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

Hellsbelles

I am 63 and,will not receive my pension until I am at age 67 so you would have retired 7 years before me.
My husband is the same age as me and hasn't worked for a few years , he receives pip mobility only which is less than £75 a week . I was his carer and received £ 80 a week .
Previous to any illness we worked hard to pay off our mortgage asap and get some savings behind us.
We went without holidays ( not been on holiday for 12 years )
Fast forward to now , I also do not work because of a debilitating illness and now also get pip at the same rate as him.
However , because no mortgages or rent plus savings over £16.000 we get no additional help, we have to also live off savings .
If we'd holidayed , drank alcohol , smoked , gone out socialising , not saved and not gone without , we'd be a lot better off now !
Plus we both have another 4 years each before ( in your eyes ) we get to be a better off pensioner.

I can empathise with your anger and frustration with the situation in which you find yourself.

However it is a bit simplistic to be angry at those who may have lived their lives differently to yourselves. We all have choices to make with our lifestyles.

I have never smoked or drank alcohol but have enjoyed holidays and socialising with others. Sometimes I have stretched the budget to do so, but life is for living not just existing. These have been my choices and I wouldn't be annoyed with others for making different ones.

On the plus side you have your own home and savings. Unfortunately their has to be a cut off point somewhere when it comes to means tested benefits. Savings are there to be used in times of need.

Having said all that have you checked if their is anything else you can apply for to help you out. If you are only both receiving PIP that gives you an income of only £7800 a year. Have you contacted your local council about council tax support? Are there any free travel services in your area?
Have you contacted Citizens Advice or Age UK. They can be very helpful.

Are you maximising your savings in terms of interest? Is their a possibility you could downsize (although this doesn't always free up enough money to make it worthwhile)

There may well be other organisations out there that can assist or point you in the right direction.

Just some suggestions sincerely made.

When you both reach state pension age you will be better off, but I believe your PIP will stop. However I appreciate that it is the here and now that is concerning you.

Hopefully things will improve for you both.

knspol

There is a lot of misinformation/differing opinion on this site so I hope nobody reading it is misled.
I paid a full stamp all my life, became entitled to a full pension but only receive the lower amount. I don't see why others should thing this is reasonable because I only had to wait a matter of months after 60th b'day to receive pension and others had to wait years. It's no more unjust than those who decided to continue to pay the lower married woman's stamp and then had their pension amount increased.
I wonder if any increase in numbers claiming pension credit will outweigh the savings from the reduction of people getting the heating allowance.

You also had to have 39 years of NI contributions to qualify for a full basic pension.
It is only 35 years now.

£1,800 pa less Typo
About £1,900 less.

PuddyCat

^That is a very simplistic version and there are so many loopholes in that argument.^

Explain that to me Allira.

your facts and figures are wrong.

No, they're not. If anything, my figures are on the generous side. I was forced to work for 6.5 years longer, for a little more money than older pensioners, only to be informed that those who retired much earlier than me are now eligible to claim additional pension, to bring them up to my pension level, plus extra benefits that I'm excluded from. Tell me where I'm wrong.

The new pension age for women was brought in over about 10 years, not a sudden change.

Based on an average annual pension of approximately £8000 per anum, you've received somewhere around £48,000 in pension
Around £8,800 pa is the present basic old State Pension.

Ten years ago the amount was C£5,800

The new State Pension was introduced in 2016 at about £8,100 pa.
In 2016 the old State Pension was C£6,200 pa., about £1,800 pa less.

Perhaps we have an accountant or an actuary on here who could make an exact calculation but it is not £48,000.

Benefits can only be claimed by the poorest pensioners and bring them up to just less than the level of the new State Pension. That includes people on the new State Pension.

