Higher and Lower rate of State Pension,. This really needs changing

I have a print out which I requested showing all my NI years, I always paid the high NI stamp. Unsure about my friends SSP however but if she retired on the grounds of ill health surely her NI would have ceased then after her payout from teaching - unsure about that but that makes sense tbh. Same local authority too. However I still think it would make sense for us all to receive a written summary of how our pension is calculated. . Re-assurance I think as it's all so confusing.

if she retired on the grounds of ill health surely her NI would have ceased then after her payout from teaching

If she retired on health grounds before 2014, she may have applied for Statutory Sick Pay, it wasn't much but at least her NI stamp would have been paid for those remaining years years so she would have the full 39 years of contributions.

Even different sections of the DWP get confused so no wonder we find to difficult to comprehend! I'm trying to sort out what may be a discrepancy in my calculations and keep being bumped from section to section and being promised yet another set of forms which will arrive in the post (some time over the next few weeks apparently).

Oh dear that's not so good Allira, I sympathise.I hope you get it all sorted out soon. I often wonder if the right hand knows what the left hand is doing in DWP. You may of course be right about my friend getting extra NI's, she didn't mention that and I hadn't thought of it. No point dwelling on it I just found it rather strange. I'm sure if there was a room full of pensioners we would have a story to tell and not one of us would be getting the same amount.

I often wonder if the right hand knows what the left hand is doing
As the Taxperson said to my husband once about HMRC!

If they don't know, how is the lay person supposed to fathom it out?

Icandoit

Oh dear that's not so good Allira, I sympathise.I hope you get it all sorted out soon. I often wonder if the right hand knows what the left hand is doing in DWP. You may of course be right about my friend getting extra NI's, she didn't mention that and I hadn't thought of it. No point dwelling on it I just found it rather strange. I'm sure if there was a room full of pensioners we would have a story to tell and not one of us would be getting the same amount.

A friend who never worked since having a family, apart from for her husband's firm where she was paid under the amount liable for tax and NI, gets a full old SP. 🤔

This is what I’ve been saying all along . Not everyone on the old pension is disadvantaged. Equalising them would disadvantage those who paid a lot of SERPS and inherited a pension.

My income, all pensions, is from so many sources and I certainly don’t understand all the calculations.
State Pension, shortfall in years when I was at home with children before Home Responsibilities Protection came in. Then p/t work, ‘ small stamp’ then f/ t, so basic pension is small, some Graduated pension, some Additional Pension, extra for deferring for 18 months.etc.but a deduction for contracted out….
Teacher’s Pension, plus an annuity bought with AVC fund, tiny French pension, but pro rata it is great to get £30 pm for working abroad for less than a year.
Now since DH died I get half his Teacher’s Pension, and extra on my State Pension, so in total my income is really good. I have no idea whether it is correct or not. DWP sent me a letter suggesting I check, but my NI record seems to be correct.

One good thing I did: having withdrawn my superannuation paid in for two years before I had children, I repaid it for a small sum - the benefit of those two extra years in the teachers’ pension system is huge.

So everyone is different. Comparisons are pointless, except for pointing out that SOME pensioners are very hard up.

So everyone is different. Comparisons are pointless, except for pointing out that SOME pensioners are very hard up.

Yes, I agree.

However, comparisons are interesting and just show wat a complete mess the system was.

Guaranteed Minimum Pension anyone?
Who can explain that?
Anyone? No-one?

Allira

^So everyone is different. Comparisons are pointless, except for pointing out that SOME pensioners are very hard up.^

Yes, I agree.

However, comparisons are interesting and just show wat a complete mess the system was.

Guaranteed Minimum Pension anyone?
Who can explain that?
Anyone? No-one?

www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/guaranteed-minimum-pension-gmp-and-the-effect-of-the-new-state-pension

I personally do not take the view the system is a complete mess. In parts it may be complicated but not impossible to understand.
People need to take their own responsibility for financial matters as well as their pension provision.
I checked my teacher's pension regularly from a young age. When I got to 50 I did some research on being contracted out and realised I would have to pay NI for longer to get the full new state pension. I paid 47 years in total and made the full pension bar a few pence.
Some people are too quick to blame the system to excuse their own lack judgement or interest in sorting out their future pension income.
With the internet it is very easy to find things out and set things up.
Neither do I accept the fact that older people cannot cope with online activities. What an insult to them. My mother is 85 and mages all finances online as well as clothes shopping , holidays etc... My grandmother who died at the age of 102 also did all her banking online! She also knew what her pensions were worth from a young age.
The state pension is fairly easy to follow in that what you pay in leads to what you can claim! Again full records are online or can be sent to you.
There is no way the people receiving the old pension are going to be levelled up. Quite a large number of people would lose out. Again my mother is under the old system but through some non contracted employment as well as contracted out employment and always paying her own 'full' stamp she receives £196 a week. In addition she has a Civil Service pension of just over £7000 a year, so manages quite well.
I can also imagine the outrage from the very people demanding equalisation when taxes have to rise to pay for it lol!

