UK Politics General Discussion

[GooseOnTheLoose]

Some budgetary announcements yesterday from Labour, the most controversial being the winter fuel payments for pensioners. Granted while there are many wealthy pensioners, there are many who depend on these payments, especially with fuel bills predicted to rise again this winter. I think they could have done this much better by targeting pensioners over a certain income, and those living abroad.

They are not scrapping Winter Fuel Payments. The benefit will no longer be universally automatically paid and will instead be means tested, specifically giving targeted help to those who need it the most.

Winter fuel payments
Saving £1.4bn this year and £1.5bn next year, this will mean the payment for pensioners will no longer be universal and will only be paid to people in receipt of pension credit or other means-tested benefits. The payments already vary in amount depending on age and income. Now those eligible will get £200, rising to £300 if one household member is aged over 80.

Source: https://www.theguardian.com/politics/article/2024/jul/29/what-are-rachel-reeves-spending-cuts-and-how-do-the-sums-add-up#:~:text=Winter fuel payments,aged over 80.

 

[jon81uk]

Some budgetary announcements yesterday from Labour, the most controversial being the winter fuel payments for pensioners. Granted while there are many wealthy pensioners, there are many who depend on these payments, especially with fuel bills predicted to rise again this winter. I think they could have done this much better by targeting pensioners over a certain income, and those living abroad.

Pretty sure by only giving the payments to those on pension credit or other means-tested benefits is exactly what you say they should do, its targeting those who need the money.

 

[GaryH]

Pretty sure by only giving the payments to those on pension credit or other means-tested benefits is exactly what you say they should do, its targeting those who need the money.

But there are many struggling financially who are not eligible for credits. There are also many women born in the 50s who still haven’t been able to get a decent pension after the pension scandal years ago

Thousands of UK women owed pension payout after ombudsman’s Waspi ruling | State pensions | The Guardian

Manner in which state pension age was raised upended many retirement plans, but DWP has indicated it will not pay compensation

amp.theguardian.com

They should have instead looked at income levels and hit those with a lot of money and those abroad. Those who are just over the threshold for pension credits will really be hit by this.

 

[GooseOnTheLoose]

There are also many women born in the 50s who still haven’t been able to get a decent pension after the pension scandal years ago

They get pension credit, so will be entitled to the Winter Fuel Payments.

The whole National Insurance payments = pension is a little bit of a facade. If you haven't got a full state pension, because you haven't met the work life requirements, the government tops it up with pension credit.

The exact eligibility criteria are yet to be announced, so we can't debate those at the moment. Anyone can make a request to DWP to request benefit, they will then be assessed and told what they are and aren't eligible for. Most other benefit payments, if you are struggling, will qualify you for the Winter Fuel Payments.

 

[jon81uk]

They should have instead looked at income levels and hit those with a lot of money and those abroad. Those who are just over the threshold for pension credits will really be hit by this.

How do they "look at income levels"? I'm not aware of the government routinely looking at that, unless someone does apply for pension credit or similar.

But more realisitincally if not getting a £500 payment causes someone to go into hardship then I think the pension credit system needs looking at, that appears to only top up income to £218 a week which seems low anyway.

 

[GooseOnTheLoose]

How do they "look at income levels"? I'm not aware of the government routinely looking at that, unless someone does apply for pension credit or similar.

But more realisitincally if not getting a £500 payment causes someone to go into hardship then I think the pension credit system needs looking at, that appears to only top up income to £218 a week which seems low anyway.

Full state pension is only £221.20 per week in and of itself.

The new State Pension

How to get and claim your State Pension, State Pension age - for men born on or after 6 April 1951 and women born on or after 6 April 1953.

www.gov.uk

Pension Credit does qualify you for Housing Benefit, Council Tax reductions, Free Television Licence and other benefit though.

