Simplified State Pension

[Paul-]

oops

[Paul-]

peter - 2013-01-15 8:23 PM

 

Poor old folks, working for 35 years to get the state pension. I had to work for 50 years for mine, 15 > 65.

 

And we thought we were grown ups at 15 when we started work :D

[RogerC]

I don't see this as a simplification at all.  It looks like meddling just to make it look as if the issue is being addressed.  IMO to simplify the system saving hundreds of £millions  in administration costs/Gov't departments salaries etc is to have a 'one size fits all' pension.  Why does the Gov't not just decide on what is an acceptable pension and pay it to all of pensionable age instead of having this stupid two tier system with top ups/means testing etc which it looks like will still be around in 2017?

 

Similarly there's a fantastic way of ensuring everyone pays their road tax......do away with having to buy a tax disc and simply put the 'calculated income generated' by road tax on petrol/diesel?  Pay as you drive.......no more need for banding relative to emissions because if you burn more you pay more.......simple.

This would actually be a double saving for HMG.  No more tax evasion and the costs of administering the system saved because there would be no need for printing discs, no need for DVLA/Post office staff to administer the system etc etc.......big savings all round.

 

[Tracker]

RogerC - 2013-02-15 12:17 PMSimilarly there's a fantastic way of ensuring everyone pays their road tax......do away with having to buy a tax disc and simply put the 'calculated income generated' by road tax on petrol/diesel?  Pay as you drive.......no more need for banding relative to emissions because if you burn more you pay more.......simple.

This would actually be a double saving for HMG.  No more tax evasion and the costs of administering the system saved because there would be no need for printing discs, no need for DVLA/Post office staff to administer the system etc etc.......big savings all round.

At the moment the tax disc also serves as the only, and inadequate, check that MOT and insurance were in force, if only on the day the tax disc was issued.Perhaps it's time we had an MOT disc and an insurance disc - paid for by the customer of course so no cost to the exchequer?Or is that just too simple to actually work?

[RogerC]

Tracker - 2013-02-15 12:57 PM

RogerC - 2013-02-15 12:17 PMSimilarly there's a fantastic way of ensuring everyone pays their road tax......do away with having to buy a tax disc and simply put the 'calculated income generated' by road tax on petrol/diesel?  Pay as you drive.......no more need for banding relative to emissions because if you burn more you pay more.......simple.

This would actually be a double saving for HMG.  No more tax evasion and the costs of administering the system saved because there would be no need for printing discs, no need for DVLA/Post office staff to administer the system etc etc.......big savings all round.

At the moment the tax disc also serves as the only, and inadequate, check that MOT and insurance were in force, if only on the day the tax disc was issued.Perhaps it's time we had an MOT disc and an insurance disc - paid for by the customer of course so no cost to the exchequer?Or is that just too simple to actually work?

 

Very true Tracker but there's a simple way to make sure the 'once a year check' is still carried out.  Instead of having the Post Office do the check the simplest way is to have garages do it.  You have to have a valid MoT to be on the road legally (going to get an expired MoT renewed is the exception) so therefore you need insurance to be legal to get your vehicle to the garage.  Ergo just have the garage look over your insurance before issuing the MoT certificate.....no insurance...no MoT certificate simples.  Better still as the DVLA 'on line' system knows if you have insurance or not when applying for a tax disc it should be fairly simple to link the MoT system to the DVLA one....or allow the garage access it to check.  The latter option should be cost neutral because the MoT certificate entails computer entry anyway so a few minutes more on line checking insurance against registration number should not impact sufficiently on the time taken to require any increase in charges.

 

[Tracker]

I can't imagine that garages will be very keen on taking on the responsibility of insurance checkers and given the difficulty which some post office people seem to have with it I can't see it being that easy - and it still only shows on the one day a year.

 

Sorry but I still think sticky discs that disintegrate when removed is the best way then at least traffic wardens could also check and either issue a ticket or advise Mr Plod if needed.

