More than 13 million workers across Britain could be heading for a shortfall in the amount of pension they need for an adequate income, according to analysis. The Pensions and Lifetime Savings Association (PLSA), which released the findings, said minimum contribution rates into workplace pensions should be increased to “at least” 12 per cent to […]
Labour’s Alex Cunningham says his party is committed to helping those women who made plans to retire under the previous timeline
Imagine reaching your retirement age only to find that it had been quietly pushed back.
This is the fate that has befallen 2.6 million women, born in the early 1950s who had expected to retire, only to find out at the last moment that their retirement age had moved.
How has this happened?
These complicated changes were not properly communicated to the women affected.
Leaving them struggling to make new plans for a later retirement.
The Tories’ own former Pensions Minister Baroness Altman has described the move as a “massive failure in public policy.”
One of the women affected by the Tories’ changes described how she has been forced to live with a friend, with only £8 a week income, having to borrow money while worrying about how she might pay for basic medical treatment.
Retirees who purposefully exhaust their pension pots and fall back on the state will not be given means-tested benefits, the government has confirmed.
The Department for Work and Pensions (DWP) has clarified how it would deal with those who spend their pension and then expect the state to fund their retirement, which many were concerned would add extra pressure on taxpayers.
It has now confirmed that if someone spends or gives away their pension fund, the DWP will treat them as if they still have that pension fund when calculating entitlement to means-tested benefits. Individuals will have to tell DWP and their local authority, which pays out some benefits directly, that they have accessed their pension pots.
The DWP uses pension credit – which is used to top up the incomes of the poorest pensioners – to illustrate its point.
It said in a document: ‘Once you (or your partner) reach the qualifying age for pension credit, you are expected to use your pension(s) to help support yourself. If you choose not to buy an annuity after reaching the qualifying age for pension credit, an amount of ‘notional’ income will be taken into account when your benefit is worked out.
‘’Notional’ income (in this case) is an amount equivalent to the income you would have received if you had bought an annuity. If you take an income from your pension pot, the amount which will be taken into account when assessing your benefit will be the higher of the actual income or notional income. If you take a cash lump sum, this will be taken into account as capital.’
Andrew Tully, pensions technical director at MGM Advantage, said the DWP ‘could not be any clearer in how they will treat cases where people have either deliberately or unwittingly spending their pension pots and intend to fall back on means-tested benefits’.
‘We have a duty as an industry to make it very clear what the consequences of this are,’ he said. ‘But all of the responsibility rests with the individual to tell DWP and the local authority when they take money from a pension.
‘It seems clear to me people need to pause before raiding their pensions next month, and ensure they fully understand what the potential long-term consequences of doing so are.’
read the original article here: http://www.mindfulmoney.co.uk/pensions-and-sipps/retirees-who-raid-pensions-will-be-blocked-from-state-benefits/
Saturday’s Daily Telegraph contained an announcement from Iian Duncan Smith:
Benefit cheats face higher fines and losing their homes.
Iain Duncan Smith hails £50 billion of welfare savings but ministers plan a new crackdown on benefit cheats after £3.5billion was lost to fraud and error ………………….
“Hundreds of thousands of pensioners who fail to declare their full earnings from private pension schemes will also be targeted as fraud investigators trawl through HM Revenue & Customs records. “………………………….
Existing claimants will be cross-checked against HMRC records to catch pensioners who are receiving extra income than they have declared from private schemes, while also claiming pension credit, a means-tested benefit…………………………………………………………..
Officials estimate that fraud by pensioners failing to declare their full income cost taxpayers £170 million last year, up from £140 million in 2012 and more than the £150 million lost to jobseeker’s allowance fraud by those falsely claiming to be out of work……………………………………………….
Officials expect to find 300,000 pensioners and workers who are claiming benefits to which they are not entitled because they have not declared their full income. The system will be tried out this month”
So the campaign to brand pensioners as shirkers and cheats gets under way.
Up till now public opinion has made an attack on pensioners impossible, here we go with the clever manipulation of the public to think of pensioners not as people who have paid into their pensions system all their lives, but as people scrounging from ‘hard earning taxpayers’
You can read the whole of his statement here: http://www.telegraph.co.uk/news/politics/10747122/Benefit-cheats-face-higher-fines-and-losing-their-homes.html