The potential of no longer paying National Insurance.

It’s already been spent hasn't it and new contributions are partially funding current pensions.

Yes, because NIC is effectively a Ponzi scheme but it is also a contributory benefit. We pay what we are asked to do during our sometimes very long working lives - often more years than we need to qualify for a full state pension.

You may as well say that workplace pensions shouldn’t be paid to the “wealthy” either. Employer’s pension schemes are under enormous pressure to remain fully funded. Many came close to crashing altogether as a result of Kwarteng’s mad Autumn 2022 Budget, had the Bank of England not stepped in to save them.

It's possible that many people are "wealthy" only because they have contributed to workplace pensions which could disappear overnight through government incompetence or corporate failure e.g. BHS, Wilko etc.

You are arguing to dissuade people from working and making provision for their old age.

Katie59

Katie59

Wealthy capital and income, income is already taxed.

No of course not, the way care home system works is that if your savings are below a certain level the value of your assets is clawed back when you die to pay for your care
Set whatever level you want £20k, £50k, make no mistake restricting pensions is going to reduce the amount you pass to your beneficiaries.

My cousin lives in Australia they have a house and investments, neither of them get a state pension their assets are too high.

Reply was to GSM

Katie59

Wealthy capital and income, income is already taxed.

No of course not, the way care home system works is that if your savings are below a certain level the value of your assets is clawed back when you die to pay for your care
Set whatever level you want £20k, £50k, make no mistake restricting pensions is going to reduce the amount you pass to your beneficiaries.

My cousin lives in Australia they have a house and investments, neither of them get a state pension their assets are too high.

That doesn’t answer the question, unless you are saying that the definition of wealth is having savings and an income. That would surely be the case with everyone but the very poorest living from one payday/pension day/benefits payment day to the next with nothing in the bank. Are you really saying that a state pension should only be paid to those with absolutely no savings? I doubt that you are.

Wealthy capital and income, income is already taxed.

I have asked that question before, in various contexts, and there has never been a reply. Perhaps Katie will give us her definition.

M0nica

^There is no justification for paying a state pension to those with wealth^

I presume, in that circumstance, all contributions, with interest, would be paid back to those who had contributed to their pension, but were too wealthy to get one.

What is your definition of wealthy, is it based on capital or income or a mixture of the two?

It’s already been spent hasnt it and new contributions are partially funding current pensions.

The only place that more can be directed to those in need is from those the have more than they need. Nobody likes wealth taken away it’s always someone else that should pay.

That question is never answered, is it?

There is no justification for paying a state pension to those with wealth

I presume, in that circumstance, all contributions, with interest, would be paid back to those who had contributed to their pension, but were too wealthy to get one.

What is your definition of wealthy, is it based on capital or income or a mixture of the two?

Katie59

If we all recieved what the national pension pot could afford we would get less than half of current pensions. With larger numbers of pensioners living ever longer, and working numbers falling the system has to change.

There is no justification for paying a state pension to those with wealth.

So what is the justification for taking NI (i) from people on very modest salaries? They might not stay poor all their lives, but what incentive is there for people to try to improve their circumstances if as soon as they do they are penalised? This is particularly the case when people know that if they don’t bother to save, work overtime, take courses and sit exams etc they will get money paid for (ii) by those who do?

Of course people whose earnings are affected by sickness or disability should pay less and get more. Do I really need to point that out in every post on every thread on this subject?

Taxation is means testing, but if everyone (ie everyone who is capable of working (iii) paid it, and not just those with income from paid work - then it would be a fair way of redistributing money. My point (as I keep saying) is not that we shouldn’t be taxed, but that taxing only workers, and not taxing those who choose not to work (iv) and then also means-testing pensions, social care and benefits such as childcare is a double whammy for those with modest incomes who are striving to improve their circumstances.

(i) however it is badged
(ii) the principle applies regardless of which economic theory is used to describe the circulation of money.
(iii) unless they are sick or disabled or are caring for someone sick or disabled, and notwithstanding purchase tax or tax on savings
(iv) see (iii) above

If we all recieved what the national pension pot could afford we would get less than half of current pensions. With larger numbers of pensioners living ever longer, and working numbers falling the system has to change.

There is no justification for paying a state pension to those with wealth.

Doodledog

*However, healthcare cost about a sixth of national GDP and I really don't see why those who can afford it (whether that money is coming from earned or unearned income) should pay so much less towards it, based on age.*
At what level of income or wealth would you decide that someone ‘can afford’ to pay? Yet again, a means-tested approach would drag down those who have always had low to middle incomes, and reduce their chances of being comfortable in older age.

