State Pension

The forecast for my state pension is £12,137.26. With the minimum triple lock rise, this will be £13,070.50 in 2028.

At today's tax figures, I will pay £98.30 income tax in 2028/29.

This would be a political blow for any government, so I expect there will be some adjustment to the tax allowance, even if it's just for those over state pension age, just as they don't pay NI.
 
gman said:
Yep, but that's where the Workplace Pension would come into play. It's already a mandatory offer upon employment for qualifying employees, currently with the ability to opt out. But I can see the opt out being removed in the future, thus becoming stage 1 of a transition away from SP.

Arguably those in the public sector may not receive it at all because their Defined Benefit pension will most likely be generous enough and as you say, if it becomes means tested then it only serves to reinforce this position (and also the workplace pensions).

Those who don't/can't/won't work will of course receive a SP as a benefit, which is easy enough to slide into this role seeing as the SP is already treated as a benefit.
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Over time, I can see the opt-out being removed.
It was right to have it at the start of the mandatory scheme, there was no real point in someone with only a couple of years left working to pay in, but as time progresses that issue will be gone.
 
Delphin said:
Over time, I can see the opt-out being removed.
It was right to have it at the start of the mandatory scheme, there was no real point in someone with only a couple of years left working to pay in, but as time progresses that issue will be gone.
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It could still be an issue for those in their later years changing jobs, perhaps there will be an opt-out retained for certain ages but I do think it will still be removed completely. Whilst it's only a 3% contribution from employers, this is still another burden. God knows how the public sector manage their massive contributions.
 
gman said:
It could still be an issue for those in their later years changing jobs, perhaps there will be an opt-out retained for certain ages but I do think it will still be removed completely. Whilst it's only a 3% contribution from employers, this is still another burden. God knows how the public sector manage their massive contributions.
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I was thinking about those who previously had no private/company pension, so a just few years contribution would be pointless.
If you already have a pension from a previous company, the small new one would be combined into your pot at the time you want to claim, be that draw down or annuity.
 
Delphin said:
I was thinking about those who previously had no private/company pension, so a just few years contribution would be pointless.
If you already have a pension from a previous company, the small new one would be combined into your pot at the time you want to claim, be that draw down or annuity.
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Ah ok I see what you mean. I guess the SP would definitely have to be means tested then.

It's actually a little odd why it isn't means tested, seeing as they consider it a benefit.
 
gman said:
Ah ok I see what you mean. I guess the SP would definitely have to be means tested then.

It's actually a little odd why it isn't means tested, seeing as they consider it a benefit.
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That would be a politically sensitive decision for any of the parties especially as NI is paid as well as income tax. NI creates an expectation of something in return for the contributions. It would be an interesting "opportunity" for any politician to explain why you're not getting anything back having paid in for x years
 
taxboy said:
That would be a politically sensitive decision for any of the parties especially as NI is paid as well as income tax. NI creates an expectation of something in return for the contributions. It would be an interesting "opportunity" for any politician to explain why you're not getting anything back having paid in for x years
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I think this is part of the problem with calling the State Pension a benefit. Whilst a Defined Contribution type scheme instead may be an alternative, I can foresee too many problems, such as lack of understanding, irresponsibility, poor ROI etc. Besides, the Governments would probably "Maxwell" them all the time.
 
The state pension is a benefit because for most people you get back more than you paid in.
 
Yes, I paid in for 48 years but only needed 35 for full pension.
Rachel will return my 13 years of extra contributions very shortly.
 
Peter123 said:
Yes, I paid in for 48 years but only needed 35 for full pension.
Rachel will return my 13 years of extra contributions very shortly.
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If you go on the Gov website you can get a full detailed list of every penny you paid in NI. Total that up to see how long it would last at the pension rate, any years you live longer and your quids in.

At the current pension rate, my total NI contributions would last less than 4 years, in my early working years I was paying under £30 a year in NI, but I'll be getting £12,137 in pension. NI goes to more than just your individual pension, it for everyone's pension, along with other government spending.
 
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Delphin said:
If you go on the Gov website you can get a full detailed list of every penny you paid in NI. Total that up to see how long it would last at the pension rate, any years you live longer and your quids in.
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That's not the point. It seems unfair that I have paid in 13 years more than many others who get the same pension as me.
 
Peter123 said:
That's not the point. It seems unfair that I have paid in 13 years more than many others who get the same pension as me.
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C'est la vie, as the French may say.
 
Delphin said:
The state pension is a benefit because for most people you get back more than you paid in.
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I'm not convinced that this would be the reason. I suspect it's more so that you can't pass it on, unlike a Defined Contribution pension and with some Defined Benefit pensions.... oh, there's that word benefit lol

I appreciate you say "most people", but of course there are factors including how long you'll live, the ever increasing pension age and the work shy who may have had their "stamp" topped up.
 
