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I worked for more than 50 years paying for my state pension through national insurance, always being contracted in. I also paid into a company pension, for which I received tax relief. So, I have no problem with my company pension being taxed, but I don’t see why state pension should suffer the same fate.
That aside, I regard my state pension as something I have paid into. I have just received a letter from the Department of Work amd Pensions that my BENEFIT will increase on 6 April 2026.
As you will have already deduced I do not regard my state pension as a benefit. What do others think?
I’d refer to most financial support payments made by the state to individuals as “state benefits”, so the state pension would fall under that terminology from my perspective.
I know “benefits” can be an emotive term that some will associate mainly with providing needless support for the workshy, and have encountered people who receive things such as carer’s allowance who don’t like it referred to as a “benefit”. But I think all these things are types of benefit really.
Disliking the word “benefit” is symptomatic of falling for the hard right agenda that has been pushed in this country over the last decade or so. There shouldn’t be any stigma attached to the word.
This is a list of State Benefits and and the State Retirement Pension is included
https://www.litrg.org.uk/benefits/state-benefits
Some are taxable, some aren’t
The State Pension is taxable, but not at source; that is, it qualifies as gross income and contributes to the tax-free allowance.
There’s been concern recently that the hefty annual increases in the pension in recent times thanks to the ‘triple lock’ will soon lift it above the tax-free allowance threshold due to that having been frozen for several years. So those whose sole income source is the pension will have to pay tax on the surplus above the allowance.
Don’t have a problem with that myself as we oldsters have, generally speaking, enjoyed the best of times and the triple lock on the pension is overly generous (IMO), and in anything more than the short term, unsustainable.
For men born after 1951 and women after 1953 the rise due in April will take the pension to around a grand per month…nice
Pay in for 50 years you may have but that money’s gone. State pension payments come of the country’s current funds, not some pot that’s been set aside. It’s not far off being a Universal Basic Income for those past a certain age (I realise not everyone gets the same amount for various reasons). It’s also very generous as Drone alludes to and it’s all paid alongside whatever other pensions and income you may have. At best it’ll be means tested by the time I get there in a few decades or so.
The original function was simply to provide older people with some basic funds whilst they sorted out their affairs before quietly shuffling off to the next life. It’s morphed into something unrecognisable compared to its origins.
Drone says
There’s been concern recently that the hefty annual increases in the pension in recent times thanks to the ‘triple lock’ will soon lift it above the tax-free allowance threshold due to that having been frozen for several years. So those whose sole income source is the pension will have to pay tax on the surplus above the allowance.
Richard is right, the no pot you’ve paid into for your state pension, instead it’s the people who’s currently working paying for yours, but my belief is what comes around, goes around.
You've got to accentuate the positive.
Eliminate the negative.
Latch on to the affirmative.
Don't mess with mister in between.35 years NI contributions is sufficient to get the full state pension. As mentioned NI is not a pot used solely to fund pension payments. It might have been originally when but is now just another source of general taxation used to fund general state expenditure.
The state pension under its current guise was introduced in 1948 following the National Insurance Act of 1946 for men over 65 and women over 60. Life expectancy then was 66 and 70 respectively. Now it is 79 and 83, but the qualifying age has only risen to 66, now for both genders.
Little wonder then that the state pension is a significant drain on overall tax revenue.
Not saying its necessarily wrong, it’s just how it is, but it does help demonstrate that it’s not really sustainable when a shrinking working age population is expected to support a growing retired one.
I would note Drone, as you are probably aware, that there is a transition to 67 and then 68 coming. Still of course far lower than life expectancy.
Little wonder then that the state pension is a significant drain on overall tax revenue.
You don’t have to retire when you hit retirement age, for me that’s 67 but in the next decade I think it’ll be 70+.
However I do a physical job and 67 I’m ready for it.
My dad died of Prostate Cancer at 76 in 2011, my mum died of Parkinson disease in 2019 at the age of 82, so I don’t take retirement in good health for granted, but I do hope for it.
You've got to accentuate the positive.
Eliminate the negative.
Latch on to the affirmative.
Don't mess with mister in between.A benefit that prob should be means-tested.
I say that despite being less than 3 years from receiving it.But then i think ALL benefits should be means tested to a degree, and anyone receiving out of work benefits should have their passport ‘frozen re travel’, until they return to work.
I’d also freeze all disability benefits and have a complete restructure of who can claim, how they claim and for what.
Also, restructure that taxpayer-sponsored vehicle mobility scheme. Clamp down on misuse of the racket that is the blue badge.Jeez, the amount of sickos on our Caribbean cruise a few weeks back!
Amazing isnt it? These peeps can fill out a form, have a telephone interview, ‘score’ enough points (so to speak) to qualify for £00s each week for a
‘disability’, BUT
Somehow, yes
Somehow
They can go on a 9-hour flight (twice in 2 weeks), board a ‘kin huge ship, wander around on ship, walk around decks, disembark at ports, walk to a port, go on trips, etc, etcAs one old dear said to me and the wife, on deck on one of the sea days, “my disability benefit pays for my cruise every year – chortle, chortle!”
I kid thee not.
And she is a widow of a high ranking RAF chap, with a big RAF Widow’s pension, plus her State Pension, of course.
Hey-ho
“… a shrinking working age population is expected to support a growing retired one.”
And scaring off foreigners who had been working here and contributing to the economy isn’t helping.
Don’t worry, I’m sure that all future governments will incentivise people to have kids through the benefits system. A cap would be ludicrous.
But then i think ALL benefits should be means tested to a degree, and anyone receiving out of work benefits should have their passport ‘frozen re travel’, until they return to work.
It’s a good job then that the State Pension is NOT a benefit.
I’d also freeze all disability benefits and have a complete restructure of who can claim, how they claim and for what.
My mum received disability benefits and had a through floor lift installed. But then she needed them.
Also, restructure that taxpayer-sponsored vehicle mobility scheme. Clamp down on misuse of the racket that is the blue badge.
My mum used to drive, but the blue badge is also for when she rode in the car, but yes I agree on the illegal misuse of blue badges.
You've got to accentuate the positive.
Eliminate the negative.
Latch on to the affirmative.
Don't mess with mister in between.Ah well a few years ago there was woman I knew , we we would kind of meet up occasionally …. Oh hang on benefits , as in financial , sorry on you go my mistake ….
Pick 3 on Saturday champion 2025/2026
It’s a good job then that the State Pension is NOT a benefit.
Did you look at the link I supplied above? The state pension is classed as a Benefit (note the capital B).
https://www.litrg.org.uk/benefits/state-benefits
As Marlingford and Gladiateur note the term has been rendered pejorative by association with the ‘workshy’ but it’s essentially just a convenient word to describe financial help from government to individuals, companies and organizations: it benefits them.
The Benefits system to individuals (Welfare) is undoubtedly over-complicated, just look at the number available on that list, and I’ve a lot of time for the idea of scrapping the whole lot and replacing them with a Universal Basic Income. But that blue-sky thinking is likely to be crowded with airborne pigs.
A state pension isn’t sufficient any longer to cover a average person living costs , more concerning all the young staff are opting out of the company pension , they don’t see as something to be concerned about , despite my warnings they are concerned how they will live in 30/40 years time
Pick 3 on Saturday champion 2025/2026
One of the problems is that many people can no longer put money aside for their retirement. With the cost of living being so high now, it simply isn’t feasible for a lot of people, not just youngsters, to have more set aside for their retirement when rent/mortgage, food, travel, etc, take up their entire income.
All down to immigrants, of course, and nothing to do with billionaires maximising profits while paying staff a relative pittance.
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