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Is my friend being unreasonable about her pension.

(91 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.

Flossieturner Sat 04-Feb-17 10:55:03

There is a difference between fairness and equality. My SIL and I both worked the same number of years, but she had her children much later than me. We have the same company pension, but she gets the full state pension whereas I get onlay 75%.
Makes her £50 a week better off than me. The reason is that her child benefit years counted towards her pension, whereas mine did not.

Pension credit only brings people up to what is considered minimum living wage.

M0nica Fri 03-Feb-17 20:42:25

I agree with what you have said,*Penstemmon*.

But in 10 years visiting older people and helping them claim benefits, almost without exception the reason their pensions were low was because quite simply that they and their husbands (most were married/widowed) had worked in poorly paid jobs where just keeping body and soul together; a roof over their heads, food for the family consumed all their resources. Thinking ahead to ensuring a decent pension in old age was a luxury they could not afford. Often people in that situation have also had periods of ill health and disability.

I am fortunate I have a decent state pension and good occupational pension and pay tax and I am very happy to be contributing to the additional pension credit and benefits that go to those older people who did not have my advantages and have struggled all their lives unable to break out from the shackles of poverty. They, more than any, deserve as comfortable a retirement as can reasonably be afforded

whitewave Fri 03-Feb-17 19:06:00

I second that

durhamjen Fri 03-Feb-17 19:01:46

Well said, Penstemmon.

Penstemmon Fri 03-Feb-17 17:38:19

I worked from the age of 21 to 60 in a pensionable job with 4 years out for childcare.I had large chunks of my monthly income automatically saved for me and put into a pension pot and into NI & tax. In addition I paid AVCs to make up my pension a) because of the 4 years out of paid employment and b) because I had not paid SERPS. I now have a comfortable pension income which I supplement with p/t work. I pay tax still. That meant I lived modestly when working and whilst OK did not have money to throw around!

I could be bitter about women who chose to stay at home and care for children and not have a paid occupation/pay NI etc. I could be angry that some people who could work but never found a job that suited can clam benefit/top ups etc. But who wants to live an embittered old biddy life? I value the welfare state and the ethos it promotes. Life is not fair,never has been. We can work to make it fairer but not if we are bitter.

M0nica Fri 03-Feb-17 16:34:34

The other reason is that if we cut back on migration into this country from other countries economic progress is going to be inhibited for lack of a large enough workforce.

However, as ever, the government haven't though this through. While many migrants are trained and well qualified, many come in to do the low paid, often physically demanding, work that others do not want to do; care workers, domestic cleaners, seasonal farm labourers and so on.

These are not jobs that many older people will have the strength and stamina to do. I am in my early 70s and in excellent health, but I have noticed over the past 10 years how my capacity to carry out sustained physically demanding work for more than a day at a time has decreased and I have recently paid others to do work for me that in the past I did for myself (like raking and spreading the 10 tons of gravel needing to be laid on our drive every five years)

durhamjen Fri 03-Feb-17 16:25:13

The strategy says that by delaying retirement until 65 instead of 55, someone with average earnings could have £280,000 extra income and could increase their pension pots by 55%.

I hear hollow laughs.

durhamjen Fri 03-Feb-17 16:22:43

The government has come up with a plan to dissuade older people from retiring early, to offset an expected fall in numbers of foreign workers after Brexit.
They are couching it in terms of it being good for mental and physical health as well as substantially increasing retirement incomes.
It's aimed at the over-50s and over-60s. They are encouraging employers to recruit more older workers.

M0nica Thu 02-Feb-17 22:23:45

The reasons some people do not get the full pension can be many and various; low wages, long spells off sick, domestic responsibilities and many many more. All are irrelevant.

Our benefit system says that older people need a certain minimum income to live on and if their contribution record, plus any occupational pension or savings leaves their income below that the state will make it up to that level.

All that matters is to make sure that anyone whose total income from all sources falls below the minimum, applies for and gets their top-up. I am pleased to think that my volunteer efforts with several charities have ensured that quite a number of pensioners who had been in dire poverty have now got all the benefits they are entitled to and can now live in modest comfort.

