Pension Credit - is it fair?

Altior

Exodi said:

Altior said:

Do you feel for example that an individual who has never formally worked, but been collecting benefits for their adult life for not formally working should get the PC bundle? And someone who has been on effective minimum wage that whole time, working ft in a menial job and accrued a minor private pension entitlement as a result should not? 

I get what you're trying to do, but someone that has been collecting benefits for their adult life could have been born with, or developed, a debilitating disability, been involved in a serious accident, etc. It's too easy to just frame a person on benefits as someone who can work but deliberately chooses not to because they're too lazy. But to answer your general question, I'm not sure if it's a serious suggestion (what's the alternative - let them starve to death?) and more generally I don't think you should seek to punish people on benefits (but of course there can be questions on the eligibility or perceived generosity of benefits).

I'm not too clear on your objective with your latter point, I know you're trying to come up with the most extreme example of someone with the smallest possible private pension, but I'd still imagine they'd be better off after a lifetime making employer matched auto-enrolment contributions at NMW compared to the value of the passported benefits gained from being in receipt of pension credit.

I certainly don't envy people in receipt of pension credit.

I'm not referencing people who are literally incapable of doing any work. These are extreme outliers and the state takes care of them outside of the pensions framework. I'm referencing those where the culture is to avoid work at any cost. Or, for example a full time gambler (yes, they do exist, it's my world), or cash in hand workers, or people who did not live in this country for a lot of their adult life. 

'starving to death' is absurd rhetoric as people now have approximately 50 years to prepare for being too old to work. Even then, many many jobs like mine can accommodate working well into 70's, ie pushing buttons on a computer. People don't reach age 67/68 by accident/overnight, we have a very long time to plan for it, if we're lucky enough to get there.

It's not an extreme example. You may well be in denial but there are tens of thousands of people raised in a deliberately lifetime non working household. This culture is passed on to their offspring (often created to assist with that mission not to work). It's a difficult cycle to break as their parent (often multiple fathers long gone) don't necessarily have a huge interest in raising their children to be upstanding adults. Have you heard of the term 'ghost children'?

I note that you wrote three paras in response to the two questions of mine quoted, but did not address either of them directly. It's a binary yes/no to both of them. 

Altior

Some facts, only looked for a few seconds but most recent data I saw:

• An estimated 1.1 million children (8.2%) lived in long-term workless households in 2023.
• Of children in workless households, 82.6% lived in long-term workless households.
• The lowest percentage of children in long-term workless households was in the South East (3.4%).
• The highest percentage of children in long-term workless households was in Northern Ireland (12.7%).

Exodi

Altior said:

Exodi said:

Altior said:

Do you feel for example that an individual who has never formally worked, but been collecting benefits for their adult life for not formally working should get the PC bundle? And someone who has been on effective minimum wage that whole time, working ft in a menial job and accrued a minor private pension entitlement as a result should not? 

I get what you're trying to do, but someone that has been collecting benefits for their adult life could have been born with, or developed, a debilitating disability, been involved in a serious accident, etc. It's too easy to just frame a person on benefits as someone who can work but deliberately chooses not to because they're too lazy. But to answer your general question, I'm not sure if it's a serious suggestion (what's the alternative - let them starve to death?) and more generally I don't think you should seek to punish people on benefits (but of course there can be questions on the eligibility or perceived generosity of benefits).

I'm not too clear on your objective with your latter point, I know you're trying to come up with the most extreme example of someone with the smallest possible private pension, but I'd still imagine they'd be better off after a lifetime making employer matched auto-enrolment contributions at NMW compared to the value of the passported benefits gained from being in receipt of pension credit.

I certainly don't envy people in receipt of pension credit.

I'm not referencing people who are literally incapable of doing any work. These are extreme outliers and the state takes care of them outside of the pensions framework. I'm referencing those where the culture is to avoid work at any cost. Or, for example a full time gambler (yes, they do exist, it's my world), or cash in hand workers, or people who did not live in this country for a lot of their adult life. 

'starving to death' is absurd rhetoric as people now have approximately 50 years to prepare for being too old to work. Even then, many many jobs like mine can accommodate working well into 70's, ie pushing buttons on a computer. People don't reach age 67/68 by accident/overnight, we have a very long time to plan for it, if we're lucky enough to get there.