Does that make sense?

magshard20

Having paid the Married Woman's stamp for all my working life, I get the grand sum of £102 weekly..... if my husband was not around, I really don't know where I would be. although I know then that I would be eligible for Pension Credit. (hopefully)
I had to wait 9 months for any sort of pension, and then because of my paying reduced stamp, it was only £25 per week, until my husband reached State Pension age and then it went up (a little) it now goes up a little each year with the last April pay rise to £102 (that is over 14 years)
Someone said earlier on in the comments, (sorry can't reemember who) why can't everyone be paid the same each week, doing away with the reams of paperwork and leaving us all on the same pension, the amount being a sensible figure, to take into account all the outgoings we have each week ( Council Tax, Electricity, Gas, Water Rates etc) Food we would just have to get and pay for as we are now.
Perhaps that is too simple for the DWP and Ministers to work out, but it seems a much simpler way of working and if pensions go up each year, we should still be able to cope !

If everyone got the same, what would have been the benefit of paying the full stamp? How can someone pay less in and expect to get the same amount out?

I agree, Hellsbelles. Means-testing doesn't encourage people to be 'sensible'. If you have a house and savings and then need care you'll be penalised there, too.

My 92 year old DSI left school at 14.
Started work next day, no university and gap years for youngsters then.
And why should those who were able to take time off to look after their children expect the same rewards as those who couldn't and paid full stamp for 39 years?

I am 63 and,will not receive my pension until I am at age 67 so you would have retired 7 years before me.
My husband is the same age as me and hasn't worked for a few years , he receives pip mobility only which is less than £75 a week . I was his carer and received £ 80 a week .
Previous to any illness we worked hard to pay off our mortgage asap and get some savings behind us.
We went without holidays ( not been on holiday for 12 years )
Fast forward to now , I also do not work because of a debilitating illness and now also get pip at the same rate as him.
However , because no mortgages or rent plus savings over £16.000 we get no additional help, we have to also live off savings .
If we'd holidayed , drank alcohol , smoked , gone out socialising , not saved and not gone without , we'd be a lot better off now !
Plus we both have another 4 years each before ( in your eyes ) we get to be a better off pensioner.

Having paid the Married Woman's stamp for all my working life, I get the grand sum of £102 weekly..... if my husband was not around, I really don't know where I would be. although I know then that I would be eligible for Pension Credit. (hopefully)
I had to wait 9 months for any sort of pension, and then because of my paying reduced stamp, it was only £25 per week, until my husband reached State Pension age and then it went up (a little) it now goes up a little each year with the last April pay rise to £102 (that is over 14 years)
Someone said earlier on in the comments, (sorry can't reemember who) why can't everyone be paid the same each week, doing away with the reams of paperwork and leaving us all on the same pension, the amount being a sensible figure, to take into account all the outgoings we have each week ( Council Tax, Electricity, Gas, Water Rates etc) Food we would just have to get and pay for as we are now.
Perhaps that is too simple for the DWP and Ministers to work out, but it seems a much simpler way of working and if pensions go up each year, we should still be able to cope !

Rafichagran No matter the size of your state pension it is included in the calculation of your total income. If all income, eg, lower SP plus, say, any occupational pension takes you above the person allowance then the surplus is taxed.

I also fully appreciate that about 20% of men and 33% of women only have their state pension as their income in retirement. However I do not know exactly how may of those are married/living together in whatever sort of couple, (therefore have 2 state pensions for a couple) or how many are receiving extra pension through having SERPS/2nd state pension payments.
Again over time this percentage should continue to reduce as most people will retire with some form of occupational pension in addition to their state pension. One benefit of auto enrolment.
My main concern is for those single people or in some cases widows or widowers who only have their state pensions on which to live. Furthermore some of those may not have full state pensions (either old or new) owing to lack of sufficient NI contributions.
Again those who who are renting in retirement can be very vulnerable indeed.
If any of us know anyone in that situation we should encourage them to ensure they are receiving everything they are entitled too such as pension credit, council tax help etc....

That is a very simplistic version and there are so many loopholes in that argument.

Explain that to me Allira.

your facts and figures are wrong.

No, they're not. If anything, my figures are on the generous side. I was forced to work for 6.5 years longer, for a little more money than older pensioners, only to be informed that those who retired much earlier than me are now eligible to claim additional pension, to bring them up to my pension level, plus extra benefits that I'm excluded from. Tell me where I'm wrong.

