Plonkers. Luckily my aunt had her head switched on and paid her 'stay at home' husbands stamp so he gets his.Because what you've paid doesn't correlate with your specific pension, it's just allowed you to claim the benefit in later life. You could have not contributed anything for 50 yrs and still get the state pension (as long as you fulfilled other criteria to enable your NI record being completed with the requisite No. of years), hence it is classed as one of the social security benefits.
I have 2 clients who aren't going to eligible for the state pension, both self employed and paid tax. Neither have paid any class 2 NI, one says he didn't realiseand the other isn't bothered.
£25 a week extra on my state pension
- Thread starter DXP55
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Blow it then may be your below the 10K in saving so your weekly incomes is low enough for pension credit.
Soldato
I think if you've only got 10k to your name when you retire then things won't be looking good. Having to beg the government for scraps is not going to be a great existence.Blow it then may be your below the 10K in saving so your weekly incomes is low enough for pension credit.
I'm not Richard - London but I'd like to have a go at solving this:Your viewing the abolition of NI in isolation without considering the fact that they will make changes to general taxation to fill the void.
Gotta love a good old war or two to even out the tax burden eh?
You do realise WHY the Baby Boomers were called the Baby Boomers and the reasons behind the NEED for it to happen (clue is in the line above). Now you want to decry a population that had no choice when they were born? This is just one of many posts from a the narrow viewpoint that is @Richard - London
@Richard - London - Tell us your solution to the Pension "problem"
1. Introduce a compulsory pension scheme for all businesses.
2. Scrap National Insurance and increase income tax so that current pensioners pay more tax but also so that you can:
3. Remove the link between accruing pensionable pay and earning the state pension to get rid of the sense of entitlement that comes with paying NI.
4. Eventually scrap the state pension altogether and offer universal credit for anyone unable to afford to live off their private pensions.
The dependency ratio (number of retired people for every 100 working age people, currently roughly 30 for England and projected to be about 40 by 2043 although this assumes net migration falls to about 350,000) is projected to increase while birth rates continue to decline - step 1 is complete and step 2 on its way.
Soldato
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Whilst i agree ultimately something needs to change it is the ones trapped in the middle i feel sorry for. Politicians could weasel word it all they want the fact is people who have paid in through most of their working life by their national insurance contributions and are rightfully expecting a pension.... hell i could log into government gateway now and it will tell me how many more years i need to pay in to get my pension as well as the figure i can expect to get.
what ever system they bring in i really hope it is phased in so that people who have paid their national insurance with the promise of a state pension at the end get one. My expectation is it will end up means tested... which as usual sucks for those of us who pinched every penny to have a nice savings pot for a rainy day and actually went without, vs those who blew all their money and didn't save anything - even tho they could have.
Jesus... that said the monsoon which just hit our house, including hailstones, i think i should be trying to save to build an Ark not a pension!!!........
what ever system they bring in i really hope it is phased in so that people who have paid their national insurance with the promise of a state pension at the end get one. My expectation is it will end up means tested... which as usual sucks for those of us who pinched every penny to have a nice savings pot for a rainy day and actually went without, vs those who blew all their money and didn't save anything - even tho they could have.
Jesus... that said the monsoon which just hit our house, including hailstones, i think i should be trying to save to build an Ark not a pension!!!........
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Suspended
Problem is that any government who actually instigates or probably even proposes a significant reduction in state pension (ie by making it means tested or similar) will be facing a similar position to the tories after delivering Brexit, making themselves unelectable for 2-3 terms. (And yes I truly believe the slide into depravity we see now was directly a result of having to massively reduce the competency of the sitting MPs in order to be able to deliver Brexit)
Plus, it creates a potentially larger risk of people hiding assets and/or going meh may as well spend everything as I am not a super earner, state will have to pay for everything when I retire.
Super earners can write off the state and just go big on private. Super low earners shouldn't attempt to save at all, the middle right now benefit from saving, if you mess with pensions you either need to set the bar so high its basically not gaining you anything (only the super rich see if taken away), or you set it low enough that a significant portion of the middle people say, meh spend it all.
