What are peoples opinions of the reducing of the qualifying years from 44 to 30 years? Will it mean a better deal (long term) for pensioners, or will it mean a "global reduction" in everyones State Pension, to reflect the fact that more people will qualify for the full ammount....even those with just 30 years contributions? It just intrigues me, as, previously governments of either party stated that the "current scheme wasnt sustainable" and that something needed to be done about it. Well, i just looked on the pensions website, and what SEEMS to have been done paints a more rosey picture than a scheme that was unsustainable, so i am totally confused
If will of course spread any finite pot thinner. There was also some mention of it not being staged and that e.g. someone retiring now or soon with 30 years contribution will get their proprtionate pension, and someone retiring with the same contributions after the operative date, gets a full pension. (Then there are those already on reduced pension because of reduced years of contributions). The difference, particularly accumulated over many years, is substantial. I don't know whether representations made about this anomoly have resulted in any proposals to resolve it.
It is likely to reduce the real value of state pensions significantly, but that has been happening for years as things have moved to pension credits, guaranteed minimum income etc, at the expense of those with a full contribution record. And a couple of months before Blair "I'll serve the full term" left, the spin of the week featured him and Broon, exhorting us to work longer and save more for our retirement to avoid a pensions crisis, without recognising the irony of them having systemetically taxed and penalised every effort to do so.
No, many of those with lower contribution levels would now be able to get means tested benefits (pension credit, housing benefit, council tax benefit), so the cost isn't as great as first appears. They are also flat-rating SERPS, which will save money. And most significantly they are raising the state pension age to 68 phased in (from 60 now for women and 65 men).
stated that the "current
Spin. Someone retiring at 60 now will likely get a much better deal from the state than someone retiring at 60 in 2050. One of the ideas is to try to get people to work for longer.
Why should it be resolved? Someone retiring now will get a pension based on the rules which have been in place for several decades and which they have long been aware of and made plans around, rather than rules which were passed 6 months ago. Why should they benefit from the new rules AND the old ones? Or are you suggesting that a woman who has long planned to retire at 60 should now be subject to the new rules and not be allowed to claim her pension till 68?
Anyway, if they were going to phase it in, they'd have phased it in from, say, 2010 to 2020, which wouldn't help anyone retiring before then.
My understanding is that that is not how it works, and you are using false logic. The increase in pension age will be phased in. But women who reach sixty in the next year or two with thirty years contribution will get the fraction of the pension under the existing rules. Immediately it comes in, women with thirty years contribution who expected to retire at sixty will still do so at that or a slightly increased age and will get the full pension. In both cases they have been expecting to retire at sixty, have virtually the same contribution record but get very different benefits because of a slight difference in age. If I recall correctly the one's retiring now will on average get something like £20,000 less over the life of their pension.
In what way is it fair that people almost the same age and having made the same contribution for the same expected benefits should now receive such different benefits persisting for the rest of their lives?
Rules which they will have been long aware of and should have made plans around.
Yes, so some people get more than they expected, others get exactly what they were expecting.
So what's your answer? If it's going to be phased in it's impractical to phase it in pre 2010. So it'll have to phased in from 2010. All that means is that people retiring after 2010 will get less. Nobody retiring pre 2010 will get more. And it'll make the whole transition a hell of a lot more complicated.
And I ask again - in what way is that fair when they have made the same contributions for the same length of time with the same expectations?
There are many more equitable answers. One of which is a more gradual transition for those who have paid less than the current full contribution, and which also allows for those currently on proportionate pensions to have these proportions gradually increased in line. As regards a whole lot more complicated, it is an algorithm which any competent programmer could do on the back of an envelope. However no doubt it would cost billions and result in total confusion when implemented on a government computer sytem, but that is another issue.
In general, we seem to have a crisis in funding for state pensions, and are now advised we should work longer and save more to make provision for ourselves. That's fair enough. But why has it been left until now when the problem exists because of the large number of post- war baby boomers now reaching retirement age? The Government can't afford the pensions that we thought we'd paid for. It's not clear why it came as a surprise to them. Did successive governments all conclude that the solutions of the formulae 'x = 1945 + 60' and 'y = 1945 + 65' presented difficulty, and would best be left until after the proof of Fermat's last theorem became available?
You remind me of a woman I was sat next to on a flight recently. It was one of these where if you want a meal you have to prebook in advance and pay 10 or so. I didn't want a meal so didn't pay for one. The cabin crew started giving out the meals and gave me one. I told the stewardess I hadn't booked a meal, but she said there'd been a c*ck up with the booking system or something so everyone was getting a meal.
