Having a pension paid up?

"Martin Davies" wrote

All that maybe true, but it doesn't stop the fact that "the real value" is still kept the same -- because "real values" are in relation to inflation...

Larger than average? Many areas, the increase in council tax at times has gone up in band A by more than some benefit or state pension increases. As far as I know, any pensioner can sell and move down - but only as far as band A area.

Martin <

And here you have crashed in to the big question of "when is a pensioner not a pensioner?". It used to be simple. Men retired at 65 and women at 60. Then came the opportunities for "early retirement" in the 1980's and 90's encouraged both by employers that wanted to get rid of staff and the govt of the time that wanted to shove the oldies out of the job market to keep the unemployment figures down. Lots of people toddled off in to the retirement sunset in their early fifties.

Now the political climate has changed and early retirement is now discouraged, Women will no longer officially retire at 60 and the govt would like men to work until they are older. Soon there will be an age discrimination act coming out in October that will make it an offence for employers to discriminate against older people, and the govt are encouraging people to defer their retirement pensions, by offering them lump sums (which, incidentally, will be discounted for life when assessing future benefit entitlements).

What we have been discussing here is, "how much is an occupational pension worth compared to how much the person would receive in state benefits if they did not have the pension." The answer varies according to the age of the recipient because entitlements to state benefits vary with age. Let us assume a single male with an occupational pension of 112 per week.who pays

At age 55 I estimate he would be eligible for HB of 44.89, and CTB of

At age 55 that person would be better off by 8.10 a week for having the occupational pension. At age 60 that person would better off by only 9 pence for having the occupational pension. At age 65 that person would be better off by 25.47 for having both the occupational and state pension.

It is quite frightening when one looks at the figures and realizes that in order to get the occupational pension that person had to pay in to a pension fund for many years. But not only that: In order to get the State retirement pension he had to pay NI contributions for all of his life when working, and to sign on the unemployment exchange (now job centre) in order to keep up his contributions whilst unemployed.

By comparison someone who has never paid in to a pension fund at all, and has never paid any NI contributions whatsoever is not very much worse off at all. Put it the other way around and ask was it all worth it, paying in to the pension fund for years and making sure the NI contributions were kept up to date. The answer must be a resounding NO!

It is still true that an occupational pension is useful in many instances, for example, if you have a job or part time job. It does give you some personal freedom and allows you to make choices. Also the equation might change considerably if one excludes housing benefit from the assessment. People who own their own homes might be somewhat better off. Obviously a good pension, one that is equal, or nearly equal to the salary you had whilst working, is always worth having. But for many people it seems to be a very dismal picture. A pension, or pensions, that bring you within the remit of the benefit system just dont seem worth having, or striving for. A lot of effort for a very meagre return.

Ellis

Ah ha!

I thought I understood it but I made the stupid mistake of assuming that the Pension Guarantee Credit and Pension Savings Credit applied to the same group of people. I should know by now to always look for hidden complications in any of Brown's hair-brained schemes.

The PGC applies to anyone over 60 (this will rise in line with the women's basic state pension age).

The PSG only applies to people over 65.

And they shoved a lot of people onto disability benefits for the same reason.

Hmm, maybe the govt should apply this to themselves. Why does a 24 year old only need

Absolutely - and practically everyone now seems to understand this point - except Brown and his cronies. The Turner report recommended reducing means testing as much as possible, and got widespread support from people of all political persuasions. But not Brown, he loves his stupidly complicated, regressive tax/pension credits systems which destroy incentives and make more and more people dependant on the state.

Also to retire abroad - but even there you may get your basic state frozen.

Yup.

Because pensioners vote, 24yr olds don't.

Jim.

Both groups vote - just more of the pensioners do. Though come to think of it, there are probably more pensioners than 24 year olds.

Martin <

Because it's harder for 60 yr olds to sponge off their parents.

Uden