There is a lot of misinformation/differing opinion on this site so I hope nobody reading it is misled.
I paid a full stamp all my life, became entitled to a full pension but only receive the lower amount. I don't see why others should thing this is reasonable because I only had to wait a matter of months after 60th b'day to receive pension and others had to wait years. It's no more unjust than those who decided to continue to pay the lower married woman's stamp and then had their pension amount increased.
I wonder if any increase in numbers claiming pension credit will outweigh the savings from the reduction of people getting the heating allowance.

Personally I believe the new system in the longer term will be fairer. There has to be a starting point for something new somewhere. I am pleased contracting out ended in 2015/2016.

As I said in my introductory post I am male.
I worked in education for 42 years full and part-time and was contracted out for may of those years up to 2016. Only well into my career did I fully realise paying into a very decent public sector pension. Although, I have to say, I went into teaching to make a difference and because I loved the job. The pension provision was never a prime consideration.

In paid a total of 47 years worth of NI contributions up to April 2024. Several payments were made as voluntary top ups (I only worked part-time from 2018 to June 2024). I now receive almost the full new pension bar a few pence. I am totally happy with this outcome.

I also have no issue with paying tax in retirement as I still make use of public services such as the NHS, use the roads, have a police force to protect me and so on. I also like the idea of continuing to do my bit. I pay about £375 tax a month.

Finally if you are able to top up with voluntary National Insurance contributions do give it serious consideration. The pay back period is relatively very short and index linking makes it more attractive. You are in profit within 2 to 3 years.

Best wishes.

I was inlocal government for my first year after uni and when I moved jobs I withdrew my pension contributions instead of transferring them to my next scheme. I really regret that as I just frittered it away and it would have made one of my other pensions quite a lot bigger! I became more sensible as I got older and froze my pension from the NHS when I took a career break to have children. Thankfully I got credits for the years when I had home responsibilities and didn't work, or didn't pay NI otherwise my state pension would be much lower.

I retired in 2020 so am on the new state pension. I was contracted out for most of my working life so don't get the maximum, but it has only been reduced by about £9 per week. In addition I have 3 small occupational pensions, so compared to those with only the state pension I am quite well off but it's still not easy! I was 66 when I retired. Still hoping we WASPIs get some compensation!

Doodledog

Brahumbug

Allira

It’s very convoluted

So convoluted that it was impossible for most people except pensions experts to keep up with the changes and how they might affect your pension.

Presumably women who worked for the Civil Service or Local Government many years ago were contracted out because they were in the CS or LG pension schemes. However, when they got married or left, their own contributions to those schemes were kindly 🤔 paid back to them in the form of a gratuity. Were they then contracted back into the State Pension scheme for those years? Of course not.

Contracting out started in 1978, were the refunds of pension contributions for periods before that?

I worked very briefly as a civil servant in the 70s. I left after a couple of years, and was given back my 'superannuation' contributions. It was optional, though I took them as I was getting married and the money came in handy. I think I got about £160, but I only had two or three years of contributions and was a teenager on an entry level salary. Someone older and more senior would get more.

I don't remember it being to do with contracting out - it was probably so that there was no need to administrate lots of tiny bits of pension for ex-employees. You could transfer the contributions to a new pension scheme if you were moving to a new job, but I think I bought wardrobes with mine .

In my case it will have made little difference to my income now. If I'd kept them I would get something, but it would probably be pennies. Again though, those with more contributions would be in a different position, but it was definitely a choice to take them back or leave them in the pension scheme.

I hadn't thought about whether state pension contributions were affected. I have well over the maximum, so losing 2-3 years has made no difference, but if someone claimed back larger sums and they included the pension part of NI they might have made themselves short without realising that would happen.

I don't remember it being to do with contracting out

It can't have been then, I just surmised that thinking about contracting in and out after reading this thread.

I do wish I'd left mine in. Hindsight is a wonderful thing.

