State Pension

[JollyPollysjolly]

my Husband is sure that by the time we reach state pension age (me 45, him 49) that it will no longer exist - or maybe when we reach 100 ha! Anyone with any knowledge that can add to this idea so I can argue back?

For people like this, there ought to be a box to tick and they should bloody well tick it to say thanks, but no thanks, I/we don't need it. So that people who do, and a few have commented on this thread, could have a bit more.

That wouldn’t happen though. £19 billion of benefits go unclaimed every year, it’s not all divvied out to other claimants at the year end. People with high retirement incomes and huge assets pay most, if not all, of their state pension back in tax so it’s really not logical to be so incensed by it.

Doubt it will affect you OP as you’ve been in the workplace for some time.
I wouldn’t be surprised if it’s announced for much younger people though and gradually introduced although how any Govn can expect people to pay into something they will never benefit from is another question.

We seem to be currently on a plateau ( or slightly going down ) in terms of how long we live. So I doubt the pension age will continue to increase unless this changes.

You have to claim your state pension. It is not sent to you automatically.

Savers are always punished so I wouldn’t be surprised if this happens.
You get nothing till there’s just enough left to bury you…..

This is a terrible attitude to have
A lady is
’creaming’…..you mean receiving money via a private pension that has been paid into
’old lady in her late 80s’…..ageism. It’s none of your business what people do with their own money
she doesn’t need the state pension…….again if she’s paid into the system the understanding is that she will be able to access a pension from the Government because she contributed in her day,

Hang on, I earn 60p over minimum wage. However, I have saved and done without luxuries every single month of my life since 16.

So yes, I have savings. Do you think (despite having never been unemployed & have my 35 year stamps) that I should have my savings effectively taken away? Even though this was not what I was led to believe?

Absolutely fucking not! I will spend the lot!

We are the same.
We deny ourselves louds and have always saved eg we currently share a phone, have no extras on the tv, share a car, I have one winter and one summer pair of shoes, I’m currently keeping warm wearing my only cardigan ( my Christmas one 😵‍💫) we grow our own veg
etc etc etc

Ive paid into the system and apart from child benefit have never received a penny back. We will treat ourselves to all the things we currently deny ourselves if our savings meant we couldn’t receive the pension we have a right to.

Yes, same with contribution based ESA, which you can get indefinitely and is not means tested in any way, unless you have an occupational pension.

There is so much uncertainty at the moment. I am 5 years away from getting my state pension. I am increasingly thinking of quitting work, with drawing private pension, and living on that. I worked with a colleague who has already done this. I think I will join her.

The wealthy do get benefits. David Cameron, for example (for his late son). There are a few benefits which, like the State Pension , aren't means tested.

Firstly the state pension IS a benefit not a pension. The NI you pay is just tax. You just have to pay a tax for a certain number of years to be eligible for the state pension. How much tax you pay does not matter.

The NI paid today is used to pay the pensions of today. There is no pot with your name on it.

The NI ringfenced fund is for for paying state pensions now, not your pension, as it has to be constantly topped up every day by tax receipts.

So it is more like your current account not your pension pot.

@Ginmonkeyagain It is like a defined benefits pension, rather than a contributory pension i.e. it is how many years you pay in for that counts, not the amounts each year.

Wrong. You can qualify for full state pension without ever paying a penny in NIC. There is NO link. There are many ways you can accumulate "credits" or years towards benefits such as the state pension. Such as being a carer for a young child, registering as unemployed, earning between the two lower income thresholds (part timers) etc.

The government needs to be taxing the rich more and squeezing foreign corps to pay the correct level of corporation tax. Then we would not be in the position of trying to freeze/scrap state pensions

Though I hate to say it 60k/70k is not a lot of money to be earning in London with the eye watering rental prices etc.

The next government needs to focus on those earning north of £80k or so and not squeezing the middle. Freezing tax bands for years has tipped lots into higher tax brackets.

"The majority of receipts from NICs are paid into the National Insurance Fund, which is separate from all other revenue raised by taxation. The Fund operates on a ‘pay as you go’ basis; broadly speaking, this year’s contributions pay for this year’s benefits."

From the Government Research Doc, June 2019

@taxguru

"Depends on the threshold. A threshold of say £50k of income wouldn't impact those lower earners who'd only be saving a "small amount" into a personal pension."

The question is, where do you set the limit? Over time, there would be fiscal drag, and 50k would end up be a lower income.
Also, You mention 50k income, but at what point during your working life would this apply? The last year?, The first year?
In other words, someone could earn 50k at one point in their lives, be made redundant, and live off their savings until retirement.
I think you mean, how much they save into a personal pension.
There is already a limit on this, before most of it is taken back in extra taxes, which is probably an easier way of discriminating against 'rich' people than means testing the state pension.

Dh and I decided to do the same.

After the pandemic we realised no one cares about older people ( we are late 50s/ early 60s ) and we could drop dead any moment just because we are getting to the age where we will be the back of the queue.

We still do some consultancy but pick and chose now, nothing too heavy and just a couple of days a week max.

Enjoy it while you can!

Higher taxes and squeezing the corps will mean the more wealthy will leave the uk.
Its happened before.

That’s why even Labour won’t do it……

Tbh, with all this talk of the "sick note" culture etc at the moment, I would not be surprised if no one ever retired, and the DWP would make everyone work until the day they dropped. All these countless WFH jobs that will suddenly appear when loads are booted off of sickness benefits... I am sure the same will be done for pensioners.

Agree, plus
if you contribute nothing you get the minimum state pension and then apply for top ups which brings you literally to just a few pounds a week short of the full state pension.
Govn site and others available online to crunch the figures.

Except a lawyer earlier stated legally, certainly for OP anyway, the Govn cant take away state pensions.

But the reality is, that if you have an occupational pension from your working years, either DC or DB, you will most likely also qualify for the state pension. However, if the state pension continues to increase on the triple lock mechanism, and tax thresholds remain fixed until 2028, then we are only a few pounds per annum or a big leap in inflation away from having people with only the state pension finding themselves liable for income tax. The income tax threshold is £12,570, and this year's single person's state pension is not quite £11,500. A modest amount of interest income on top of that, perhaps the proceeds of a downsize that released £200k would put you close to paying income tax. With any kind of occupational pension on top, then most pensioners are close to being tax payers.

And?

What’s your point?

Exactly. We all know that. Why shouldn’t pensioners pay tax?

I am a pensioner. I do pay tax, and will continue to do so for many years. But not because I am in receipt of state funding other than SP. Because I was self-employed for most of my peak earning years, I made other arrangements. Currently, our other arrangements deliver about £40k pa which split between two people means tax at 20%. This is not a whinge fest, but it's not a gloat either. We should be able to afford a comfortable retirement; plus, the downsize card is still available.

And there's no reason why well to do pensioners shouldn't pay tax. But it bites at a stupidly low level of annual income that doesn't encourage people to save to improve the quality of life in their first, most active years of retirement.

The point I was making is that the state pension is getting quite close to the threshold for paying income tax. If tax thresholds are fixed to 2028, and inflation or earnings increase rapidly, then it is not hard to see a point in 2027-28 where the state pension hits 12,570 pa, and the state pension is paid out of one government pot and siphoned back in. So we go back to the years when pensioners were almost always poorer than anyone else in society. You may consider that is a desirable outcome.