Autumn Statement 2012: The government has announced that the basic state pension will increase by 2.5% to £110.15 per week from April 2013.
As a result, pensioners will see a £2.70 increase in the basic state pension in 2013/14, which the government said is in line with both average earnings and inflation.
Mark Wood, chairman of JLT Employee Benefits, said: “An individual would need savings of £195,000 to buy an annuity of the same value (£110 per week) as the state pension.
“This is not far off the average value of a home in the UK (£224,473, according to Office of National Statistics). The average pension pot of those approaching retirement is £55,000, according to the Treasury.
“So the state pension has become worth a very significant amount in today’s low-interest environment.”
We welcome the government’s confirmation that its state pension reforms are going ahead. We believe, however, that the package needs to be seen to be fair for those who are retiring ahead of the changes – it will be a political banana-skin if those retiring after a certain date are seen to get a much better deal than existing pensioners. This may mean the Chancellor will need to find some extra-cash in the years ahead to progress the reforms.
Andrew Vaughan is right to point out the dangers for those retiring ahead of the changes but he should have emphasised that need is not to be SEEN to be fair but to actually BE fair.
Of course, the reforms apparently continue the most disgraceful discrimination of all and which has been the iniquitous government policy for over sixty years – the frozen pension policy.
Retire to the UK, EEA or a select group of countries like the USA, the Philippines or Israel and your State Retirement Pension is uprated annually. Retire to Canada, Australia, Thailand or one of about 100 other countries and you become one of the 4% of UK pensioners world wide whose pension is frozen at the rate that becomes first payable in the host country. Never to increase. A pensioner in Australia has recently celebrated their 100th birthday; they still get the same full pension as they did on the day they retired…£6.20 per week! .
These pensioners contributed to the NI Scheme when working under the same terms and conditions as everyone else but, now in retirement, they are not allowed to withdraw from the NI Fund under the same terms and conditions. The country of residence is totally irrelevant and there is no moral justification for this discrimination.
There is also no legal justification – the ECHR ruling in March 2010 did not make the universal payment of up rating illegal. There is no financial justification as the “ring fenced” NI Fund is in current surplus of over £33 BILLION and gaining sufficient interest per annum to foot the Pensions Minister’ quoted requirement of £650 million twice over. Pensions are already paid world wide so there is no administration problems, either.
The well researched Oxford Economic Report not only underlines the financial advantages to the UK of implementing uprating universally but also, with the Runnymede Trust Report, confirms that the continuation of the policy will serve only to exacerbate the problems for both pensioners and governments. The Minister, who is solving the Pensions problems that he tells us “would baffle Einstein” naively and discourteously dismissed them…it appears he either had not read or did not understand them
That’s alright for some but let’s not forget the frozen state pensioners. All have paid into the NI fund the same as everyone else but just because of where they live in retirement the government withholds annual cost of living increases and many are living in poverty on less than £10 a week. This outrageous theft of pensioners rightful uprating is swept under the rug and never mentioned let alone anyone in the UK demanding that this disgraceful discrimination be brought to an end.
Three good comments so far and another consideration would be for the government to take it’s commitments seriously. There have been many agreements signed by the government over the years with the United Nations probably at the top of the long list that agree to do away with poverty and discrimination and this freezing policy goes against all of them. So when are the politicians that are in the driving seat going to acknowledge and uphold these agreements ? This is not only shameful but downright dishonest. Even shouting gets no action because they continually turn a deaf ear.
The rise of 2.5 per cent in State pensions from April will certainly help 96 per cent of the UK’s State pensioners and here is no resentment about this from the remaining 4 per cent who are “frozen”, but I am disappointed that Jennifer Paterson’s article is published under “Employees Benefits”. English dictionaries define a ‘benefit’ as: ”an advantage; a bonus or extra privilege; a favour; a payment to a person who is ill, unemployed” etc. A pension is not a ‘benefit’, it is an earned entitlement and I fully support the comments above. We, the UK’s frozen State Pensioners, paid our mandatory contributions to the National Health Service on the same terms as State pensioners who enjoy annual indexation. We do not expect any special ‘benefit’, merely that the Government should honour the obligations implicit while it was accepting our Insurance payments which were paid with the confidence that we were making adequate preparations for our retirement. As Jane Davies has said, the discriminatory deprivation of a fair pension to more than half a million frozen pensioners amounts to theft and demonstrates a complete lack of conscience on the part of our Prime Minister and his Government. The injustice needs to be reversed if Britain is to regain any global acknowledgement of integrity.
The rise of 2.5 per cent in State pensions from April will certainly be welcomed by 96 per cent of the UK’s State pensioners and there will be no resentment about this from the remaining 4 per cent who are “frozen”, but I am disappointed that Jennifer Paterson’s article is published under “Employees Benefits”. English dictionaries define a ‘benefit’ as: ”an advantage; a bonus or extra privilege; a favour”. etc. A pension is not a ‘benefit’, it is a paid-for expectation. I fully support the comments above as we, the UK’s frozen State Pensioners, paid our mandatory contributions to the National Health Service on the same terms as State pensioners who enjoy annual indexation and we had every expectation that the Government would honour the obligations implicit while it was accepting our payments. We were confident that we were making adequate provision for our retirement. As Jane Davies has said, the discriminatory deprivation of a fair pension to more than half a million frozen pensioners amounts to theft and demonstrates a complete lack of conscience on the part of our Prime Minister and his Government. The injustice needs to be reversed if Britain is to regain any global acknowledgement of its former integrity.
