Body & Soul1 min ago
Is The State Pension A Benefit?
I read a story in the news today about how 'potentially' the state pension 'could' be means tested in the future - the actual story was about the government putting through legislation to grant access to your bank details to combat fraud. One thought that came from the article was using it to means test people for benefits and state pensions. As income tax can be applied on a state pension then surely the state pension is not a benefit, but is being treated as one, what are other peoples take on this?
Answers
Tilly they do have access, not to withdraw but they can look at transactions but the vast majority of us are of no interest to them. I work for a US bank and we send regular reports to the FED. Since 2008 the central banks have had powers to demand regular data. I have no doubt the UK does the same. It's for monely laundering and also to anticipate and guard against a collapse like the one in 2008.
"As my mate Phil explains, another Brexit benefit."
Strangely, Phil suggests that "The Tories" will be able to monitor bank accounts. Will a Labour government not be able to do so as well? Or do all laws become null and void when a new government comes to office?
Anyone believing their bank accounts are protected by privacy laws is deluded. HMRC knows exacly what goes into them and when, and it has done for years.
TORATORATORA, "If someone has paid the requisite NI for the requisite time then it's a pension, paid for by the person and their employer."
The rate of State Pension is based upon a person's number of Qualifying Years (QYs) not the National Insurance record.
Whether a tax year is a QY or no is dependent upon earnings and NI credits or voluntary NI contributions where appropriate.
In reality the UK State pension is a giant Ponzi scheme – N.I. contributions are not ring-fenced to pay your pension, they are part of the government’s ongoing spending – the next (working) generations have to pay for your State pension, as you paid for the pensioners before you.
Although a scare story, I doubt very much that the earned Basic State pension will be means tested. For one, the value of the UK State pension is very low compared to other developed countries; and to means test it when contributions have been paid to qualify for it, would be manifestly unfair regardless of how rich the pensioner was.
JOURDAIN, "For a few years now the word 'benefit' has been slid into statements about pensions." - Yes they may call it a benefit, that is an incorrect label, it is not a benefit, employees and employers pay into it for N years. That is NOT a benefit a benefit is free money given to those that have not earned it. Only a complete idiot could confuse the two.
So far as I can see, yes I have, Barry. I don't get a full pension because of years off rearing children (and being born in 1949); so the chunk I get I reckon I have paid for. Be nice if someone upped it to be in line with modern pensions; you know - the ones where almost everyone younger than I gets an equivalent sum.... I can only dream.
Thanks for BA, Barney.