Since the higher rate pension only came in in 2016 it wouldn’t be financially feasible to level the two pensions, I have tried to find out how many are on the old pension without success but it must be a huge number. DH and I are both on the old pension, he gets about £300 more than me every four weeks because I stayed home to care for our sons for nine years but since we both have occupational pensions we are happy with our income and I consider myself fortunate to have been able to retire at 60, DH retired at 63. The only thing that irks me is that politicians claim that pensioners got a rise of £900 last April, they never mention that those on the basic pension got less, both parties are guilty of this. The gap between the two pensions will widen as time goes by of course because increases are given on a percentage basis, that is while the triple lock is in existence, possibly its days are numbered?

Grannynannywanny

Excuse me if I’ve got it wrong. Will pensioners whose only income is the old state pension not be entitled to pension credit to top it up to new state pension rate? So they will still be entitled to the winter fuel allowance.

Yes. The minimum pension income guarantee for a single person is £218.15 pw. If your state pension together with any other income falls below this threshold, pension credit will top it up to this level and qualify you for WFA.

It’s also worth remembering that if you have a disability you can claim attendance allowance. If you’re successful this will mean you have a higher minimum pension income guarantee because of a disability. Your income will be topped up to the threshold of £218.15 and you will receive an additional £81.50pw on top of that.

If you are caring for someone who receives attendance allowance, or the care component of PIP, child DLA or the Scottish ADP payment you could receive an extra premium as well as your pension credit top up. This is called an underlying entitlement, currently £45.60 pw. It’s paid because carers allowance stops at state pension age - they’re overlapping benefits, so you’re paid the underlying entitlement instead. Both of these top ups mean you have access to the WFA.

If you claim attendance allowance you may also be entitled to a higher rate of housing or council tax benefit if you qualify for them.

About 700,000 people retire every year apparently, so in the 8 years since 2016, 4.8 million approx will now have reached the new retirement age. There are 11 million pensioners. On that basis the balance to there being more on the new pension than the old will be in 2025.

Icandoit

I've not had all these posts on this thread however I did find out yesterday from a chat with my friend who was a teacher since aged 21 retired early due to ill health at 57 now 79 and she receives £1000/month as her state pension. I cannot believe she actually gets more that £200/month than me. I am now 70, retired at 2011 at 57, received my pension at 66 after waiting 6 years. Worked with Local Government all my life. Surely this cannot be the case. I find the pensions so complicated. Think when we retire we should get a summarised breakdown of how they achieve the figure we are going to get as a pension each month.

I retired early due to ill health and collected my state pension this year, at the age of 66. My pension is a few pounds short of £1000 every four weeks, because l’m widowed and was entitled to a proportion of my late husbands’ pension, which topped it up from just over £900. Could that be the reason your friend has a higher pension ?

I wouldn't argue for equalisation for all the reasons I've already given, but I don't think it's fair to say that everyone should have taken responsibility, BaronJohnPaul. It's easy now to check on things, but many people on the old pension would not have had access to the Internet before they retired, and it is clear from a number of posts that people were badly advised (eg told that their pensions would be based on their husbands', so there was no point in paying for a 'full stamp'). We know from when women's pension age was raised that people weren't informed - successive governments have been dreadful at giving information about the State Pension, and without the Internet, where would people have gone to do regular checks.

The TPS is very clear, and makes it easy for members to check regularly, but not all pension schemes are the same, and not all employees (particularly in the past, and more particularly female employees) were in similarly helpful ones - if they were in occupational pension schemes at all.

Women in particular need to be careful to ensure that they have enough full years to get the full State Pension, but the new pension is more straightforward than the old one, as everyone gets the same, and it all depends on their own contributions, rather than those of spouses and additional contributions.

Franbern

Does anyone know, for definite, if pensioners on lower rate can get Pension Credit to top up to Higher rate? I have searched and searched for an answer to this, but nothing on the Pension information mentions this.

Surely if this is the case, then all those Pensioners on the lower rate should be informed and told to make that PC application immediately..

Minimum pension income guarantee is £218.15 (single rate) so if state pension together with any other income falls below that rate, then pension credit will be payable. The minimum income guarantee is higher if you claim attendance allowance or you are a carer for someone else who claims care component of a disability benefit. Posted upthread in more detail.

I understood that inheritance of your late DH's state pension had been stopped some time ago.

It was. 2016.

I assume the poster you are referencing is talking about her husband's occupational pension. Most of them can be inherited, and the bereaved receive a percentage of them.

Doodledog

Allira

So everyone is different. Comparisons are pointless, except for pointing out that SOME pensioners are very hard up.

Yes, I agree.

However, comparisons are interesting and just show wat a complete mess the system was.

Guaranteed Minimum Pension anyone?
Who can explain that?
Anyone? No-one?

www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/guaranteed-minimum-pension-gmp-and-the-effect-of-the-new-state-pension

Oh! Is it amusing?
I didn't think it was that funny.

People retiring on the old State Pension may receive GMP - apparently that annoys people retiring on the new State Pension because apparently some on the old State Pension receive enormous amounts monthly.

However, receiving GMP does mean that a firm's pension is reduced accordingly and also there is nothing in the way of increases for that part to which GMP applies.

