keitha
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2024, hopefully the year I get out of P2P
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Post by keitha on Jul 18, 2023 14:15:13 GMT
The current state pension is £10,600 at the current rate I think within 3 years it will hit the income tax threshold.
is it time to say the state pension is tax free or would that just be too expensive.
been doing a little research and our state pension appears to be roughly comparable with the rest of Europe.
I hear from younger acquaintances that our pension is unaffordable, but isn't really that great is it.
research because a friend who is due to retire later this year is insisting on a basic state pension he will be better off than on minimum wage, he has no other pension.
State Pension £10,600 Minimum Wage is circa £19,000 after tax and NI. OK he loses the travel to work costs, and will probably get some help with council tax and rent but I can't see how it will be worth £8,400 a year
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mogish
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Post by mogish on Jul 18, 2023 19:23:15 GMT
I'm sure he will have to have savings of less than 16k to get rent assistance. Might be wrong though.
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toffeeboy
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Post by toffeeboy on Jul 19, 2023 14:25:13 GMT
The current state pension is £10,600 at the current rate I think within 3 years it will hit the income tax threshold. is it time to say the state pension is tax free or would that just be too expensive. been doing a little research and our state pension appears to be roughly comparable with the rest of Europe. I hear from younger acquaintances that our pension is unaffordable, but isn't really that great is it. research because a friend who is due to retire later this year is insisting on a basic state pension he will be better off than on minimum wage, he has no other pension. State Pension £10,600 Minimum Wage is circa £19,000 after tax and NI. OK he loses the travel to work costs, and will probably get some help with council tax and rent but I can't see how it will be worth £8,400 a year If you make the state pension tax free are you then saying that you can use your tax free amount on another source of income therefore benefiting only those with a private pension and not helping anyone with just a state pension. Not sure why any party would do this When I was just starting work I thought that the state pension would be finished by the time I got to retirement age but it seems to keep hanging in there. Not sure if it can continue to but that is what auto enrolment was supposed to address for later generations so the state pension can be eased.
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aj
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Post by aj on Jul 19, 2023 14:49:04 GMT
The moral dilemma with cutting the state pension is it is paid for by the current generation of workers via national insurance. There isn't a government savings pot used to fund it.
Any cuts will mean the current generation of workers will have paid for other peoples pensions and not receive any future benefit in return.
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mogish
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Post by mogish on Jul 19, 2023 15:46:53 GMT
The moral dilemma with cutting the state pension is it is paid for by the current generation of workers via national insurance. There isn't a government savings pot used to fund it. Any cuts will mean the current generation of workers will have paid for other peoples pensions and not receive any future benefit in return. Indeed. Leave it alone for at least the next 20 years! I want my moneys worth.😁
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keitha
Member of DD Central
2024, hopefully the year I get out of P2P
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Post by keitha on Jul 19, 2023 16:00:55 GMT
If you make the state pension tax free are you then saying that you can use your tax free amount on another source of income therefore benefiting only those with a private pension and not helping anyone with just a state pension. Not sure why any party would do this When I was just starting work I thought that the state pension would be finished by the time I got to retirement age but it seems to keep hanging in there. Not sure if it can continue to but that is what auto enrolment was supposed to address for later generations so the state pension can be eased. I'm looking 2-3 years down the line state pension @ £10,600 this year likely to be over £11,000 next year and £12,000 by 2026 very close to the Tax limit. then add in even a small private pension and you are over, indeed this year a private pension of only £50 a week put you over the limit, I'm hoping by then the tax free limit will be raised. Googling the figures the average pensioner in the UK gets 33% from state pension and 66% from private pensions. But nearly 1/3 of workers expect to have only the state pension, apparently this issue is particularly prevalent among 50-60 year olds. Lol one 50 year old I know says his house is his pension he will sell it and buy something smaller, given where it is It's only worth about £250,000 and a small property will cost him at least £100,000 so he has a pot of £150,000, with interest and inflation at 4% he will run out of money in 16 years if inflation outstrips interest even sooner
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jlend
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Post by jlend on Jul 19, 2023 17:38:47 GMT
The current state pension is £10,600 at the current rate I think within 3 years it will hit the income tax threshold. is it time to say the state pension is tax free or would that just be too expensive. been doing a little research and our state pension appears to be roughly comparable with the rest of Europe. I hear from younger acquaintances that our pension is unaffordable, but isn't really that great is it. research because a friend who is due to retire later this year is insisting on a basic state pension he will be better off than on minimum wage, he has no other pension. State Pension £10,600 Minimum Wage is circa £19,000 after tax and NI. OK he loses the travel to work costs, and will probably get some help with council tax and rent but I can't see how it will be worth £8,400 a year If his income is only the state pension then he can get more than £10600 as pension credit kicks in. www.gov.uk/pension-credit/what-youll-getWith pension credit, then other support kicks in such as housing benefit. This is one of the challenges for people on very low income during their working life, particularly those who can never afford to buy a home. For some there is no point saving into a pension.
