UK Ministers plan to pay £140 a week and end means testing

[size=85:168gg4uo]System will be simplified, with single pensioners receiving up to £7,280 a year and couples banking £14,560

THE RADICAL SAYS THERE THREE ISSUES NOT MENTIONED HERE:-

1. THE PERSONAL ALLOWANCE OF PENSIONERS AND THEIR PARTNER
2. MAXIMUM EARNING LIMIT OF £22900 BEFORE PERSONAL ALLOWANCE IS REDUCED AND THEREFORE FURTHER INCOME TAXED TWICE.
3. A COUPLE CANNOT ADD THEIR PERSONAL ALLOWANCE TOGETHER AS THERE IS NO 'MARRIED MAN'S ALLOWANCE' AS SUCH ( I THINK)

PERSONAL ALLOWANCE :-
65-74=£9490,
75 onwards =£9640
Single Persons Allowance -£6475


The state pension may be standardised at £140 per person per week. Photograph: John Stillwell/PA

Ministers are planning a radical transformation of state pensions, which will see the system simplified and the amount available to pensioners increased.

Everyone will receive the same £140-a-week payment and there will be an end to means-tested top-ups.

Under the current system, a single person can receive £97.65 a week and a couple £156.15, with an extra means-tested amount available for the poorest pensioners.

The changes, which are due to be detailed in a green paper by the end of the year, mean a single person could receive £7,280 a year and a couple £14,560.

Ministers believe that removing means testing and the resulting reduction in bureaucracy will save around £6bn a year. They believe a single-tier system would also reduce reliance on benefits.

The changes are likely to benefit married couples and stay-at-home mothers the most, as the latter often fail to qualify for the full basic pension because they have taken time out from work and have not built up enough national insurance contributions.

The proposal should give a boost to the coalition government after it came under intense criticism for scrapping child benefit for those earning more than the £44,000 threshold.

A Department for Work and Pensions spokeswoman said last night that the proposals would make the pensions system easier to understand. "
The chancellor has confirmed that the government will improve the quality and accessibility of pensions in the spending review period,"
she said.

"
We will be bringing forward proposals for reform in a green paper later this year. Our aim will be a simple, decent state pension for future pensioners, which is easy to understand, efficient to deliver and affordable."


The plans are being drawn up by Iain Duncan Smith, the work and pensions secretary, and pensions minister Steve Webb. They hope to cut pensions spending, which was around £66.9bn last year, although the reforms would need to be approved by the Treasury before they could go ahead.

"
The current system is very complex,"
the Daily Mail quoted a senior coalition source as saying. "
It forces too many older people to be reliant on means testing, with many not taking up the support offered by the state.

Too few are rewarded for working and saving, and it generates unequal outcomes for men and women.

A radically reformed state pension will reward people who work and save, clarify the deal for future pensioners, and simplify the role the state plays in providing a clear and solid foundation for old age."


Instead of basing pensions on means testing, the new system would be based on residency, with British citizens or people who have been living in the country for a certain number of years qualifying.

Pensions are taxable, so people with savings which are over the income tax allowance threshold would not receive the full amount.

From April 2020 the state pension age will increase to 66 for both men and women, who will be worst hit with up to a six-year increase.

If Duncan Smith's plans go through, the reforms are likely to be applied before the 2020 age increase.

Although reforms were due under Labour, the previous government had planned to increase the pension age gradually to 66 by 2026.

Responding to the planned changes, Ros Altmann, a former pensions consultant to the Treasury and the newly appointed director-general of Saga, said:
"
A full-rate citizens' pension would be the most fantastic reform.
The current system was designed decades ago by men and for men. It isn't fair to women."

B :Very sad:by the time it is standardised to a £140.00 a week, a £140.00, might be just na third nor even half of that.

By the time it reaches 140 most of us old uns will be pushing up daisy's

tonyb60 wrote:

By the time it reaches 140 most of us old uns will be pushing up daisy's

I know the feeling Tony

pixi wrote:

B :Very sad:by the time it is standardised to a £140.00 a week, a £140.00, might be just na third nor even half of that.

Yes, you are right pixi - this increase is not coming in straight away, it is a carrot that is always dangled in front of us oldun's.
Unfortunately, the UK pay the 4th worst pensions in all of Europe and expect those of us already on pensions to subsidise the rest of the benefits system. The UK Government should be ashamed of themselves!!