Brahumbug

Allira

It’s very convoluted

So convoluted that it was impossible for most people except pensions experts to keep up with the changes and how they might affect your pension.

Presumably women who worked for the Civil Service or Local Government many years ago were contracted out because they were in the CS or LG pension schemes. However, when they got married or left, their own contributions to those schemes were kindly 🤔 paid back to them in the form of a gratuity. Were they then contracted back into the State Pension scheme for those years? Of course not.

Contracting out started in 1978, were the refunds of pension contributions for periods before that?

I worked very briefly as a civil servant in the 70s. I left after a couple of years, and was given back my 'superannuation' contributions. It was optional, though I took them as I was getting married and the money came in handy. I think I got about £160, but I only had two or three years of contributions and was a teenager on an entry level salary. Someone older and more senior would get more.

I don't remember it being to do with contracting out - it was probably so that there was no need to administrate lots of tiny bits of pension for ex-employees. You could transfer the contributions to a new pension scheme if you were moving to a new job, but I think I bought wardrobes with mine .

In my case it will have made little difference to my income now. If I'd kept them I would get something, but it would probably be pennies. Again though, those with more contributions would be in a different position, but it was definitely a choice to take them back or leave them in the pension scheme.

I hadn't thought about whether state pension contributions were affected. I have well over the maximum, so losing 2-3 years has made no difference, but if someone claimed back larger sums and they included the pension part of NI they might have made themselves short without realising that would happen.

I was born in March 1953, so just about the last to get the old pension, and had to work till I was 63. My pension is £177 per week, and being a recent widow thst includes a small amount from my husband's pension (you cannot inherit any of their basic pension, only the additional part). Also I have a small NHS pension which takes me just above the amount necessary to get pension credit.

Allira

The problem with free dental care (and for children) is that there are few NHS dentists around and those that are are not taking on new patients!

Indeed! However, that's true for those receiving Pension Credit too, so not a benefit for pensioners on either the old or new amount.

The problem with free dental care (and for children) is that there are few NHS dentists around and those that are are not taking on new patients!

Franbern

\think the bit about free dental care is laughable in many parts of the country, as it only applies if attending the dentist as an NHS patient. As great swathes of the UK there are absolutely NO NHS dentists, it means that anyone, whether or not in receipt of pension credit has to pay full wack for private dental treatment.

Even with glasses, Pension Credit may give money off the main eye test, however, specs still hve to be apid for as does any additional eye tests.

Like a lot of benefits, they always seem so much more than they actually are.

But good that those older pensioners in rreceipt of lower rate (and no other pension), can get top-up to nearly tghat of higher rate.

Most recipients of Pension Credit are eligible for an HS2 certificate, which entitles holders to free NHS dental treatment and the full value towards the cost of glasses and contact lenses plus travel costs to receive NHS care.

Nobody deems to advertise these certificates, so people receiving Pension Credit need to Google them

PuddyCat

That is a very simplistic version and there are so many loopholes in that argument , some of which have been pointed out already, that I won't argue except to say that, actually, your facts and figures are wrong.

I think we should stop arguing among ourselves, which is benefitting only the Government

The system was a complete maze, perhaps designed to confuse us and at least it has been simplified now.

Brahumbug

Allira

It’s very convoluted

So convoluted that it was impossible for most people except pensions experts to keep up with the changes and how they might affect your pension.

Presumably women who worked for the Civil Service or Local Government many years ago were contracted out because they were in the CS or LG pension schemes. However, when they got married or left, their own contributions to those schemes were kindly 🤔 paid back to them in the form of a gratuity. Were they then contracted back into the State Pension scheme for those years? Of course not.

Contracting out started in 1978, were the refunds of pension contributions for periods before that?

Yes, I left in 1973, so 10 years of contributions were refunded which didn't seem to amount to much at the time although admittedly it came in useful at the time.

What should be noted is that NI contributions were not just paid by employee but by employer on employee's behalf too.

Caring for the elderly in various ways is a challenge for any government. I don't think older people should have to worry about money, keeping warm or getting to see a doctor.