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Post by erniec on Jul 19, 2023 20:16:49 GMT
Unfortunately, with an annual income of £10,600, you wouldn’t get Pension Credit.
Pension Credit tops people with low income up to £201.05 weekly.
The current new state pension is £203.85 a week.
This means Pension Credit only applies to people on the old state pension or those not on a full new state pension.
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Post by mostlywrong on Jul 20, 2023 7:15:08 GMT
Can I gently remind readers of this esteemed board that, if you are of a certain age, you might have been "contracted out" of the state pension by your company.
That means that you will not have built up a full pension under the new rules.
It is worth your while checking with the Future Pensions team - not the standard pensions website which does not have the correct data.
MW
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Post by overthehill on Jul 20, 2023 7:38:57 GMT
Can I gently remind readers of this esteemed board that, if you are of a certain age, you might have been "contracted out" of the state pension by your company.
That means that you will not have built up a full pension under the new rules.
It is worth your while checking with the Future Pensions team - not the standard pensions website which does not have the correct data.
MW
I've not been following this thread so are you saying the information from the government website www.gov.uk/check-state-pension is wrong or using the wrong data ? I've been through my details a while ago and it seems accurate and clear to me. Why would I need to contact Future Pensions team ?
Your forecast is £203.85 a week, £886.38 a month, £10,636.60 a year
You need to continue to contribute National Insurance to reach your forecast
Estimate based on your National Insurance record up to 5 April 2022
£171.03 a week
Forecast if you contribute another 6 years before 5 April 2028
£203.85 a week
£203.85 is the most you can get
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Post by Deleted on Jul 20, 2023 7:56:35 GMT
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Post by bracknellboy on Jul 20, 2023 8:53:26 GMT
Well I have to say that is all about as clear as the proverbial mud - and no I'm not suggesting that is your fault. The "check your state pension" site for me gives a value of £213, and tells me I cannot improve that. It states taht as being my "State Pension". Like you, I have the "you were contracted out of state pension...." blurb with link. That link states that my COPE is £40. But that page does contain the words: "The amount of additional State Pension you would have been paid if you had not been contracted out is known as the Contracted Out Pension Equivalent (COPE)."
Your COPE estimate is £40.28 a week
This will not affect your State Pension forecast. The COPE amount is paid as part of your other pension schemes, not by the government."I would suggest that the normal meaning of the words as put up on the web site is that the amount quoted on the Check My state pension link IS the amount that the govt. will pay you. It is NOT an amount which INCLUDES the COPE. The COPE element is additional, (is incorporated in the relevant private pension). And if you had NOT been contracted out, then the first value on the Check my pension would be as is PLUS the COPE element. And therefore the first value is correct. Am I missing something ? It would not be the first time.....
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iano
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Post by iano on Jul 20, 2023 9:37:58 GMT
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Post by Deleted on Jul 20, 2023 9:53:15 GMT
Well I have to say that is all about as clear as the proverbial mud - and no I'm not suggesting that is your fault. I must say that I am heartened that you are not holding me personally responsible for the dire state of UK government technology 
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Post by bracknellboy on Jul 20, 2023 9:54:05 GMT
Most importantly, that contains the following: "One key point (which confuses many people) is that the COPE figure on the statement is just for information – you don’t have to do any maths or deduct it from any of the figures on the statement, as all of that has already been done." I take that to mean what I had already inferred: namely that the figure given to you on the Check my state pension link is the amount you will be paid in your State Pension. No adjustment for COPE needed as it does not include the contracted out element. Which frankly is the most obvious way of doing this, but then this is public body so obvious and clarity are not necessarily going to be the prevailing considerations.
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