The state pension is HOW MUCH???

[BeatieBourke]

Call me stupid (fair) but I've just realised how much the state pension is. £800 odd a month (£185.15pw).

As a non-means tested benefit. For EVERYONE.

I'm generally of the opinion that benefits are too low and too punitive. I usually advocate for universalism. I understand that people have worked their whole lives and paid in, and deserve a retirement. And that having pensioners in poverty does no favours to the economy or other welfare services.

But £800 a month / £9k a year for EVERYONE?? So a widower in rented accommodation with no other income or savings, £800pm. A wealthy 68 year old who's earned a 6 figure salary, has a huge property portfolio and investments coming out of their ears that pay a fortune out in dividends, £800pm. Seriously?

I understand that no party, least of all the Tories (because tory voters as a population are older) will ever go after pensions because it would be unpopular (and older people vote more generally). But in a time when the country is supposedly facing a financial "black hole" and everything else has already been cut to the bone for the last 12 years, why the hell are we paying out state benefits to millionaires?

Maybe if pensions were means tested (with a fairly high and tapering threshold) there'd be enough to pay pensions for women at 65, and more for people who haven't built up huge assets, can't afford to live, heat their homes or eat a hot meal every day in their later years. I can see the (cynical) political sense in it, but no economic sense whatsoever.

AIBU?

@BeatieBourke, the other day I heard debate on pension on radio. They said government are considering putting up pension age to 69/70 for those born after 1990. If born before that 68 will be highest to wait.

Of course it wouldn’t save the full 110 billion ( and no one ever said it would). But it utterly ridiculous to claim means testing would save nothing. Depends how it was done but even you must realize that’s just rubbish.

as I said, means testing would likely affect me negatively but I am not so selfish to expect money to me that I don’t need to be a priority at this time of cut backs.

I'd be really happy woth this as long as I could opt out completely ad pay a hugely reduced rate of NI to reflect that choice. Otherwise.. If I pay into state pension I expect it to pay out

@kateluvscats, many millionaire pensioners own an expensive property they live in. They may be equity rich but cash poor. With house prices so high more and more people find their homes are worth so much money. They still need somewhere to live though. If you discounted the home they live in the number of millionaires would be much lower.

You do understand that a six figure index linked pension is extremely unusual, don't you? Also that your father will be paying tax at higher rates on both pensions?

Also that he must have paid pension contributions out of salary all through his working life?

He must have been at the very, very top of the civil service - a six figure civil service pension is impossible for most people. Certainly not the norm.

*Of course it wouldn’t save the full 110 billion ( and no one ever said it would). But it utterly ridiculous to claim means testing would save nothing

You've given no evidence to support this claim.

I think they write to you telling you how to claim about 4 months before its due?

According to an OECD analysis published in 2019, the UK has an overall net replacement of 28.4% from state pension for an average earner, whereas the EU average is 63.5%. Hardly lucrative.

Im not personally invested in means testing pensions - as I said I would likely be negatively impacted. But I think it’s better to stop giving rich people large amounts of government benefits than to cut the nhs (for example).

In réponse to your « points » below:

1. I didn’t at any point « get means testing wrong ». It’s complete rubbish that means testing of benefits doesn’t save any money. That’s why we means tested almost all working age benefits. You might not want it to be true but doesn’t mean it’s not.
2. As I said it has been illegal for over 40 years to refuse to allow women to join pension schemes because they are women. I am not aware of any case of this in recent years.
3. Don’t talk nonsense - of course I am aware women are still discriminated against. But in the uK, I would be very surprised if you can find any case of a pension fund that refused to allow women to join in the past 20 years.
4. maybe read what I said about « fossil fuel companies ». Total corporate on all companies in the uK tax raises about £50bn a year. The basic cost of state pension is over £100bn a year. The money saved from a sensible scheme to means test pensions could likely never be raised by corporate tax.
5. What? State pensions are about 10% of all government expenditure and in many cases go to some very rich people. That’s exactly where we should save money.

I'm early 50s.