I read about this when I was in UK recently but I am not sure whether people living abroad will be able to get it. I seem to remember it was for UK residents only. Am I correct and if so, what are we all supposed to live on when the exchange rate fluctuates and prices rise everywhere in the world? After all, we expat pensioners have been saving Britain a lot of money by not claiming benefits because I couldn't live in Britain on my basic State pension without claiming and 2 of us live on it here in Bulgaria - just!
I hope I'm wrong about this.

They would not dare take your pension off you. if you qualify for state pension, you will be paid it in any eu country,.
what i dont understand about the changes is.......if you have savings above the personal allowance, you will not get the full pension. why. :shocked1:or have i not read it right.

If you have paid in you must get something out, EU law will back that up. Don't 4get it is not the governments money it is yours by right.

I don't think that even this Government know what is going to happen. In industry the best way to find out if a new policy will work with the workers is to start a rumour. Sounds like the rumour has started.

After what I have paid in, if we don't get our dues then I for one will be seeking legal advice, that is if I'm still breathing on this planet. As I also think that this will not happen in my life time. If people that have been living in the UK for anything under 10 years get it then I will become the new Guy Fawkes :Excited fire:

Lets just hope that they stop giving our money away

I agree if we are elligible for a State Pension then we should get it wherever we live. I didn't mean they would take away all my pension because I am getting it as is my right now. However, I thought it might mean that the 140GBP flat rate might not be applicable just as folks can't get inflation proofed pensions in some countries, notably the ex-Commonwealth. Also, how long will this flat rate 140GBP last? Will it be inflation proofed and will we get it abroad? Lots of questions to be answered on this. It sounds too good to be true to me.

Someone once said if it sounds to good to be true then it is not

[size=55:k88xtduh]OPP

Legal changes won't kill the QROPS market

Fears that forthcoming legal changes will destroy the QROPS (Qualifying Recognized Overseas Pension Schemes) market have been grossly exaggerated says a leading financial advisory company.

“QROPS will continue to play a central role in retirement planning for many thousands of pension investors regardless of the introduction of new flexible draw-down options in April,” IFA Guardian Wealth Management told OPP this week.

“Speculation that the reforms will kill the QROPS market is wide of the mark,” the company’s chief executive David Howell told OPP.

“In fact, it’s a different issue aimed at a different type of client. Cross border pensions are still in the early stages of a rapid growth phase.”

“Even after April, UK rules are going to be more stringent than most other overseas jurisdictions so if people planning to live abroad have the opportunity to choose something better, then many will take it.”

Howell believes that the changes could even increase interest in the QROPS market amongst affluent investors who won’t have the size of pension needed to benefit fully from flexible draw-down.

“Flexible draw-down is now a known quantity that will suit some people but disappoint others,” he said. “There isn’t going to be another shake-up any time soon so all those disappointed with these rules are going to be looking for an alternative.”

QROPS have helped and encouraged thousands of overseas property buyers from the UK to choose to live abroad, allowing them to legitimately get around the ways in which UK pension rules can restrict how and when they take their pension benefits.

Expatriates can transfer UK pension money into a QROPS and, after five years there, benefit from the fact that there is no requirement to report this to HM Revenue &
Customs.

The advantages of QROPS include:

· the availability of income payments that are not normally liable to UK tax for those not resident for tax purposes;


· no requirement to buy an annuity or to secure a minimum annual income (as with flexible draw-down), which gives considerably more flexibility over investments and how benefits are accessed;


· a wide range of investments, including international / offshore funds, stocks, bonds currencies and non-standard assets, such as property and private assets;


· funds can be held in the currency of the country in which the retiree resides, removing exchange rate risks;


· up to 30% tax free cash can be withdrawn from QROPS in certain jurisdictions and on death, the remainder of the fund can pass to the estate with no inheritance tax liability, as long as the individual has been non-UK resident for five years. Lump sum death benefits paid from a UK-based pension fund are taxed at 55%.

The QROPS route has been a very successful long-term method for Britons to move overseas. It has been good way to make their pension arrangements feel safe and secure once they move out of home territory. Formerly, overseas retirees had to pay extra taxes in order to get their funds transferred out of the United Kingdom.

Furthermore, the status of this money with regards to the pension laws in other countries was rather ambiguous before QROPS, resulting in a great deal of confusion and inconvenience.

The Introduction of QROPS Pension option came in 2006, covering state as well as private pension incomes. The scheme has tended to work best in the European Economic Area (EEA) where the paperwork is less complicated. For countries outside the EEA, extra bureaucracy often applies.