Pension credit

I am sorry, but my response may be hard, but there have to be cut off points, and when they occur they are unfair for those just on or above the cut off point.

I have often thought about this in many contextx, but I cannot think of a solution. It is something that comes up in so many contexts. When people cease to receive a benefit, means tested (like PC), or anything else, there is a group just on and above the line who suffer.

If you can think of a solution for making these cut-off points fairer, you should qualify for a Nobel Prize.

I totally agree with you watermeadow, my pensions are the same as yours, nothing extra at all, and I'm on my own.
I'm quite happy for people to receive pension credit but why are they given so many extras, the list is endless. I'd love some help with my high energy bills, some extra loft insulation maybe, TV licence, dentist, spectacles etc etc but don't qualify for anything.

This is why a small pension is often not worth having ....my MIL had no pension other than state....she had her rent and council tax paid and a whole host of other things....thats just the way it is....there is a cut off point and thats that....I think younger people now consider this and think why bother ...especially if they rent ..

I am on my own with just state pension. Due to the pension changes in 2016 I am not entitled to pension credit as my pension is £3 per week over the limit!
I am lucky in that I can get help with my rent and council tax, but I can get no other help at all.

I have enquired about getting pension credit due to my very low income, but I do not qualify. Your sister must be on the old state pension to qualify for this.

Just be glad that your sister isn't living in penury- just get her to pay when you go out for lunch or something...

The only positive for you is you are able to have large savings she won't.

I just think the whole pension system is flawed.

Of course our DC and DGC should ensure that they have good private pensions, there may not be a state pension by then!

In my opinion State Pensions should be ringfenced and personal pension pots and therefore payouts more fairly reflect taxes paid in.

Of course, those who couldn’t work for the full amount of time required due to serious illness or disability should be catered for separately.

It's a minefield and I know you must be very frustrated and it isn't fair at all but as Monica says there has to be a cut off somewhere. It's the same with many other things and some are winners and some are losers.

Definitely if you’re on the old state pension, you qualify for PC.

It’s way below the newer SP. Which I think is unfair.

The whole welfare system needs over alling, if you never work, have children like rabbits, then when the kids are 16, play the sick game, get everything for free even god forbid you end up in a care home....EVERYTHING IS FREE....IT DOESN'T PAY TO WORK OR SAVE ANYMORE....my husband and I have found out the hard way....NO SAFETY NET FOR US

Greciangirl

Definitely if you’re on the old state pension, you qualify for PC.

It’s way below the newer SP. Which I think is unfair.

Not again.

A lot of people on the OSP get far more than those on the NSP. The New one is fixed, and even those who have paid in enough for a full pension can't get enhancements for things like SERPS, spouse's contributions etc. I worked from the age of 16, including when I was a student, and paid NI every year until I retired. For most of that time I paid higher rate tax. My mother left work at the age of 21 when she was pregnant with me, and didn't work again until she was in her late 40s, when she worked for a few years until retiring at 55. She is on the OSP, but because she paid SERPS, had her pension contributions paid when she stayed at home for decades and inherited my father's SP (also enhanced by SERPS) she gets significantly more than I do, as well as the occupational pension my father left, and she has had those pensions for six more years than my generation. Most of her friends are in a similar position. If my husband goes before I do, I will get nothing of his SP, and the only reason I get a full NSP is because I have full contributions - many women of my generation do not.

It is simply not true to suggest that people on the OPS are necessarily worse off than those on the NSP. Some are, but others are significantly better off. I agree with Cossy that pension payouts should properly reflect contributions paid. If two people want to claim two pensions when only paying one lot of tax they should pay two NI contributions.

I don't want to see people like my mother penalised - she did nothing wrong - but I do think that that nobody should be worse off for working than they would be if they hadn't. I think that this sort of unfairness, which also extends to people on benefits being better off than if they worked*, and to young people being stuck with rents that pay others' mortgages is responsible for a lot of the resentment that is fragmenting our society.

The answer is not to cut benefits to those who have them, but to change the system so that the expectation is that everyone pays in and takes back in their own right, with exceptions only being made for those who are unable to do so. There should be subsidised childcare and free/very cheap retraining available to those who have been left behind when it comes to filling job vacancies, but nobody capable of work should be able to claim allowances that are paid for by others.

People who worked and paid full stamp but retired before 2016 on the OSP have been badly treated, IMO - the full SP should go to everyone who paid for it - but if they opted out of paying the full amount in, they must have realised that they wouldn't get the full amount out? I don't see any reason why married women should get a different deal from single ones, and pay less in to get the same amount back.

*I realise, of course, that many people on benefits also work - I am talking about people working short hours getting wages made up to full time, and people who don't work at all. I think that anyone working a full week should not need benefits to have a decent standard of living, and that the balance between NMW and the cost of housing and childcare should be such that no full-time workers should need benefits to survive.

Must admit I have wondered about the level of add ons available to benefits. Also does anyone have any idea how tge £35K income level was arrived at for the winter heating allowance and why it is for each individual within a household. Seems hard when households can have a joint income well in excess of the £35K yet can qualify.

Sadie5803

The whole welfare system needs over alling, if you never work, have children like rabbits, then when the kids are 16, play the sick game, get everything for free even god forbid you end up in a care home....EVERYTHING IS FREE....IT DOESN'T PAY TO WORK OR SAVE ANYMORE....my husband and I have found out the hard way....NO SAFETY NET FOR US

Child benefits are limited to the first 2 children only. Currently average family size is below replacement level. Whether that is a good or bad thing is a separate discussion.

