State pension to be £7.5k in today's money
Discussion
BoRED S2upid said:
I heard some pensions minister trying to explain this on the news today. You need to pay in 10 years of NI contributions to get anything. Why don't I believe that? If you have never worked a day in your life come 66 or whenever your pension kicks in you will be cut off without a bean because you haven't paid 10 years NI? never in a million years. Did I hear him wrong?
Isn't part of the benefits package to pay the persons 'stamp'?Decent discussion about this on the Today programme this morning when they interviewed someone from the IFS.
Basically this proposal, which is supposed to be 'good' news for those retiring, will mean that most are worst off. Because, even after the changes made by Brown, the State second pension plus the basic state pension would give a higher income than this flat rate pension.
The media seem to have decided that this is a good thing mainly on the basis that it is easier to understand. Though the concept a earnings related second state pension doesn't seem that hard to grasp.
Basically this proposal, which is supposed to be 'good' news for those retiring, will mean that most are worst off. Because, even after the changes made by Brown, the State second pension plus the basic state pension would give a higher income than this flat rate pension.
The media seem to have decided that this is a good thing mainly on the basis that it is easier to understand. Though the concept a earnings related second state pension doesn't seem that hard to grasp.
BoRED S2upid said:
I heard some pensions minister trying to explain this on the news today. You need to pay in 10 years of NI contributions to get anything. Why don't I believe that? If you have never worked a day in your life come 66 or whenever your pension kicks in you will be cut off without a bean because you haven't paid 10 years NI? never in a million years. Did I hear him wrong?
AIUI if you don't pay enough NI you don't get as much pension (so no NI at all = no pension).Instead you get a means tested benefit called "Pension Credit", which is roughly equivalent to the basic pension.
That's a whisker over half of my current annual take-home pay, so assuming I've somehow managed to buy and pay off a property by the time I retire (currently paying 40% of my income on rent), and don't have to commute anymore, and have my occupational pension on top, I'll probably be better off than I am now! All relative to today's money of course. In reality, if unavoidable living costs keep rising so much faster than incomes then politicians, bankers and lawyers will be the only ones left who haven't have starved and/or frozen to death long before then.
IroningMan said:
Am I being thick, or does this create a two-tier system: if you've contracted-out of SERPS then your NI is lower, but you'll still get the same 'flat rate' pension as someone who hasn't contracted-out?
That is one of the details that hopefully todays announcement will address.BBC News said:
Meanwhile, several million employees in the private and public sectors are opted out of the state second pension because their final-salary schemes pay an equivalent benefit.
As a result, they pay reduced NI contributions.
The change will bring an end to this system of "contracting out", with two consequences.
The government will have to decide if these individuals should receive the full flat-rate pension, if they first qualify for it after April 2017, despite the fact that they will not have not been making full national insurance contributions for the state second pension in the preceding years.
The government must also decide if these people should start paying higher NI contributions, after that date, while still in work.
As a result, they pay reduced NI contributions.
The change will bring an end to this system of "contracting out", with two consequences.
The government will have to decide if these individuals should receive the full flat-rate pension, if they first qualify for it after April 2017, despite the fact that they will not have not been making full national insurance contributions for the state second pension in the preceding years.
The government must also decide if these people should start paying higher NI contributions, after that date, while still in work.
I heard it will lead to public sector workers and those on final salary based pensions paying more in National Insurance...which means it's a piss take as my pension contributions already rose by c.2% last year and my retirement age went up from 60 to 67, now this, a NI hike too. On top of 9% student loan payments.
what is the point in anyone having a state pension? What if everyone had to look after themselves apart from those who can't?
You just save up and invest your own money as you go along your working life, maybe your employee gives you the contribution in cash and you can do whatever you want with it?
If you don't have enough money to retire and still look after yourself, you just die homeless on the streets? What's so bad about that? Would give people some incentive to look after themselves
You just save up and invest your own money as you go along your working life, maybe your employee gives you the contribution in cash and you can do whatever you want with it?
If you don't have enough money to retire and still look after yourself, you just die homeless on the streets? What's so bad about that? Would give people some incentive to look after themselves
rossmc88 said:
what is the point in anyone having a state pension? What if everyone had to look after themselves apart from those who can't?
You just save up and invest your own money as you go along your working life, maybe your employee gives you the contribution in cash and you can do whatever you want with it?
If you don't have enough money to retire and still look after yourself, you just die homeless on the streets? What's so bad about that? Would give people some incentive to look after themselves
Whilst I think many PH'ers will recognise the need to instill responsibility and thrift into the general UK population,I really do think that, suggesting "you just die homeless on the streets" is very likely to raise considerable opposition.You just save up and invest your own money as you go along your working life, maybe your employee gives you the contribution in cash and you can do whatever you want with it?
If you don't have enough money to retire and still look after yourself, you just die homeless on the streets? What's so bad about that? Would give people some incentive to look after themselves
The real problem in this, is in finding the way to ensure everybody contributes as they can to their future and to the future of the other citizens of the country. I cannot see the philosophy of "you just die homeless on the streets" as anything other than completely unacceptable, in a civilised democracy.
Steffan said:
Whilst I think many PH'ers will recognise the need to instill responsibility and thrift into the general UK population,I really do think that, suggesting "you just die homeless on the streets" is very likely to raise considerable opposition.