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gman said:
I appreciate you say "most people", but of course there are factors including how long you'll live, the ever increasing pension age and the work shy who may have had their "stamp" topped up.
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This brings us into the whole question of who should receive what, does it not?

If you live in a council house and take advantage of the system you're "work shy". If you live in Park Lane and live off a ten million pound inheritance from your grandparents' estate, then you're "a person of means", rather than a work shy layabout.
 
Peter123 said:
That's not the point. It seems unfair that I have paid in 13 years more than many others who get the same pension as me.
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How about those who only paid for 35 years, but weighed in a lot more than you in those fewer years?
Swings and roundabouts as is often the case.
 
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Peter123 said:
Yes, I paid in for 48 years but only needed 35 for full pension.
Rachel will return my 13 years of extra contributions very shortly.
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NI contributions fund a variety of social security benefits, not just State Pension.
 
AndrewFlannigan said:
This brings us into the whole question of who should receive what, does it not?
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That's pretty much the case with everything.

AndrewFlannigan said:
If you live in a council house and take advantage of the system you're "work shy".
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That's a terrible outlook for you to have and arguably incorrect.


AndrewFlannigan said:
If you live in Park Lane and live off a ten million pound inheritance from your grandparents' estate, then you're "a person of means", rather than a work shy layabout.
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Another terrible outlook for you to have.
 
gman said:
I appreciate you say "most people", but of course there are factors including how long you'll live, the ever increasing pension age and the work shy who may have had their "stamp" topped up.
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There are fuller details on the “most” in this PDF, and even the very highly paid tend to get back more than they paid in (they tend to live longer)
Those "work shy" will not get the same amount, I believe someone with less than the 35 years NI will get around £3K a year less than I will, if we go off the average life expectancy of 82 for a man around £45K in total. Obviously, some will live less than the average, some longer.

If you're lucky enough to live as long as Ethel May Caterham at 115 or Donald Rose at 110, you're definitely quids in (oldest living Woman and Man in UK today)


 
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Delphin said:
There are fuller details on the “most” in this PDF, and even the very highly paid tend to get back more than they paid in (they tend to live longer)
Those "work shy" will not get the same amount, I believe someone with less than the 35 years NI will get around £3K a year less than I will, if we go off the average life expectancy of 82 for a man around £45K in total. Obviously, some will live less than the average, some longer.


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That's still a pretty good deal for the "work shy".
 
So after a 44 year career in IT. My final day will be the 31st August.
Got a 2 days a week job lined up after that. Picking up and dropping off customer cars for a local Ford dealer.
Spoke to an FA last week who gave our plans a once over and thinks it all looks ok.
 
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If finance permit I never understand why people would want to work a few days a week after retirement.

That's 2 days less photography or whatever your hobbies or pastimes are. After 40 odd years, I'd had enough working for someone else. :D
 
I just can't believe my luck:)
My state pension will go up by a whole 25p a week (before tax) on my birthday!
 
Delphin said:
If finance permit I never understand why people would want to work a few days a week after retirement.

That's 2 days less photography or whatever your hobbies or pastimes are. After 40 odd years, I'd had enough working for someone else. :D
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Yeah. You hit the nail on the head. I had originally planned to go to 62 in my current job, but in the end this year at 60 I decided I had had enough of it.
So doing a few days a week for the bit of extra money is fine with me.
 
Delphin said:
If finance permit I never understand why people would want to work a few days a week after retirement.

That's 2 days less photography or whatever your hobbies or pastimes are. After 40 odd years, I'd had enough working for someone else. :D
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That's a fair point, and it might suit some people. However all of my friends and peers (I'm 68, they are all around that age more or less) seem to spend their whole lives either on holidays or planning holidays, and when at home between holidays seem to do nothing except look after grandchildren maybe. As I've not got kids, and have no particular desire to spend time at airports, on airliners, or cruise ships, I like working 4 days a week at home, spending my spare time doing things on TP, doing a few volunteer roles for amateur radio societies, writing articles for magazines, and even sometimes actually doing my hobbies. I like the fact that I don't have time to do everything I want, because it gives me things to look forward to. I don't envy my retired friends in the least, their lives seem hollow compared to mine (to me). Besides which, most of the men have known of my parents' generation, finished work around 60 and died before 70, with the odd exception. I guess it all depends on how you fill the space that work used to occupy.
 
I would imagine that there's a difference between working because you have to and working because you want to, with the latter being far less stressful because it's on your terms and you can stop at any time.
 
