The Sting in the Tale Of Your State Pension

TODAY’S BLOG

THE STING IN THE TALE OF YOUR PENSION

If you are a client, even a very new one, you will know that one of the many things we check is your State Pension. This has two key elements to check – your State Pension forecast and your National Insurance record. Have a look here to get yours again (click here)

I know that many are frustrated by their State Pension age or entitlement to it. You will doubtless have heard about women who believe that they were never properly told about the equalisation of State Pension Age (SPA) which has resulted in them waiting longer than their 60th birthdays to collect their weekly State Pension.

I am not going to “get into” the debacle of WASPI and the unfairness or otherwise of equalisation, earnings and careers. In my limited experience, most Governments fail to communicate well and most of us vote based on little evidence and plenty of personal bias. Few people take the time to check Government records, most of us live in the hope that fairness is achieved. There is a further sting in the tail of this tale…

You may have picked up that the state pension has been underpaid for an estimated 200,000 women, so it would be “sensible” to check your entitlement regularly. I am going to make this clearer…. CHECK YOUR STATE PENSION.

Solomons IFA State Pensions Sting in the Tale..

DOUBLE STANDARDS

Those working within the financial sector know well that there is not really a time-barring for complaints. However our wonderfully inept Government doesn’t have to suffer the same criteria, responsibility is something that is simply passed along to the next gaggle of woefully hapless sycophants, or ignored, denied and moving on….

State Pension payments are understandably important to millions of people right across the UK as a source of income in retirement, however, due to an error at the Department for Work and Pensions (DWP), thousands of women may find they have been underpaid their entitlement. The issue arises for those claiming the old state pension due to rules about how much a woman could receive. Under the system, married women who were looking at a limited state pension in their own right were permitted to claim a 60% basic state pension sum. This was based on the National Insurance record of their husband at the time.

Women were only allowed to undertake this action, however, if the sum was bigger than the state pension they would have received based on their own National Insurance record. An uplift to the state pension sum should have been applied automatically since March 2008. However, due to a system error, in certain circumstances some women did not have this increase automatically applied.

Individuals retiring before this date needed to make what is being described as a “second claim” to uplift their state pension sum. These women will have needed to take action, however, the DWP stated it wrote to those affected telling them what they could do next. Issues, however, arose when certain women stated they received no such correspondence and were thus left out of the loop. Women who have been impacted will have missed out on potentially years of higher state pension payments.

However, another issue is arising for women which is causing further strain. Under present rules, individuals can only get backdated payments for the boosted state pension sum for 12 months. This means many have missed the opportunity to receive years of contributions. Rectifying the issue, though, is likely to provide significant peace of mind to the female state pensioners who have been impacted.

The DWP is now taking action to contact those individuals who may have been hit by the error. However, experts such as former pensions minister Sir Steve Webb have urged women to take action by contacting the DWP if they feel they have been affected.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – info@solomonsifa.co.uk
Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Mill Cobham Park Road, COBHAM Surrey, KT11 3NE

Email – info@solomonsifa.co.uk Call – 020 8542 8084

7 QUESTIONS, NO WAFFLE

Are we a good fit for you?

Take Survey

PRIVACY POLICY | DATA PROTECTION

The Sting in the Tale Of Your State PensionDominic2023-12-01T12:13:07+00:00

I, Daniel Blake

Solomons-financial-advisor-wimbledon-blogger

I, Daniel Blake

The new Ken Loach movie “ I, Daniel Blake” has created something of a ruckus. It would seem that if you hold entrenched political views, then probably you would learn nothing new. If you are a little more willing to be informed or at the very least, challenged, then this film has something to offer.

You might wonder why a financial planner is writing about a story, essentially about poverty and the UK benefits system. After all, our clients don’t draw benefits and are clearly not poor, by most normal definitions. My reasoning is that human dignity is simply a human issue for us all, and of course should disaster strike, any one of us could be left at the mercy of the State system – one that we all contribute towards and reflects our wider collective values.

Daniel Blake is one of those typical, gritty, grim and grey British films, that in truth you probably have to be in the mood for. It isn’t “entertainment” and it isn’t a documentary. However in the days of food banks and some fairly vile tabloid newspapers, it’s a film that needs to be seen, rather like the truthfulness of your own finances.

Passive? moi?