[RogerC]

Tracker you're possibly right but the check would be against a data base which just needs to be read and if the insurance is current then the MoT certificate is issued. 

 

However we digress.....what I was trying to illustrate is that almost every Gov't system that is 'simplified' nearly always makes things even more complicated meaning ever more 'civil servants'...(now there's an oxymoron if ever there was one.......self serving would be more like it) required to implement the 'simplification'.  Just look at the tax system in this country.....even HMRC staff struggle to understand it. The Gov't, be it central or local is always harping on about cost savings having to be made but they never seem to go for the simple effective options.......and never ever look or act to reduce the numbers of overbearing, over paid beauracrats.

 

[Wandering]

Well I wouldn't put too much faith in any new system folks. During my working life I saw many changes and new ideas from various governments. We had systems where promises were made of a new and fairer pension - systems where folk were discouraged, even not allowed at one period, to have more than one pension - systems where everyone was encouraged to have more than one. - and various alterations to the systems. I ended up with a small works persion plus the state pension plus SERPS. Not forgetting the many friends I had who had poured cash into private pension schemes only to see them crash. I would add also that when the last but one pension rise came into being it didn't apply to the SERPS bit, not that it makes much difference because like a lot of pensioners I pay tax on my collective bits and pieces. Usually the pension annually will go up maybe 3% followed by electric, gas and other service increases of around 15%. This happens each year driving my spending power down. Trouble is that each time there's a new minister in any department they have to make some sort of change to justify their existence. After the next election, when I'm pretty sure there will be another change of government, the minister in charge of pensions will have some other bright idea of his/her own. Just have to hang in there and keep takin' the tablets folks.

[colin]

Tracker - 2013-02-15 12:57 PM

RogerC - 2013-02-15 12:17 PMSimilarly there's a fantastic way of ensuring everyone pays their road tax......do away with having to buy a tax disc and simply put the 'calculated income generated' by road tax on petrol/diesel?  Pay as you drive.......no more need for banding relative to emissions because if you burn more you pay more.......simple.

This would actually be a double saving for HMG.  No more tax evasion and the costs of administering the system saved because there would be no need for printing discs, no need for DVLA/Post office staff to administer the system etc etc.......big savings all round.

At the moment the tax disc also serves as the only, and inadequate, check that MOT and insurance were in force, if only on the day the tax disc was issued.Perhaps it's time we had an MOT disc and an insurance disc - paid for by the customer of course so no cost to the exchequer?Or is that just too simple to actually work?

Do keep up :D http://en.wikipedia.org/wiki/Police-enforced_ANPR_in_the_UK

[Dave225]

colin - 2013-02-15 6:58 PM

Tracker - 2013-02-15 12:57 PM

RogerC - 2013-02-15 12:17 PMSimilarly there's a fantastic way of ensuring everyone pays their road tax......do away with having to buy a tax disc and simply put the 'calculated income generated' by road tax on petrol/diesel?  Pay as you drive.......no more need for banding relative to emissions because if you burn more you pay more.......simple.

This would actually be a double saving for HMG.  No more tax evasion and the costs of administering the system saved because there would be no need for printing discs, no need for DVLA/Post office staff to administer the system etc etc.......big savings all round.

At the moment the tax disc also serves as the only, and inadequate, check that MOT and insurance were in force, if only on the day the tax disc was issued.Perhaps it's time we had an MOT disc and an insurance disc - paid for by the customer of course so no cost to the exchequer?Or is that just too simple to actually work?

Do keep up :D http://en.wikipedia.org/wiki/Police-enforced_ANPR_in_the_UK

What will happen, and I am surprised it has not already, is that a 'chip' will be placed in your number plate and it will record whether you have a valid MOT, or paid the right tax, or paid your wife's alimony. Cameras, of which there are plenty will track you wherever you are and report accordingly. Methinks there must be a few horses they have not yet turned into lasagne and will start using one of them. I can also sell the byproduct as a manure.

[Basil]

Sorry cross posted.

