Category Archives: UK pensions

UK Government and Its State Pensioners

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UK State pensioners should be forgiven for not understanding their treatment by the present UK Government. The Prime Minister, Gordon Brown, often states he is coming from the moral high ground, for example as he said in a speech to the Labour Party conference on 23 September 2008.

What angers me and inspires me to act is when people are treated unfairly.  So when people share with me stories about the hard time they’re having with bills, I want to help, because I was brought up seeing my parents having to juggle their budget like the rest of us.

However we now have a story in the Telegraph that Adults could be forced to take out private insurance to cover nursing home costs.  This is to cover the cost of their care in old age under plans being considered by the Government.

This stands in sharp contrast to the views expressed in a recent blog post by Michael Thompson of Link-Age/Countrywide.

What makes matters much worse is not just the national apathy on this issue from both richer pensioners with other income, from the general public, from the British media, and from the the two major political parties in this country.

It is that the money is there, with this Government sitting on a National Insurance “surplus” of around £40 billion*, which is expected to be 74.1 billion by 2012.  And also that the Government’s Pension Credit Means Test system is costing tax payers 10 times more than the restoration of the earnings link.

To think that our war veterans and younger pensioners are means tested for extra money on a £90 odd quid a week state pension makes me puke, when MP’s themselves are sitting pretty thank you.  Still we British largely do nothing.  We get what we deserve in this country, but our pensioners do not.

It would appear that seniors in the UK do not get the respect they deserve.

* Update: Peter Morris in a comment to another post offered the following information:
Some time ago I received a response under FOI from the UK Government’s Debt Management Office which holds the surplus in the National Insurance Fund in an investment account called “Call Notice Deposits” and the balance was around £50 billion as at 31st March 2008.

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UK State Pensions Lowest In Europe

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UK State Pensioners resident in Canada do not fare as well as their fellow Pensioners, who are resident in the UK.  However that does not mean that UK pensioners who reside in the UK are having an easy time of it.

 Michael Thompson, who is the founder of Link-Age/Countrywide and is a member of The Devon Pensioners Action Forum took the time to respond to another blog post on 10 Downing Street Twitterings While UK Pensioners Freeze.

He also sent me some information on how UK State pensions compare with those in the rest of Europe as a percentage of the average wage.  As this chart shows, Britain is at the bottom of this State Pension league table.

Britain At The Bottom for UK State Pensions

His information made me aware of another useful website, Seniors Network,
which claims to be the Top  Web Site For the Over 50′s in the UK.  If you wander around that website, I think you will find the claim to be well justified.  Thank you, Michael Thompson, for introducing me to that Seniors Network website.  If you wish to contact Michael Thompson then you can do that by email or by telephone at 01803 857020 after 7pm GMT. If others know of useful sites for seniors, then perhaps they could mention them in the comments.  The best will be featured in the Money Resources page.

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Frozen UK State Pensions – Spousal Advice

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Frozen UK State Pensions are never far from my mind, given the severe hardship it creates for many of its recipients.  Naturally when I visited Black Pudding, that incredible cornucopia of UK goodies here in Langley, British Columbia, UK State Pensions did come up in the conversation. 

One surprise to some was the revelation that the spouse of a UK pensioner is entitled to a UK pension on reaching the retirement age.  This is true even if the spouse has never lived in the UK nor paid State Pension contributions.  Given the unfairness of other features of UK State Pensions paid to Canadian residents, it is important not to overlook this useful contribution.  If you are a UK State Pensioner resident in Canada, then I would encourage you to look into this.

Of course there is rarely good news without associated bad news.  The bad news is that the retirement ages are rising as you can see from the following extract from The Pension Service A to Z listing.

State Pension age: The State Pension age is 65 years old for men and 60 years old for women. However, the State Pension age for women is changing – it will rise gradually from age 60 to 65 from 2010 to 2020. The state pension age for both men and women is to increase from 65 to 68 between 2024 and 2046, with each change phased in over two consecutive years in each decade. The first increase, from 65 to 66, will be phased in between April 2024 and April 2026; the second, from 66 to 67, will be phased in between April 2034 and April 2036; and the third, from 67 to 68, between April 2044 and April 2046.

