Pension boon

[teamsaint]

I don't follow your point, BeefO. If the "very modest income" is below £10000, then they don't pay Income Tax - whereas anyone receiving the State Pension, Jobseeker’s Allowance, Carer’s Allowance, Employment and Support Allowance, Incapacity Benefit, Bereavement Allowance, pensions paid by the Industrial Death Benefit scheme, Widowed Parent’s Allowance, or the Widow’s pension, does.

do people who earn below the weekly NI threshold have a contribution paid by the employer/state?

[ardcarp]

That puzzles me. Both of my parents received Attendance Allowance in addition to their sate pensions.

That may be because they began receiving it before the new 'rules'. As I understand it, Disability Living Allowance (or whatever they call it now) is paid directly to the disabled person if over 16, whereas Attendance Allowance is paid to the carers.

Changing tack a bit, there has been some discussion whether the state retirement benefit is a true 'pension' or not. There is indeed no pension 'pot' from which it is paid...but of course there could be if contributions were put in a pot and invested instead of being treated like general taxation. Neither is a Private Personal Pension Plan a true pension (I shouldn't start on this, really...maybe I'll post up an article wot I rote another time) it's an annuity which doesn't keep pace with inflation and from which greedy providers make sure they're the winners, not you.

The only true pensions are the occupational pension schemes, now mainly confined to the professional classes and the super rich and disbanded for everyone else. In my grandfather's day (he was a foreman toolmaker) he received a generous pension from Lucas (a big firm in Birmingham) plus many other benefits such as free sports and social facilities plus a mind-boggling annual Christmas hamper during his long retirement in the 50s and 60s. Can you imagine that happening today???

[Beef Oven!]

I don't follow your point, BeefO. If the "very modest income" is below £10000, then they don't pay Income Tax - whereas anyone receiving the State Pension, Jobseeker’s Allowance, Carer’s Allowance, Employment and Support Allowance, Incapacity Benefit, Bereavement Allowance, pensions paid by the Industrial Death Benefit scheme, Widowed Parent’s Allowance, or the Widow’s pension, does.

Why do you choose £10k? The London Living Wage Foundation gives the 'existence' income for London as just over £19,000 pa.

[Anna]

Why do you choose £10k? The London Living Wage Foundation gives the 'existence' income for London as just over £19,000 pa.

But London is a special case with the 'living wage' so salaries are completely different, the rest of the country is on 'minimum wage', but still not for all.
Edit: Minimum wage is £6.50, London Living Wage is £9.15, Living Wage elsewhere (if it's applied) is £7.85. Minimum wage x 40 hour week gives income of £13,540 pa

[Beef Oven!]

People in the latter position (if I understand what you mean correctly) who are not liable for NIC by virtue of being entitled to and in receipt of state benefits will in most cases find themselves with fewer "qualifying years" for state retirement benefit when they reach state retirement age, so it's not all roses for them either - and, it has to be said, those in receipt of state benefits other than state retirement benefit are entitled to them only because their circumstances merit it and someone has to fund them, just as they have to fund state retirement benefit. That said, by those people whom you mention whoare "not employees", I take you to refer specifically to the self-employed on modest incomes but not so modest that they have no tax liability; I don't understand why you single them out in not having their NIC liabilities met for them - surely no employee or self-employed person has his/her NIC liability met for them, irrespective of the level of income received by them? But I suspect that, for some reason, I'm not getting what you're writing here, so perhaps you could explain what it is that I'm missing!

You should've said that at first, rather than put words in my mouth!!

Take an NHS or local authority worker on a modest salary who has just been made redundant through the ongoing public sector re-organisations. If they are over 50 they will have their pension paid to them as part of their severance package. If they have a reasonable amount of service, they may get a pension between 15k - 19k, for example.

Take London where the bare-existence wage is £19k. These people will not be able to survive if they struggle to find new work. And they can't sign on the dole because they have an income. As they struggle to get by, they will not have NI contributions paid for them by the tax-payer, as people on the dole will. Seems unfair to me, especially as these people are tax-payers themselves.

I'm not in the least thinking about self employed people like you and I who are comfortable and have no cause for complaint

[Beef Oven!]