If someone is not working then presumably their income or wealth is from money they have saved when they did work. Why should that be used against them in retirement?

Would this be a household expense or would those who didn’t contribute in their ‘working’ lives be exempt again? If it is to be included in general taxation would this represent a cut in the State Pension in real terms, and is that ok?

I’m not saying that I don’t agree with pensioners paying NI however it is badged - I pay it myself- but it should be the same rule for everyone.

Not necessarily. Owning BTL property isn't working, but quite a lot of pensioners have substantial income from this route.

Doodledog

*However, healthcare cost about a sixth of national GDP and I really don't see why those who can afford it (whether that money is coming from earned or unearned income) should pay so much less towards it, based on age.*
At what level of income or wealth would you decide that someone ‘can afford’ to pay? Yet again, a means-tested approach would drag down those who have always had low to middle incomes, and reduce their chances of being comfortable in older age.

If someone is not working then presumably their income or wealth is from money they have saved when they did work. Why should that be used against them in retirement?

Would this be a household expense or would those who didn’t contribute in their ‘working’ lives be exempt again? If it is to be included in general taxation would this represent a cut in the State Pension in real terms, and is that ok?

I’m not saying that I don’t agree with pensioners paying NI however it is badged - I pay it myself- but it should be the same rule for everyone.

IMO the vast majority of people could afford to pay something towards the NHS - at whatever age. If payments were integrated into the general tax system without some myth that NI is somehow different, those with higher incomes would pay more. If that's what you consider to be means testing, so be it.

I would make exceptions for those with disabilities or serious illnesses, which is why I included a proviso about affording to pay.

Callistemon21

*And*, to press home a point, we still paid about 6% of our salary in NI contributions which presumably went into the general pot from which everyone might benefit.

Which was half the percentage current workers pay.

Both our fathers died just before retirement and received nothing. My mother had worked all her life, paid for a full stamp and her pension was based on her earnings not her late husband's. Although her husband was entitled to a Naval Pension, my mother didn't receive a penny of that either because she wasn't married to him when he retired and she was one of those who didn't qualify when the rules changed.
A civilised society cares for its elderly whether they have paid for the privilege or not and despite it not seeming like it sometimes, we are lucky to live in a civilised society where if you haven't paid for your pension, you will be entitled to some form of state benefit.

I don’t think it is fair to blame people who abided by the system they were under. In the same way that I don’t think that anyone who has paid into the current system for decades is responsible for the fact that successive governments have ignored the demographic time bomb, it is not the fault of women who paid a lower stamp if that is what they were told to do. In either case we paid in believing that we would get a pension, and regardless of the fact that there is no ‘pot’ we are entitled to believe that this will be honoured.

My beef is that people who chose not to work got stamps paid, when mothers who worked did not, and with the constant threat of means-testing which would reduce the living standards of contributors to that of those who didn’t work and pay in, on the grounds that having an occupational pension means that they ‘can afford’ to pay for things that others get free.

And, to press home a point, we still paid about 6% of our salary in NI contributions which presumably went into the general pot from which everyone might benefit.

maddyone

Yep.

To be fair, our Personnel Manager didn't call us "love"
He was a respectful and very polite gentleman 🙂
But toeing the senior management line - just sign here!

Yep.

To give an example, we are talking typically about the '60s and '70s. The culture was different then. Often women married very young, so many of the women who switched over to the married woman's rate were teenagers or in their early 20s. One woman who wrote a letter to me explained that she came back from her honeymoon, at the age of about 19, and the man from payroll came round and said, ''Did you have a nice honeymoon, love? Sign here. You're a married woman. You pay the married woman's rate.''

www.theyworkforyou.com/pbc/2003-04/Pensions_Bill/07-0_2004-03-18a.3.0

maddyone

I think the new state pension is treated differently. I think only people on the old state pension can claim a widow’s pension as well as her own pension. Someone might know better. I might be wrong, but think that’s the case.

A widow can't claim her husband's as well as her own pension, only instead of or the SERPS part of it.

The employers didn’t tell women what the implications of paying the reduced stamp were. You are right. My mother did not lie to me.

We lived in a very misogynistic society back in the 60/70s

I don't think much has changed in that respect but at least women are more aware of their rights now!

I'm rather fed up of older women being blamed and the implication being that they were stupid but the fact is employers lied.

I think the new state pension is treated differently. I think only people on the old state pension can claim a widow’s pension as well as her own pension. Someone might know better. I might be wrong, but think that’s the case.

It’s not a myth Callistemon. Of course I know that the married women’s stamp did not mean no contribution was paid - but it was very little compared with the ‘full stamp’.