To be angry with people who describe the old age pension as a "benefit"?

[FlubandSlub]

When I started my working life, aged 16, I entered into an agreement with the government for them to save my pension money for me. It was stated that it would be until I turned 60 which would be when I could starting drawing my old age pension. Even though I made my FULL pension payment contributions by the time I turned 51 the government has decided it will not abide by the original agreement and that it is going to keep MY money until I am 67. Probably hoping I will die before then.

Consider this, not only did I contribute to my pension, my employer did too. It totalled 15% of my income before taxes. If you averaged only £15 000 p a. over your working life, that's close to £220,500. Read that again. Did you see anywhere that the Government paid in one single penny?

We are talking about the money that I and my employer put in a Government bank to ensure that I would have a retirement pension. It was not money that the Government had any right to spend on other things! Upon reaching the age to take it back they've started to call the money we paid in a "benefit" !

If you calculate the future invested value of £2500 per year (yours & your employer's contribution) at a simple 5% interest (that's less than what the govtpays on the money that it borrows from overseas), after 49 years of working you'd have
£892,919.98.

This money was supposed to be in a securely locked box, not to be used as part of the Government's general funds.
Successive governments borrowed the money to spend on other things but that doesn't make my pension some kind of charity or handout!! If a private pension company did this we would sue them. Unfortunately the Government can legally rob us blind and get away with it

IT'S MY MONEY! IT IS NOT A BENEFIT!!

I agree OP.it shouldn't be referred to as a benefit.

BUT If state pension is classified as a benefit why does it require yearly working contributions to qualify and once taken it is subject to tax.

The same logic should apply to other benefits..
UC and housing should have minimum contributory period to qualify say 15 years. Then once in receipt it should be taxed.

Sorry OP but your payments were paying for the folk who were retiring at that moment. More fool you. The people who are starting work now are paying for yours. It pays forward.

Definition quibbling aside, there is nothing stopping anyone from advancing that as a policy for a future government. However Let's hope that unlike the Brexit debate, the possible outcomes are discussed honestly and openly. Because it's amazing how quickly minds can change when they realise quite what they have just thought of.

The example of cutting your toenails with a scythe springs to mind. It is unarguably a guaranteed way to avoid podiatrist charges in future.

Successive governments have faffed around with state pensions and caused lots of the problems. Over the decades, "graduated state pension" came and went, then SERPS came and went, then S2P came and went, and now they've given up completely with earnings related state pension and "subcontracted" it out to workplace pension schemes, administered by pension firms instead. Typical government short term thinking. Right back to the 70s, the looming problem was known, but different politicians over the decades brought in and them took away alternatives. So to an extent, there's been constant reviews and different plans to solve the problem, but none of them lasted long enough to solve the problem. A monumental waste of time and effort and money over the decades.

It's not your money and it is a benefit. Capital letters won't change that fact.

Well exactly this. If it’s just any other benefit why does it work so differently?

Yes, and that descriptor was changed in 1948.

Because it does. And no amount of repeating the question will change that.

Maybe look to how such things get changed in the UK and proceed from there ?

OP is 30. Retirement age for women was already set to rise when she started work.

Nope. It’s not your money. Your NIC contributions have not, and have never been specifically allocated to your personal state pension. Your contributions pay the pensions of the previous generations, just as future generations will pay your pension when the time comes. In the meantime the state pension is subject to government legislation and age increases for eligibility are applied as a result of periodic reviews, considering factors like increased life expectancy and the financial sustainability of the pension system, based on the proportion of the population paying NICs.

And I’m sorry to disappoint you but the State Pension is actually legally defined as a benefit and not a pension. It’s administered and paid by the DWP and the term ‘contributory benefit’ is used in legislation to provide consistency with other social security benefits so as to fit within the framework.

National Insurance contributions don’t just pay for the state pension, they pay for other benefits and the NHS. And contrary to what you believe, no, the government has not been robbing from NIC funding ‘to spend on other things’. The money in the National Insurance Fund can only be used for a specific set of social security benefits and to provide some funding for the NHS. It’s not available for other government spending. Money is only allocated to the National Insurance fund after a portion is set aside for the National Health Service. So if it helps you understand think of it as a reserve for contributory benefits, including the state pension. Which as I said is legally defined as a contributory benefit.

Lots of benefits have criteria attached to them, it doesn't make them not benefits.

In reality though, if you don't work enough to qualify for a state pension (or only a partial one) and you are sufficiently poor (ie. you have no private pension or a spouse who can support you) then you get pension credits anyway to prevent you from becoming destitute. What's the alternative? Old men and women freezing to death on the streets because they didn't pay enough NI?

genuine question - do you think other people don't have chatgpt access or are unaware of its existance? If The OP wanted to ask chatgpt she would have done do. The point of these threads is for humans to talk to humans. You are are not helping by adding AI generated rubbish to a thread.

If she's 30 then it was already set to rise when she was born! The increase in women's SPA from age 60 was introduced in the Pensions Act 1995.

I think you're confused between your private work pension and the state pension.

Two different things

My goodness, this is a depressing thread, 😥

You might not like it but legally the state pension is a a benefit. Currently it is paid to everyone above state pension age as long as they have made the required number of years of NICS payments. Future governments may decide to means test it, raise retirement age, remove it entirely. Or they may hugely increase it (highly unlikely)

Your National Insurance contributions are a tax that pays for today's pensioners. There is isn't a pot of your money. Sorry about that

You do not understand how it works at all. There is no government bank and your NI was not only going towards your pension. You don't have an agreement, nothing was signed.

Old men and women freezing to death on the streets because they didn't pay enough NI?

Sounds like an idea. Although if you are mean enough to begrudge people enough to keep them alive, you are surely going to whine about the cost of collecting the corpses.

You are paying for those already claiming, not for yourself. And yes it’s a benefit

The biggest misconception is that ni is just for your pension, it also includes working age unemployment and sickness benefits, child benefit, disability benefits etc

I would scrap pension credits but have a long lead in time so people are fully aware and have time to prepare accordingly. Their choice to do so or not but the onus on them.

But its not AI generated rubbish, it’s telling it how it is

Meh.

They’ve changed the age I will get a state pension 3 times in my lifetime. They may change it again, take it away entirely and rely only on pension credit to support low wage workers, who knows.

I started my own pension when I was 23 in the 90s, at the behest of the government at the time with a massive campaign suggesting personal pensions were a good idea. Employers were made to provide IFA for employees, we were encouraged to “opt out” of SERPS and use that in a personal pension so it didn’t even have to cost us anything. I’ve never put £££ in to it, only a few quid a month. Latest calculations say I should receive at least the amount I’d expect the state pension to give me. Anyone who has got to their mid 50s who could afford a few quid a month in a personal pension from the point they started working, and is still relying only on the state pension to provide for them in their retirement, really hasn’t done the best for themselves in planning for the future.

There are lots of types of benefits and they do work differently.

The state pension is still a benefit

I've seen this exact post doing the rounds on Facebook. Copied and pasted nonsense. It really is extraordinary how many people (my mother included) have absolutely no understanding of how pensions of any kind work, never mind the state one.