To think the idea of NI contributions is a farce

[OneAmberFinch]

Or: "No, you haven't paid in..."

Off the back of the WASPI whining issue, but a more general point about pension entitlements. I'm continually astounded in every thread that there are people who honestly believe the state pension is one that you "pay into". People go on about years of contributions and stamps as if it has any meaning at all. Why?

Firstly, it's a defined-benefit entitlement that you get regardless of how much you and your peers contributed - it's funded by today's taxpayers.

Secondly, you can get "stamps" for all sorts of things that don't bear any relation to "paying in", including literally being unemployed on JSA?!

Thirdly, if somehow you didn't bother doing any of that, you get that defined benefit anyway regardless of whether you even contributed, because pension credit will top you up to exactly the same amount!

I think it's a real problem that we use the language of contributions and paying in to describe what is effectively a bog-standard universal benefit. I've got a lot of respect for many older people in my life and I'm not begrudging the genuine contribution they did make to society and people around them. But what is the point of pretending that the state pension and NI system is tracking that? All that time, money and effort just to give people an incorrect and actively misleading impression?

AIBU to think we should scrap all this tracking and just be honest that it's a benefit?

Odd assumption to make, considering this is a thread about renaming and talking differently about the state pension. Also, could you confirm which posters are the millennials and where you gleaned this information?

You’re completely right - there’s a generation of people who think they’ve “paid in” their entire career when all they did was pay the pension of the generation before. It’s a benefit and we should rebrand as such.

I think historically it wasn’t seen as a benefit. However given the fact that you can now get the same “benefit” as those who have made contributions for 40 years, having paid in comparatively very little, this is clearly unfair so I do think the whole thing now needs looking at.

We were the ones paying when other people were just kids. We put money into the government through taxes and NI, so it is our turn now when they're paying.

I'm in my 30s and don't assume I'll get a state pension, certainly not a non-means-tested one.

But the point of this thread isn't to argue we should take it away. It's about the lack of understanding of how the system is set up among the general public, which is actively encouraged by misleading terminology from the government.

To be honest, even talking about whether younger generations are paying in for the older ones is beside the point. The "pot" doesn't exist. The benefit amount is fixed per eligible person. It's not like, state pension is £100 in 2024 but the NI intake from the 2024 taxpayers was 5% lower, so the state pension is going to be £95 in 2025. It's just completely unlinked. From either personal contributions or from overall NI tax take.

Interesting post

That is the old basic state pension, that those with full contributions who retired pre 2016 get. Anyone with full contributions retiring later gets around £50 more, about £221 a week. www.gov.uk/new-state-pension/what-youll-get#:~:text=The%20full%20rate%20of%20new,Insurance%20qualifying%20years%20you%20have

DH and I get no means tested benefits, we are both on the old rate, but mine is only around £100 a week because I had some years at home with the DC (prior to NI credits being introduced) and some years on a low income paying a reduced rate of NI, kniwn as the Married Women’s stamp. I have a small occupational pension that lifts us above the Pension Credit threshold. There are a lot of older pensioners in similar circumstances.

I'm assuming then that all the whining millennials on this thread wouldn't mind if they were told the state pension was being scrapped and they won't get anything, after paying tax and NI for 40 years. I mean, you haven't paid in after all.

I'm a whining millennial and I don't expect to get any kind of state pension. We have a rapidly declining birthrate, an economy in the doldrums and a large proportion of my generation will still be in private rented accommodation by the time they retire. If I have a private pension and own my own home then I doubt I'll get anything, all the money will be going to the large numbers of people who will be financially fucked.

I agree and I don't.

Yes pensioners didn't pay into anything - they paid for government services that were delivered at the time they paid and now they are receiving benefits that far outstrip what they actually "paid in" thanks to working age people who can never hope to receive those same benefits.

On the other hand, the notion of NI is a contrivance by the government to con people that they are paying in to something and, in a population of 67 odd million you'd expect a decent number to fall for this con.

As other posters have said, it should just be rolled into income tax.

How is the pension paid for? Well that’s through NI contributions. So if no one made them because we would all automatically get it anyway how would the state pension be funded?

A pension is an unemployment benefit for the elderly who are theoretically unable to work.

Years of healthy pensioners receiving benefits and continuing to work is why the pension age is rising. If you are fit to work, you don’t need an unemployment benefit.

’you will get state pension if you have all your qualifying years of NI contributions’ is what I was led to believe so this is what I expect. if I was told at 20 or even 30 that I might not get it, I’d have got a shift on & saved more. I’ve worked all my life with only 1 gap for maternity.

However, I have planned with this in mind. My savings are to top up what I was led to believe I would get. All good I thought.

Simple solution for me though, any mutteringz from the pissing money up the fucking wall morons government about means testing or no money in the pot, I will spend all my savings & go straight on benefits.

Well no - you only get full state pension if you pay NI for 30 years or whatever it is. A long time anyway. If you haven't paid the requisite NI you would only get pension credit based on means testing. So minimal savings and no partner's private pension to contribute to household income

The state pays for pensions from the general pot. The fact that we have, in NI, a tax in all but name that people are exempt from if they have a certain type of income and/or when they hit a certain age means less gets paid in than it would if the system were reformed.

FIL and MIL 'worked hard and paid in' all their life. I worked out that I've worked more hours by my early 50s than they worked altogether.

And I bet I'll get bugger all.

Please do come back when you know what you are talking about.

This whining GenX assumes millennials will get fuck all. One of the many reasons, along with CoL, house prices, Brexit and everything else, that they don't feel inclined to pay towards other people. They're buggered themselves.

Apart from everything else, the 'paying in' concept as a direct money in-money out idea doesn't work, because pension is currently £169.50 per week. Someone on an average UK salary of £35k will pay less than that a month. Which means half the population will be "paying in" less again. Unless someone works for 4x as long as they receive their pension (which was the original idea, but there are pensioners now that might end up longer retired than years worked) pretty much everyone will receive more than they ever put in, if "putting in" is defined as NI contributions only.

You're right there's no pot. But wrong that it's unlinked to NI contributions. I'm 40 and I need to pay NI for 14 more years to be eligible for full state pension of £11,000 a year, £220 a week . The amount is not fixed as if I were to stop paying in now I'd only get £140 a week or something like that. You can check this on the HMRC app. If you are short of a few years NI contributions it's well worth topping them up. For example if you've been a SAHM for a long time.

£11,000 is not nothing either. It would be hard to live off but as an addition to a private pension could pay for a few nice holidays a year for example.

Many pensioners continue to work as they can't afford to live off their pension alone. Or they loved their job, and want to continue doing it.

By the way, people that are of working age and claim unemployment benefit because they are not fit to work, are still allowed to work. They have a work allowance.

If they're working they're paying tax. It's the ones who don't work and live a long time who are more of a problem

My point being that if you’re able to work you don’t need an unemployment benefit that was designed for people to ill or frail to work.

But they are allowed to work though.

Unless you want pensioners to undergo regular Work Capability Assessments?

Yep. Scrap NI, roll it all in to income tax (reshape that too). Rebadge pensions as a benefit, without making any sweeping changes to the qualifying criteria for that benefit. I’d support all that.

Everyone pays different amounts of NI & it goes into a pot so everyone gets the same basic amount including those who have put more in & those who have not contributed.
It was a good idea when it was developed but the benefits system has become increasingly "means tested" which was not the original idea at all. It's due to changes in society such as unemployment, family structure, low living wage & an ageing population. The original idea is that benefits would only support sick people & the rest of us could work.
It was from the Bevan report if anyone is interested. But anyway it didn't work out the way he envisioned.