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  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 18th Nov 14, 6:29 PM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    MSE News: David Cameron - We will give pensioners security and dignity
    • #1
    • 18th Nov 14, 6:29 PM
    MSE News: David Cameron - We will give pensioners security and dignity 18th Nov 14 at 6:29 PM

    The pensions system is undergoing massive reform over the next few years. In the link, the PM writes exclusively for MoneySavingExpert.com to explain the changes and why his Government is shaking things up....

    Read the full story:

    David Cameron: We will give pensioners security and dignity




    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.

    Last edited by Former MSE Andrea; 19-11-2014 at 8:37 AM.
Page 1
    • 6 6 6
    • By 6 6 6 19th Nov 14, 12:26 AM
    • 59 Posts
    • 50 Thanks
    6 6 6
    • #2
    • 19th Nov 14, 12:26 AM
    What a distrubing nerve
    • #2
    • 19th Nov 14, 12:26 AM
    Incentivising pensioners to buy up cheap housing to obtain a continual revenue from Buy to Let is reckless short termism designed to pander for older votes, as transparent as glass. Rather malevolent in fact against the backdrop of the manufactured housing shortage, untaxed land banking and overly restrictive planning laws, all artificiality conspiring to assure a house price crisis for many / windfall for some. The only result out of this will be a continued shortage of good quality property for the first time buyer for years to come and indeed their children’s children. Never again will the new generation get to own their own home. This is not just a running disgrace but a betrayal of the highest order.

    Why does this government support schemes that undermine the credit crunch and the banks caution to loan, by offering to put a loan on top of a loan only to prop up an inflated housing market that should have had its adjustment back to 3x average salary by now. Corruption always wins.

    When are they going to legislate for minimum acceptable home sizes for a human being, cap the 3 bed residential markets to 3x the average wage and fix the transport system, fix the buy to let system, tax land bankers who are part of the root course to high land and thus house prices in the first place. When are they going to enforce all councils to release 10% of the surround green field land for new developments given first to self builders with priority to first time buyers and big builders last. The list is endless yet they pull tricks that will only further destabilize the next generation. Never is the answer! Unless someone takes em out.

    This government superficial moves need to be seen for what they are, garbage.
    Last edited by 6 6 6; 19-11-2014 at 12:41 AM.
    • Doc N
    • By Doc N 19th Nov 14, 6:32 AM
    • 6,924 Posts
    • 19,785 Thanks
    Doc N
    • #3
    • 19th Nov 14, 6:32 AM
    • #3
    • 19th Nov 14, 6:32 AM
    "If you're a man and were born on or after 6 April 1951 or a woman born on or after 6 April 1953, you will be eligible to claim your State Pension under the new rules."

    Thanks, Cameron - and what about all the people born before those dates who are stuck forever on the old rules, with a much lower pension, and certainly won't be getting the much-publicised £148.40 a week?
  • yorkshireman99
    • #4
    • 19th Nov 14, 6:35 AM
    Yes, BUT........
    • #4
    • 19th Nov 14, 6:35 AM
    This looks like a case of jam tomorrow...


    Existing pensioners will not benefit from the new flat rate pension. We saved for our retirement and planned and made assumptions based on the rules at the time.


    We assumed that increases in pensions (both occupational and state) would rise in line with the REAL cost of living (RPI) and when Cameron was elected this was cut, at a stroke, to the ARTIFICIAL cost of living (CPI).


    We assumed that the Personal Allowance for income tax would rise from year to year. The last 3 years have seen a rise for everybody EXCEPT pensioners (the 'granny tax') - effectively ensuring that every increase in pension has been fully taxed at 20%.


    We assumed that our savings would bring a return of 4-5%, but we are now 'lucky' if we can get more than 1% interest.


    Local services have been cut, making it more expensive to live, particularly in rural areas. Our bus services have been decimated, libraries have closed, and the roads and parks are suffering from lack of maintenance.


    A few decades ago, the then government (it doesn't matter which colour it was) decided, very sensibly, that it would be a good idea to move government departments out of London to parts of the country which were both cheaper and more pleasant places to live. Then Cameron came along and said there were too many civil servants in the regions and used this as a reason to cut jobs in those areas. This has resulted in a decline in the quality of life for all residents and does make the pensioners more disgruntled.
  • jamesd
    • #5
    • 19th Nov 14, 7:28 AM
    • #5
    • 19th Nov 14, 7:28 AM
    what about all the people born before those dates who are stuck forever on the old rules, with a much lower pension, and certainly won't be getting the much-publicised £148.40 a week?
    Originally posted by Doc N
    Such a person who put money away for their retirement has the option of deferring their state pension, even if they have already started to take it, and getting an increase of 1% for each five weeks of deferral. This is roughly twice the gain that a person in the flat rate system would get from the same deferral time. They will also starting late in 2015 have the option of buying more state pension. This option is not available to those who reach state pension age under the new system.