The real problem in this, is in finding the way to ensure everybody contributes as they can to their future and to the future of the other citizens of the country. I cannot see the philosophy of "you just die homeless on the streets" as anything other than completely unacceptable, in a civilised democracy.
Out of interest, how many pensioners have you seem dying, homeless on the streets over the years? The real problem in this, is in finding the way to ensure everybody contributes as they can to their future and to the future of the other citizens of the country. I cannot see the philosophy of "you just die homeless on the streets" as anything other than completely unacceptable, in a civilised democracy.
You can pay no NI all your life and still get paid welfare in your old age.
The concept of the State pension seems rather pointless. Forcing those who are working to pay into a scheme that gives a genuinely appalling ROI and all the while it is wholly non essential as a product for the poorest as they are covered by benefits regardless.
If one ponders too long one could almost begin to suspect that it is one of the biggest scams on the working man going.
DonkeyApple said:
Steffan said:
Whilst I think many PH'ers will recognise the need to instill responsibility and thrift into the general UK population,I really do think that, suggesting "you just die homeless on the streets" is very likely to raise considerable opposition.
The real problem in this, is in finding the way to ensure everybody contributes as they can to their future and to the future of the other citizens of the country. I cannot see the philosophy of "you just die homeless on the streets" as anything other than completely unacceptable, in a civilised democracy.
Out of interest, how many pensioners have you seem dying, homeless on the streets over the years? The real problem in this, is in finding the way to ensure everybody contributes as they can to their future and to the future of the other citizens of the country. I cannot see the philosophy of "you just die homeless on the streets" as anything other than completely unacceptable, in a civilised democracy.
You can pay no NI all your life and still get paid welfare in your old age.
The concept of the State pension seems rather pointless. Forcing those who are working to pay into a scheme that gives a genuinely appalling ROI and all the while it is wholly non essential as a product for the poorest as they are covered by benefits regardless.
If one ponders too long one could almost begin to suspect that it is one of the biggest scams on the working man going.
I have no idea how to address the Benefits Society we have created, or allowed to be created in the UK. Large numbers of individuals have found a way to make utter fecklessness and complete irresponsibility replace the need ti get up and work and to remove any need for education, effort or personal skills.
The fact is that unemployment has become a voluntary way of life for many people. Pensions become meaningless if the previous 50 years of adult life has already been fully provided free to the unemployed. What do pensions matter? They never need to stop work because they never start work. They are already protected from the cradle to the grave by benefits. Pensions are therefore of no significance.
There is going to be a massive change in the Benefits Society because, at last the complete unaffordability is apparent to all. Expect the idiots and crooks in the Labour party. What will replace the benefits for all whenever called upon, approach? I have no idea. But this cannot go on.
Steffan said:
I entirely agree. An excellent example of weasel words from politicians. National Insurance should be scrapped and honestly readmitted as taxation. Politicians prefer to lie than risk the truth.
I have no idea how to address the Benefits Society we have created, or allowed to be created in the UK. Large numbers of individuals have found a way to make utter fecklessness and complete irresponsibility replace the need ti get up and work and to remove any need for education, effort or personal skills.
The fact is that unemployment has become a voluntary way of life for many people. Pensions become meaningless if the previous 50 years of adult life has already been fully provided free to the unemployed. What do pensions matter? They never need to stop work because they never start work. They are already protected from the cradle to the grave by benefits. Pensions are therefore of no significance.
There is going to be a massive change in the Benefits Society because, at last the complete unaffordability is apparent to all. Expect the idiots and crooks in the Labour party. What will replace the benefits for all whenever called upon, approach? I have no idea. But this cannot go on.
I've no idea what the solution is but what we do know is that a man who starts work from school is the one most likely to have a full working career. Whereas the one who leaves school and goes onto benefits has a serious chance of remaining there. And yet we were trying to get kids onto the benefits system before they even left school. I have no idea how to address the Benefits Society we have created, or allowed to be created in the UK. Large numbers of individuals have found a way to make utter fecklessness and complete irresponsibility replace the need ti get up and work and to remove any need for education, effort or personal skills.
The fact is that unemployment has become a voluntary way of life for many people. Pensions become meaningless if the previous 50 years of adult life has already been fully provided free to the unemployed. What do pensions matter? They never need to stop work because they never start work. They are already protected from the cradle to the grave by benefits. Pensions are therefore of no significance.
There is going to be a massive change in the Benefits Society because, at last the complete unaffordability is apparent to all. Expect the idiots and crooks in the Labour party. What will replace the benefits for all whenever called upon, approach? I have no idea. But this cannot go on.
I wonder if there were no benefits available to school leavers until they had completed 'x' years of work whether we would actually have any youth unemployment at all?
Lotusevoraboy said:
There are no benefits available to school leaver aged 16. You can't sign on until 18!
I didn't know that. Thanks. There was a kid in our village last summer who quit his job so he could hang out with his mates and allegedly signed on or was getting some form of payment.
Countdown said:
I think even that will be too much for the State to afford.
People should assume no State pension and much lower State spending in future
I'm 32 and for the last few years I have been making the comment to friends that "by the time we get there, there won't be a state pension". People should assume no State pension and much lower State spending in future
I have pretty much decided it will go down the pan and am making my own provision.
It's extremely disappointing that an awful lot of people will pay a hefty whack in taxes all their lives and be pretty much given a pittance when they retire, but maybe that's how it needs to be in future? A country costs so much to run that all taxes are spent long before the opportunity to give them out as pension?
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