State Pension -V- Pension Credit - only £3 difference!

[hoarderofthedough]

Why do the Government spend money monitoring and recording whether people have paid enough to receive a full State Pension (at £241 per week), when people who have paid no stamps at all get Pension Credit (of £238 per week). What's the point? May as well just pay everyone £238 per week and stop recording who has paid what.

As someone who has paid my full stamp - and I am still paying, as I have now been working for 40 years, honestly I'm a bit miffed that someone who has never wored will only get £3 less a week than me. Where's the incentive?

But ..... you don't need to work all your life to get the state pension. People on benefits and stay at.home parents get NI credits that count as working years for the purposes of the state pension.

Also the truth is actually pretty close to what you describe. The amount you get for state pension is not really related to the amout of NI you paid at all (if it was, many many people would be getting a lot less than £241 per week). You just need to ave paid NI (no matter hown ittle) for a set number of years. That includes people who get NI credits from the state.

If it makes you feel better YOU adod not pay anything for your state pension, that is being paid by current workers (you paid for the generations above you).

I stand to be corrected here but if you haven't earned the full SP and instead get PC, aren't these dependant on you not having savings/income above a certain level?????

If you have the full SP, you can have any amount in savings/income and STILL receive the SP.

It annoys me OP. I HAD to pay 11% of my salary into NI, yet people who claim to be self-employed paid nothing and can still effectively get the full pension

Google says : the amount of savings you have will affect how much you receive:

• Up to £10,000: If you have £10,000 or less in savings, investments, and capital, it is completely ignored and will not affect your Pension Credit.
• Over £10,000: For every £500 (or part of £500) you have over £10,000, it counts as £1 of weekly income. This is known as "tariff income." For example, if you have £11,000 in savings, it will be treated as generating an extra £2 of income per week.

So yeah, you can have savings, and have never worked and still get PC that's almost the same as someone who has paid NI for 50+ years. 😵

NI does not just pay for the state pension. It's just a tax.

And very specifically the amount you pay has fuck all to do with your state pension..

It’s not a race to the bottom. Perhaps be pleased you have a state pension and drop the bitterness and stampy feet ‘it’s not fair’ attitude towards others. It’s a really ugly trait.

My point is WHY do the Gov track and record what NI you have paid, when there's only £3 a week difference between SP and PC? Just pay everyone £238pw and then nothing needs to be tracked. I mean how much does it cost us to have this monitoring and recording??

Surely PC only helps those with minimal savings and/or income in retirement?
If you have gaps in your NI but some savings and occupational/private pension etc then the amount of PC decreases.

I tend to agree with this. If they just pay anyone over pension age the set amount it would likely mean less admin. You get a full pension no matter what if you’ve paid enough NI. If you haven’t paid enough NI you can get pension credit to the same amount as pension (unless you have significant savings ). If you haven’t paid NI but have a reason why it was paid for you (like getting child benefit or being on universal credit), you can get full pension despite not having worked. Unless they are going to means test the whole thing honestly I think it’s just better to pay a set amount to everyone past retirement age.

It's mind boggling the number of people that think the govt has millions of 'piggybanks' with 'John Smith's NI contributions' written on it. NI is just a flat rate tax which bankrolls the state pension of all current claimants. It is not a pay in - take out savings bank system.

I think pension credit will slowly reduce as more and more are on the new state pension where you need 30 years NI record, many more women work and most self employed people get automatic class 2 credits.

I would think a lot pension credit recipients are older retired women, possibly divorced or widowed, who did not work much and relied on their husband's pension.

You get to keep your full state pension even if you inherit £££, and if you have a partner with a high income.

You won’t get pension credit if you have contributed next to nothing or not got enough credits, lived under the radar or have inherited AND have assets ( savings, houses, etc) - you will get zilch or upwards of zilch but not full state pension nor pension credit and yes there are people like this

At the moment, getting PC automatically qualifies you for full HB up to the local housing allowance rate if you rent and live alone and the maximum reduction in council tax (80%?). If it was merged with state pension, every pensioner's claim for HB/CTR would have to be assessed.

That's how come MIL, who only worked a few years in her life, gets a good chunk more from the state than I do after working for over 50 years.

I think Pension Credit also unlocks doors to other things, doesn't it? Not sure what exactly. So they would need to track it because of that. But that seems to make it more unfair. I think to be honest we just need to accept and be happy for that fact that regardless of what work people have/haven't been able to do (or chosen to do/not do, for whatever reason)that we live in a society where all our OAPs are looked after to the extent that they able to live without being in abject poverty. Just like those who are childfree have to accept that they pay tax towards schools that they won't directly benefit from (although indirect benefit in terms of future doctors etc)

Although they may be paying more or less the same, when you have a state pension you can have personal pensions, savings and continue to work without being penalised.

Pension credit is means tested.

This ^.

Not many people can live a comfortable life on £240pw whether it's state pension or pension credit. Most people have some private pension and/or other savings and investments on top of their state pension. Pension credit is only available to those who don't have these.

Pension credit is the pensioners version of Universal Credit; it is means tested, so you can't have savings over the limit, and if you have other income such as a private pension then your pension credit is reduced, or you are not entitled at all.

State pension is not means tested, so you still keep it all no matter what savings and other income you have.

People on benefits get contribitions to state pension paid as do mothers who are claiming child benefit so paying contributions doesn't have to be from work.

I do sometimes wonder if I shouldn't have paid into my NHS pension all my working life, at some points I could have used the extra money. I am a renter so will likely need to claim housing benefit once I retire to help towards my rent as have no means to buy. Pension credit does open gates to other things though such as free TV licence.

But we don't know what position the benefits sector will be in once I retire in 17 years so I will keep contributing to nhs pension and be grateful I have this.

This. You can’t get pension credit if you have any other form of income i.e a private pension.

Because pension credit is means tested and SP is not. You could not qualify for PC because of a private pension or savings, but still qualify for state pension.

For example, my private pension and my savings would both exclude me from claiming PC, but since I've paid my contributions, I will still be entitled to the full state pension.

This is the basic argument behind universal basic income.

@hoarderofthedough hate to tell you op but actually the person on pension credit is better off than someone on just full state pension because of all the attached perks like free dentist,council tax and rent help. I worked out with my neighbour who gets PC that those perks completely cancel out my small NHS pension as i have to pay full council tax etc🥴

Because pension credit is means tested and state pension is not. You can have £50k a year from a private pension and still be entitled to your state pension, but obviously wouldn;t be entitled to pension credit.

because NI is just a tax