It's not an extreme example. You may well be in denial but there are tens of thousands of people raised in a deliberately lifetime non working household. This culture is passed on to their offspring (often created to assist with that mission not to work). It's a difficult cycle to break as their parent (often multiple fathers long gone) don't necessarily have a huge interest in raising their children to be upstanding adults. Have you heard of the term 'ghost children'?

I note that you wrote three paras in response to the two questions of mine quoted, but did not address either of them directly. It's a binary yes/no to both of them. 

I'm suprised you refer to people with disabilities as 'extreme outliers', but then go on to cite 'full time gamblers' in your example... nevertheless and respectfully, when someone deliberately sets up a loaded question, it would be daft to provide a binary answer - hence why I pointed out the nuance that not all people on benefits are lazy layabouts.

If the question is now - specifically the lazy layabouts, or gamblers, or what have you, should they get pension credit? Then I can obviously understand the emotive aspect of this question, but again, I'm not sure what the alternative is?

It's a tad ironic that you say starving to death is absurd rhetoric (which I accept it currently is, as welfare mostly stops this from happening) yet simultaneously pose questions about limiting or stopping welfare that would cause it to no longer be absurd rhetoric.

I'm not in denial that people live in 'deliberately lifetime non working households', you could not be further from the truth - my mothers side of the family are all like this, who haven't worked a full week between all the generations, and I have spent my life distancing myself from them because it frustrates me.

I would however suggest that you may the one out of touch with reality if you think because 'people have approximately 50 years to prepare for being too old to work' and 'people don't reach age 67/68 by accident' that there aren't people reaching retirement age without pension provision. While you can lecture people to your hearts content about saving for retirement or for potential care provision, there will people who don't. What do you do then?

Altior

Exodi said:

Altior said:

Exodi said:

Altior said:

Do you feel for example that an individual who has never formally worked, but been collecting benefits for their adult life for not formally working should get the PC bundle? And someone who has been on effective minimum wage that whole time, working ft in a menial job and accrued a minor private pension entitlement as a result should not? 

I get what you're trying to do, but someone that has been collecting benefits for their adult life could have been born with, or developed, a debilitating disability, been involved in a serious accident, etc. It's too easy to just frame a person on benefits as someone who can work but deliberately chooses not to because they're too lazy. But to answer your general question, I'm not sure if it's a serious suggestion (what's the alternative - let them starve to death?) and more generally I don't think you should seek to punish people on benefits (but of course there can be questions on the eligibility or perceived generosity of benefits).

I'm not too clear on your objective with your latter point, I know you're trying to come up with the most extreme example of someone with the smallest possible private pension, but I'd still imagine they'd be better off after a lifetime making employer matched auto-enrolment contributions at NMW compared to the value of the passported benefits gained from being in receipt of pension credit.

I certainly don't envy people in receipt of pension credit.

I'm not referencing people who are literally incapable of doing any work. These are extreme outliers and the state takes care of them outside of the pensions framework. I'm referencing those where the culture is to avoid work at any cost. Or, for example a full time gambler (yes, they do exist, it's my world), or cash in hand workers, or people who did not live in this country for a lot of their adult life. 

'starving to death' is absurd rhetoric as people now have approximately 50 years to prepare for being too old to work. Even then, many many jobs like mine can accommodate working well into 70's, ie pushing buttons on a computer. People don't reach age 67/68 by accident/overnight, we have a very long time to plan for it, if we're lucky enough to get there.

It's not an extreme example. You may well be in denial but there are tens of thousands of people raised in a deliberately lifetime non working household. This culture is passed on to their offspring (often created to assist with that mission not to work). It's a difficult cycle to break as their parent (often multiple fathers long gone) don't necessarily have a huge interest in raising their children to be upstanding adults. Have you heard of the term 'ghost children'?

I note that you wrote three paras in response to the two questions of mine quoted, but did not address either of them directly. It's a binary yes/no to both of them. 

