The potential of no longer paying National Insurance.

Please excuse typos.

That’s true GSM, but I suspect that fewer people will be able to afford to retire early in the coming years. The retirement ages for many public sector workers have risen and rather a lot of younger people apparently haven’t made any private pension arrangements. Many more people will have to work longer in the future.

This was another petition that gathered enough signatures to require a goverment response:

petition.parliament.uk/petitions/650940

DWP responded on 5 February 2024. Among other things, it says:

There are a number of misconceptions about this measure, namely, it does not grant DWP access to any bank accounts and it does not allow DWP to see how claimants are spending their money.

What this measure will do is require third parties to look within their own data and provide relevant information to DWP that may signal where claimants do not meet the eligibility criteria for the benefit they are receiving. DWP will only receive data on accounts matching criteria DWP prescribe, these will be linked to eligibility criteria for benefits that, if met, may require further consideration to ensure a claim is correct through our business-as-usual processes . For instance, some benefits have rules regarding how much money a claimant can have in a bank account and remain eligible for that benefit. This is called the capital limit and claimants breaching the capital limit is one of the largest causes of fraud and error in the welfare system, accounting for almost £900m in overpayments just in Universal Credit in 2022/2023.

Banks already notify HMRC of the annual interest received on accounts.

I see the new DWP powers as an extension of what already happens.

Try getting some on GN to accept that …

Germanshepherdsmum

Try getting some on GN to accept that …

Speaking as one of 'some on Gransnet', I'm not sure what I am supposed to accept. I am happy to accept that TinSoldier sees the new powers as an extension of existing ones. In fact I am happy to accept that anyone sees them as anything. That's up to them, but I can only speak for myself, and I don't accept that they are innocuous.

I have read the paper that Terese Coffey submitted, which does say that and also, in the budget speech, Jeremy Hunt mentioned that the new Child Benefit rules will require HMRC (or was it the DWP?) to access accounts at a household level, something that the government will put in place (if they stay in power). Again, this reduces privacy, and suggests means testing is going to become more widespread. Why else would the accounts of household members be collated if one person is in receipt of a benefit?

Currently there has to be suspicion of a crime before accounts can be scrutinised. Under these powers that will not be the case, which is a huge shift in the ethos with which the justice system is underpinned. If the assumption is that all claimants are criminally inclined, why not assume the same about all taxpayers and access all taxpayers' accounts in case they are not paying enough tax? They could be collated with business accounts to ensure that there are no excess profits being squirrelled away, or paid to family members, but AFAIK that is not in the pipeline - why not, if the intention is genuinely to prevent financial fraud?

The ability to access my accounts because Mr Dog gets a SP (I don't yet) is a huge difference - and however other posters see it, I do not see it as a extension of existing powers, any more than I would see public executions as just an extension of the powers of the existing powers of the judiciary.

I believe that if they stay in power the Tories would love to abolish payouts and subsidies of any kind to anyone but the poorest, and this would include pensions, child benefit, much of the NHS, and ultimately post-16 education. Of course the poorest should be supported, but I also believe in universal benefits, and IMO pensions and child benefit should be among them.

Doodledog

*I can't honestly see that the DWP would have the time or resources to access the bank accounts of anybody who isn't receiving some kind of means-tested benefit.*

So why is the right to scrutinise accounts of pensioners and others in their households being brought in? The new powers will also extend to the scrutiny of bank accounts of child benefit claimants.

I wrote to my MP (Labour) to ask if the LP would oppose this legislation and he replied to say that yes, both he and the LP were against it, and he agreed with me that there was no obvious reason why the accounts of State Pensioners not in receipt of means tested benefits should be scrutinised. I don't think that those in receipt of such benefits should be scrutinised either, unless there is reason to suspect fraud, in which case existing legislation would cover it.

Because it means that permission does not have to be sought every time. If people apply for a means-tested benefit, they would need to be told that their bank accounts might need to be scrutinised without further permission.

In my case, I would much rather the council just accessed my bank accounts every six months to access the required information. I have nothing to hide. As it is, I have to print off my statements every six months and wait for them to be scrutinised.

We will have to agree to differ. I have no problem whatsoever with my bank accounts being subject to surveillance. Anything which helps to combat fraud is fine by me.

maddyone

^I don’t accept the argument that pensioners shouldn’t contribute towards health care ^

They do. They pay tax.

They pay tax at a significantly lower rate than people of working age.

growstuff

maddyone

I don’t accept the argument that pensioners shouldn’t contribute towards health care

They do. They pay tax.

They pay tax at a significantly lower rate than people of working age.

Surely they pay tax at the same rate?
It's just that they don't pay NI.

Exactly! As NI is just another tax, they are paying a lower total rate on the same income.

It is still called National Insurance. Whatever pot it goes into, it is an insurance which entitles you to benefits and a state pension.

Those earning less than £242 per week do not pay it either.

Because it means that permission does not have to be sought every time. If people apply for a means-tested benefit, they would need to be told that their bank accounts might need to be scrutinised without further permission.
But state pensions are not means-tested benefits. Yet. I have ‘nothing to hide’ either, but that doesn’t mean that I understand why anyone should be able to look at how I spend my own money.

