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State Pensions – old and new

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For the tax year April 2017 – 2018 to Basic State Retirement Pension is £125.95.

For those who come under the New State Pension rules which came into force in April 2016, the amount paid for 2017/18 is £164.25, that is a whopping £38.30 per week difference –  £1,991.60 per year. Can this be fair???

Those who are stuck under the old system get a lower amount and can claim MIG but this is only if their income is low enough. If they have made some provision towards their old age and have an extra small pension, this extra provision is taken into account. Therefore, in essence their efforts to be self supporting in old age has done nothing more than made them ineligible to claim something that is available to people who didn’t bother to make any provision at all.

When these people were making their contributions and saving into their plans, it was a hardship as the monies saved could have been spent in many other ways. So it is very hard to find out in old age that being financially prudent was not the thing to do.

One way that they government could go some way towards putting things right is to stop counting any private pension provision towards the Minimum Income Guarantee. After all, many of the people stuck in the old system have 40 years’ worth of contributions yet are getting a sub-standard pension just because they missed a cut off date. This is not fair at all. http://bit.ly/2HnI68W

 

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Posted on 24th April 2018