Don’t Get Caught Unaware – State Pension Problems Brewing

Pensioners may have a new battle: getting the right pension amount in the first place….

Pensioners may have a new battle: getting the right pension amount in the first place. The type of pension we’re talking about today is the standard state pension, which is supposed to be 151.25 GBP a week. However, multiple people received statements that confirmed their worst nightmare: their payments were being reduced. For the pensioner trying to live on such a meager sum, this was bad news. It is absolutely scary to imagine that people are being forced to live on less than what they deserve.

Here’s some background on what’s going on. The problem is that money is being taken away from the state pension, and no one can understand why there is such a miscalculation. The new state pension is going to be introduced in April of 2016, with a new computer to go with it. But April is a long way from now, and that means that pensioners have to figure out what’s going on.

State Pension uk

The new state pension isn’t going to be a flat rate, which is a blow to savers that felt that they were led to believe it would be. The new single-tier system was designed to be less complicated, but that isn’t the case.

The current state pension is 115.95 a week, which is why the new flat-rate pension system was supposed to be better. There’s a penalty going around for the savers that contracted out of second pensions in the 1980s. However, you can’t blame them: the government at the time told them this would be better for them.

The deduction problem is at the heart of the state pension crisis, with people ending up getting less than they deserve simply because they did what they were told. It’s like never getting a state pension increase at all.

Another problem is that under the new system, people who worked less but served in the civil system over the private system would get a bigger state pension, despite paying less in National Insurance.

National Insurance has long been a debate within itself, but in this larger context it’s tragic.

It looks like we are going to continue hearing about the state pension problem for a really long time. We’ll keep you posted as new updates emerge.