Council Tax for State Pensioners

I think that's right GSM, although I couldn't pinpoint the generation Would you mind going and telling your party that making proper arrangement to offset our slightly odd State Pension is essential if we are going to do it in a way that serves everyone.

Why did they start the payment into the Workplace Pension at 22. I love the fact that Australia starts at 17? All those small amounts compounding over the years have been missed. Why have they done so little about it over the years they have had in government. If they really are thinking about abandoning the State Pension as we know it they will have to replace it with a benefit. What have they been doing all this time?

To reply to Doodledog: I don’t envisage the sp being phased out until our children’s children start work, so that they have a proper chance to make their own arrangements. Those who cannot work for medical reasons would receive benefits, which I think it would be fair to pay on a means-tested basis; not all people medically unfit to work are poor - some may have received large compensation payments or inheritances. Those who refuse to work, so far as I’m concerned, would receive nothing.

Having just written about the Australian system (above) what are the drawbacks to us moving to such a system as long as it is properly done?

Germanshepherdsmum

You’re being rather nasty to Norah, growstuff. It may be that the present sp system becomes unsustainable and that NI payments are reduced with the intention of people making their own pension arrangements.

That would be 'fair', so that those paying in get out. But what about those who can't pay in, as they are struggling together by as it is? If they would get a means-tested payment, what is the point of paying in, unless you can afford to lift yourself way above that threshold?

What about those who won't pay in as they won't work? Are they to be left to starve? Should the burden of paying tax continue be pushed onto workers so that non-workers can live free?

And what about those of us for whom it's too late (like most of us on here, no doubt)? How do we make up for decades of deficit, unless the payments we have made already are transferred to a new scheme? Who would take that admin task on - it would be phenomenal, and would still be a government scheme at heart.

But huge numbers of people either wouldn’t or couldn’t make regular savings into a pension scheme and then the government would have to make provision for those people upon retirement.

You’re being rather nasty to Norah, growstuff. It may be that the present sp system becomes unsustainable and that NI payments are reduced with the intention of people making their own pension arrangements.

Norah

growstuff Says a person who never worked outside the home and doesn't have to rely on a state pension as a major source of income.

Being a sahp isn't part to my opinion - SP system could be broken and could change drastically or be eliminated over the next years.

Have you any idea how much people look forward to retirement and receiving a state pension? How dare you suggest that people should receive nothing after working for 45+ years!

maddyone

People will only willingly contribute if they have a stake in the society they’re paying into. That’s why universal benefits work. Child benefit is no longer universal and I disagree with that too. It should be universal as should the state pension. I think there maybe more of an argument for reducing council tax for older people if there was no universal pension. As it is, I disagree with biglouis that council tax should be reduced for pensioners because everyone gets the pension, even if it’s better late than never.

This www.pensionfundsonline.co.uk/content/country-profiles/australia/80 tells you about the Australian system. It did seem to be what was in the minds of the government when we started with our Workplace Pension, but theirs are from age 17, whereas ours starts at from 22. Theirs also starts on an income of just under £3,000 a year whereas ours doesn't start until you earn £10,000 pa. This is called their Occupation Pension. Employers also contribute to this.

They also have a Public Pension. This is a non-contributary, means-tested pension which works as part of their benefits system. This makes more sense to me than our mixed and very complex contributory/none contributary system for State Pension.

Then they have the same third pillar as we do. Personal pensions that come from Retirement savings accounts (RSAs). These opperate in the same way as a private pension does here, although their tax rules may well be (I'm sure they are) different to ours.

That’s totally unrealistic. Even higher payments for families to make to fund the shortfall - and two-person households would include many highly paid childless professionals.

I would like to see the discount given to just two in a household.

growstuff Says a person who never worked outside the home and doesn't have to rely on a state pension as a major source of income.

Being a sahp isn't part to my opinion - SP system could be broken and could change drastically or be eliminated over the next years.

Norah

maddyone

Do I understand correctly Norah that you feel state pension should end in about twenty years? The problem with that is that the younger generation who have been paying in for many years would no longer have a stake in paying at all, and there would be demands to end or reduce NI. Then what would those who rely on the benefit of a state pension be?

Yes, I think that perhaps SP could end in 20 years - there seems nothing being done to improve the balance sheet. The number of people being paid out is growing as the number paying in is shrinking.

I've no solution, I stated a thought.

Says a person who never worked outside the home and doesn't have to rely on a state pension as a major source of income.

Callistemon21

DaisyAnne

I can't see how they could stop it completely. People would die - lots of them, I imagine. They could, and are right-wing enough to be intending to do so, change to only an income-related benefit. They have talked about the Australian system. The only problem is that this was well planned so people had saved well into a private pension - by law. For some reason our government never followed through with this side.

I can't imagine that would go down well, but then I never thought they would get as far with dismantling so many other services.