    A low paid person who worked a full working life as an employee under the old rules would get a combined basic state pension, additional state pension and graduated retirement benefit of about £190 a week under current rules, up to £250 or so for a high earner, whether that's one high paid job or working lots of hours.

    To get less than the flat rate would mean not working as an employee full time for much of a working life. There are many reasons that could apply to someone, including choosing not to work, perhaps as a house husband whether raising children or not, long periods of inability to work or unemployment, being self-employed or spending a long time in prison. For most of these cases credits to the basic state pension would be made, but not to the additional state pension that would raise the total above the flat rate level. That is as the current UK system is designed to work, as a basic state pension with private top up decided by each individual person and additional means testing to help those who for some reason ended up not getting a basic living income. The flat rate takes money from the NI contributions of workers on low and higher incomes and uses that to get the low workers above the means tested benefit level, replacing the general taxation used for means tested retirement benefits. Effectively a stealth tax rise, reducing what is paid for out of taxation and replacing it with money taken from NI benefits.
    Last edited by jamesd; 19-11-2014 at 7:34 AM.
  • devon1955
    • #6
    • 19th Nov 14, 7:46 AM
    • #6
    • 19th Nov 14, 7:46 AM
    As usual, what is NOT publicised widely is what is important. I received a pension calculation last week which shows that I have a full NI record. This would entitle me to approx. £113 per week if I were to receive the existing pension but only £64 per week from the new state pension.


    This comes on top of having seen my state pension age rise twice since I started working. In addition I will not be entitled to the benefits of free bus travel etc. until 66.


    This is not the message which is being pushed by the government.
  • MonyeyPenny
    • #7
    • 19th Nov 14, 7:48 AM
    Why are we still not being told all the facts?
    • #7
    • 19th Nov 14, 7:48 AM
    I read this article with great interest, hoping that at last we would get to know how much State Pension we are likely to receive, if born after those key dates in the 1950's.


    Unfortunately, we are not being told anything new here - "The full amount of the new State Pension will be at least £148.40 a week, but how much you get depends on the National Insurance contributions you have made".


    The headline amount of £148.40 sounds great, but not if you opted out of SERPS, or for any other reason haven't paid the full amount of NI contributions. I've been watching out for information on this for nearly a couple of years now, and still we don't know what will happen. When are they going to tell us?
    • starkj
    • By starkj 19th Nov 14, 7:50 AM
    • 63 Posts
    • 19 Thanks
    starkj
    • #8
    • 19th Nov 14, 7:50 AM
    • #8
    • 19th Nov 14, 7:50 AM
    This was a party political broadcast on behalf of the Nasty Party.

    To show impartiality do we get a response from other parties?
    • redux
    • By redux 19th Nov 14, 7:56 AM
    • 19,141 Posts
    • 26,080 Thanks
    redux
    • #9
    • 19th Nov 14, 7:56 AM
    • #9
    • 19th Nov 14, 7:56 AM
    Plenty of Cameron's own family investments, set up by his father's business, are offshore, based nominally in places like Jersey Panama and Geneva, where they can grow unfettered by UK taxation.

    OK, that isn't directly about pensions, and certainly not state pensions, but it is about building up other funds to support oneself later in life.

    Examples from fund prospectus:

    "The fund is not liable to taxation on its income or capital gains as long as such income or
    capital gains are not derived from sources allocated within the territory of the Republic of
    Panama."

    "The Directors intend that the affairs on the Fund should be managed and conducted so
    that it does not become resident in the United Kingdom for UK taxation purposes.
    Accordingly ... the Fund will not be subject to United Kingdom corporation tax or income
    tax on its profits."

    Investors in those funds are only subject to UK taxation if they remit money from there to the UK.

    Maybe we are not all in this together, which adds a little difficulty to hearing lectures from Cameron about what the state can and cannot afford.

    Is this actually about dignity and security for pensioners, as the former PR expert states, or is it coincidentally going to mean the state forks out less money to those pensioners?
    Last edited by redux; 19-11-2014 at 8:07 AM.
    • bzd
    • By bzd 19th Nov 14, 7:57 AM
    • 121 Posts
    • 80 Thanks
    bzd
    From weekly email
    Why "we'll leave you to make up your own mind" ?

    I really really want to see an independent and informed analysis of these changes. Then I can properly make up my mind. Please MSE, if David Cameron is allowed to post on moneysavingexpert.com then he (and we) should expect a detailed analysis of how the changes he proposes affect our money saving. If not then this is just a tool for government propaganda.