Perhaps like you, I am occasionally found shouting at the TV or radio as something rattles my cage, yet it is not often that I do so in a cinema. Yet, that’s what I was doing within about 15 minutes, exasperated by the ludicrous treatment of someone by box-ticking automatons. I won’t ruin your experience of it by giving away the story, but it resonated with similar experiences that most of us will have had at some point when dealing with some organizations, particularly Governmental ones.

A curriculum vitae…

The story of Daniel, a carpenter in his late 50s or perhaps early 60s suffers a heart attack, signed off work by those professionally qualified to do so (his doctors) and then assessed by a “professional health worker” (as if) that he is not sick enough to be off work… and so the story ensues with an exploration into the penalty system introduced by a man who was actually found to mislead within his CV (according to BBC News night) one Mr. Iain Duncan-Smith.

You cannot be serious..

I know many of you are medical professionals – proper ones, not deemed so by a job title that reflects the ability to read a questionnaire containing medical terminology. So I am sure that some of you will have had experience of being confronted by those less qualified, purporting to know better…. which these days seems to be most people in political office.

Clearly none of us want a society where it is easier and more rewarding to “do nothing” than to provide something of value to others. We don’t want to encourage a culture of benefit vultures or tourists. However this is loaded with political sentiment and bias. One might make the case that a rich businessman that pays no taxes is also a benefit scrounger, not “paying their way” for all the things that the rest of us mere mortals believe important for the wider society.

It seems to me that “the system” simply isn’t very good and attempts to make it work rather better because of bile generated from supposed “journalists” have failed spectacularly.

There’s something very wrong with this isn’t there?

My own former MP was at a hustings and said he was “proud that we have a food bank here” which is hardly something to be proud of, merely reflecting the failure of our “first world” social system and is actually a reflection that the local people believe that this is very wrong, and respond to a very real, very human problem.

Planning upon uncertainty

As for your financial plan… well at the heart of this is the ability to do your sums. To live within your means… which is a lot easier when you are healthy and let’s be honest, wealthy (by comparison). However when health becomes an issue, you have probably ensured that you have savings and insurance to cover certain eventualities (well if you took my advice you did). So it will always appear easier to cope than it is in practice, because you and I are fortunate enough to have enough to plan and think ahead, even thinking about the bleak, improbable and perhaps unlikely. Part of my job is to reduce reliance on the State system by creating independence of it, self-sufficiency. This is not the same as being disconnected or unconcerned, which is the general line taken by those who have chosen to “critique” the film for being an extreme example….

Ok, there will always be some people that want to do nothing and expect something, but I struggle to believe that is how most of us behave. Most want a better life, not a benefits life. When I talk of lifestyle financial planning I am not advocating one of selfish disconnection, but of self-direction.

Anyway, wherever you are on the political spectrum (and I find myself finding some merit in most arguments from all sides) here is the trailer for a truly valuable film.

Dominic Thomas
Solomons IFA

I, Daniel BlakeDominic2025-01-21T15:43:59+00:00

State Pension News

State Pension Announcement

The State pension has been under review by the Coalition Government. The system is currently very complicated, involving elements of National Insurance contributions at different rates and levels over many years. In a noble attempt to ensure that pensioners cannot fall below a minimum income, various credits and guarantees had been introduced over the years. The main problem with this is that it punished those that saved who then lost out on extra money that would have been provided. Of course this is a problem for the poorest in society and not everyone, although we all obviously have to collectively contribute tax towards the welfare state.

State pension – a target for means-testing?

Today the Government is expected to announce a flat £144 a week rate for the State pension. It is anticipated that this will require additional qualifying years of NI payments (35 years instead of 30) and of course we all know that the State pension retirement date is moving upwards from 65. Quick sums will tell you that £144 a week is £7,488 a year, which forms part of taxable income, is itself below the annual personal allowance, so effectively tax free. So any changes to genuinely simplify the benefit and State pension system are welcome. There’s almost certainly a catch. The State pension is fairly expensive and we have an ageing population as we all know. We have seen the alteration of Child Benefit to a means-tested benefit and I would suggest that the State pension is almost certainly likely to become a target for means-testing within the next 20 years. By then, who knows what shape UKplc will be in, but the mathematics of the State system look fragile if we continue to make the same central Government spending choices and promises into the future. The new proposals (which are just that) are scheduled for implementation in 2017 (a different Government) and will not effect existing pensioners.

Here’s a video that I found on You Tube. I regret that I do not know its source or if it’s ok for me to put it here. There’s no commercial agenda on my part here. I have assumed that it has been taken from BBC television somehow.

State Pension NewsDominic2023-12-01T12:23:21+00:00