I'm suprised you refer to people with disabilities as 'extreme outliers', but then go on to cite 'full time gamblers' in your example... nevertheless and respectfully, when someone deliberately sets up a loaded question, it would be daft to provide a binary answer - hence why I pointed out the nuance that not all people on benefits are lazy layabouts.

If the question is now - specifically the lazy layabouts, or gamblers, or what have you, should they get pension credit? Then I can obviously understand the emotive aspect of this question, but again, I'm not sure what the alternative is?

It's a tad ironic that you say starving to death is absurd rhetoric (which I accept it currently is, as welfare mostly stops this from happening) yet simultaneously pose questions about limiting or stopping welfare that would cause it to no longer be absurd rhetoric.

I'm not in denial that people live in 'deliberately lifetime non working households', you could not be further from the truth - my mothers side of the family are all like this, who haven't worked a full week between all the generations, and I have spent my life distancing myself from them because it frustrates me.

I would however suggest that you may the one out of touch with reality if you think because 'people have approximately 50 years to prepare for being too old to work' and 'people don't reach age 67/68' that there aren't people reaching retirement age without pension provision. While you can lecture people to your hearts content about saving for retirement or for potential care provision, there will people who don't. What do you do then?

Funnily enough I don't write off disabled people out of hand. Most disabled people I've come across (including employed) view it as a hurdle to overcome, not something that will pull them back. Just part of who they are, they don't see themselves or want to be seen as victims. The proportion of people that literally cannot work at all is miniscule. 

The topic is centred around PC being fair. My questions are not emotive, but your responses are. As it seemed your approach originally was that nobody seeks a lifetime on benefits or a lifetime not paying income tax/NI. Well, they do. I personally knew a black cab taxi driver who had somehow managed to stay off grid and had paid no NI or income tax at all and he was in his 50s. Though this was at least 10 years ago, I don't know him now.

It wouldn't be plausible to withdraw PC overnight, and it's not something I'd advocate either. Ten years' notice is typical in pensions world. What I would advocate for is a restructuring of that benefit, and it should be a sliding scale based on what people have contributed. So if you've lived off the state's out of work benefits for a lifetime, then you get the minimum pension with no bells and whistles. Obviously I can't design the upscaled benefit here and now and it won't have anything to do with me ever, but given a free hand it would be correlated to demonstrable positive contribution.

Exodi

Altior said:

Exodi said:

Altior said:

Exodi said:

Altior said:

Do you feel for example that an individual who has never formally worked, but been collecting benefits for their adult life for not formally working should get the PC bundle? And someone who has been on effective minimum wage that whole time, working ft in a menial job and accrued a minor private pension entitlement as a result should not? 

I get what you're trying to do, but someone that has been collecting benefits for their adult life could have been born with, or developed, a debilitating disability, been involved in a serious accident, etc. It's too easy to just frame a person on benefits as someone who can work but deliberately chooses not to because they're too lazy. But to answer your general question, I'm not sure if it's a serious suggestion (what's the alternative - let them starve to death?) and more generally I don't think you should seek to punish people on benefits (but of course there can be questions on the eligibility or perceived generosity of benefits).

I'm not too clear on your objective with your latter point, I know you're trying to come up with the most extreme example of someone with the smallest possible private pension, but I'd still imagine they'd be better off after a lifetime making employer matched auto-enrolment contributions at NMW compared to the value of the passported benefits gained from being in receipt of pension credit.

I certainly don't envy people in receipt of pension credit.

I'm not referencing people who are literally incapable of doing any work. These are extreme outliers and the state takes care of them outside of the pensions framework. I'm referencing those where the culture is to avoid work at any cost. Or, for example a full time gambler (yes, they do exist, it's my world), or cash in hand workers, or people who did not live in this country for a lot of their adult life. 

'starving to death' is absurd rhetoric as people now have approximately 50 years to prepare for being too old to work. Even then, many many jobs like mine can accommodate working well into 70's, ie pushing buttons on a computer. People don't reach age 67/68 by accident/overnight, we have a very long time to plan for it, if we're lucky enough to get there.