But state pensions are not means tested benefits

No, they’re not, but that’s where the government is heading in my opinion.
That’s why they want to get rid of NI, so that no one has an unwritten contract to draw state pension at a certain age, currently 66.

I agree, which is why I added ‘Yet’ .

maddyone

^But state pensions are not means tested benefits^

No, they’re not, but that’s where the government is heading in my opinion.
That’s why they want to get rid of NI, so that no one has an unwritten contract to draw state pension at a certain age, currently 66.

Nobody has any unwritten contract to draw state pension at a certain age for a certain amount.

I don't get the logic of the abolition of NI and means-testing the state pension.

My hunch is that in the future, the UK might adopt something more like the German system. Paying hypothecated pension contributions is compulsory for all except the very wealthy. Pensions are then correlated with the value of contributions rather than the number of contributions, as they are in the UK. People who earn more over their working lives receive more, so Germans make less use of private pensions. There is little need for means-tested benefits. Moreover, they don't look to investing in buy-to-lets to boost their pensions. The whole system is run by private organisations, but heavily controlled by the central bank/government. It's outsourcing to a non-government provider rather than giving a commercial company a free rein.

If change does occur, it must be over the long-term and people need to be informed, so that plans can be made. Almost anything would be preferable to the current pension mess in the UK.

A change to a contribution-based system would be a shift from the theoretical "universality" of the system we have now, but in fact the system is so full of loopholes and apparent randomness, it's not very universal anyway. It would mean those who contribute more would receive more, which isn't always the case in the UK at present. There would always have to be a safety net for those who can't contribute through no choice of their own.

Doodledog

*Because it means that permission does not have to be sought every time. If people apply for a means-tested benefit, they would need to be told that their bank accounts might need to be scrutinised without further permission.*
But state pensions are not means-tested benefits. Yet. I have ‘nothing to hide’ either, but that doesn’t mean that I understand why anyone should be able to look at how I spend my own money.

My understanding from someone who has some knowledge of these matters is that the current intention is to check a fraction of pensioners who don't receive means-tested benefits, if there is a suspicion that the recipient isn't actually living in the UK. To be honest, I don't know how big an issue that is (I don't have accurate stats), but apparently there are pensioners who don't meet the residence criteria for receiving a UK pension or NHS treatment.

PS. Don't shoot the messenger!

To be fair, the document does mention people living abroad, and it did cross my mind that that could be relevant. But it must be a very small number, and there must surely be more efficient ways to find out than trawling millions of accounts to look for too many transactions made in euros? Sledgehammers and nuts spring to mind.

Also, if the intention is to move to a newer, fairer system such as the German one, why not say so? By dint of their pretty much irreversible loss of earning power, many, if not most pensioners are vulnerable when it comes to changes in policy, and the debacle over the rise in the SPA must have brought this home to even the most obtuse of ministers. Scaring people with half-cocked announcements, and regular ‘debates’ about the future of pensions in the media only serve to worry them*, whereas a reassurance that planned changes would be phased in gradually would allow people to listen properly without the ‘noise’ of dire imaginings and catastrophising that get in the way of adult conversations.

*me (but I’m sure I’m not alone)

I doubt if they would trawl millions of accounts randomly. I suspect there would already be a suspicion and if bank accounts showed a very high number of foreign transactions for items such as utility bills or groceries over the year, there would be further investigation.

I really have no idea how big the issue is, but I believe it does happen. I was told about this last week by a friend who used to manage accounts of people who live abroad for months at a time. In fact, she does herself, but she's obviously very hot on the rules and makes sure she's within the law. She told me that many of her clients think laws don't apply to them, but I'm afraid they do.

What would probably happen is that banks have to monitor accounts and send some kind of code regularly to HMRC. The code wouldn't give details, such as where individual spending has taken place, but there might (for example) be a code for "90% of bank activity has taken place outside the UK" or "pays foreign utility companies, not UK ones". AI would handle it all, so the cost would be minimal, once the system has been set up. There would be red flags, which would need to be handled by humans.

Doodledog I know pensioners have less control about increasing income, which is why I've written that there would need to be a long, transparent lead in. It would affect younger people, who will be affected one way or the other anyway because the current systems are flawed and unsustainable.

PS. It's not the government which has scared people, but certain sections of the media, who rely on this kind of thing to sell their products

I don't expect you are alone. The pandemic taught me how prone people are to catastrophising.

At the moment state pension is classed as a benefit, when I inquired about carers allowance, I found out that if a person gets state pension, they can't get carers allowance, because you can't get 2 benefits. after paying N I stamp all your working life.
just another way of keeping money off people.

The best (and fairest) way to raise people (any age) out of low income is to raise the Personal Allowance. Freezing it for another 3 years just creates the fiscal drag mentioned above. Less well off folk would benefit hugely by raising it.

Carer’s allowance normally stops when you receive the sp pably, but it is not the case that you can’t receive two benefits at once - pension credit and housing benefit for instance.

What growstuff says at 05.15 is entirely plausible. They really are not looking to see how you spend your money Doodledog. Who would be remotely interested in your shopping habits?