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

kibera10

I think it will mostly be females on the lower pension - because if they worked and paid the 'married woman's rate' of National Insurance this didn't count towards a pension (or to sickness benefit or unemployment benefit). Maybe these should still get the winter fuel allownce.

I worked and paid the full rate but still receive less pension than my sister who didn’t work after she married but reached retirement age later.I think the two tier system is simply unfair and everyone should be equal..

I think we should stop arguing among ourselves, which is benefitting only the Government. Classic divide and conquer. I do agree that our state pensions are a mess and that it is a scandal they are so low compared to the rest of Europe. Especially as we are still one of the richest nations.

Personally, I'm much more worried about the possibility of the state pension, old and new, being means tested, as is being suggested at the moment.

I don't much like the idea of being forced back into work at nearly 70 if my state pension is removed because I have a private pension that I poured as much of my salary as I could afford into.

Bellzy

Try the Martin Lewis Pension Credit calculator online. I never thought my mum would be eligible for Pension Credit but she was. And being eligible opens the door for other things, like an eligibility for council tax discount and a lower BT rate you can apply for. It’s a bit of a faff to do but apparently there are 800,000 pensioners who are eligible but haven’t claimed yet, and the govt are urging people to check. Definitely worth the effort. Am sure Age UK or Citizen’s Advice would be able to help if necessary.

You can also try this link

www.entitledto.co.uk/

I agree with Poppyred had to work extra 6 years before I could retire, resulting in the loss of thousands.

Try the Martin Lewis Pension Credit calculator online. I never thought my mum would be eligible for Pension Credit but she was. And being eligible opens the door for other things, like an eligibility for council tax discount and a lower BT rate you can apply for. It’s a bit of a faff to do but apparently there are 800,000 pensioners who are eligible but haven’t claimed yet, and the govt are urging people to check. Definitely worth the effort. Am sure Age UK or Citizen’s Advice would be able to help if necessary.

I was born in November 1952 and started to receive State Pension (at the old rate) just before I was 63.
I do have two (small) occupational pensions and pay income tax on both of them

At first glance it does seem unfair Franbern but, if you stop to look at it for a moment, you'll see that it's actually the younger pensioners who are being short changed. You were lucky enough to receive your state pension 6.5 years before me. Based on an average annual pension of approximately £8000 per anum, you've received somewhere around £48,000 in pension, whilst I was told to carry on working. Even allowing for the fact that I will receive £3000 per annum more than you, it is unlikely I will live long enough to recoup that difference. Younger pensioners income is above the threshold for Pension Credit, meaning that we lose out on the extra benefits such as Winter Fuel Allowance etc. You on the other hand can claim that, even though you worked for less years than we did and so will claim your pension for longer. You're right, there is unfairness but it's not where you think it is.

Pension Credit is means tested - so not an automatic right. (It will depend on your other income and any capital assets etc.) And only those entitled to Pension Credit will receive the Winter Fuel Payment.
Well that’s my understanding of it.

Maggiemaybe

It’s very convoluted, Brahumbug. Your earlier post sets out the main differences clearly and concisely. I’m really not sure why you’re suddenly getting the blame for it all!

I don’t personally know what any of my friends and family get in their pensions, but I’m willing to bet every one secretly feels badly done to in some way.

My DH is another example of this. Like many people he was contracted out for part of his career. This meant his starting amount in 2016 reflected this in a contracted out deduction. Since 2016 he has made further national insurance payments which have removed the COPE deduction, however, now he has reached the maximum he can't improve it any further, despite still paying NI. Under the old system this would have added more money to his pension.

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?

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.

It’s very convoluted, Brahumbug. Your earlier post sets out the main differences clearly and concisely. I’m really not sure why you’re suddenly getting the blame for it all!

I don’t personally know what any of my friends and family get in their pensions, but I’m willing to bet every one secretly feels badly done to in some way.

Cossy

Doodledog

But a pension is meant to be a payment for years of working that allows you to live past the age where you are no longer ‘serviceable’.

If you have never given service outwith your own home, how does that work? I don’t how anyone can expect ‘society’ to pay them to do nothing other than bring up their own children and clean/run their own home and then pay them a salary when they reach a certain age. We all do those things, but most people also go out to work.

Occupational pensions cost money. Those who have them have paid significant amounts into them, yet can find that this works against them as those who opted out of work, (and with that option stopped contributing by way of taxation) still get provided for, and can claim means-tested benefits whilst complaining that they don’t get as much as those who paid in for decades.

Many do get more, to the frustration of those who have paid in, as pension credit opens the door to so many payments denied to those who have contributed by working.

Why does anyone expect to be paid just for being alive? It seems to me that those who have this expectation are often the same people who complain about asylum seekers and others they perceive as taking rather than giving.