But London is a special case with the 'living wage' so salaries are completely different, the rest of the country is on 'minimum wage', but still not for all.

The rest of the country must accept the statutorily set minimum wage of £13,556.4 for full time work. Still more than 10k and they will be paying tax. Why 10k anyway?

[Beef Oven!]

The rest of the country must accept the statutorily set minimum wage of £13,556.4 for full time work. Still more than 10k and they will be paying tax. Why 10k anyway?

London has a higher ratio of workers than the rest of the country, amongst its estimated 8.5 million people.

London is a very big special case.

[gradus]

Ref personal pension plans not being true pensions, surely it depends on what happens to the proceeds of the plan when (now if) invested in an annuity and one has annuity choices these days. Just like occupational pensions ie defined benefit pensions, it is perfectly possible to buy an annuity that is increased annually in line by an agreed % which may exceed or undershoot inflation, or to buy an index linked annuity to keep pace with it. For most though the defined benefit scheme was better though generally more expensive for employers, hence its near demise.

[Anna]

The rest of the country must accept the statutorily set minimum wage of £13,556.4 for full time work. Still more than 10k and they will be paying tax. Why 10k anyway?

Beefy, I never mentioned 10k - I think that was ferney!!
I also amended my post showing wage levels, so the minimum x 40h/pw gives that figure of £13,500. How can anyone save for a pension on that after paying housing and other living costs? Also, many supermarket checkout operatives aren't on a 40h week, they do 4h shifts and have to claim tax credits because that benefits the employer.

London may be a 'special case' in your eyes but does that mean the rest of the UK workforce should earn £3ph less?

[Beef Oven!]

Beefy, I never mentioned 10k - I think that was ferney!!
I also amended my post showing wage levels, so the minimum x 40h/pw gives that figure of £13,500. How can anyone save for a pension on that after paying housing and other living costs? Also, many supermarket checkout operatives aren't on a 40h week, they do 4h shifts and have to claim tax credits because that benefits the employer.

London may be a 'special case' in your eyes but does that mean the rest of the UK workforce should earn £3ph less?

London is a special case, never mind in my eyes.

I agree that pay levels are simply too low, across the board.

[Anna]

London is a special case, never mind in my eyes.

I agree that pay levels are simply too low, across the board.

If house prices and rents weren't at ridiculous levels then low pay simply wouldn't be a problem would it? But that's a different discussion altogether ...

[Eine Alpensinfonie]

London is only a special case because people who happen to live there think so. If London weighting were abolished, perhaps fewer people would choose to live there, and the economy throughout Britain would be better balanced.

[Beef Oven!]

London is only a special case because people who happen to live there think so. If London weighting were abolished, perhaps fewer people would choose to live there, and the economy throughout Britain would be better balanced.

I can perfectly understand people being irked by the sometimes-arrogance of London dwellers, but it should not get in the way of the facts. London is a very different kettle of fish from the rest of the country. That's not to say that life's that much easier elsewhere, unless one is comfortably off.

[mangerton]

The rest of the country must accept the statutorily set minimum wage of £13,556.4 for full time work. Still more than 10k and they will be paying tax. Why 10k anyway?

The personal allowance for those born after 5-4-1948 is £10,000 for this tax year. 30 hrs per week at minimum wage is £10,140. A single person, not disabled, over 25 years old, working 30 hrs or more per week can claim Working Tax Credit. This is income related, but those earning less than c £12,500/£13,000 and meeting the criteria above will get something. A single person meeting the criteria above and earning £10,140 pa would get c £23 per week, and that is not taxable. There are different rules for those responsible for children, disabled people, and those over 60.

[Flosshilde]

That may be because they began receiving it before the new 'rules'. As I understand it, Disability Living Allowance (or whatever they call it now) is paid directly to the disabled person if over 16, whereas Attendance Allowance is paid to the carers.

No - it's paid to the person being cared for to enable them to pay for care (or as a contribution to it). They can use it, for example, to pay a relative, partner or friend petrol costs if they are driving the cared-for person anywhere. Relatives etc. providing care can apply for Carer's Allowance.
My mother, who was registered disabled after she was 65 & therefore did not qualify for the DLA, received the Attendance Allowance; it was paid with her pension.

See my earlier post for a link to Government information.