OAP fury over pension reforms
Pensioners, who will be exempt from pensions reform announced today, have attacked the planned changes as a "work shirker's charter."
Internet message boards hummed with fury over the reforms, which will see a flat rate pension of £140 a week introduced.
Currently, at 65 you're entitled to a basic pension of £96.65 a week. On top of this is the means-tested element for lower earners - known as pension credit- which boosts pensions up to £132.60 a week for a single person and £202.40 for couples.
But the reforms to introduce a flat-rate pension will not apply to current pensioners.
The big drawback
Pensions ace Ros Altmann, director general of Saga says: "None of today's pensioners will get less than now, but they will not receive the new benefits. This is a big drawback to the proposals and it would be good if the government could find a way to deal with the anger of today's pensioners."
One reader, who chose to remain anonymous, commented on Moneywise.co.uk: "What about people who have worked for the last 40 odd years paying 40% tax and maximum National Insurance payments? My pension entitled me to £170 per week. Am I to get the same as someone who has never worked and paid tax and NI? This surely is a work shirker's charter."
Pensioner John Deakin from Rhyl, North Wales calls the move "disgusting, disgraceful, despicable, deplorable, reprehensible and immoral."
He says: "It should be illegal that the government are even considering not giving the new state pension to current pensioners. How can they justify not giving the increase to old people who have worked all of their lives, paid their taxes and insurance contributions and in many cases fought for their country?"
But Laith Khalaf, pensions analyst at Hargreaves Lansdown, says there will have to be winners and losers in order to reach the government goal of keeping pensioners out of poverty.
He says: "The government can't go tinkering with people already receiving their pension. This would be a positive reform for some existing pensioners but then others would lose out. What about women who are currently retired? The government couldn't go to them and say; 'you owe us five years of state pensions'."
A scheme originally established in 1944 to provide protection against sickness and unemployment as well as helping fund the National Health Service (NHS) and state benefits. NI contributions are compulsory and based on a person’s earnings above a certain threshold. There are several classes of NI, but which one an individual pays depends on whether they are employed, self-employed, unemployed or an employer. Payment of Class 1 contributions by employees gives them entitlement to the basic state pension, the additional state pension, jobseeker’s allowance, employment and support allowance, maternity allowance and bereavement benefits. From April 2016, to qualify for the full state pension, individuals will need 35 years’ of NI contributions.