    ANALYSIS! ANALYSIS! ANALYSIS! <come on everyone> Analysis! Analysis! <looks over shoulder> Analys... okay I'll be quiet.
    • hugheskevi
    • By hugheskevi 19th Nov 14, 8:00 AM
    • 2,233 Posts
    • 2,912 Thanks
    hugheskevi
    Shame that this could not be a more factual and accurate description of what is a generally good policy (the change to single-tier pension, and of course only in my opinion) without all the political spin.

    For current pensioners, we have committed to increasing the basic State Pension each year by inflation, average earnings or 2.5% – whichever is highest.
    Although the current administration changed the measure of inflation from RPI to CPI. If State Pension had been uprated by the previous administration's policy (RPI, with a minimum increase of 2.5%) the rate of Basic State Pension in 2015/16 would be exactly the same as it will be under the current administration's policy.

    This means that next year the basic State Pension will increase by double the rate of prices.
    As it would have done under the pre-2010 uprating regime.

    This remedies the unfair increases of the past, where one year people saw their pensions rise by a paltry 75p a week.
    Given that the changes have had almost nil impact compared to the previous regime, and in particular that the 2.5% underpin was operated by the previous administration, this statement is not justified - nothing has been remedied that wasn't already remedied.

    Every penny you have saved during your working life, you will keep.
    Simply wrong. Housing Benefit and Council Tax Benefit, as well as a small proportion receiving Pension Credit will continue, leading to about 35% of pensioners in the future receiving means-tested benefits, even in the very long-term when the new system is fully in place.

    The Pension Policy Institute say "Eligibility for Housing Benefit and Council Tax Support is not expected to change significantly after the implementation of the single-tier pension"

    Perhaps also worth recalling the Institute for Fiscal Studies' assessment of the policy impact:

    "The proposed single-tier pension represents a less generous state pension for almost everyone in the long run. Income at the SPA would be lower under the proposed system, and particularly so for those who contribute for longer, whether through paid employment, caring or receiving disability-related benefits. Although the more generous indexation arrangements under the proposed system would narrow this gap through retirement, most people would have to live to beyond age 100 to be better off overall.
    This gives you complete control over your own money, so you can spend your private pension savings as you wish, and are no longer forced to buy an annuity.
    Annuitisation was not compulsory before the changes - no one was "forced to buy an annuity."
    Last edited by hugheskevi; 19-11-2014 at 8:04 AM.
  • MonyeyPenny
    We need more detail
    But I still can't find any facts about how the following will affect those of us born after the key dates in the 1950's.


    "The full amount of the new State Pension will be at least £148.40 a week, but how much you get depends on the National Insurance contributions you have made".


    This is still too vague, and has been too vague for too long. I guess this will have a huge impact on many people.
    • luxor4t
    • By luxor4t 19th Nov 14, 8:07 AM
    • 10,463 Posts
    • 37,979 Thanks
    luxor4t
    I read this article with great interest, hoping that at last we would get to know how much State Pension we are likely to receive, if born after those key dates in the 1950's.


    Unfortunately, we are not being told anything new here - "The full amount of the new State Pension will be at least £148.40 a week, but how much you get depends on the National Insurance contributions you have made".


    The headline amount of £148.40 sounds great, but not if you opted out of SERPS, or for any other reason haven't paid the full amount of NI contributions. I've been watching out for information on this for nearly a couple of years now, and still we don't know what will happen. When are they going to tell us?
    Originally posted by MonyeyPenny

    I am in a similar position.


    Without that knowledge, I am unable to plan effectively as I have less than 10 years till my 66th birthday. I cannot be confident that that I am making the right financial and employment choices.


    6th April 2016 is getting closer - surely Cameron and Co have decided the exact figures for the 'adjustments' by now!
    I can cook and sew, make flowers grow.
    • MalcBridge
    • By MalcBridge 19th Nov 14, 8:30 AM
    • 13 Posts
    • 11 Thanks
    MalcBridge
    Not impressed
    The changes made, and proposed insofar as we can tell what they are, might slightly simplify the system (which is welcome) but seem unlikely to make much difference to pensioners' actual incomes.

    The point with which I should particularly like to take issue, however, is the proposal to allow pension pots to be passed tax-free to next of kin. This is money that has been saved tax-free and, while taxing it at 55% is difficult to justify when the highest rate of income tax is 45% and most people pay only 20%, to allow it to be passed on tax-free is equally unfair as it means that those of us who do not have large (or any) pension pots will have to pay more to subsidise the next of kin of those (the very rich) who do. As someone has already said, this was basically a party political broadcast on behalf of the Nasty Party.

    On a (just) related theme. Wouldn't it be fairer to charge Inheritance Tax on the recipients of bequests, thus varying with their financial status, rather than on the estate?
  • uneasy
    Great party political article there on behalf of the Conservative Party.

    I guess expecting the multi-millionaire founder of MSE to support any other party is like expecting turkeys to vote for Christmas.

