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

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/

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.

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.

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.

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?

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.

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.

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.

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

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

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 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.

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..

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.

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.

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.

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.

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

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!

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.

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.

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.

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.

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!