👏👏👏👏👏

I agree with you both.
I also think that retirement planning should be offered by the government, rather like health screening is offered by the NHS.
It is no good expecting to get to retirement and just hoping things will sort themselves out. I appreciate that the younger generation may not get a SP, but how many of them would even be aware of that?
I’m of the generation where I stopped working when I had my children, although not in the financial industry, I was aware that my pension contributions would be affected and took out an AVC. It cost very little every month and could be increased when I resumed work.
More education about retirement and pensions is needed.

Mollygo

Your arguments and ‘proofs’ mean nothing to those on £169 PE, except that you appear to be criticising them.

I am not criticising anyone, I am merely stating facts as laid out in the pension legislation and tackling the misunderstanding around the new pension system. Anyone just on the basic pension will likely have a workplace pension as well. If not, then they wouldn't have qualified for the new pension either. Anyone on a low income should apply for pension credit or help on low income grounds. Have a look at the entitlement calculator in the link below.
www.entitledto.co.uk/

Mollygo

Your arguments and ‘proofs’ mean nothing to those on £169 PE, except that you appear to be criticising them.

It's our own fault, Mollygo for not keeping up with the constant rule and regulation changes because we were busy working, bringing up a family and often caring for elderly relatives too.

I also know pensioners who receive only a small amount above the basic of £169 because they were contracted out for many years

Contracting out means receiving less than the £169.50 pw, not a small amount more, despite a little extra for paying the rather pointless Graduated Pension contributions for a number of years in the dim and distant past.

Your arguments and ‘proofs’ mean nothing to those on £169 PE, except that you appear to be criticising them.

It is important that people claim any help you can get. Even if you are over the limit for pension credit, you can still claim help with council tax, rent and dental charges on low income grounds.
www.entitledto.co.uk/

Maggie maybe, yours is a perfect example of the complex calculation involved in the new pension. I forgot to add in my previous post that one of the people I know recieving £270 a week under the 'old' pension is my father!

Cabbie21

Maybe those on £270 pw are widows getting extra because of their late husband’s contributions in addition to their own entitlement?

Some may have inherited from their husbands, but it's generally due to having higher earnings when working and therefore a higher SERPS payment. The maximum SERPS is £218 a week on top of the basic pension, am amount that is now unobtainable under the new system.

Chocolatelovinggran

Brahumbug, it is interesting that you know several pensioners on the old rate who receive £270 a week. I am on the old rate, and no one I know on this receives anything like that: not one person.
To make it absolutely clear, I worked for forty years, taking just a few months out with each baby.
And, I am not complaining, simply stating facts.

What of it? Are you saying I don't? I also know pensioners who receive only a small amount above the basic of £169 because they were contracted out for many years. Instead they receive a pension from their workplace in place of SERPS and S2P. It still doesn't alter the fact that the 'new' state pension was designed to reduce government spending on pensions, not increase it. The view was that SERPS and S2P was becoming unaffordable and instead they wanted to push more people into defined contribution pensions.

Because Brahumbug knows several people on the old rate who are receiving £270 pw doesn’t make it true for everyone, but makes it easy for her to dismiss those in the lower rate.

Occupational pensions cost money. Those who have them have paid significant amounts into them, yet can find that this works against them
Yes, contracting out was not explained at the time and was compulsory anyway.

I was a lazy SAHM for a while, feet up, eating chocolate, watching TV, nothing to do all day 🤔
There were no nurseries in those days, no grandparents available, I should have got off my backside and opened a nursery.

Doodledog

But a pension is meant to be a payment for years of working that allows you to live past the age where you are no longer ‘serviceable’.

If you have never given service outwith your own home, how does that work? I don’t how anyone can expect ‘society’ to pay them to do nothing other than bring up their own children and clean/run their own home and then pay them a salary when they reach a certain age. We all do those things, but most people also go out to work.

Occupational pensions cost money. Those who have them have paid significant amounts into them, yet can find that this works against them as those who opted out of work, (and with that option stopped contributing by way of taxation) still get provided for, and can claim means-tested benefits whilst complaining that they don’t get as much as those who paid in for decades.

Many do get more, to the frustration of those who have paid in, as pension credit opens the door to so many payments denied to those who have contributed by working.

Why does anyone expect to be paid just for being alive? It seems to me that those who have this expectation are often the same people who complain about asylum seekers and others they perceive as taking rather than giving.

👏👏👏👏👏

Chocolatelovinggran

Brahumbug, it is interesting that you know several pensioners on the old rate who receive £270 a week. I am on the old rate, and no one I know on this receives anything like that: not one person.
To make it absolutely clear, I worked for forty years, taking just a few months out with each baby.
And, I am not complaining, simply stating facts.

To get 39 years of contributions was just about manageable for women if they had been to college or university and took no time out when they had a family. Most women I know did take time out, at least until children started school.
Calculated on age 21 - 60 when retirement was compulsory.