[Tracker]

colin - 2013-02-15 6:58 PM

Do keep up :D

http://en.wikipedia.org/wiki/Police-enforced_ANPR_in_the_UK

 

Thanks Colin - I am of course aware of ANPR - but how many police cars do you pass every day, and how many of them have ANPR fitted and working?

 

I'll hazard a guess - not a lot!!

 

Once again it only shows on the day - not the previous day nor the next day!

[RogerC]

Back on topic...once again the bureaucrats have made a dogs dinner of something that should/could be very simple. Simply make a bottom line (say 10 years contributions) and set the State pension at a rate such as the proposed at £144.  If the individual meets the 10 year minimum they get the pension.  If they don't then they get an agreed single rate pension of say £114 for example.   This would be very easy to implement and by doing away with hundreds of 'administrators....(non 'civil' servants) it would save £millions.

 

The only exceptions would be those with medical reasons for not having made the requisite 10 years contributions.  This would mean the shiftless and spongers would not be 'rewarded' but still supported.  In essence to get the full pension you have to have contributed not sponged all your life.

 

[Tracker]

RogerC - 2013-02-16 3:02 PMBack on topic...once again the bureaucrats have made a dogs dinner of something that should/could be very simple. Simply make a bottom line (say 10 years contributions) and set the State pension at a rate such as the proposed at £144.  If the individual meets the 10 year minimum they get the pension.  If they don't then they get an agreed single rate pension of say £114 for example.   This would be very easy to implement and by doing away with hundreds of 'administrators....(non 'civil' servants) it would save £millions.

 

The only exceptions would be those with medical reasons for not having made the requisite 10 years contributions.  This would mean the shiftless and spongers would not be 'rewarded' but still supported.  In essence to get the full pension you have to have contributed not sponged all your life.

I don't think so Roger! Pensions already cost a fortune so reducing the number of qualifying years for contributions to 10 makes no sense whatsoever.A sliding scale should apply - perhaps forty years for a full pension and every half year worth of credits (through ill health, maternity, child care or unemployment) or contributions buys you 1 / 80th of the pension - just like occupational pensions - what can be fairer or more simple than that - and everyone to get a pension statement and forecast once a year as part of their tax return or tax code notice so there will be no excuse for not knowing?

[CliveH]

I am still waiting to see the full details so there may be some surprises - pleasant or otherwise :-S

 

But as I see it the main advantage is that means testing will cease and with it the debacle of some being advised by the likes of me NOT to have a Private Pension because every £ of pension income achieved will simply reduce their means tested benefit by the same £.

 

i.e. there was no incentive for many people to save for their retirement at all.

 

This along with Gordon Browns 1st stealth tax which taxes dividend income within the pension "pot" and we advisers found ourselves doing the due diligence research and for some - the answer was steer clear of pensions unless your employer contributes a significant percentage of salary and /or you are a higher rate tax payer!!

 

Now - those people can plan for a basic state pension of circa £140 a week and whatever income comes from their own pension savings will sit on top.

 

Those who earn more will pay more NIC - but the benefit for those who up until now have been totally STUFFED by the pension system - the low paid and the Self-Employed will benefit.

 

I see the new system as being less complex and therefore cheaper to run - I also see it as being fairer to all.

 

[Mel B]

I'm confused! 8-)

 

I'm trying to make sense of all of this for our situation and am just about going gaga with it all!

 

55 year old male, 50 (next month!) female, both left work and have a 'final salary' work pension which can be taken from 60 (reduced rate), no state pension (full amount) for either of us until 66. So does that make us better or worse off????? *-)

[CliveH]

It is difficult Mel

 

Currently you would be eligible for a full OAP is you have just 30 years NIC. So you may under the old scheme have been eligible for a full state pension. This State pension could then be topped up by the old Graduated Pension, which sort of morphed into SERPS and then this became the second state pension (S2P) and these state "top-up" schemes boosted the state pension further and how much it boosted it depended on how much NIC you paid. The higher your earnings the higher your NIC the higher your GradPen/SERPS/S2P.

