What is the point of paying NI for 35 years to get a full State Pension, when people who have never worked receive Pension Credit anyway?

[Blondiebeachbabe]

I just cannot get my head around this. You have to pay National Insurance for 35 years, in order to receive a State Pension of £241 per week. However, if you have never worked (like my cousin), you will receive Pension Credit of £238 per week. So basically, having contributed for 35 years, means that you get an extra £3 a week. Woop de fucking doo.

Moreover, why did some people who didn't have the full 35 years, pay extra to top themselves up, when Pension Credit would have bumped them up to £238 anyway?

Not only this, but people on Pension Credit have access to things that people receiving the SP do not, such as :

Housing Benefit: Often covers 100% of your rent.
Council Tax: You may pay nothing at all.
Heating: Free Winter Fuel Payments and Warm Home Discounts.
Health: Free dental treatment and eye tests.
TV Licence: Free for those aged 75 or over.

Make it make sense!

You only get Pension Credit if you have no other form of income though - I've paid several thousand pounds to top up my State Pension to close to the maximum because the fact that I also have a private pension means I wouldn't be eligible for Pension Credit.

Personally I don't have a wildly extravagant lifestyle but I wouldn't like to be having to exist on just Pension Credit in my old age, even with the fringe benefits that come with it.

If you ONLY have a state pension, then yes, at best you are no better off and in reality likely to be worse off than someone who is eligible for pension credit due to other passported benefits. However, the benefit comes that SP is not means tested which means you will receive it on top of savings or private pensions so then it becomes advantageous including buying back missing years

Because you don't just work for your lifetime to get state pension? You get a better standard of living, different opportunities in life (and so on) someone who has never worked has probably had a very limited life.

Does this mean then that if you have no pension savings but have worked your whole life so far, you'd be better off quitting work before you reach the max. NI contributions to ensure you can get pension credit instead of state pension?

You can use a benefit calculator to work out what your position might be.
https://www.gov.uk/benefits-calculators
Yes, you might be better off if you have nothing other than a state pension.

Don't forget you need to fund yourself until you get to state pension age though - and UC/JSA won't pay (in full) if you quit your job.

You get state pension whatever, even if you have savings, other pensions..
Pension credit is means tested.

That's a good point about the SP not being means tested. Although, people keep saying that it should be (I disagree). I do have a private pension too. But it only became mandatory for employers to pay pensions in 2010, so there must be loads of older people who have no private pension, and despite working their whole lives, they will be receiving only £3 more than the person next door who has never worked. It doesn't seem fair at all!

National Insurance also helps to cover Jobseeker's Allowance, Employment and Support Allowance, Maternity Allowance and Bereavement Support Payment, as well as contributing to the NHS.

My friends and family have benefited from some of these without having hit retirement age yet, so I'm happy to keep paying NI.

Eh because il receive my own private pension too which I can afford to pay a lot into because I work full time ! So when I retire I won’t be living off 238£ a week - il have way more than that and have a way better life because of it 🤷‍♀️🤷‍♀️

also those people only getting the pension credits will have been broke all their lives surely if they never worked ! So how is quitting work to not pay ni helpful if you have no money to enjoy your life

you're making no sense

What do you suggest as an alternative?

I remember when Gordon Brown introduced Pension Credit. I am broadly in favour as a safety net for those who haven't managed to make full contributions. We don't want elderly people to be destitute. But since those claiming benefits, get given their National Insurance credit as part of their claim, it maybe shouldn't really be necessary, as those groups of people should have their full entitlement anyway.

Making the gap bigger I guess. So people who have actually paid in don't feel like mugs.

And what would you live on in the intervening years between giving up work and claiming pension credit?

so state pension to be higher than current amount?
or pension credit amount to be lower than current amount?

I'll get the full state pension in November. Plan to work, part-time for another couple of years.

I started work when I was 20, having 7 years off when the children were little.

My national insurance contributions, and tax, have gone towards those who have been unable to be financially independent. I ha e no issue with that. The mortgage was paid off several years ago, so no rent. I shall also get a handsome occupational pension, and continue to pay tax until I die.

We have a lovely home, the dc went to uni, we have nice cars, nice clothes, nice holidays, etc., and all of that will continue.

Otherwise I could have spent a life on benefits, in a nice house because I made it nice, but probably in a dodgy area, not ha e travelled and not have had nice things. The children would probably have had far fewer oppprtunities.

Go figure why work and making contributions is better.

Oh, another benefits rage bait thread.

The '35 years on rock bottom benefits followed by the bare minimum retirement income, whilst never being able to buy a house, living precariously and having no autonomy' doesn't seem a great option.

This is such a narrow perspective!

Loads of people used their wages to buy houses - some now have savings - some loved their careers.

Working buys you mobility, freedom, pride, options - all these things are about quality of life.

I agree that working is better! I have worked since I was 16. I'm 56 now and still working. It just sticks in the craw a bit, that I will have paid NI for 51 years by the time I can get my SP, and old Billy-Bob over the road that has never worked, will get £3 less per week, for having done sweet fanny adams. He will also get his rent paid, pay no council tax, get free dental treatment etc, when I will have to pay all of those things. Something just feels a little "off". Or maybe I'm being mean?

Should we just throw these non-deserving pensioners in an active volcano instead?

Love the faux naïveté- something just feels a little off or am I being mean?
so fed up of all the posts where someone can’t get their head around something…

My neighbour died 2 days after his 65th birthday. Maybe he shouldnt have worked at all 💁

But, we cant see the future can we??

Can you stop working now and then you might qualify for pension credit?

I presume you are renting? I think old age is tough if you are renting, state pension or pension credit notwithstanding.

Yes, I think you are being mean. We all get free prescriptions and eye tests over 60, which I think is ludicrous for those still working and on good salaries.

Perhaps it's relative too, because BillyBob on benefits, lives nowhere near me.

I’ve finally paid enough years for my full state pension! I have no other pension. So yes it’s awful to think I e done all of that for exactly the same amount plus none of the extra help. Also dreadful that when I started to pay in for my pension I thought I d get it at 60 will now be 67. I do worry about it all , sleepless nights, as I no longer have an income as too poorly to work and no private pension.

I agree.