Plus, it creates a potentially larger risk of people hiding assets and/or going meh may as well spend everything as I am not a super earner, state will have to pay for everything when I retire.
Super earners can write off the state and just go big on private. Super low earners shouldn't attempt to save at all, the middle right now benefit from saving, if you mess with pensions you either need to set the bar so high its basically not gaining you anything (only the super rich see if taken away), or you set it low enough that a significant portion of the middle people say, meh spend it all.
Associate
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The government need to increase the auto enrolment minimum pension contribution rate from 8%. This should be done in steps but ultimately needs to be around 16%. It also needs to be much harder to opt- out.
Bumping the state pension upwards is putting millions of people into poverty in their 60's, at least higher private pensions could fill some of the gap.
Bumping the state pension upwards is putting millions of people into poverty in their 60's, at least higher private pensions could fill some of the gap.
Soldato
Unfortunately millions of people are worried about paying the bills and eating now, not a pension they may or may not live to see 40 years in the future.
Soldato
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the whole thing is a bloody mess and i dont think there is an easy answer
because like you say, if you can barely get by today then you are not going to worry about tomorrow.... however OTOH do we as a society really want to remove incentives from those who can theoretically put a little aside for the future - but at the expense of sacrificing some jam today by making it so that if you have anything set aside that will have to be spent before you get any state help in the form of a state pension?.
I get it, now i am incredibly fortunate, i have a nice car, low debt and a home.............. but it wasnt always the case, for 2 decades i was skint... but partly by my own choice. every penny i had went into savings and then later mortgage payments. for the longest of times i had a pager when my mates had mobile phones and a brick of one when i eventually got one.
i saw people queuing up outside the bookies and the pub, with better clothes than i had and more stuff and i must admit i was quite jealous .
Now dont get me wrong i am not asking for sympathy BUT now that is starting to pay some proper dividends, I do kind of think why the hell should i be shafted now some of those same people are in massive debt, nothing to their name and complaining that they cant afford their credit card payments.
People who never had enough money to save and genuinely struggle are another issue and i am not touching on them here.... i am on about those who chose to live for today and to hell with tomorrow.... Is that what we want everyone in our society to do? because it looks to me the way things are going i was a mug for saving up when i could have just spunked it all away, if i am gonna get stung for it in the future anyway.
even now all my clothes come from the supermarket , and whilst we get clarks shoes for our lad because he has weird feet, mine are cheap ones which - to the angst of my wife - i wear till they literally fall apart.
at some point there is going to be a massive shock, and i can imagine rioting and what not. It does take the p... however that we apparently cant sustain people retiring at 67........ where the French still get their state pension at ... is it 62? (and iirc there were riots when it was planned to go to 64)
Soldato
Step 1 is not complete though as the pension scheme (Workplace Pension) is not compulsory - you can opt out...
Agreed. it should be compulsory though and, probably increased in a phased way as someone else has mentioned.
I don't have a real issue with this. I never understood the whole grievance from some pensioners who have to pay tax on their pensions. Bearing in mind that the only pension income they would have to pay tax on is the very same pension pit that they received tax relief on whilst paying into it. They received growth on that tax relief over the period (circa 40-50 years) and all the Government claim back is the tax relief itself and not the growth on that tax relief.
If people want pension income to be tax exempt, they need to fully change it and drop the tax relief that it currently attracts when putting it in
This will just encourage people to spaff all their money up the wall or encourage hiding it... You'd feel a little aggrieved if, after saving all your life, you end up in the same financial position as someone who didnt because thy get UC top ups and you dont.
State pension is going the same way as NHS, for similar reasons. The amount required to keep them viable has gotten to be beyond what they can raise in tax. Similar reasons as in, increasing age profile of the popular means that pension is claimed for longer, and people need more NHS.