It's not an extreme example. You may well be in denial but there are tens of thousands of people raised in a deliberately lifetime non working household. This culture is passed on to their offspring (often created to assist with that mission not to work). It's a difficult cycle to break as their parent (often multiple fathers long gone) don't necessarily have a huge interest in raising their children to be upstanding adults. Have you heard of the term 'ghost children'?

I note that you wrote three paras in response to the two questions of mine quoted, but did not address either of them directly. It's a binary yes/no to both of them. 

I'm suprised you refer to people with disabilities as 'extreme outliers', but then go on to cite 'full time gamblers' in your example... nevertheless and respectfully, when someone deliberately sets up a loaded question, it would be daft to provide a binary answer - hence why I pointed out the nuance that not all people on benefits are lazy layabouts.

If the question is now - specifically the lazy layabouts, or gamblers, or what have you, should they get pension credit? Then I can obviously understand the emotive aspect of this question, but again, I'm not sure what the alternative is?

It's a tad ironic that you say starving to death is absurd rhetoric (which I accept it currently is, as welfare mostly stops this from happening) yet simultaneously pose questions about limiting or stopping welfare that would cause it to no longer be absurd rhetoric.

I'm not in denial that people live in 'deliberately lifetime non working households', you could not be further from the truth - my mothers side of the family are all like this, who haven't worked a full week between all the generations, and I have spent my life distancing myself from them because it frustrates me.

I would however suggest that you may the one out of touch with reality if you think because 'people have approximately 50 years to prepare for being too old to work' and 'people don't reach age 67/68' that there aren't people reaching retirement age without pension provision. While you can lecture people to your hearts content about saving for retirement or for potential care provision, there will people who don't. What do you do then?

Funnily enough I don't write off disabled people out of hand. Most disabled people I've come across (including employed) view it as a hurdle to overcome, not something that will pull them back. Just part of who they are, they don't see themselves or want to be seen as victims. The proportion of people that literally cannot work at all is miniscule. 

A cheap strategy - I'd already said in my post above "a debilitating disability" so I resent that you're now implying I think all disabled people don't work here.

I understand that the proportion of disabled people that cannot work is relatively small, but this was in response to your suggestion that they were 'extreme outliers' while simultaneously using 'full time gambler''s in your example?

Altior said:

The topic is centred around PC being fair. My questions are not emotive, but your responses are. As it seemed your approach originally was that nobody seeks a lifetime on benefits or a lifetime not paying income tax/NI. Well, they do. I personally knew a black cab taxi driver who had somehow managed to stay off grid and had paid no NI or income tax at all and he was in his 50s. Though this was at least 10 years ago, I don't know him now.

I don't know where I said or implied that no-one chooses to be on benefits, and as I said before, my mothers side of the family all chose not to work so I obviously know that's not true. I dislike that you've set up this strawman to attack. You have continually tried to put words in my worth throughout this thread about this.

Great to hear about your anecdote, I've no doubt he's not alone and no-one is disputing that this happens.

Altior said:
It wouldn't be plausible to withdraw PC overnight, and it's not something I'd advocate either. Ten years' notice is typical in pensions world. What I would advocate for is a restructuring of that benefit, and it should be a sliding scale based on what people have contributed. So if you've lived off the state's out of work benefits for a lifetime, then you get the minimum pension with no bells and whistles. Obviously I can't design the upscaled benefit here and now and it won't have anything to do with me ever, but given a free hand it would be correlated to demonstrable positive contribution.

The problem is, many see the state pension as the minimum amount a retired person needs to live on (though this position gets harder to maintain while the triple locks causes it to increase above inflation).

Currently it's £11.5k while the RLS (Retirement Living Standards) suggests a retired person needs ~£14.4k as a minimum. You could suggest they're biased, but lot's of retirement planners online suggest a sum around this figure.

One question would be how much do you think you could trim off it while not causing issues like starvation or freezing. This is all strictly theoretical because we know this would be deeply unpopular. Remember how World War 3 started because of the £200-£300 annual winter fuel payment.

I guess an argument could be made to universal credit, which pays ~£4.7k as a standard allowance for one person. Some could ask why we think relatively young people can survive on £4.7k per year, whereas relatively older people need nearly 3x that as a minimum. Though I have a feeling the consensus might be that universal credit is stingy to encourage people to work (which might not be an option for retired people). Honestly I don't know enough about universal credit to have a strong opinion (I understand rent is paid on top, but I understand this happens on PC as well).