SparklyGrandma Thu 02-Feb-17 21:06:52

A problem can be that its difficult to base your choices on what jobs and salaries you do, with pension planning and exactly what you might receive from a monthly/weekly pension, in say 30 or 40 years time.

A person could be doing full time work for much of their working life, but because say women are paid 70% of male salary/wages, end with a smaller pension than another person working part time with maybe caring responsibilities?

Its a minefield, pensions. I prefer not to know what my friends are earning or receiving. Its their business.

gillybob Wed 01-Feb-17 15:30:44

My DH has come up against the same problem (re SERPS)durhamjen and it's like banging your head against a brick wall.

DH was 65 in November. Can't "retire" as we would have no other income at all. The pensions service say that they have records of him being opted in/out for a period of time and have reduced his payment accordingly. The company he was with at the time say they have no records of this so he is going round and round in circles.

We have a problem in the fact that there is an 11 year age gap between DH and I. His official "retirement" age was 65 but mine won't be until I am at least 67.5 (which will no doubt go up again). Meaning that he will have to try and work until he is 78 , when I can finally retire. (maybe?).

Rigby46 Wed 01-Feb-17 15:16:30

When the system was set up fully in 1948, the main principle was benefits based on NICs to meet those situations where the usual form of income stopped because of unemployment, sickness and retirement. The assumption was that most women were married and would rely on their husband's contributions ipif they were widowed and when hey retired. .National Assistance was there for those who fell through the cracks. Well obviously, society changed a great deal and do has the system. But what was introduced in 1978 was home responsibilities protection which basically gave women help towards building up a pension if they stayed at home looking after children under 16. In 2010 the system changed and covered children upto 12. The point is that for nearly the last 40 years mothers staying at home have had help towards their pensions whilst looking after children. That seems fair enough to me

M0nica Wed 01-Feb-17 12:10:29

The whole purpose of the welfare system that we have in this country is to ensure, among other things, that all older people have enough to live on in retirement, regardless of much they have contributed to the system during their working life. That is how the benefit system works

How the complainant has managed, presumably, to live her whole life in this country without grasping the basics of what a welfare system is, doesn't say much for her either her intelligence or her education.

melp1 Tue 31-Jan-17 11:57:58

My feeling is if they've taken time out to raise children especially up to the age of 11 they should be entitled to a pension.

After all if you're a carer you get tax credits and children need their mothers, its especially difficult to work even part-time over the school holidays if you haven't got a good family/friend network (it can be very expensive).

The only ones that really annoy me are people that are capable of working, have no commitments and choose not to work. I don't think its fair that they receive the same amount but there will always be people that play the system.

newnanny Sun 29-Jan-17 14:01:23

Sweetness1 I don't think you can claim anything until of pensionable age; don't know whaen that will be for you but if you are unsure when you can retire go to websiite on pensions to find out. If not looking for job no jobseekers and if not disabled no disability allowance. You may be able to get reduction in CT if managing on private pension income and redundancy money. I think but am not certain that if yo0u have savings of more than £8000 may biot get benefits, you would need to check this out. Your best bet maybe trying to get an easier or part-time job.

Sweetness1 Sun 29-Jan-17 09:49:29

Born March 1954..(63 in march)state pension due July 2019(I believe)..was made redundant at 61..managed to get another full time job..but am so tired doing it don't think I can go another 2 years ..have small private pension £300 per month what would I get if gave up? Can I claim anything?

Lilyflower Sun 29-Jan-17 07:11:33

There are so many anomalies and unfairness in the pension and benefits system that it would be easy to get in a stew about it. No, of course it is not fair when some people work harder, contribute more, save for a rainy day and take responsibility for others and themselves and the idle, feckless are rewarded more highly.

However, I have seen that the resentful only hurt themselves by dwelling on their grievances. It is better to take pride in being a contributer and benefactor and to get by on what you can. Self respect is worth any amount of money and others cannot always have that.

