Pension credit only £3 less than State Pension

[SpanishBaguette]

Maybe it's been obvious to others but I've only just found out that Pension Credit will top you up to no less than £227 per week which is only £3 less than the state pension.

AIBU to be hacked off that I need to pay 35 years of contributions to end up with a near identical pension to someone who gets it for free. WTF?

@Allthings Thank you! I’m at least 10 years ahead age wise, my DC were born early 70s. There was no Child benefit for the first, no HRP credits, little childcare (I was so envious of friends who had family nearby, we didn’t), no subsidised childcare, and patchy work to fit round DH’s job. He worked away sometimes, so agency was the best I could do for quite a while.

I have an occupational pension from around 25 years of later full time work, but a fairly abysmal reduced state pension due to earlier irregular contributions, Married Women’s stamp etc.

@Fearfulsaints maternity provision was still woeful until later in the 1980s due to the conditions placed on it.

Absolutely, it was a terrible mess compared to now, but it didnt exist at all until 75 or was it 78. Certainly my mum had no access to any leave.

I do think some younger people really dont know what is was like for women and what a huge shift it has been.

I had my babies when mat leave was good, but shared parental leave wasnt a thing. My children are still school age. I see threads telling me I should have shared leave and there's no excuse etc. People forget so quickly

Also worth a mention that women weren’t even taxed independently until 1990! It was a husband’s responsibility to file his wife’s tax return, and a woman’s income was legally her husband’s until then.

And SMP wasn’t available to all women until 1993.

@Rockandhardplace

Did single or widowed women do their own taxes then ?

Lots of women worked after the 2 World Wars

Where did I say they didn’t? Some women did. Many women couldn’t. I had an aunt who worked, my DM looked after my cousins. There was no free childcare hours, and hardly any childcare provision other than the odd childminder. She went back to work when my cousins were 10 days old. Unless you were well off (most people weren’t back then, not like today where half the population are in blue collar jobs and identify as middle class), you’d need a relative to look after your children while you went to work.

My Mum worked. She cleaned our local pub for a couple of hours every day. She used to take us with her and we’d have to sit on a chair with a colouring book. It wasn’t a career, and she wouldn’t have paid tax or NI.

My point is that most women didn’t get to choose. Once they had children they had to stay at home and look after them, or at best work part time around them.

And yes, single women, divorcees and widows did their own taxes.

@Seymour5 sadly that was typical for the majority of women. I was lucky and benefited from HRP. I did work on an evening in a semi professional role which was term time only when my DC went to school, but there were some weeks where I didn’t pay NI. No access to an occupational pension at that point. Like you I did eventually move into a full time public sector role and had access to an occupational pension.

@Wholenigh5skytime a lot of women worked during the war efforts and then had to give up their jobs to men returning from war. But access to a job, in a lot of cases only for a period of time, did not give access to pensions. The modern state pension was only introduced post WW2 in 1948. As many others have said, married women were generally expected to stay at home, raise children and look after their husbands and he was expected to work to support his family and do little else. Those behaviours are still ingrained even now. Despite most women working outside the home and a lot working full time, they still do the bulk of child rearing and domestic tasks.

Interesting points raised.

So - you can transfer part of your personal allowance to your spouse in marriage if one is not working... I guess the state recognises that single income households may rely on the unpaid labour of one partner so that the other person to be as economically active as they are.

Indirect contributions - by this I mean the unpaid care work of children or unpaid domestic work around the home or volunteer work in schools or wider local community that provides vital supports to paid organisations. My MIL didn't work but saying she didn't contribute anything to the economic activity of the nation is dreadful. Without her presence and support - all the early mornings and food prep and driving the kids around to the various activities that led to their high earnings today. My FIL often says he wishes he could have paid her for all the work she did which allowed his success and nurtured his children's futures so well.

Just confirming - did I understand you properly? You believe the higher earning spouses NI contributions so should redistributed to all of society except his wife/partner? Who should support her in her old age?

In my experience high earners intrinsically see the value of unpaid and lower paid work to the economic activity of the country. While lower earners have their hand out for any wealth redistribution while simultaneously saying the higher earner shouldn't get a larger say themselves AND lower earners than them should get nothing.

I am just genuinely baffled by how people end up with this cognitive dissonance - like I deserve this unearned money in my old age but others do not.

The pension system you're describing in your last paragraph is how it works in Canada. All people have an annual cap on how much "NI" they contribute (but it's a specific fund called CPP). So once high earners have made that contribution they don't pay any further. If you don't make enough money and can't make the contribution that's too bad - you simply won't get a full pension. It means no one gets a top up from the other and the high earner has enough money to put aside privately and to save for their family units retirement. The concept of wealth redistribution doesn't exist in the same way and people who earned little in life earn little in old age. Seniors have much less voting sway here as the population is quite young and you can see that in the pension policy. Living here - it's crap to see so many older people in such dire straits.

Happy to be corrected on any point if I've misunderstood!

@Livingincanadaafter19yearsinlondon you can transfer £1,260 of your tax allowance a year if you are married or in a civil relationship and do not pay tax yourself (low income or not working).

@Livingincanadaafter19yearsinlondon, I don't think you have misunderstood, I think we just disagree.

In the UK people are taxed separately, not as couples or households. It is not possible for one partner to pay the tax of another. If the hypothetical wife worked, she would be taxed in her own right, which in the situation you describe she is not. Every parent ferries children about, makes lunches and so on, and a lot of voluntary work is also done by people in work passing on professional experience or doing things like running Brownies in the evenings. It is untrue to suggest that SAHMs provide all the voluntary work or that working mums don't look after their children. Of course they do, and it's quite insulting to suggest otherwise. The only difference for a lot of parents is that a SAHM has her children with her for an hour or two longer when they finish school. Otherwise, early mornings, evenings and weekends are the same whether parents work or not.