 

This is all incredibly complex and expensive and so it became possible to "Contract Out" of SERPS so that you could bi-pass paying your NIC top-ups to the State scheme and have them paid into your employers scheme or your Personal Pension scheme where this built up a separate pension pot called the "Protected Rights".

 

Unless of course you were self/employed and then you got non of the above benefits from the State. And if you were silly enough to have a Private Pension then what State Benefits you were entitled to in retirement were offset £ for £ for the pension income your pension fund generated.

 

Confusing?

 

Unfar?

 

You bet! - on both counts.

 

So get rid of all that above - give everyone a flat pension based upon 35 years NIC - not 30 - and whatever pension pot you have and the income it generates will sit on top of the new flat rate State Pension.

 

The low paid and the self employed are now on the same playing field as everyone else.

 

If you do not have the full 35 years NIC - it is not too bad as the payments are pro-rata - if you have 30 years then you will get 30/35ths of the new rate.

 

If Hubby is 55 and has a full NIC since age 20 then he should have the 35 years. You may be different if you started work at 20 then at age 50 you only have 30 years - add to that time off for having a family etc and your NIC history could be compromised.

 

You can pay top up NIC if you wish

 

And if your taxable income is less than £5500 (CHECK - i cannot remember the exact fig - I will check and post it later ) you can apply for a NIC Credit - so you do not pay any NIC but you accrue a full NIC "Stamp" for that year.

 

Best thing you can do Mel is to get a Projection of what your State Pension is going to be.

 

There is a form - and I have it on my works computer - to request this - but again on a saturday night it is not available to me. So I will post it later.

 

 

 

8-) 8-)

[colin]

Tracker - 2013-02-16 2:24 PM

 

colin - 2013-02-15 6:58 PM

Do keep up :D

http://en.wikipedia.org/wiki/Police-enforced_ANPR_in_the_UK

 

Thanks Colin - I am of course aware of ANPR - but how many police cars do you pass every day, and how many of them have ANPR fitted and working?

 

I'll hazard a guess - not a lot!!

 

Once again it only shows on the day - not the previous day nor the next day!

 

There are thousands of ANPR cameras across UK, that is why numberplate cloning and stealing is now a major problem, just today I would estimate we where checked by at least twenty cameras. Big brother is here and to a much greater extent than ever envisaged by George Orwell in 1984

[Tracker]

colin - 2013-02-16 10:04 PM

There are thousands of ANPR cameras across UK, that is why numberplate cloning and stealing is now a major problem, just today I would estimate we where checked by at least twenty cameras. Big brother is here and to a much greater extent than ever envisaged by George Orwell in 1984

 

The only people fixed cameras catch are those that are partly illegal but with a genuine address on the V5 to follow up, or equally soft targets that have simply broken the speed limit.

 

I'm not for one second justifying 'forgetfulness' but basically honest people are a nice little easy earner and so much more cost effective for the accountants to justify in the cost to benefit ratio than a real cop car and kit can ever be.

 

Only a live copper with a car can stop an illegal untaxed, uninsured, unregistered and un MOT'd vehicle - and you don't see many live traffic cops anymore!!

 

Meanwhile the real scum bags continue to flout the law safe in the knowledge that they are largely unchecked.

[Mel B]

CliveH - 2013-02-16 9:34 PM

 

If you do not have the full 35 years NIC - it is not too bad as the payments are pro-rata - if you have 30 years then you will get 30/35ths of the new rate.

 

If Hubby is 55 and has a full NIC since age 20 then he should have the 35 years. You may be different if you started work at 20 then at age 50 you only have 30 years - add to that time off for having a family etc and your NIC history could be compromised.

 

You can pay top up NIC if you wish

 

And if your taxable income is less than £5500 (CHECK - i cannot remember the exact fig - I will check and post it later ) you can apply for a NIC Credit - so you do not pay any NIC but you accrue a full NIC "Stamp" for that year.

