State Pension - two-tier system . WHY?

[Haliotis]

I took voluntary redundancy when I was 61 and, instead of taking any lump sum, i left the whole amount to give me maximum private pension, and better increases per year.  The company also gave me a bout 80% of the value of the state pension until I reached pension age.  This was before Gordon Brown got his fingers on private pension dividends, and we got good annual increments - as much as 9% one year.  Also, the company increased my “temporary state pension” by the same percentages, along with my private pension.  This gave me two results - (1) my private pension at 65 was more than if I had stayed in work until then, and (2) my ‘temporary state pension” had grown beyond the real state pension, and that dropped slightly.  But, overall, I gained by not waiting until I was 65 to retire.

[Corolly Poly]

On 9/4/2024 at 2:24 PM, Graham47 said:

Enough said !,

agreed

[Corolly Poly]

4 hours ago, jthspace said:

Agreed, but my State Pension is currently £12,535, just a few £££ short of the Personal Allowance, so if the triple lock gives me the rumoured £400 . . . 😭

 

Then you will pay tax on that over the threshold, not the whole lot, so you still gain. What is wrong with paying tax? I wish Govts would have the balls to increase income tax to improve public services, etc (with a rise in the lower threshold to protect the vulnerable) but it seems to be a sacred cow for all of them - including Labour bizarrely!!!

[jthspace]

9 minutes ago, Corolly Poly said:

What is wrong with paying tax?

Nothing, the frozen personal allowance is the problem that will cause grief to lots of people less fortunate than myself. I already am in the higher tax bracket so 20% tax on the extra +/- £400 is neither here nor there.

[Corolly Poly]

4 minutes ago, jthspace said:

Nothing, the frozen personal allowance is the problem that will cause grief to lots of people less fortunate than myself. I already am in the higher tax bracket so 20% tax on the extra +/- £400 is neither here nor there.

Hence my point to raise it with increased tax rates to protect the vulnerable. I too am fortunate enough to pay 40% tax on my pension but many of my friends/family who rely on the state pension alone would be unfairly punished if a rise in SP was partially offset by them coming into a tax position.

[Corolly Poly]

9 minutes ago, jthspace said:

Nothing, the frozen personal allowance is the problem that will cause grief to lots of people less fortunate than myself. I already am in the higher tax bracket so 20% tax on the extra +/- £400 is neither here nor there.

wouldn't you pay 40% (or more depending on which bracket you are in)?

[jthspace]

3 minutes ago, Corolly Poly said:

wouldn't you pay 40% (or more depending on which bracket you are in)?

20% from £12,570 up to £50,270

40% from £50,271 up to £125,140

[Corolly Poly]

1 minute ago, jthspace said:

20% from £12,570 up to £50,270

40% from £50,271 up to £125,140

"I already am in the higher tax bracket so 20% tax on the extra +/- £400 is neither here nor there."

you suggested you were already in a higher bracket so additional income would be taxed at that rate  - not 20%

[Mjolinor]

7 hours ago, Puglet said:

Throughout my working life the pension goal posts have moved a few times, which not only confusing but also plays havoc with so called 'retirement planning'. As mentioned thankfully I have some 'work' pensions and also a private pension to also rely on, whose terms and conditions have stayed constant thoughtout the years, good job to cos at least I can get at my private pension before my state pension retirement age, which thinking about it has also moved upwards in my working lifetime.

 

I worked out very early on after I left school in the 70s that the goal posts constantly moved so made the conscious decision to avoid national insurance all my working life (without breaking the law).

I got to retirement age and get a minimum amount but they make it up with some benefit or other and I end up with more than my wife who worked and paid. On top of that there is other stuff that comes free like dental and whatever.

The system is flawed. I have more money than I can spend and no way should I end up like that.