The woman next to me complained, saying she'd paid extra for her meal so why were people who hadn't paid getting one. The stewardess simply said to her "you're getting what you paid for, what other people are getting is none of your business". Or words to that effect.
impractical
Nobody
transition a
gradual
Why should they? The pension changes are intended to secure the long term viability of the state pension system, not give those who have paid relatively low NI in their working life and who have a relatively early retirement age greater pension.
There is no way they should be backdating contribution rules for those who retire pre 2010, but there is an argument that those retiring shortly after 2010 with partial contributions are being treated too generously.
What, like the tax credits system? The algorithm there is pretty simple, but very few people seem to understand it.
confusion
No we don't. Other countries do, because of more generous state pensions and lower birth rates.
Only if we want more than the state pension to live on. Previous generations made do with just the state pension.
conclude
Don't you think the birth rate has something to do with this? It's not the number of pensioners that's the problem, it's the proportion of pensioners to those in work and paying tax. Like I always say to the clueless tossers who whinge about their taxes supporting other peoples' kids - don't then expect my kids taxes to pay your pension in
The question is not whether they get (at least) as much as they expected, it is whether it is *fair* between the two groups (who are, in fact, very similar to each other - perhaps just a few days different in age).
"Andy Pandy" wrote
No problem with that!
"Andy Pandy" wrote
But, they will get *at least* "... a pension based on the rules which have been in place for several decades and which they have long been aware of and made plans around" (as you keep saying!).
"Andy Pandy" wrote
If complicated transitions are such a major problem, then why are we phasing-in the change in retirement age?
No I'm in a slightly different postion to your lady, since I have no personal axe to grind. And the lady who feels cheated in these circumstances has the option of taking her business elsewhere rather than continuing as acustomer of an organisation she regards as not dealing with things fairly.
Why should they not? If the proposals show up a practical anomoly, why should they be regarded as carved in stone, rather than adjusted to make them more equitable.
The can adjust the actual single/couples pensions and the relationship between them, they can introduce new rules. They can introduce pension credits and minimum income guarantees to give extra benefits to those who have contributed less (effectively a retrospective contribution adjustment). Why then, should they not also adjust the proportion rules retrospectively if it makes things more equitable?
Indeed
The fact that the problem is greater elsewhere doesn't mean that we don't have a problem? The current major reviews are because of a recognised crisis. That is of course a subjective term and not mine.
Yes the birth rate has something to do with it. That could explain why I raised the issue of the post-war birth-rate as being a major factor :-)
Equitable didn't use a similar argument. The Equitable argument was a bit like people who booked their flight meal before a certain date having been promised caviar with their meal, and then being told that because the price of caviar has gone up, they'll get less beef than they otherwise would have.
The anomoly is that the changes are too generous for some people. You want them to have less I take it?
relationship
pension
It won't make things more equitable, it'll simply make things more equitible among people with a small age difference. Do you think they should have done that with the married couples allowance, ie give a gradually dwindling proportion of it to people born after 1935, or with things like child tax credits, child trust fund etc? What about someone who gets a redundancy payoff on 5 April, compared to someone who gets it on 6 April, why should the former (most likely) be taxed much more heavily on it?
pension in
If it wasn't obvious, I was referring to the birth rate amongst the generations who will be paying the taxes to pay the pensions of the "post war baby boomers". Ie right up to 1990, even 2000. Did you expect them to know that in the 50's and 60's?
... but in that case, they paid for both the 'flight plus standard beef'
*and* the (extra) caviar, and the other passengers (not buying the caviar, just paying for 'flight plus standard beef') actually got more beef (they got the amount originally expected; not less, as those with the caviar got) -- even though both groups effectively paid the same for their beef.
It doesn't matter whether you count the "extras" as the whole meal (my example) or just the caviar (your example) -- (I believe) they are both equivalent to the Equitable case where "extras" are the GAR.
One group pays more, but gets the same value benefits...
Yes, actually! We all know that things do change. It's when things change *abruptly* that people perceive unfairness; if something changes gradually, over a period of time, that is usually perceived as much fairer.
"Andy Pandy" wrote
Except (eg) the twin who happened to be born a minute
*before* midnight, with the same subsequent NI history as their sibling (who was born a minute *after* midnight), seeing their twin getting a full pension when they will not.
"Andy Pandy" wrote
Eh? Are you trying to say that the government has lost the details of everyone's DOB?
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