That link mainly applies to those receiving a pension after 2016.

Presumably men born before 1945 and women born before 1951 need to seek specialist advice (again, and at a cost).

With the internet it is very easy to find things out and set things up

The internet was only available to the public generally from about 1993 and the Government Gateway not until about 2001.

Many people retired before then.

Allira

^With the internet it is very easy to find things out and set things up^

The internet was only available to the public generally from about 1993 and the Government Gateway not until about 2001.

Many people retired before then.

Yes, which is exactly what I said in my post of 16:15.

Do you bother to read other people's posts, or try to find things out for yourself? You asked a question about Guaranteed Minimum Pension as though it was something only few people know about: Anyone? No-one? and I linked to it with a smile, as it took seconds to Google.

Oh! Is it amusing?
I didn't think it was that funny.
I wasn't amused by it - it's hardly a subject for comedy - but that is the second time (at least) that you have been actually on the Internet when you asked people to find information that is literally at your fingertips if you could be bothered to find it.

People retiring on the old State Pension may receive GMP - apparently that annoys people retiring on the new State Pension because apparently some on the old State Pension receive enormous amounts monthly.
I am not 'annoyed' that some on the old pension get more than the new. I do get irritated when people (like yourself, so I'm not accused of doing the 'some people' thing) insist that they are right about the old pension being lower, and demand stats to prove otherwise, though. Incidentally, I note that there has been no climbdown now that various posters have said that yes, there are indeed those who get more under the old system, and it is not just my opinion.

However, receiving GMP does mean that a firm's pension is reduced accordingly and also there is nothing in the way of increases for that part to which GMP applies.
Yes, just as there is no compensation for being opted out, or for all sorts of anomalies that catch out those who have untypical working patterns.

That link mainly applies to those receiving a pension after 2016.
Which is exactly what I said above.

Presumably men born before 1945 and women born before 1951 need to seek specialist advice (again, and at a cost).
No. Now that we all have the Internet, they can check themselves, and if that is not possible because they are not able to use the Internet there are phone numbers they can ring.

I have no objection to helping people do what they can't do themselves, but not only are you asking others to do your donkey work and Google for you when you are online yourself, you are also repeating what has already been posted a few posts up as though you thought of it.

I understand that you may be concerned about life just now. I honestly do. But you are being aggressive when there is no need. I for one (and there are many others) am not trying to pretend that life is easy now, or that it will be in future. The country is in a mess. But attacking people is not helpful to you or anyone. We need to stick together and look for collective ways though this.

maddyone

Brahumbug
You are clearly don’t understand the true facts.
Perhaps you should do a little more research.
Some people on the old basic state pension may collect a higher pension, but that depends upon those pensioners having paid SERPS or other additional contributions. The vast majority of pensioners who are on the old basic state pension do not get more, or even as much, as the new state pension. Therefore your statement that

The new pension is not more than the old pension.

is factually incorrect!

Sorry, but I do understand the system and my statement is factually correct. The new pension is a maximum, not an automatic entitlement. It was designed to reflect people's previous entitlement to SERPS and S2P, so if you didn't qualify for those you wouldn't get them in the new pension. Please check your facts before posting misleading statements.

To restate an earlier post of mine, which IS factually correct.



09/09/2024 00:44Brahumbug

There is a lot of nonsense in this thread about pensions. The new pension is not £221 a week, that is the maximum that some one starting contributing after 2026 can get. Currently most people are in transitional arrangements which will continue for decades. The basic pension of £169 could be topped up by SERPS and S2P which can take the pension to over £300 a week. Many pensioners get far more than £221 under this system. The new pension got rid of SERPS and S2P. Accumulated rights under the old system were reflected in the starting amount of the new pension so nobody lost out. In Addition a deduction was made to reflect any years that people were contracted out. If your starting amount was less than the full pension then contributions after 2016 would increase it to the new maximum but no further. Under the old system you would have been able to build further pension entitlement. So the new pension is actually worse than the old. If you get less than the full new pension then you would never have qualified for it anyway. Around half of those on the new pension recieve less than the full amount. I personally know several pensioners on the old pension who revive well in excess of £270 a week, my father
being one of them. The state pension in this country is actually generous considering the amount of money we pay into it in national insurance. It is important that anyone receiving less than £218 a week applies for pension credit to see if they are entitled. Plus if you are over the pension credit limit by a small margin, then you can apply for help on low income grounds.
benefits-calculator.turn2us.org.uk/

A much discussed topic I would say and tbh I'm no further forward even with all your comments. I stick to what I first said which is I believe everyone should get a detailed summary of what and how their pension is worked out before you actually start claiming it. If this is/was done I certainly did not receive anything. However it is a topic which we could talk about until we are blue in the face. I do receive less than £218/week as Brahumbug quotes so I may look into the Pension Credit to see how I stand but I do not hold out much hope.

Do you bother to read other people's posts, or try to find things out for yourself?

Sorry? There is no need for rudeness Doodledog.

I was responding to BaronJohnPaul's statement about the internet being available, which I quoted. It helps to read all the posts.