I feel no-one should be left destitute in older age, but I am not convinced that pensions should automatically go to anyone who hasn't supported themselves if they were capable of doing so, whatever the reason for their choice. Means-tested PC should be the only way those who chose not to work get a pension, which is what I meant when I said a pension should not be a reward for reaching a particular age. They are supposed to be a reward for working and contributing to society, not just looking after your own family. I think it is different when children are babies, but I wouldn't pay contributions to parents of children of school age. If a woman has a high-earning spouse she would fail the means-test but would, presumably, be financially ok, as she was when younger. I don't think the taxes of everyone else should be redistributed to pay for her to stay at home.

I wasn't describing the Canadian system in my last pp above. What I mean is that people pay in depending on income, and take out a flat rate. This means that higher earners subsidise lower ones, but higher earners also get higher tax relief on pension contributions in the UK, and pay a lower rate of NI on earnings over about £50k, so proportionately they pay less, freeing up more money to invest in occupational or personal pensions outside of the state system.

You realise that pension credit is for those who CANNOT work too?

fuck me, am I glad I don’t live in your horrible gammon head.

Your position on this is quite interesting because, in the UK, two people making 50K each will actually continue less tax dollars than a single earner contributing 100k. So the treasury actually has less NI to redistribute.

And married couples can transfer tax allowance to one another in the UK.

Yes, agree to disagree!

We might be taxed separately, but a lot of benefits are based on a household. I know i cant access the higher amount of student loan either, due to my husband income. Which means if I want a degree, he has to agree basically! Its not sexist, the same would apply the other way round. Its just he already has a degree.

I would prefer to see the transfer of tax allowance abolished. I can't see for the life of me how it makes sense to not only have capable members of society taking advantage of everything that taxation buys without contributing a penny, and allowing them to also take advantage of the allowance given to those who do contribute before they start subsidising those who don't. It's madness.

I also think that students and others should be assessed on their own status, not those of husbands, wives or partners.

How do you make the maths math?

You believe a household of two people who've contributed less to the treasury should get more out than a household of two people who have contributed more to the treasury (simply because one of them wasn't in what what you consider economic activity).

Do you have different feelings if the partner is caring for aging parents or a disabled child? Or what if she herself became disabled during the course of their marriage?

Genuinely curious here

Agreed entirely about students

Basically yes.

I think healthy adults should be taxed as individuals, and I don't think that one person can (or should be able to) pay the other's tax. That is not what happens anyway. Two people don't contribute more to the treasury - one does, and the other contributes nothing. Why do you refer to 'what I consider' economic activity? How is looking after your own home and child(ren) remotely contributing to the economy? As I said earlier, all parents do that anyway, not just those who are at home when their children are at school.

I have repeatedly referred to people who are capable of working, so of course that doesn't include the sick or disabled, or carers for same.

People should do what works for them, IMO, but they shouldn't expect others to pay their pension for them if they choose to SAH when they are capable of work. Not paying tax, and not producing goods or services already means that they are being massively subsidised by taxpayers as it is.

Current pensioners are over 66, not 60.

Such a fascinating point of view. I actually agree that tax is an individual contribution.

But also, the UK doesn't actually differentiate and see households as a blob - for example households with a high single income have benefits removed. So their is some overlaps as a family with two people earning 99k a year (for example) and gross income of 198k will retain child benefit whereas a household with a single person earning 100k causes the entire family to lose it. Not commenting on the threshold at play here it does blur lines a bit.

Thanks for your thoughts

Yes i do realise this and thats a big difference if you really can't work or if its your choice, unfortunately lots of people choose not to work and before you call me a gammon head again i know lots of people who choose not to work or work part time .

How many people ‘choose not to work’ do you think? I’d be interested to see your stats and where they’re coming from (I’m assuming this isn’t just a feeling but you’re talking about reality with real numbers).

Of those who you are choosing not to work, or ‘only’ work part time, how many have caring responsibilities (elderly parents, children)?
How many have some health issues, bad enough to stop them from working full time? Remember not all people who qualify for PIP, for example, actually try claiming. Many won’t start a claim with UC or ESA because their partner works etc…. so they dint qualify.
How many are mothers who support their partners career (eg partner is away a lot, like a truck driver) but have little support network (see illness, hols etc…)
How many are parents who would love to work but would end up with less disposible income if they were (like working school hours or term time only)?

I think it’s very easy yo stay at surface level and say ‘people are CHOOSING not to work full time’. But doing so is naive, doesn’t reflect reality and is just another stick to beat people with.

You would think if someone had worked in NHS jobs she would at least have a bit of a decent NHS pension ? hasn't it been one of the best pension schemes around for years?

Unless she cashed it in becayse she needed the money to raise her dcs.
or it went to the ex when they got divorced so she could keep the house.

etc… many possible reasons there

@Harriet9955 it is one of the best pension schemes, but you have to pay in, or prior to 1991, have been eligible to pay in which excluded a lot of part time non clinical personnel.

@Harriet9955she wasn’t in the NHS pension scheme. Her demanding jobs were admin jobs and she started them late. Maybe aged 58/59? There was no point her joining the scheme. She worked past her retirement age because she needed every penny so sending some of that income to pension at aged 58/59 was not a priority.

@CaptainSevenofNine I think it’s very easy for people not to recognise that rules and regulations in place today around pensions have changed over the years. There have been a lot of changes in less than 5 years for the NHS pension schemes as well as various other changes over the years. What may appear to be a no brainer now, may not have been allowed or sensible a few years ago.