The optics also need some work - employed people pay NI by default, it's not optional, they have no say on the matter. Virtually all people would work whether it counted as an NI contribution or not. So you have people passively given an upscaled pension for doing what they were going to do regardless, while other people (such as those who have raised children, or those with a debilitating disability, or those involved in a serious accident) are told they will get a significantly reduced pension, because they haven't been able to work.

Pollycat

Whether it's fair or not - it is what it is.

hugheskevi

Pollycat said:

Whether it's fair or not - it is what it is.

This is key. Many folk would do far better to accept systems as they are and make the best of the existing system, rather than question things that can be viewed in different perspectives are unlikely to change.

Fairness is very subjective. You could argue it is fair that all pensioners get the same amount. Or you could argue State Pension should be earnings related, giving a bit more to those who paid the most. Or that it would be fair to means test the State Pension as it should not be paid to those who have no need for it. All of these are valid perspectives of fairness.

Unfortunately, fairness is often presented as a definitive position that is easy to define in any particular case, and often something that cannot be argued about. Politicians are most guilty of this, as new policies are almost always presented as being fair and alternative perspectives ridiculed. Contentious aspects of policy are often justified by a need to be fair to another party. I am very suspicious of anyone making arguments on grounds of fairness rather than the substance and desired aims of a policy.

It is commonly said that policy can be cheap, simple, and fair. If you consider fair to be defined as not containing any blatant unfairnesses, typically, you can choose 2 of those 3. So for things like the Child Benefit taper, cheap and simple was chosen but it is obviously not fair. The single-tier State Pension with Triple Lock is simple and reasonably fair, but is not cheap. Pension Credit is fair and cheap, but it is not simple (especially the Savings Reward component).

Cobbler_tone

This (like many threads) can be boiled down to a debate between socialists and capitalists.
You will never find perceived 'fairness' in any walk of life.
The person who overtook you two minutes before you were stopped for speeding.
The person with a horrible Tweet getting more jail time than the local rapist.

You have to have systems. Implementing them 'fairly' and consistently is almost impossible.

My personal gripe is around people who choose to pop out kids, choose to sit at home (often for life - "it's the hardest job in the world"...P.S. It's not a job) and then blame everyone else and consistently lack accountability for their life decisions. I probably wouldn't give them pension credits if they needed them.   

MattMattMattUK

hugheskevi said:

Pollycat said:

Whether it's fair or not - it is what it is.

This is key. Many folk would do far better to accept systems as they are and make the best of the existing system, rather than question things that can be viewed in different perspectives are unlikely to change.

Fairness is very subjective. You could argue it is fair that all pensioners get the same amount. Or you could argue State Pension should be earnings related, giving a bit more to those who paid the most. Or that it would be fair to means test the State Pension as it should not be paid to those who have no need for it. All of these are valid perspectives of fairness.

Unfortunately, fairness is often presented as a definitive position that is easy to define in any particular case, and often something that cannot be argued about. Politicians are most guilty of this, as new policies are almost always presented as being fair and alternative perspectives ridiculed. Contentious aspects of policy are often justified by a need to be fair to another party. I am very suspicious of anyone making arguments on grounds of fairness rather than the substance and desired aims of a policy.

It is commonly said that policy can be cheap, simple, and fair. If you consider fair to be defined as not containing any blatant unfairnesses, typically, you can choose 2 of those 3. So for things like the Child Benefit taper, cheap and simple was chosen but it is obviously not fair. The single-tier State Pension with Triple Lock is simple and reasonably fair, but is not cheap. Pension Credit is fair and cheap, but it is not simple (especially the Savings Reward component).

I totally agree, people like simple, but simple is not the solution to complex problems. They also claim to like "fair", but in general most people who say they want fairness mean that they want someone else to pay and for them to benefit. In modern conversation fair seems to have changed meaning to "what I want", rather than even a vague subjective fairness that it meant previously. 

Linton

Perhaps if we compared the OPs take home pay with that of a pensioner on PC one could better judge whether current arrangements are fair.