The rise of 2.5 per cent in State pensions from April will certainly be welcomed by 96 per cent of the UK’s State pensioners and there will be no resentment about them receiving it by the remaining 4 per cent who are “frozen” and whose pensions will remain unchanged, but I am disappointed that Jennifer Paterson’s article is published under “Employees Benefits”. English dictionaries define a ‘benefit’ as: ”an advantage; a bonus or extra privilege; a favour”. etc. A pension is not a ‘benefit’, it is a paid-for expectation. I fully support the comments above as we, the UK’s frozen State Pensioners, paid our mandatory contributions to the National Health Service on the same terms as those pensioners who enjoy annual indexation and we had every expectation that the Government would honour the obligations implicit while it was accepting our payments. We were confident that we were making adequate provision for our retirement. As Jane Davies has said, the discriminatory deprivation of a fair pension to more than half a million frozen pensioners amounts to theft and demonstrates a complete lack of conscience on the part of our Prime Minister and his Government. The injustice needs to be reversed if Britain is to regain any global acknowledgement of its former integrity.
What is not mentioned, is that countries like Canada will not pay your pension in the UK unless you have paid more than 20 years into the system. It is not just the thieving UK politicians, but the same in many other countries. The UK is particularly bad because they have many very poor pensioners and the money is needed to maintain their poverty, or they would be actually starving. UK politicians need to spend less time planning their own luxurious, overseas retirements and fiddling expenses and more time worrying about the people who pay them.
I totally agree with the comments re pensioners retiring to certain overseas countries – they should receive the proper increased pension payments. What further annoys me as a ‘recent’ retiree was the govt. decision to drastically reduce the number of qualifiying years of NI payments from 44yrs (which I had to pay!) to 30yrs-where is the justifying logic in that action in today’s economic maelstrom! Common sense and plain logic where are you?
does my second pension rise too
I agree with Keith being a recent retiree and as a woman who previously had to have 39 years but only completed 29years , my pension was calculated as 29/39ths whereas someone less than 6 months younger had only to have 30 qualifying years. As NI is based on a percentage of income not a flat rate as it used to be I could have paid more into the fund than my friend . No outcry then. What is everyone getting on about as there has never been fairness when the Government changes things.
How about those of us who paid a married woman’s contribution and was never told by their employer it would mean a reduced pension. I worked for the same firm from 17 to 67 years of age and for all that receive £64,40 pension and had to wait for that until my husband was 65. He also gets a reduced pension because he was self employed for many years. We struggle to heat and eat and often sit indoors in our coats. Disgusting for us and many others in the same situation.
Why doesn’t the government phase in the new changes instead of having a “cliff edge” at a certain date. My husband has worked out that he will lose £40K (if he lives to be 85) compared with someone born a few years later. He’s not a happy bunny!
Mark Wood’s comment that “An individual would need savings of £195,000 to buy an annuity of the same value (£110 per week) as the state pension” is incorrect as a 65 year old man could buy an annuity worth around £213 a week with savings of £195,000. I think he must be referring to money in a poor savings account, not an annuity purchase.
2.5% of very little is still very little. It’s not the percentage that counts, it’s what it’s a percentage of. If the state pension were increased by 50%, it would still be very little. Blurring the issue by saying you’d need £192,000 in your pension pot to pay for it doesn’t change anything. Mr Cameron crowing that the pensioners have never had it so good over last year’s 5% pension rise doesn’t change anything. Life is hard for a good many people; pretending that they’re getting more than other people doesn’t change that. Especially when it’s privately educated rich boys who are saying it.
When I find myself in poverty abroad because this UK government is stealing my state pension annual increases, I will be back in the UK and the government will have to rehouse me, and get my pension to it’s rightful amount. I will refuse to pay any council tax, and let the government put me in jail. They steal from me and I will steal from them, and remember, it is not the tax payers money, it is the governments, as they do what they want with it, ie overseas aid, MPs “expenses” etc. An eye for an eye.
I understand that the pension rate for those with no increases because they’re living in Australia etc can actually be increased by visiting the UK (or even Europe). I’ve been told that any length of visit qualifies for the full increase to that date.
Dear All,
If there is a pension of £140.00 per week to come ina couple of years time,Just remember many pensioners excluded from this princely sum had to work for almost fifty years to qualify,not thirty.Far more democratic would be to pay the same pension to all,and higher ammount with no other benefit involved to account for heat allowance and ten pound chistmas bonus etc.think of the saving on admin.
as a service wife I followed my husband which meant living in various countries,he paid his N.I.and tax as he would have in the UK,I however am treated different no protected stamp for being a stay at home mother.All those years count for nothing,as usual service wives count for nothing,just an appendage to keep the troops quiet when they are not putting their lives in danger!
As a soon to be retiree I am disgusted at how many are being treated. My wife now has to wait until the year 2020 to get a pension and my “allowances” are being restricted. Our retirement plans always included both of us getting a state pension at bout the same time (65 and 60 years old respectively). Now, despite having worked all of my life (almost 50 years).and my wife unable to work through ill health we are in a poorer financial position. My employment pension plus the state pension will mean we do not “starve” but it is not the retirement we planned.