Oh to have the hindsight of now looking back to when I was in my teens, why was it all the girls with rich parents were cow dog ugly or fat . Should have married one then I wouldn’t have to worry about a pension .
Money don’t buy you love but it bloody well helps :banana: :banana::banana::banana::banana::headbang:
 
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lindsay said:
That's a fair point, and it might suit some people. However all of my friends and peers (I'm 68, they are all around that age more or less) seem to spend their whole lives either on holidays or planning holidays, and when at home between holidays seem to do nothing except look after grandchildren maybe. As I've not got kids, and have no particular desire to spend time at airports, on airliners, or cruise ships, I like working 4 days a week at home, spending my spare time doing things on TP, doing a few volunteer roles for amateur radio societies, writing articles for magazines, and even sometimes actually doing my hobbies. I like the fact that I don't have time to do everything I want, because it gives me things to look forward to. I don't envy my retired friends in the least, their lives seem hollow compared to mine (to me). Besides which, most of the men have known of my parents' generation, finished work around 60 and died before 70, with the odd exception. I guess it all depends on how you fill the space that work used to occupy.
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Do you really believe retired people sit twiddling their thumbs between holidays?
Not sure how I found the time to go to work, busier now than ever even without grandchildren or cruises.
Yes I do spend time planning holidays, but that's part of the enjoyment, just sorted out two more for later this year.
Spent last Friday to Monday down near the Sussex coast with sis in law at Alfriston.
So far this year we have been by rail to Brussels, Frankfurt and Alkmaar and also replaced a bath with a walk in shower.
Then there was helping our daughter decorate her dining room and clearing her jungle of a garden
Not sure about bored, more like a bit knackered now and in need of another holiday.
Best of all is nobody telling me what or when to do it, so I don't envy you your in my view mundane life either.
 
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Peter123 said:
That's not the point. It seems unfair that I have paid in 13 years more than many others who get the same pension as me.
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I’ve also paid in 42 years. The “extra” I’ve contributed I just count as a bonus for other people; those that maybe couldn’t work for all sorts of reasons: medical problems, those that have had to care for someone, those that have had to look after children, etc etc. You’re still likely to get far more out of the state pension system and cost to the NHS than you’ve ever paid in during your working life.
 
From some of the quick reading I've done, you would need a pension pot of roughtly £250k with a 4% dividend to roughly match the state pension. Conincidentally, this is very similar to NIC's paid in during the lifetime, as per Delphin's link earlier. I've not read the article in detail, so I don't know if the NIC figure being used is purely toward pension, or relevant for other benefits.

Obviously there's the NHS, but I believe NIC are not a direct contributing element and their funding is primarily from taxation.

The equivalent contributions to a private pension compared to the state pension, I believe you would need to be on an average salary of £50k. It's just a very rough calculation. There's obviously inflation and other things to consider. So for a lot of people, the state pension will be a good thing.

Perhaps one caveat to the state pension is that with the private pension you can pass the pot on.
 
boogie man said:
I’ve also paid in 42 years. The “extra” I’ve contributed I just count as a bonus for other people; those that maybe couldn’t work for all sorts of reasons: medical problems, those that have had to care for someone, those that have had to look after children, etc etc. You’re still likely to get far more out of the state pension system and cost to the NHS than you’ve ever paid in during your working life.
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yes that is an excellent way of putting it I think it is probably fair to say the system runs at a terrible loss when it is all said and done
myself i am guilty of paying less NI over the years but a lot more Corporation Tax however i would imagine that goes into a sperate pot.
 
Started my new ‘driving’ pt job on Monday.

So far I have averaged 12500 steps a day around the site and not eating anywhere near as much as I was before.
In one way if this was permanent I would shift a few pounds easily. But now I am off until next Monday which is also a good feeling
 
Not read through the whole thread again.

But that this mean as SP is not taxed at source, all (or most) pensioners will have to do self assessment every year ?
 
I have not read through the whole thread.
Been advised that I will get the £200 winter Fuel Payment. I am 83.

However, I will have to declare it on my annual tax return....
 
leaky5 said:
Not read through the whole thread again.

But that this mean as SP is not taxed at source, all (or most) pensioners will have to do self assessment every year ?
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According to Google AI , HMRC will send you a simple tax assessment based on your reported other income (Private Pension etc) and what what have paid you in state pension.

  • If the state pension is your only income: For the 2025/26 tax year, the full new state pension (£11,973 annually) is just below the £12,570 personal allowance. If the state pension is your only income, you likely will not owe any tax. However, if other taxable income (such as savings interest) pushes you over the personal allowance, or if your state pension amount alone exceeds it, HMRC will send you a Simple Assessment tax bill after the tax year ends.
 
Good question?
But, I really cannot believe that the current government is going to allow the state pension to taxed. At the very least the personal allowance will be increased to at least the state pension level.
 
Cordy said:
I have not read through the whole thread.
Been advised that I will get the £200 winter Fuel Payment. I am 83.

However, I will have to declare it on my annual tax return....
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not according to HMRC

Eligible recipients of the Winter Fuel Payment do not need to include the amount they receive on their tax returns because HMRC treats it as a non-taxable benefit
 
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