But it's a hard one to tackle. With all those voting pensioners, which political party is going to be foolish enough to put killing the state pension in its manifesto ? You'd suspect that whatever the plan is, it'll involve a tapered age cut-off, leaving those no longer eligible enough years to build up a good private pension including with the money that would have otherwise gone to NI contributions.
Its been compulsory for some time now for the vast majority (all ?) employers to enroll their employees in a private pension, with minimum employer/employee contributions also stipulated.
But it's a hard one to tackle. With all those voting pensioners, which political party is going to be foolish enough to put killing the state pension in its manifesto ? You'd suspect that whatever the plan is, it'll involve a tapered age cut-off, leaving those no longer eligible enough years to build up a good private pension including with the money that would have otherwise gone to NI contributions.
Its been compulsory for some time now for the vast majority (all ?) employers to enroll their employees in a private pension, with minimum employer/employee contributions also stipulated.
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Last financial year.
£125.4b state pension
£124.2b working age benefits inc. UC / child benefit.
£78.3b disability benefits
£31.5b housing benefit
Lots of cash splashing around to all age groups. I don't see a need to suddenly can state pension when it can be limited/taxed and there are plenty of other benefit recipients.
Wealthly pensioners will pay a little more tax and they may means test any cost of living or cold weather payments to minimum wage level or similar. Otherwise, no drama
Perversely, rising the state pension age results in more working age benefits.
I guess it depends on the how a wealthy pensioner is defined. Also, haven't they said that some of the top-up benefits like the cold weather payment would overall cost more to means test it than what would be saved ?
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Caporegime
25p in 1971 would be just over £3 now if adjusted, so £150ish a year, laughable it's still a thing, I would have thought the admin costs are more than the actual benefit.
Indeed, pension age does impact working age benefits, through pensions are payable for an average of 15 years assuming you get to retirement age, a significant portion don't. Unless there is a significant shift it's likely some sort of continued base pension can be managed. In my opinion these reports stating 71 etc. are mostly just to create fear so when the government says they are moving the switch 67 - 68, 5 years earlier people think 'it could have been worse', shrug and move on.
Wealthy from a government perspective is anyone not on pension credit. I.e. with any income above the state pension. They are already enacting this. Pensioners used to have a higher personal allowance. This is now aligned with working populations and frozen for the next few years, scooping in a lot more cash. Mid earners have tax cut through reduced NI to partially offset this but this doesn't apply to pensioners who don't pay NI so taxation on pensioners is increasing to recycle some of the cash.
My dad is currently a pensioner and has been for many years. Owns a 3 bed detached, has state pension plus a little personal pension. He actually spends at least £2k less than the state pension including all bills etc. per year. (I help him keep track) He's running a car and 3 motorbikes (hobby). Eats well, though mostly cooks for himself. Doesn't smoke, drink or take holidays. Overall he lives comfortably. Key is being a home owner, would be very different if he was renting.
Fair point on administration costs though with increased use of AI to track every penny we have and likely a digital pound in 10 years that overhead could significantly reduce.
I don't think so, I think they are based on analysis of predicted ratio of working vs non working age population over time.
Soldato
They already are scrapping National Insurance and increasing Income Tax.
Step 1 - Align the brackets [done]
Step 2 - Reduce National Insurance, increase Income Tax via fiscal drag <-- you are here
Step 3 - NI rate becomes zero and is scrapped + something happens to State Pension as NI years/stamps are no longer a thing
Edit: I think we probably end up with a single rate of income tax too.
Step 1 - Align the brackets [done]
Step 2 - Reduce National Insurance, increase Income Tax via fiscal drag <-- you are here
Step 3 - NI rate becomes zero and is scrapped + something happens to State Pension as NI years/stamps are no longer a thing
Edit: I think we probably end up with a single rate of income tax too.
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Soldato
Take what it is now and add 2.5% on for every year until you get it. Maybe (you can hope lulz, but don't bet on it)
Simplifying the system wouldn't be a bad thing.
If NI gets scrapped it doesn't matter, its just a tax and there is no specific pension pot held by the government so it doesn't matter how the tax is raised.