's being withdrawn from the actual poorest pensioners.

I agree it wouldn't be any more complex from a claim perspective. The higher premia for carers and disabled are pretty straightforward too. As are different rates for single and couples. It isn't all that long ago there were higher rates for older pensioners too. None of these things in isolation are complicated.

Taken together though, it makes messaging harder. The simplest message would be that if your income is less than £218.15 then you are eligible for Pension Credit and should claim.

At the moment, it is if your income is below £218.15 and you are single you should claim, or £332.95 if you have a partner. Then looking at a newspaper article Martin adds the caveat " but in some cases, you might still be able to claim if you have a higher income and you have a severe disability, you're a carer, or you have to pay housing costs, such as a mortgage...You might get additional payments if you’re a carer, severely disabled, or responsible for a child or young person."

There also has to be the warning that "If you reached State Pension age before April 6, 2016, or you have savings or a second pension, you may be eligible for the savings credit element of Pension Credit. This is worth £17.01 a week if you're single, or £19.04 a week if you're in a couple."

That leads to Martin suggesting:

"It takes minutes to check if you qualify, so don't stall, just call. The exact rules of who can get Pension Credit are complex...If your income is slightly higher, there’s A CHANCE you will get pension credit, it depends on circumstances (there’s a higher threshold if you claim certain disability benefits or have caring responsibilities, so if this is you it’s worth checking)."

And whenever Martin says this on television, DWP gets flooded with calls from pensioners wanting to know if they are eligible, with some apparently calling frequently, just in case anything has changed.

Adding another little threshold in, which may have a secondary higher threshold for carers and disabled, would give another couple of values to add into the mix to further obscure messaging. None of these things are complicated in their own right, but having multiple different enhancements rapidly leads to people not understanding the benefit.

Much better would be to have no passporting, and simply universal State Pension and means-tested Pension Credit so that you only means-test once and avoid any linked goodies (encouraging councils and businesses to do likewise, but that could never be done as a government would be pilloried by the media if it suggested goodies shouldn't be given out to poor pensioners).

FatFred66

hugheskevi said:

Much better would be to have no passporting, and simply universal State Pension and means-tested Pension Credit so that you only means-test once and avoid any linked goodies (encouraging councils and businesses to do likewise, but that could never be done as a government would be pilloried by the media if it suggested goodies shouldn't be given out to poor pensioners).

Yes, it's all the goodies added on to the means-tested amount which cause the unfairness to pensioners just above the threshold. If the entire benefits package was capped below NSP it would be fairer.

On your other point of simplifying when to claim, if the higher threshold was aligned with the Personal Allowance for Income Tax then it could be a simple message of 'if you don't pay tax then put in a claim for Pension Credit'.

That would put a big cliff-edge at £12,570 of course but it surely has to be better than faffing about with council tax bands - and the current situation where lifetime NI contributors lose out.

Nebulous2

woolly_wombat said:

Nebulous2 said:

I've complained about political discussions before - and here I am joining one.  Pointing it out before anyone else does. 

Pensioners are a powerful lobby group, and they vote in big numbers. There's an article in the independent saying that a lot of new Labour MPs have been shocked at how many letters and complaints they've had about stopping winter fuel allowance. There are likely to be further tax rises /  cuts in the budget, so it will  be interesting to see if cracks appear in their resolve to see their plans through. 

That ship has sailed.

Millenials now outnumber Boomers.

There doesn't need to be a majority to be a powerful lobby group, but pensioners include more than boomers.

I'm towards the end of the baby boom, with both parents still alive. 

The figures will move inexorably in that direction however, I've suspected for a while that the boomers charmed existence would eventually run out of road...... 

Nelliegrace

The full Basic State Pension for anyone who retired before April 2016 is £169.50 a week, £8,814 a year. £51.70 a week less than the New State Pension. 

hugheskevi

Nelliegrace said:

The full Basic State Pension for anyone who retired before April 2016 is £169.50 a week, £8,814 a year. £50.70 a week less than the New State Pension. 

Indeed, but the Basic State Pension was only one tier of a two-tier old State Pension system, so a more complete description would be:

The full Basic State Pension for anyone who retired before April 2016 is £169.50 a week, £8,814 a year. £50.70 a week less than the New State Pension. 

In addition to the Basic State Pension, the maximum Additional Pension for anyone who retired before April 2016 is £218.39 a week. This is paid together with the Basic State Pension, giving a maximum possible old State Pension of £387.89 per week. £20,226 a year. £166.69 a week more than the new State Pension.

An individual in receipt of the maxmium old State Pension may also have benefitted from inheritance of their spouse's Additional Pension, and also from being able to defer their State Pension and increase it by 10.4 percentage points per year of deferral, so may receive more than £20,226 per year.

Many women in receipt of the old State Pension were able to claim it from age 60, and men from age 65, whereas since October 2020 all people retiring under new State Pension reached State Pension age at 66. A female with a State Pension age of 60 under the old State Pension could have deferred for 6 years, and claimed their old State Pension at age 66 with a 62.4% uplift for deferral.

Pensioners under the old State Pension system will also receive an additional 25 pence per week from age 80, £13.04 a year.

Nelliegrace

Doesn’t that sound generous. DH worked from age 16, like most of his age, and paid NI for 48 years and gets he £184 a week pension.