    I'm just left wondering if MSE will be giving an equal opportunity to the others taking part in the by-election tomorrow?

    Or is this just an attempt to halt a new UKIP candidate trouncing his former party again?

    The full list of candidates standing for election in next week's Rochester and Strood by-election, in alphabetical order by surname, is:

    Barker, Mike - Independent
    Challis, Christopher - Independent
    Davidson, Hairy Knorm - Official Monster Raving Loony Party
    Fransen, Jayda - Britain First Party
    Goldsbrough, Stephen William - Independent
    Gregory, Clive - Green Party
    Juby, Geoff - Liberal Democrats Party
    Khan, Naushabah - Labour Party
    Long, Nick - People Before Profit Party
    Osborn, Dave - Patriotic Socialist Party
    Reckless, Mark - UK Independence Party
    Rose, Charlotte - Independent
    Tolhurst, Kelly - Conservative Party
    Last edited by uneasy; 19-11-2014 at 9:34 AM. Reason: Whoops, the by-election is actually tomorrow
    • mancmum
    • By mancmum 19th Nov 14, 9:33 AM
    • 82 Posts
    • 43 Thanks
    mancmum
    If Cameron has posting privileges then MS should pursue answers to valid questions
    You asked what we thought about Cameron posting. Well I think if posters raise legitimate questions Cameron should be pinned down for answers by MSE.

    I am afraid I still remember how strongly you backed the new student loans regime even though now only 3 years in we are being told its a disaster.

    My question relates to the end of widows rights on husband's contributions. My husband will draw a pension on 1st July 2018. Will I lose rights to benefits built up in SERPs as a widow? If his Serps benefits are better than the flat rate pension can he and I keep them? Benefits are not just to the contributor but also to the spouse.
    • Dephead2004
    • By Dephead2004 19th Nov 14, 9:37 AM
    • 32 Posts
    • 16 Thanks
    Dephead2004
    But I still can't find any facts about how the following will affect those of us born after the key dates in the 1950's.


    "The full amount of the new State Pension will be at least £148.40 a week, but how much you get depends on the National Insurance contributions you have made".


    This is still too vague, and has been too vague for too long. I guess this will have a huge impact on many people.
    Originally posted by MonyeyPenny
    Well I have an answer in writing and confirmed by DWP verbally.

    I should benefit from the new state pension by virtue of age ie £148 ish.

    My projected pension statement says that I will receive £22.01 a week (Yes £22.01) instead of the headline figure of around £148+.

    This is because I paid a reduced contribution down from 12% to 10.6% apparently as a public servant for 35 years

    Kindly(?) the Gvt. will protect my pension at the OLD existing state pension rules of £114.41 pw.

    This is another scandal waiting to happen. When more people get their statements they will realise that this new state pension promise has many caveats.
  • archived user
    This was a party political broadcast on behalf of the Nasty Party.

    To show impartiality do we get a response from other parties?
    Originally posted by starkj
    Exactly - and the fact that it was posted the day before an important By Election is even more reprehensible. MSE should be apolitical. I hope that invitations have gone out to the other Party Leaders - but I doubt it.
    • bmm78
    • By bmm78 19th Nov 14, 10:07 AM
    • 420 Posts
    • 563 Thanks
    bmm78
    I don't have a problem with giving Cameron a platform to express his views (as long as the same courtesy is extended across the board).

    I do however think that MSE has a duty to highlight any inaccuracies and ambiguity in his article:
    • In the long run many people will be worse off with the new single tier pension
    • The majority of death benefits from pensions will be taxed on withdrawal
    • Compulsory annuitisation was scrapped many years ago
    I work for a financial services intermediary specialising in the at-retirement market. I am not a financial adviser, and any comments represent my opinion only and should not be construed as advice or a recommendation
    • buzzard
    • By buzzard 19th Nov 14, 10:12 AM
    • 220 Posts
    • 3,022 Thanks
    buzzard
    The important thing not stated here is "in the longer term, the new system will be less generous to just about everyone than the system that it is replacing. " from the Institute of Fiscal Studies, not known for producing reports unfavourable to the government.

    The headline figure is a cynical ploy to win the grey vote by misrepresenting what people with receive and most people are not financially literate enough to spot the difference.

    I am part of the group that Cameron thinks he get votes from - does he really think we don't care that the NHS is being sold off so that the quality of care will diminish. Does he think we dont care that our children are in debt all their lives for an education that can mean as little as 3 contact hours a week? Does he think we don't realise that he has offshore money and despises anyone who doesn't?

    It annoys me immensely that the current leader of the Labour Party does not point to the choice between greed (the Nasty party and fellow travellers) or a fair days work for a fair days pay. Or to the difference between tax avoiders and taxpayers.
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