Barmyoldbat Sat 28-Jan-17 19:37:34

Good post Bluegayn58

Bluegayn58 Sat 28-Jan-17 19:34:25

Everybody's life choices are different - some don't have a choice depending on circumstances. I used to work as an administrator for an occupational pension scheme until 2010, when the qualifying rules for a state pension were different.

I was lucky enough to be able to contribute to my pension and took early retirement at the age of 51. I cannot however, expect any state pension until I'm 66 - a way off yet!

I had the benefit of being able to work for a decent wage during my working life - not something that everyone can have. Those who didn't/couldn't may have had to do without during their younger years.

I think your friend needs to be happy with what she has achieved in her life and not be concerned about what others are getting. It does no good and leads to bitterness if not careful. She should enjoy her life and be content.

Chewbacca Sat 28-Jan-17 18:49:01

Not unfair at all Sweeek. It's very frustrating when you've been careful and prudent but then get penalised. Are their no other benefits that you might be entitled to, such as Attendance Allowance? It's not means tested as far as I'm aware.

Skweek1 Sat 28-Jan-17 18:08:18

I had to stop work to become carer for DH and feel every pensioner should automatically receive the same realistic fixed basic rate pension, maybe based on minimum wage rates, and scrap pension credit, so everyone gets say, £150 per week, not means tested, with rent/council benefits/winter fuel allowance etc given authomatically to those in need of such help e.g. disabled, long-term sick etc or extreme age).Then those who are "savers", and/or who have work pensions,not spenders, should be allowed to keep as much as they manage to earn in interest, only paying tax on income. I have a tiny work pension, less than £10 per month and inherited £10,000 from my mum's estate, which I invested shrewdly, to make sure that I can afford funerals, "rainy day" expenses etc, so DH's ESA was immediately cut. Since I'm saving the government thousands each year by acting as full-time carer for both DH and DS, I feel aggrieved that on reaching retirement age, I lost my Carers' Allowance and it feels very unfair that because I'm frugal and careful with money, I am being penalised. Does anyone else agree or do you feel that I'm being unfair?

lemondrizzle Sat 28-Jan-17 17:18:24

chrissie my sister was born in february 1953 and altogether with pension credit gets £155 a week, do you not get pension credit to make yours up to that?

lemondrizzle Sat 28-Jan-17 17:10:46

Pauline that is so true. I remember reading a biography once of an Irish lady, who grew up in a time when there wasn't any pensions. It was a time when to be old meant depending on your children to look after you or you ended up in the workhouse.

When the old age pension was introduced in Ireland this lady was so overwhelmed to be handed the money over the counter she at first refused to take it all saying it was far too much for her, even though it won't have been, and then promptly burst into tears of joy and relief, so happy was she to be provided for.

I often think of how it must have been in those times. Old age must have been something to dread.

Legs55 Sat 28-Jan-17 16:36:40

I am 61, born July 1955, first I was told that my State Retirement Age would be 65 then 66 (thanks David Cameron). I was a Civil Servant for 17 years when I took Early Retirement at 50 to care for my DH who retired at 65 & was in poor health. DH died 4 years ago.

I receive a small Pension from the Civil Service, ESA (Income based) reduced because of my Pension, Disability Premium as I am also on PIP (which is disregarded for benefit purposes). I don't pay Council Tax & receive Housing Benefit (I live in a Park Home so have a monthly fee to pay to Park Owners), I own my own home.

Yes I am fortunate at the moment but how I will be when I do reach State Pension Age, certainly I know my Civil Servant Pension will affect my State Pension payments. Any-one who is on a low income can apply for help with Council Tax, Housing Benefit & help with Medical expenses such as Dental.

etheltbags1 Sat 28-Jan-17 16:24:25

Referring to the opening post, people who have paid into the system and get full pension that brings them beyond the level for help annoy me when they grumble. My late in laws were like this when father in law retired (mother in law never worked much), they got the state pension plus his works pension and smaller married woman's pension and they were livid, they quoted examples of others who had never worked and yet we're bringing in almost as much as them. I told them that state benefits were a right not a reward and if they were not entitled then they must have a reasonable income. Some people think that the taxpayer owes them a living. We are supposed to save for our old age some of us do ,,some don't and some can't. I'm in the last group.