Means testing state pension.

I don’t understand what you’re saying Pamela. If there was no pension scheme how did your husband opt out? Opting out was just transferring money from NI to an occupational pension, which he couldn’t do if there wasn’t one. Sorry if I’m missing something obvious- I slept badly last night

Thank goodness my DH opted out. His employer didn’t have a pension scheme and opting out made him start to pay into a private scheme. He opted back in at a later date but kept the private one going. Now he gets both reasonable state pension and together we have an investment pot.
I don’t think the LP could possibly make the SP a means tested benefit, at least not in the immediate future , it would take many years to introduce IMO.
As has been mentioned Australia already has that in place. Neither my DD or her DH will get a state pension there but they have always known that. They pay into the ‘super’.

Means testing state pension is a possible course of cash to run the NHS and benefits system, BUT it is very much the “nuclear” option, the economy would have to get a lot worse before that kind of action is needed.

Currently the other measures being discussed, limiting benefits and increasing taxation for the wealthy will be sufficient.

You are right, GINMC. That is how it works, but not everyone had correspondence from pension providers or the DWP. They therefore didn't realise that they weren't paying the part of the NI contribution that covered their state pension.

Many people, particularly women with children who had busy lives were just interested in the take-home pay, and if they did examine their payslip could see that they were paying into both Occupational Pensions and NI, so assumed that they would get both pensions. When they got to retirement age, however (in many cases 6 years later than expected) they found that unlike their friends who hadn't worked, they would get a smaller SP. This is why they feel short-changed. Plans were made on the assumption that they had paid for two pensions, and nobody had told them otherwise.

Aux=six

Can someone enlighten me about opting out and why some think they have been short changed? As I understand it with my own pension the "opted out" amount is included in my company pension. Correspondence from both my pension provider and the DWP confirm this. So I get less in my state pension but more in my company pension. As I retired aux years before my state pension age (being a Waspi), the opted out portion was included in my company pension six years earlier than I would have received it if it was still in the state pension. I'm not complaining, I'm just curious really, have I missed something significant?

Well the Press has little to fill it's pages and newscasts at the moment. The new government has stopped feeding the traditional culture wars so they are now setting about creating something new to get people raging against each other. Harmony is the last thing they want.

AGAA4

I don't think state pension is a benefit. People pay in all their working lives so it wouldn't go down well if you were told you wouldn't be receiving anything.

It seems the new higher state pension is actually classed as a benefit since April 2016.

“In addition, the introduction of the new State Pension from 6 April 2016 is also classified as a “benefit” under Section 1(1) of the Pensions Act 2014.”

I think there is a moral entitlement to the state pension if one has paid NI and income tax for years but any government with a big majority can do as it pleases. I still however believe it's Tory/Daily Wail/Torygraph scaremongering.

State Pension is technically a benefit. Not all benefits are means-tested. There are some which are contribution-based eg New Style JSA, and SRP. In the case of others, entitlement to them depends on certain conditions being met, eg disability, or maternity, bereavement, etc regardless of income.

My school staff room had a financial advisor come in. He specialised in advising teachers. He explained the system about so-called opting out and how it would reduce our State Pensions (though as it was not optional, we could not change anything), but he said our TP would be higher and outweigh the loss.
One thing I was most grateful for was being advised I could repay the two years superannuation I has taken out when I came out of teaching to start a family, as many did in those days. For a small sum I regained two years extra Teacher’s Pension.

People were making life-changing decisions without having all the information. I think there should have been a longer window for paying back the contributions when people realised what had happened, but for many they were too expensive to pay in the time they had.

I have an NHS pension. Never knew I'd opted out until getting pre retirement pension forecast just before I retired.

1summer

I worked in a bank and was given no choice about opting out. I never fully understood the implications until I was approaching retirement.

You're not alone, Isummer. It was a disgrace, really, and the people saying that women 'should have taken advice' have no clue, really.

