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Is my friend being unreasonable about her pension.

(90 Posts)
lemondrizzle Fri 27-Jan-17 11:42:15

I don't really know what to think of this but i'd be grateful for some of your views. My friend recently retired gets a good state pension, and a small company pension, just enough for her not to require any pension credits. However it's annoying her that someone she knows of the same age is getting a much smaller state pension but has had it topped up by pension credits to an amount very near to what my friend gets.

I can understand why this might annoy my friend, because in her view she's made more contributions, thereby should be rewarded with a higher pension than the one she knows who paid much less in but is now more or less getting the same. But on the other hand someone who hasn't paid enough, if they didnt get a top up probably wouldn't have enough to get by on. It's a tricky one, what do you all think.

sunseeker Fri 27-Jan-17 11:50:05

I receive a full state pension having paid full "stamp" all my working life rather than the old "married woman stamp" and am not entitled to any pension credits. However, I have a friend who only paid the reduced stamp and took time off to raise her family, she now receives almost as much as I do but I don't resent that, she still has the same bills and expenses as I have and would not be able to cope without the top up. Would your friend like to see the other person unable to feed themselves, pay rent, council tax or heat their home.

mumofmadboys Fri 27-Jan-17 11:54:39

This is the same problem as those doing low paid jobs getting little more than those on benefits. There is no easy answer. We need to look after vulnerable people but also incentivise people to work. How can it be done? From a moral standpoint it is good to think you are have contributed to society.

lemondrizzle Fri 27-Jan-17 12:05:21

Yes sun seeker i agree with you, the vulnerable have to be supported, but also do you think it might cause a lack of incentive to work towards a full state pension if you know that it would get topped up if you didn't. Its hard isn't it. My friend doesn't expect people who haven't paid in enough to now suffer and not get enough to live off, i think she thinks perhaps she should be better rewarded. How, i don't know. confused

lemondrizzle Fri 27-Jan-17 12:14:13

Yes it's very similar to that mumofmadboys. But i think that should be an easier problem to solve. The average wage isn't in line with inflation, the nat min wage is too low, the government having to subside employers because they aren't paying a living wage is the reason people have to claim tax credits. There should be much better incentives for people to work, i.e. better wages.

FarNorth Fri 27-Jan-17 12:28:22

Maybe your friend thinks a "good" state pension should be more generous than it is?

lemondrizzle Fri 27-Jan-17 13:05:35

Maybe north.

Charleygirl Fri 27-Jan-17 13:30:39

My ex brother in law is not at retirement age yet but I will not be happy when he receives a state pension because he has hardly worked his entire life, each job on offer being "not quite right".

I worked my entire life so I also receive a good company pension so at least he will not be entitled to one of those.

rosesarered Fri 27-Jan-17 13:41:44

I think this situation is the same as the parable in the New Testament, the men working in the vineyard/olive groves,some were taken on early and agreed to the price paid to them, much later in the day another worker was taken on at the same rate of pay.The early workers were angry and protested..... but they had agreed to the price, so if the owner chose to be generous to the later worker that was no concern of theirs!

thatbags Fri 27-Jan-17 14:16:59

Bringing up/caring for kids is work if it's someone else's kids and you get paid for doung it but not, apparently, when it's your own kids and is unpaid work. That, for me, is the nub: unpaid work isn't counted as benefitting society in the same way as paid work even when, in fact, it does.

This is one of the reasons why I like the idea of a citizen's income paid to everyone. I believe it is being piloted in Finland.

Rigby46 Fri 27-Jan-17 14:27:52

Since 1975 women with children staying at home have received credits towards their state pension ( although they have to have paid so many years NI to benefit from that).

sunseeker Fri 27-Jan-17 14:50:55

thatbags I agree with you about childcare. I didn't have children so never took a break from paid work, but seeing how hard my friends worked raising their children I didn't doubt for one moment that it was work - even though they were not paid for it!

janeainsworth Fri 27-Jan-17 15:16:24

I think what is unfair about pension credit is not the money itself, if I have understood correctly.
It's the additional things that go with it, such as entitlement to housing benefit and free NHS dental treatment, which means that someone receiving say £160 per week which includes Pension Credit, is actually much better off than someone receiving £160 per week from just their pension(s).

gettingonabit Fri 27-Jan-17 15:19:41

Bang on, thatbags.