If the state pension is cut to take more account of what will be a fairly modest pension, I'll immediately stop paying into Additional Voluntary Contributions and when the time comes I'll take the 25% tax free lump sums for a lower annual pension figure.

There are changes that someone suggested up thread that seem sensible- I'd say higher rate tax relief on pension contributions should definitely be removed. But there's a huge rump of us in the middle who yes are lucky to have decent jobs and afford to pay into a pension, but equally decide to make that decision rather than spending it all now.

This thread and others like it about the rich not giving all and landlords, not to mention all the people are starving and freezing to death hyperbole.

Typos apologies from my phone

Indeed @londonmummy1966 your FiL is very much the exception. The most you can get under the scheme which her fil was in would be 40/80 of his final salary, and pensionable earnings over £100,000 may be restricted. Very few civil servants will earn enough to come away with a six figure pension. Maybe FiL is an ex Perm Sec or something

www.civilserviceworld.com/professions/article/civil-service-high-earner-ranks-swell-by-85-transparency-data-shows

Anyway, the Tories must love these types of discussions. All the plebs fighting over the scraps instead of getting together and ensuring good living standards for all.

Some people would be happier if all the over 65s were made to give up their houses (multi million pound houses if owned and too many bedrooms if social housing)and six figure pensions 😅then slung in the workhouse. Fair enough, as long as you are happy for the same to happen to you. Alternatively, stop voting Tory. We all know it is not just older people who keep voting 'em in.

Cutting state pension affects the middle earners most. Grossly unfair given they’ve worked to save for their retirement and contributed to the benefits others get all their life.

The idea of reducing benefits is abhorrent for a rich nation. Take the money from those who are fleecing the system; sort out tax loopholes, extend period of asset transfer used to avoid care costs and inheritance tax, get rid of ministerial severance pay (Over £750, 000 as one off payments to the very wealthy in past three months alone).Why should Kwarteng get a handout worth more than people live on for his few days in office?
Look at other tax avoidance and government grants for larger companies and landowners, reclaim monies wasted on COVID contracts that weren’t delivered, stop Johnson’s vanity project spending. Perhaps stop expats returning to use NHS for free and claiming benefits including state pension. Stop subsidising private education and private healthcare. Reduce MPs allowances and cheap restaurants/bars.
Plenty of ways to reduce costs and increase revenue without attacking benefits.

The tipping point - the age at which a voter is more likely to have voted Conservative than Labour - is now 39, down from 47 at the last election

yougov.co.uk/topics/politics/articles-reports/2019/12/17/how-britain-voted-2019-general-election

How does being a single parent and the number of dc you have impact on your pension calculation ?

What do you mean? I work full time, no one pays me to look after my child.

The pension age is rising. 67 for both of us. My FIL died at 65 just claiming a year of pension. I can imagine it will still rise.

Tax relief is not overall a government contribution, you are not taxed on that part of your salary that you put into savings. You will be taxed on it when you take it out. Above the threshold. And if your earnings are below the threshold you are most likely not rich.

@Ugzbugz I don't understand this comment either, I'm not clear on the link between being a single parent and having one child and pension entitlement hopefully @TheNosehasit will come back and explain.

most people haven’t ‘paid in’ enough to get the value of the state pension.

the state pensioner will get around £200k out (£800 x 12 months x 20 years). Assuming average life expectancy of 80s.

let’s take the average salary of £25,000. Ni is paid at 12% over about £6,000. So (£25,000 - £6,000) x 12% = £2,300 a year NI paid. 40 years of ‘paying in’ is £90,000!

obviously all based on average figures.

we do need to get away from this attitude of I’ve paid in all my life. We need to combine ni with income tax so people change their attitude that they have paid in.

However I agree that people should get a state pension if they are poorer. state pensions will be only given to poor people anyway. It’s why they set up the new work pension. I fully expect to not receive a state pension Im in my 30s.

You obviously are unaware exactly what happened with Wapi women and the accelerated age increase, it's been accepted they definitely did not have 20 years warning of that and it's debatable they had any warning. But they are boomers so who cares?