Any benefit system is hard on the people who are just above the benefit level. But if anything is an incentive not to be dependent on benefits if you possibly can, the thought of having to be dependent on the state to pay care home fees must be the most pressing.

To be put into the cheapest care home your local council can find, regardless of its situation and distance from family and friends and whether you like it or not, must surely be the worst outcome at the end of life.

Child benefits go to all children if the family income qualifies. It is the part of benefits such as UC claims for children that has been limited to the first two, although that will change in April.

The similarity in the way the two (very different) things are expressed is responsible for a lot of confusion.

A lot of people on the OSP get far more than those on the NSP.

Not again

A lot of people don't and, in the main they are women because, in the 1960s and 1970s, the system was loaded against them.

The other thing to note is that those who may have an increased old State Pension paid for it in other ways ie by having a reduced works pension. This will not happen under the new system

The old system was unnecessarily complicated with Serps, GMP (reducing works pensions), other add-ons for which we paid through deductions from pay eg Graduated Pension contributions, which may now contribute about £2 per month to our old State Pension if we're lucky after years of contributions.

The system did need an overhaul and not before time but not everyone on the old State Pension is better off than those on the new State Pension by any means.

The other thing to note is that those who may have an increased old State Pension paid for it in other ways ie by having a reduced works pension.

That was not through choice btw

Exactly the same position as my brother and myself. I get the full State Pension plus a small work pension of about £280 per month, after tax. My mortgage is paid off, my brother never had to pay for a house as he still lived with my late mother and retains her house until his death. He gets pension credit and has a lot more disposable income than I do.

One thing that would help solve the issue for those of us not much above Pension Credit level is to raise the personal tax allowance.
When I retired I paid hardly any tax, but now the state pension is not much below the personal tax allowance, which means my private pension is taxed much more than it used to.
I think those of us with an income well below minimum wage should be paying much less tax.

Doodledog I worked and paid the full NI cont and qualified for a full pension , old, lower rate. I've read before that you say those on the old SP get enhanced paymts for spousal conts and serps. This is not always the case. My DH was in a very well paid job but DWP do not award me any enhancements. I wrote to them twice, the first time no reply and the second time just a statement of my personal SP award.

Allira

^The other thing to note is that those who may have an increased old State Pension paid for it in other ways ie by having a reduced works pension.^

That was not through choice btw

Manythose of us old enough to get the OSP were frequently barred from occupational pension schemes because we worked part time, or were returned all contributions when we left work because we had not been in the pension scheme long enough.

I lost the equivalent of 12 years occuptional pension through either staying in a job less than 5 years (later reduced to 2 and then abolished) and working part time for a company that barred part timers from the pension scheme. I suspect that my 'lost' pensions could have amounted to several £000s a year. A very useful additionn to my income

watermeadow Totally agree, my ex husband died recently, never worked a day in his life but had a beautiful housing association flat over looking a village gree and the sea plus £26k per annum in benefits! How is this fair 🥲

M0nica In my opinion your response is just too cut & shut, people who’s benefits that go over £12,570 should be taxed like the rest of us!

knspol

Doodledog I worked and paid the full NI cont and qualified for a full pension , old, lower rate. I've read before that you say those on the old SP get enhanced paymts for spousal conts and serps. This is not always the case. My DH was in a very well paid job but DWP do not award me any enhancements. I wrote to them twice, the first time no reply and the second time just a statement of my personal SP award.

It is complex and depends on age and when the spouse died.

Former Pensions Minister Steve Webb explains through the Lane Clark Peacock website.

www.lcp.com/en/our-impact/inherited-state-pensions-for-widows-and-widowers

Broadly, if a widow(er) has not earned a full basic (old) state pension in their own right they can use their late spouse’s pension to top up to the full rate.

They may also be able to claim a percentage of their spouse’s additional state pension if they paid SERPS and were not in a works pension scheme that had contracted out. If the late spouse was entitled to an additional state pension, the older you are (and they were) the better the percentage inheritance.

This is why one comes across some very elderly widows who have large state pensions. It's usually when their late spouse worked for an employer with no pension scheme so paid SERPS. The widow has inherited all or part of his basic pension to top up to the full basic pension plus 100% of the additional state pension. (The maximum additional state pension is £222.10 pw although few people reach the maximum).

Of course, what that they won't have is any inherited works pension.

The rules are different for those who come within the new state pension scheme. There is no provision for a widow(er) who doesn’t have the 35 years of contributions needed for a full pension to top up the new state pension using a late spouse's pension.

Inheritance of a late spouse’s additional state pension is also much restricted for younger pensioners:

www.gov.uk/additional-state-pension/inheriting

M0nica

Allira

The other thing to note is that those who may have an increased old State Pension paid for it in other ways ie by having a reduced works pension.

That was not through choice btw

Manythose of us old enough to get the OSP were frequently barred from occupational pension schemes because we worked part time, or were returned all contributions when we left work because we had not been in the pension scheme long enough.

I lost the equivalent of 12 years occuptional pension through either staying in a job less than 5 years (later reduced to 2 and then abolished) and working part time for a company that barred part timers from the pension scheme. I suspect that my 'lost' pensions could have amounted to several £000s a year. A very useful additionn to my income

Yes, this too, M0nica.

Thst 'marriage gratuity'
Or 'baby bonus' .
Having your own pension contributions returned to you and being expected to feel grateful.