If your spouse is not yet at the UK State Pension retirement age, there is a retirement age calculator provided to determine the age at which the pension will be available.  I guess the bottom line on that is Better Late Than Never.

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Frozen UK Pension Issue Is Daft – BBC Expert

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bbc money box
The first pensions being paid at a post-office in London.
Source: Illustrated London News
9 January 1909.

January 2009 will mark the 100th anniversary of the first pension payment, following the passing of the Old Age Pensions Act in August 1908.  On today’s Money Box Live, Paul Lewis was fielding listeners’ questions about pensions and discussing them with a panel of experts:

  • Michelle Cracknell, strategy director at investment group Skandia
  • Tom McPhail, head of pensions research, Hargreaves Lansdown
  • Malcolm McLean, chief executive, The Pensions Advisory Service

You can listen to the actual discussion at this link, which will be available until January 5th.   Thereafter the transcript should be available at this link in two to three weeks.

The reference to the frozen UK pension issue being daft comes about 15 minutes into the broadcast.  David Wood of Kuala Lumpur in Malaysia raised the issue that half of all British pensioners living outside the UK have frozen pensions while the other half receive pensions exactly like UK residents.  Indeed if he lived a little to the north in the Philippines he also would receive a pension adjusted for inflation.  He would also receive a subsidy for fuel even though that is clearly illogical.  As Malcolm McLean said, there is no rhyme or reason in the way UK pensions are being administered for their recipients.  It’s just plain daft.

Moneybox seems to be a great initiative and there are some excellent external internet links.  In particular Paul Lewis, the host, has a large collection of articles on Money, which will be of particular interest to UK residents.

Related Posts:

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Frozen UK Pensions – Should Legality, Equity or Morality Apply?

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Three issues that affect seniors by causing extreme financial distress were handled according to different principles by the UK government during the past month.

In the first case it was legality that rules.  Expats Pension: Appeal against frozen pensions ruling

The International Consortium of British Pensioners will appeal against the European Court of Human Rights’ rejection of its claim that Britain’s frozen pensions policy is discriminating and in breach of the Human Rights Act.  The judgment adversely affects more than half-a-million expat retirees and some of the most vulnerable people in society. It will also deter thousands of Britons still resident in the UK from joining family overseas – surely a right that none expected to have taken away after paying pension dues throughout their working lives.

In the second case, apparently forgetting the principle of legality, the UK government seemed to be looking at equity in this case.  Brit pensioners abroad face fuel pay cuts

A Parliamentary investigation into fuel poverty is to investigate £12 million a year of winter fuel payments made to British pensioners living abroad. Under official rules the £200 winter fuel allowance is paid to anyone living in Britain on their 60th birthday on a state pension, even if that person intends to retire or spend winter months in warmer countries. The payments rise to more than £300 for the over-80s. There is not even a requirement for the money to be used for heating bills.

The payment is only made if British citizens move to one of the 29 countries in the European Economic Area. It is part of the European Union portable allowances scheme and cash is paid into overseas bank accounts.  It does not apply to anyone moving to Commonwealth countries such as Australia, New Zealand or Canada, who have their pension and fuel payments frozen once they leave Britain.

The third case illustrated that the UK government was now moving to the higher plain of morality.  Gordon Brown and Archbishop of Canterbury in moral clash

Mr. Brown said that as the son of a church minister he always listened to senior church figures.  Drawing on the parable of the good Samaritan, he said: “Every time someone becomes unemployed or loses their home or a small business fails it is our duty to act and we should not walk by on the other side when people are facing problems.  That’s the reason why our fiscal policy is designed to give real help to families and businesses and to give them that help now.

Picking and choosing among these different principles is hardly moral.  At the least going forward one might hope that all three cases would be handled with a certain consistency.

PS. If you’re looking for a way of keeping up-to-date on the first topic, the Pension Parity UK website is a complete information source with all the latest news.

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