 

Best thing you can do Mel is to get a Projection of what your State Pension is going to be.

 

There is a form - and I have it on my works computer - to request this - but again on a saturday night it is not available to me. So I will post it later.

Thanks Clive

 

I'm already registered for the Government Gateway and pension enquiry service so have had a look and have got 30 years NIC credit. So basically as it stands now, as I've got 30 years NIC credit I'm entitled to a full state pension, but when it all changes I'll only be entitled to 30/35th ... wonderful ... so much for planning and savings so we could leave work early! :-|

 

Hubby should have 33 years in (I can't check at the moment as the 'Gateway' doesn't like him and he can't log in ... flipping stupid website!), so he'll get 33/35ths.

 

Good job we will have our work pensions too which we can take from 60 (reduced) so fortunately that and the state pension should do us nicely. :-S The next downside is that this will take our income over the tax limit so we'll end up paying tax. *-) I'm not complaining though as we'll be better off than some, but it is annoying when you do all this planning and savings and they STILL move the blooming goal posts!!! >:-(

[Tracker]

When I reached 60 and 'earned' below the NI threshold (intelligent accountancy!) the state very kindly gave me five more years of pension credit free - but not before they had 'invited' me to pay voluntary contributions for those same five years from 60 to 65.

 

I don't know if it still applies but well worth checking Mel?

[Dave225]

I agree, you can pay back 'missing years' but it is specific years and if the 'missing' ones are too old, you have effectively lost them. However, bear in mind this is only a proposal, and like many others it is unlikely to see the light of day. I see even today they have now discovered this will mean private pensioners paying more for less and public sector workers paying less, for more so i doubt that that will fly with too many workers. Don't know if it is true but it seems the Government has not done all the homework and made a promise to the Unions that all public sector workers are exempt from any changes for 25 years. Lucky old them.

 

Anyway, my point is that if you pay the extra years, and this does not fly and stays at 30 years, then you do not get back the extra payments. Wait untill nearer the time and see if it is definite and then pay them if you wish to.

[Tracker]

Dave225 - 2013-02-18 5:46 PM

I agree, you can pay back 'missing years' but it is specific years and if the 'missing' ones are too old, .

 

You may have missed my point Dave, and that is if you already have enough years in for a full pension or the remaining five from 60 to 65 is all you need there is no point in taking up the 'invite' to pay voluntary contributions for five years when if your income is below the threshold the state will give you free credits - well they did for me and I am very grateful!!

[Guest 1footinthegrave]

Mel B - 2013-02-16 8:45 PM

 

I'm confused! 8-)

 

I'm trying to make sense of all of this for our situation and am just about going gaga with it all!

 

55 year old male, 50 (next month!) female, both left work and have a 'final salary' work pension which can be taken from 60 (reduced rate), no state pension (full amount) for either of us until 66. So does that make us better or worse off????? *-)

 

I'd be trying to make sense of how your going to manage to live currently with no salary for the next 11 years. 8-)

 

I shouldn't bother looking that far ahead in any event, many don't make it, brother-in-law took early retirement, dropped down dead at 63.

(!)

 

But if you do you can look forward to not having to survive like so many do now on £107.45 a week. ;-)

[Tracker]

1footinthegrave - 2013-02-18 7:59 PM

I'd be trying to make sense of how your going to manage to live currently with no salary for the next 11 years. 8-)

 

I shouldn't bother looking that far ahead, many don't make it, brother-in-law took early retirement, dropped down dead at 63.

(!)

 

We did exactly that for some 5 years between selling a business and getting a pension and it is surprising how little you can live on if you are careful and have saved and planned for this very situation - as did we!

 

Yes - some people sadly don't live long after retirement - and these are the ones you get to hear about! What you don't get to hear about are the majority who will live longer than ever for a variety of reasons. Look at any age statistics if you don't believe me!

And if you do die young all the more reason to have had a bit of fun along the way after years of working and saving.