To be annoyed pensioners effectively now get a bigger personal allowance

[FlightBeforeXmas]

So because of the fiscal drag from not increasing personal allowances the chancellor has announced basic state pension will not be taxable.
So if you earn this amount you pay tax on it despite having the extra costs of working.
Pensioners are also much more like to own their homes.
How on earth does this make any sense?

If your income is more than 35k it's clawed back through tax. Effectively we don't get it any more.

I think the change is the belief that young families should somehow have the same financial security as older people which seems to have crept up on us. I have no idea where this has come from.
Yes houses,were cheaper when we were starting out, but saving for a deposit was still hard - we basically went nowhere for three years to save 5k from a joint salary of 15k.
Now, if a pp is typical anyway, there seems to be an expectation that life carries on as normal while moaning you can't afford to save. Upthread, my generation was criticised to apparently saying it would be possible to save if holidays were stopped. Well yes.

There is a cohort born between 2002 and 2011 who were given Child Trust Funds by the then Labour Government, with £250 invested. My older DGC benefited from those, and many parents added to them. Children from lower income families were given £500. There was another payment made when the child reached seven, but only the older ones would have been eligible as the scheme stopped in 2011. There was a hope that the scheme would mean all children would have some savings at 16. Over 750,000 of these accounts are unclaimed, the most valuable being worth up to £2k.

As some parents didn’t use the vouchers the government opened accounts on the child’s behalf. They can be traced. Might be useful for someone.

www.gov.uk/child-trust-funds/find-a-child-trust-fund

It’s a bit off, all this infighting about who has something you don’t-yet.

A brief history of the state pension - developed in the early part of the 20th century it was intended for those, mainly widows, to be able to subsist (food and a roof) if left alone. That continued in that vein until a Harold Wilson government in the 1960s decided to ‘buy’ the elderly vote by raising the amount paid. That trend has continued since. (Remembered from a paper I wrote years ago).
Think back to when (great) granny lived with their children - it was a case of having to in those days.

I think you might have misremembered.

https://www.charles-stanley.co.uk/insights/commentary/history-of-the-state-pension

The modern state pension began with the introduction of the Old Age Pension in 1909. It was paid from 70, a ripe old age at the time. It required no contributions or work record, although a recipient had to have lived in the UK for 20 years and be of ‘good character’. In addition, it was means tested. To qualify for the full amount, you needed to have an annual income of £21 or less. Those earning between £21 and £31 got a reduced payment on a sliding scale.

The first contributory state pension emerged with the Widows, Orphans and Old Age Contributory Pensions Act 1925. Both employer and employees were required to pay into to the scheme, and it was broader, payable to individuals whose income was below £250 per annum. However, it was only compulsory for low-wage workers. It was more generous, worth twice as much as the Old Age Pension and paid from the lower age of 65.

• 1942 - 1980

In 1942 the Beveridge Report – Social Insurance and Allied Services – proposed a universal state pension to provide a safety net against poverty in old age. Subsequently, The National Insurance Act 1946 introduced the Basic State Pension, with effect from 1948. It was funded by National Insurance contributions paid by all workers, although initially married women were excluded. The State Pension Age was 60 years for women and 65 years for men.

Acknowledging the subsistence level of the Basic State Pension, an additional Graduated Pension Scheme was added in 1961 based on earnings. This was later replaced with SERPS (State Earnings Related Pension Scheme) from 1978 for employees based on a ‘middle-band’ of earnings. Individuals with an occupational pension scheme were able to ‘contract out’ of SERPS and reduce the rate of their national insurance contributions.

• 1980 - today

The 1980 Social Security Act removed the link between the average worker’s earnings and the pension paid.

The 1995 Pensions Act outlined a plan to phase in a higher pension age for women to 65 from 60 between April 2010 and April 2020, so that it was equalised with men. The 2011 Pensions Act accelerated this to completion by November 2018 and provided for the gradual increase to the state pension age for both men and women to increase to 66 years.

SERPS was replaced by The State Second Pension (S2P) in 2002 with the aim of providing additional pension benefits to lower earners and to include certain carers and those with long-term illness or disability.

In 2011, the Conservative and Liberal Democrat coalition government introduced the ‘triple lock’, the commitment whereby the state pension is uprated in line with inflation, wage growth or 2.5% – whichever the highest.

A major overhaul took place in 2016 when the New State Pension replaced the combined Basic State Pension plus additional pension (S2P).

This makes sense:
https://mol.im/a/15352445

But some get widely different amounts of state pension!

This epitomises the unfairness of it all.
I know someone who this applies to also.
Her income is afew pounds over the threshold for pension credit elegibility and associated financial benefits.
There are always winners and losers in any situation

Instead of moaning about state pensioners why not have a good look at the gold plated public sector pensions.Workers in the private sector used to have final salary pensions but the previous Government scrapped this and introduced a much reduced pension scheme.Interestingly they didn’t scrap the public sector final salary scheme,which costs the tax payer a hell of a lot more the the state pension.Amazingly no one seems to have a problem with this..

Where is there a current final salary pension scheme in a public sector service?

The basic rate of state pension is less than£12,000 pa, so is not taxed, any additional earnings which take pensioners over the personal allowance amount is taxed in the exact same way as anyone in employment earning that amount.

Nowhere, I imagine.