I can imagine that it could be means-tested, as it is in Australia. An elderly relative did receive the Australian Age Pension and it was more generous than ours but others were disgruntled because they didn't receive it, as assets, including your house contents and car, were taken into account.
I think your home is excluded.

Nothing would surprise me.

To an extent, the state pension in the UK is already means-tested. People who haven't "earned" enough credit through NICs are eligible for Pension Credit, which is means tested, so everybody receives the same as if they had contributed, whether that comes from additional benefit or from a person's own savings/resources. It's a disincentive for people to contribute themselves.

People will only willingly contribute if they have a stake in the society they’re paying into. That’s why universal benefits work. Child benefit is no longer universal and I disagree with that too. It should be universal as should the state pension. I think there maybe more of an argument for reducing council tax for older people if there was no universal pension. As it is, I disagree with biglouis that council tax should be reduced for pensioners because everyone gets the pension, even if it’s better late than never.

If pensions were to be stopped in 20 years, it would affect people now in their late 40s, who are possibly already planning for retirement. I think there would be general uproar!

If there is going to be a wholesale change, it need to be in 50 years' time, which would affect people just starting their working lives and they would need to be adequately informed, so that they could make alternative arrangements.

I think people might decide not to put into a pension scheme at all because they would know that there will absolutely have to be a benefit (call it whatever you like) that would provide for older people who are not working and they would feel, okay if I save myself you won’t pay me so I won’t save. Plus some people are such low earners that they couldn’t afford to save. And people wouldn’t want to pay into NI if they didn’t see a benefit to themselves at the end.
Anyway, haven’t the government made a contract with workers, you pay NI for 35 years and then we pay you the state pension?

That's the problem. The change would put those who have managed to save just enough in an even worse position than now. Add to that the fact that we are not making people start paying into a pension from, I think, 17 and at a fairly high percentage as Australia does and, while all changeovers are unpopular for a period of time, ours would be even more challenging.

DaisyAnne

I can't see how they could stop it completely. People would die - lots of them, I imagine. They could, and are right-wing enough to be intending to do so, change to only an income-related benefit. They have talked about the Australian system. The only problem is that this was well planned so people had saved well into a private pension - by law. For some reason our government never followed through with this side.

I can't imagine that would go down well, but then I never thought they would get as far with dismantling so many other services.

I can imagine that it could be means-tested, as it is in Australia. An elderly relative did receive the Australian Age Pension and it was more generous than ours but others were disgruntled because they didn't receive it, as assets, including your house contents and car, were taken into account.
I think your home is excluded.

Nothing would surprise me.

I can't see how they could stop it completely. People would die - lots of them, I imagine. They could, and are right-wing enough to be intending to do so, change to only an income-related benefit. They have talked about the Australian system. The only problem is that this was well planned so people had saved well into a private pension - by law. For some reason our government never followed through with this side.

I can't imagine that would go down well, but then I never thought they would get as far with dismantling so many other services.

I honestly think that would be the final straw for people who have paid tax and NI for many years, doing what the government has asked, and generally living law abiding lives. Many of us have already had 6 or more years added to our working lives, which for a lot of people has resulted in messed up retirement plans, and for many more has resulted in poverty. Being told that there will be no pension at all will give people no incentive to do the right thing, and the consensus on which our legal system depends will come under enormous strain.

It won't just affect older people either - if younger generations see how trust can be broken they will have no incentive to play the game either.

maddyone

Do I understand correctly Norah that you feel state pension should end in about twenty years? The problem with that is that the younger generation who have been paying in for many years would no longer have a stake in paying at all, and there would be demands to end or reduce NI. Then what would those who rely on the benefit of a state pension be?

Yes, I think that perhaps SP could end in 20 years - there seems nothing being done to improve the balance sheet. The number of people being paid out is growing as the number paying in is shrinking.

I've no solution, I stated a thought.

There are no funds to dry up though. And for those who have paid in for decades, it would be very unfair to let the pension phase out, whether or not the actual money they paid is sitting in a money box somewhere. The deal was that we paid for the previous generation in the knowledge that the next one would pay for us.

I agree that it would have been wiser for them to step in earlier, but that still doesn't make it the fault of the current generation of pensioners.

And yes, we have moved off the topic of council tax😀

Do I understand correctly Norah that you feel state pension should end in about twenty years? The problem with that is that the younger generation who have been paying in for many years would no longer have a stake in paying at all, and there would be demands to end or reduce NI. Then what would those who rely on the benefit of a state pension be?

Doodledog

I'm not sure I understand - wiser than what?

I did say that whilst it is the government's responsibility to solve things, the solution may (almost certainly will) be that we all have to pay more to put things right.

It would have been wiser for the government to have always played the long game, counted on birth rates dropping and longevity of the population. I'm not sure to the solution, perhaps ending SP in 20 years or so, allowing the funds to dry up? But nothing to do with council tax, imo.

I'm not sure I understand - wiser than what?

I did say that whilst it is the government's responsibility to solve things, the solution may (almost certainly will) be that we all have to pay more to put things right.