I think you get credited with some form of contribution until your kids are 12. It's all a bit unclear, but you CAN make voluntary contributions, I think.

gettingonabit Fri 27-Jan-17 15:23:47

jane I think that's correct.

Another thing: when do you pay tax? If you have a total pension income of, say, £200 per week, you'll pay tax, yes?

If you get, say, a pension which includes an element of entitlement to other top-ups, but still to the value of £200, do you still pay tax at the same rate?

janeainsworth Fri 27-Jan-17 15:49:05

Someone with a total income of £200 a week wouldn't pay tax Gettingon. The tax threshold is £11.5K a year, so you have to receive £221 a week before you pay income tax.
I don't know whether housing benefit is counted as taxable income or not.

starbird Fri 27-Jan-17 16:52:57

Another thing is that someone who is renting may get help with rent, but what happens if someone who owns their house but is on a basic state pension and no other income or savings, needs to carry out essential repairs, new boiler, etc? If they raise money from the equity how can they afford to repay it?

callgirl1 Fri 27-Jan-17 17:02:14

I only paid the housewives stamp, and was told by people I worked with that I wouldn`t get a state pension, so, although I stopped going out to work aged 49, I didn`t claim a pension at 60. Since my husband died in October, I`ve found out, by accident, that I should have received a pension from when my husband started to claim his, just over 7 years ago. I`ve been in receipt of a small works pension ever since I left, I now get a state pension of £155 a week, but it`s minus my works pension, so I get £119 a week instead, and count myself extremely fortunate.

gettingonabit Fri 27-Jan-17 18:29:59

jane I gave a very poor example there! I should know better as I'm self employed myselfgrin.

Chewbacca Fri 27-Jan-17 18:48:36

I paid the full stamp from the day I started work aged 16. When I was 21, I was advised to pay the enhanced stamp, SERPS, so that I would get "a better pension " when I retired at 60. I'm now 63 and, like many others, my state retirement age has been put back to 66. When I applied for a pension forecast, I noticed that it was for the basic pension and so phoned the pensions department to enquire about my SERPS contributions. I was told that they weren't paying "enhanced "pensions anymore, instead everyone would get a higher basic pension. Whilst I'm happy that everyone will get a fairly decent income, it makes me think that I contributed more of my income to benefit me in my retirement, not everyone who either couldn't or wouldn't do that and spent their money on other things.

lemondrizzle Fri 27-Jan-17 19:25:10

chewbanc if you're 63 shouldn't you be getting your pension now or later in year depending on the month you were born? or have i got that wrong.

Chewbacca Fri 27-Jan-17 19:36:06

I wish lemon! I received a letter to tell me that my state retirement age was being put back to 64, then, in March of last year, thinking I had only 6 months to go, I went on the government website to double check. Good job I did because it's been put back to 65 years and 6 months. I didn't get any letter to formally tell me, just the YOU GOV info based on dob and NI number.

Judthepud2 Fri 27-Jan-17 19:58:25

lemon if your friend has enough income to live comfortably on, why is she concerned about someone else? Surely she should just be enjoying this part of her life without adopting an 'it's not fair' attitude. Would she want this other person to be starving?

I took 11 years out of the workplace (and contributions) to raise my 4 children past infancy and then went back part time for several years. At that time I was not entitled to a work pension because I was part time. I was, however, paying NI contributions. So my pension is very small. Luckily I have a husband who worked really hard setting up a business which he recently successfully sold so we have enough to live comfortably. He was able to do this because I did the childcare 24/7 while he worked.

Note that if some of the younger generation had their way, we would all be euthanised instead of receiving a pension. 😖 So maybe your friend needs to get things in perspective.

lemondrizzle Fri 27-Jan-17 20:21:19

That's so harsh chew, to think not that long ago it was 60 for everyone, now just depending what part of the year you were born you can miss out. By the time we get to 65 i just don't think we're up for going out to work.
Jud that's my philosophy in life too, not to be bothered about someone else's good fortune. But tbf on my friend, i think she just feels as if all her good efforts aren't being fairly rewarded, even if they are itms.

Cherrytree59 Fri 27-Jan-17 20:26:21

callgirl could you get your pension back dated?