However the impact of public sector pensions is rarely discussed. They have always been generous, and unlike the private Direct Contribution pensions that many pensioners rely on, they are direct benefit and paid at a guaranteed rate however the investment markets have performed, so a massive commitment by current taxpayers.

Pensioners on direct contribution pensions live with the knowledge that they can go up as well as down. Pensioners pots were very badly hit by the start of the war on Ukraine. Mine was just starting to get back to its former value when Trumps Tarrifs sent it plummeting again.

The state covers public sector pensions come what may.

There haven’t been final salary schemes in the public sector for aeons. They’re all career average now and have been for well over 20 years.

Teachers were pretty much the last to get a final salary pension, and even they were swapped to career average more than a decade ago.

Career average is very much more advantageous than most people get though.

Has anyone said otherwise?

But without the decent pensions, few people would be prepared to work in the public sector, when they could earn more in the private sector. It's a trade-off.

This old chestnut. People may be living longer ( though life expectancy dropped between 2019 and 2021 in uk and globally, and has yet to recover), but they aren’t living healthier.

the idea that people should continue to work until their 70s is the domain of the wealthier, affluent, white collar workers. Do you think about the carpet fitters, the builders, the nurses, the roofers etc etc. how the heck can you expect all those to work past 70. Or even 67 ? And then drop dead a few years after retiring…you do know that rates of disease we “drop dead from” have dramatically fallen…survival rates form heart attacks, strokes, cancers are thankfully increasing. But we still have to die of something and that leaves long lingering incapacity physically and mentally. And all those aging conditions that make us less mobile. Yep, there are some pensioners that buck that trend , usually wealthier and more educated and privileged, but the majority are still beset with all those aging conditions.

if you were to raise the state pension above 70, many many more people would go onto disability benefits unable to continue to work. Pension is cheaper to find, cheaper to administer .

and it’s mostly women. Are you aware that the vast majority of pension contribution tax relief benefits men. 75% of all tax relief goes to men.

and the country can afford bigger pensions. This is about demonising the poorest people, the least able, to keep money in pockets of the wealthy

do you consider why politicians were so keen for everyone to have their own perosnally invested pension vs upping NI contributions by that same minimal amount you are contributing into your private pension.? It’s becuase pension and insurance companies, the whole financial services industries, are prompt up on your private pension…with the wealthy investors getting richer out of your monthly contributions.

so much could be done to make pensions fairer, but making people work longer aint one of them until we’ve got a cure for arthritis, osteoporosis, dementia, COPD, and generally wearing out of body conditions.

Are you simply falling right into hands of wealthy politicians/businesses/media moguls etc etc who want to pitch your current difficulties again “wealthy” pensioners (eg on c 12000 a year) to stop you actually identifying where the problem really lies.

Let’s be really clear this Only impacts those pensioners whose sole source of income is state pension. The poorest.

living off c£12500 a year is extremely difficult even if you’re not paying rent or mortgage. But these are poorest pensioners who are least likely to be owner occupiers anyway,

and they’re way more likely to be women. 54% of retired women only have state pension as they’re only source of income. Just 28% of men fall into this category.

for anyone, like me, who has additional private pension, I have always been taxed over the lower nil band rate. And that isn’t changing. I have had to do a self assessment tax return and pay my taxes for years. Fiscal drag is affecting me just the same as any worker. And typically private pensions have not kept pace with inflation like the state pension has. My buying power of my private pension is signifactly less than 5 years ago when I retired. I also , like most older people, spend a lot of money on energy as am in the house during day and feel cold more nowadays. I do have to watch my pennies, even with this additional private pension, god knows how someone lives on just state pension.

the chancellor is also being massively pragmatic. The cost of all those additional poorer pensioners, often the most elderly, completing HMRC self assessment forms for first time in their lives will be very high. They’d need to recruit new staff to deal with it. For a net gain that won’t by any means cover that cost. Just same as winter fuel allowance: the cost of putting in a means tested approach (which is sensible) is far more costly to the state than just making a universal payment to everyone.

At one time child benefit was called child allowance (a pay back on tax ifvyou like), pensions weren’t viewed as benefits, and nor was winter fuel allowance. Clue in name. When NI contributions were ntroduced it was recognised that people needed to get something out of the additional payments they were being asked to make….pensions, child allowance, etc were all allowance that everyone could apply for and get something back form the “system”. Successive governments have removed entitlements and replaced with benefits. And stood back while arguments like this happen . Pensioners aren’t the issue here. The very wealthy, the wage inequality are what is to blame. Same as right wing demonising immigration and disability…a tale as old as time.

🤣🤣

As a retired person, who has an additional private pension as well as my state pension (so will be taxed, etc, as the tax code on the private pension is adjusted to reflect it), I wanted to add, that the Winter Fuel Allowance IS going to only those whose income is below a certain amount.
ie; The winter fuel allowance WILL be added to my tax record, and if necessary, the tax code on my private pension will be adjusted, as only those whose income is very low will actually get it.
Personally, I actually agreed with it being taken away, but I thought it would be a Conservative Gov, rather than a Labour Gov. This, because if everyone needs it, then just add it to the pension, and be done with it. However, it is important to remember that the Winter Fuel payment is paid to the household, so if a couple you only get half anyway. And Secondly, it seems to be a good way of paying extra during the energy crisis (ie the mechanism was already in place).