State Pension v Statutory Maternity Pay

[FiFiTrixa]

Not a TAAT, but reading about the triple lock on pensions has got me thinking.

I’m employed in the private sector and have worked for a number of different companies (around 8). None of these companies have offered enhanced maternity pay, so after the initial 6 weeks at 90% it reduces to c.£150 per week (I can’t remember the exact figure).

Compare this to the state pension of £180 per week and it seems rather low. Especially when you consider that pensioners will have likely paid off their mortgage or also be in receipt of housing benefit, plus are unlikely to have any dependents to look after.

Why is it that there is such a disparity between the two benefits?

Is it assumed that the mother will have a partner to financially support her? But comparatively a couple would receive double the pension rate per week between then.

Are companies expected to offer enhanced maternity pay? Outside the public sector it seems that this is often not done, or is a small token amount.

AIBU unreasonable to compare the two benefits and to think that SMP is too low in comparison or is there something I’m not understanding?

No idea about the discrepancy but stat sick pay is even lower at just £95 a week so if you were to do a comparison you'd need to look at all state paid benefits not just those 2. Mat pay is generous compared to others, just not state pension.

@Happyfeet1972

No idea about the discrepancy but stat sick pay is even lower at just £95 a week so if you were to do a comparison you'd need to look at all state paid benefits not just those 2. Mat pay is generous compared to others, just not state pension.

This. You should be comparing it to sick pay, not pensions. It's for temporarily not being able to work, as opposed to permanently not being able to go back to work.

@Happyfeet1972

No idea about the discrepancy but stat sick pay is even lower at just £95 a week so if you were to do a comparison you'd need to look at all state paid benefits not just those 2. Mat pay is generous compared to others, just not state pension.

It shouldn’t be a race to the bottom though! Sickness doesn’t generally last as long as pregnancy.

OP I agree that SMP is crap, I didn’t realise that a pension was higher. It does seem unfair given that having a baby comes with additional costs whereas retiring doesn’t.

I also assume that there’s more unplanned pregnancies than there are unplanned retirements.

Surely having a baby is a choice though, getting old will happen to us all.
Pensioners have paid into the system for years and for many they don't have enough to live on. Often they live alone. Most people having babies are in couples so a 2 salary family.
If you can't afford to have kids don't have them 🤷🏼‍♀️

Thank you @FredaFox for reminding us that pensioners have paid into the system for years. Its something that is all too conveniently forgotten now. As well as the contributions they made to the community in the past some pensioners still have to work to make ends meet. Others do volunteering or childcare so are still actively contributing. Pensioners also use goods and services so are helping to keep others in work as well.

We also get the lowest pensions in Europe and still pay tax on them which is a scandal.

The new state pension is a maximum of £180 per week which you only get if you have made sufficient National Insurance Contributions for 30 years. It's just gone up from £137. Most pensioners do not qualify for the full £180 and many wind up depending on means tested benefits. As you might guess, poverty in old age is much greater among women. You can also claim means tested benefits if you are on Statutory Maternity Pay,which is a maximum of £151. If you are unemployed and not on SMP/OAP you get unemployment benefit of £74 per week. Carers Allowance is £67 a week. Maternity Pay is comparatively lavish !

What people who say pensioners “paid in” miss is that they were footing the bill for the people who were of pension age at that time. People are living longer and it is the younger generation who are footing the bill for it. I absolutely don’t advocate a race to the bottom but don’t feel it is fair that it is higher than maternity or sick pay especially when statistically the baby boomer generation benefitted disproportionately from state expenditure more than generations preceding or following.

Its crap but comparatively more compared to other benefits eg ESA is 74 a week, which you'd receive if you were out of work due to health problems through no fault of your own. At least for most people pregnancy is a choice, being sick or a carer is not.

I have paid into my pension pot for 50 years via national insurance and it is based on how many payments a person has made. It is not a benefit but in a way a savings plan. If a person had not worked and not paid national insurance they will get less money. This seems fair to me. The issue here is not that pensions are too high, but that mat benefit is too low and the rate of sick pay is appalling. I am still working but if I were to become ill I would only get the much lower amount of sick pay as everyone else despite working all my adult life .

Women on SMP still have maybe 30 years (or more) of working life in which to earn and hopefully save a bit. Once you retire, that is it. There’s a point at which people need to stop working - for health. Do you want people to have to work till they basically drop dead?

SMP is temporary and you hope that earnings pick up. After the age of 67 there is a finite time to earn and save.

The two benefits are just not comparable.