 

[rob666]

Two of my customers, who I love to death, are senior members of the Ribble Valley Catholic mafia.
They have both expressed guilt at getting the winter fuel allowance, and would much prefer it to go to those on pension credit, or income support in whatever guise.
One of them had an income tax bill of over a hundred thousand pounds last year, and gives huge amounts of money to charity, especially the local food bank.
He has no need for such an allowance at all.
The divisions between the better off and lesser off have never been wider.
This is a step in the right direction, without a doubt.

 

[jon81uk]

Full state pension is only £221.20 per week in and of itself.

The new State Pension

How to get and claim your State Pension, State Pension age - for men born on or after 6 April 1951 and women born on or after 6 April 1953.

www.gov.uk

Pension Credit does qualify you for Housing Benefit, Council Tax reductions, Free Television Licence and other benefit though.

Maybe I mis-read the pension credit website then, but if the £218 is correct that makes no sense that its set lower than the state pension, therefore no-one gets their income topped-up! This seems a much bigger issue than removing winter fuel payments for some.

 

[GooseOnTheLoose]

Maybe I mis-read the pension credit website then, but if the £218 is correct that makes no sense that its set lower than the state pension, therefore no-one gets their income topped-up! This seems a much bigger issue than removing winter fuel payments for some.

Not everyone automatically qualifies for full state pension. It's based on how many hours you worked, over a certain time. Stay at home parents, for example, are unlikely to have met the work related requirements through their lives; freelancers; those who are deemed unsuitable for work for health reasons; long-term unemployed; people who have spent a while in the criminal justice system; people on zero hour contracts; those who only work part time. It's a catch all blanket.

Pension credit ensures that everyone who reaches retirement age will get pretty much the same pension amount.

What counts as income?
Your income includes:

State Pension
other pensions
earnings from employment and self-employment
most social security benefits, for example Carer’s Allowance

Pension Credit

Pension Credit is extra money for pensioners to bring your weekly income up to a minimum amount - what you'll get, apply, eligibility.

www.gov.uk

Here is how eligibility for full state pension is calculated.

If your National Insurance record started before April 2016

You’ll need 10 qualifying years on your National Insurance record to get any new State Pension.

A qualifying year is one in which you were:

working and made National Insurance contributions
getting National Insurance credits for example if you were unemployed, ill or a parent or carer
paying voluntary National Insurance contributions. You might also qualify if you’ve lived or worked abroad or paid reduced rate National Insurance for married women.

If your National Insurance record started after April 2016 you will need 35 qualifying years to get the full rate of new State Pension.

 

[BarryZola]

Pretty sure by only giving the payments to those on pension credit or other means-tested benefits is exactly what you say they should do, its targeting those who need the money.

On the whole I probably agree with the new measures. However, it does make you wonder if it's worth bothering to make sure you pay your full national insurance stamp until you retire as with pension credit and other free stuff you get if you don't auto qualify for full pension, the difference will probably end up negligible anyway.

 

[GooseOnTheLoose]

On the whole I probably agree with the new measures. However, it does make you wonder if it's worth bothering to make sure you pay your full national insurance stamp until you retire as with pension credit and other free stuff you get if you don't auto qualify for full pension, the difference will probably end up negligible anyway.

If you're on the low end and only just qualify for full state pension, and don't have any other source of income, you're almost certainly better off being on pension credit.

The biggest shocking difference is that you only need 10 years of eligible National Insurance contributions if you started work before 2016. If you started work after, you need 35 years; this is certainly going to make many people think twice about a career break, for any reason.

 

[GaryH]

They get pension credit, so will be entitled to the Winter Fuel Payments.

Incorrect. I know of two people in the family born in the 50s who have been hit with the pension scandal who are not entitled to pension credit and who will be hit by the removal of the winter fuel payment.

 

[jon81uk]

On the whole I probably agree with the new measures. However, it does make you wonder if it's worth bothering to make sure you pay your full national insurance stamp until you retire as with pension credit and other free stuff you get if you don't auto qualify for full pension, the difference will probably end up negligible anyway.