I'm not following the logic that opting out was the same as a means test though. You could have a million pounds in the bank, or five other pensions, and you would still get both the TP and the SP equivalent to the NI you paid into it. The problem is that not everyone realised that some of their NI was being diverted to the TP (or other opted out pension). I don't blame them for that at all, and think it should have been on every pay slip in large red type, but it is not means-testing, however you look at it.

If anyone reading this is still working (particularly if you have worked in the public sector), it is worth checking your state pension entitlement and paying any missing NI contributions if you can afford them. If you live four years after you start getting your pension you will break even, and any longer will put you in credit.

I worked in a bank and was given no choice about opting out. I never fully understood the implications until I was approaching retirement.

J52

Doodledog

vegansrock

Because I have a teachers pension my state pension is lower than it would be if I didn’t - so it’s been means tested all along.

That's because of opting out, not because of means testing. Still unfair, as not everyone understood that they would get less (or that they were paying less in), but it's not the same thing.

Teachers were given no choice and had to opt out.

Yes.

It was a sneaky way of means testing the old State Pension.

It's not a benefit no matter how some parties wish to title it as such.

It's an entitlement and I am entitled to it as I been paying Taxes and NI for nearly 50 years. I did my bit. I worked and I paid for it all my long working life , and the deal is when I reach the 'extended' state pension age they will pay out my state pension.

I do not trust this government. Unlike their trade union buddies, state age pensioners cannot go on strike so they will be an easy target.

J52

Doodledog

vegansrock

Because I have a teachers pension my state pension is lower than it would be if I didn’t - so it’s been means tested all along.

That's because of opting out, not because of means testing. Still unfair, as not everyone understood that they would get less (or that they were paying less in), but it's not the same thing.

Teachers were given no choice and had to opt out.

I know, and didn't say they did. I have a TP. Because I was opted out, I paid less NI than if I hadn't (and I know there was no choice). I therefore paid even more flipping NI to bring my SP up to the full amount. Maddening, I know. I also know that a lot of people didn't realise they'd been opted out, as many people (understandably) just look at the take home pay box on the pay slip.

It's rubbish. So many people (particularly women) expected to retire at 60 with a full pension on top of their occupational one, and why wouldn't they? They then had to work to 66 only to find that their SP was short because someone else had opted them out of paying full NI without making it clear. Not only that, but they have to listen to smart Alecs telling them that they must have known this was all going to happen.

Doodledog

vegansrock

Because I have a teachers pension my state pension is lower than it would be if I didn’t - so it’s been means tested all along.

That's because of opting out, not because of means testing. Still unfair, as not everyone understood that they would get less (or that they were paying less in), but it's not the same thing.

Teachers were given no choice and had to opt out.

Sago

I think there would be a silver uprising if it were to happen.

Indeed.

And rightly so. There is an expectation, must be met.

Ladyleftfieldlover

This has all the hallmarks of the Daily Mail doing their best to antagonise and alarm the population by being very economical with the truth concerning the new Labour Government.

As a point of interest The Telegraph are also discussing the possiblity of Labour means testing the State Pension.

Witzend

AFAIK it’s means tested in Australia. A friend of ours (comfortable but not hugely wealthy) got no state pension.

It is means tested in Australia, but Australians know that. It is seen as a benefit, unlike in the UK, and Australians pay more into private pensions than we do (I have family over there). I think the move to calling it a benefit here was an attempt to shift the public mindset, but on the whole it has failed.

Witzend

AFAIK it’s means tested in Australia. A friend of ours (comfortable but not hugely wealthy) got no state pension.

We have two lots of Australian friends who get no pension as they are deemed to have enough savings and private pensions.

This has all the hallmarks of the Daily Mail doing their best to antagonise and alarm the population by being very economical with the truth concerning the new Labour Government.

vegansrock

Because I have a teachers pension my state pension is lower than it would be if I didn’t - so it’s been means tested all along.

That's because of opting out, not because of means testing. Still unfair, as not everyone understood that they would get less (or that they were paying less in), but it's not the same thing.

AFAIK it’s means tested in Australia. A friend of ours (comfortable but not hugely wealthy) got no state pension.