Generally funding things through treating National Insurance as a tax instead of a contribution towards costs does feel like it makes more sense.

 

[GooseOnTheLoose]

Incorrect. I know of two people in the family born in the 50s who have been hit with the pension scandal who are not entitled to pension credit and who will be hit by the removal of the winter fuel payment.

In which case they're entitled to full state pension. If you're not entitled to full state pension, of £221 a week, then you're entitled to pension credit. It's a binary system. It's one or the other.

The WASPI women issue is about how long they were promised they had to work, about increasing the age at which they could retire. It meant that they had to wait longer for their state pension than initially promised. It had no effect on what they were entitled to, or what they would get, just when they could get it (equalised with men). They'll be getting their full state pension, plus whatever amount from their private pension (if they have one), which makes them ineligible for the new means tested Winter Fuel Payment.

WASPI women will have had fewer years of being able to claim their state pension than initially promised, which may have given them some financial struggle whilst working, but at that point they wouldn't have been entitled to the Winter Fuel Payment anyway because they hadn't reached state pension age. Unfortunately it doesn't factor in this scenario.

 

[jon81uk]

Incorrect. I know of two people in the family born in the 50s who have been hit with the pension scandal who are not entitled to pension credit and who will be hit by the removal of the winter fuel payment.

But they will now be over the state pension age now anyway. The issue of the change in age that delayed them being able to claim state pension has nothing to do with their current financial circumstances, it meant they couldn't retire as early as planned, but everyone born before 1955 would have reached state pension age in 2020 so the changes no longer have anything to do with their finances in 2024.

 

[Tom]

A rare act of doing something unpopular when you have just won an election. Analysts often talk about it (ironically they didn't this time) but it usually doesn't happen.

Good, rare, targeted approach of removing something that is just aimed at pleasing people more likely to vote.

Next, it must be reviewed how the pension itself is paid, i.e. to who.

Labour have been virtually flawless in their approach to things so far. Good to see some level of intelligence and lack of desperation in government for a change.

 

[Benzin]

Means tested is always a double edged sword.

If you're just over it, you can really be living right on the edge. Often as well that it's a weird limit that is nowhere near what can be termed as "comfortable living".

Be interesting to see the stats on how many this actually effects.

 

[jon81uk]

Next, it must be reviewed how the pension itself is paid, i.e. to who.

I can't see the main state pension changing significantly, except maybe to find a way to stop it going to the significantly wealthy, but there is the argument that they paid national insurance so are entitled to it, so any mention of building up contributions will need to be removed first.
Many on middle incomes with a private pension may have planned their retirement considering the state pension and their private one together. I think any significant changes to stop some people getting a state pension at all will have to be stated now to be enacted well over 20 years in the future. the Waspi issue was first put into law 20 years before those people would have been eligible for a pension and look how well that went in the end.

At the moment I think a bigger priority would be ensuring the lowest earners are properly supported even if they don't get all the NI contributions. The pension credit benefits system probably needs some work

 

[rob666]

In which case they're entitled to full state pension. If you're not entitled to full state pension, of £221 a week, then you're entitled to pension credit. It's a binary system. It's one or the other.

Not quite so simple.
People with a large amount of savings, but few national insurance payments, can end up on no pension at all...
I know of one couple in exactly that situation...too much savings, self employment, little faith in the system, so zero pension.

Pension credit is the poverty safety net, but is not "there for all with lower pensions".
It is there for those with no other options.

 

[Squiggs]

The biggest shocking difference is that you only need 10 years of eligible National Insurance contributions if you started work before 2016. If you started work after, you need 35 years; this is certainly going to make many people think twice about a career break, for any reason.

I'm not sure if that's how it actually works.

I've not looked at it recently, but I worked abroad a few years back, and I'm pretty certain when I looked at it back then, to understand the impact of not paying National Insurance for a few years, it wasn't 10 years of contributions to get a full state pension.