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For years, Express readers have reacted with fury to claims that the state pension is a benefit. They believe it is an entitlement, because they have made contributions towards it for decades, via their National Insurance contributions. Newsflash: they\u2019re wrong.<\/p>\n
It gives me no pleasure to write that. If the state pension had been done properly, it would be an entitlement.<\/p>\n
We would all have an absolute right to claim it, provided we had made sufficient NI payments during our working lifetime.<\/p>\n
Unfortunately, it wasn’t done properly. The state pension is based on a lie, and many of us continue to swallow it.<\/p>\n
This leaves us all in a much more precarious position. Benefits are something given. They can also be taken away.<\/p>\n
In practice, that isn’t going to happen. Pensioners would starve. But the definition does give the government some leeway over what happens to the state pension next.<\/p>\n
Here’s a pretty good definition of what the state pension is: \u201cThe state pension is a universal, non-means tested benefit available to all, so long as they have made the requisite NI contributions or credits.\u201d<\/p>\n
Benefit. Not right. Not entitlement. Benefit.<\/p>\n
Yet the myth persists that the state pension is a benefit, with Express reader newresistance2023<\/b> taking issue with an article on our site today saying: “DE….the State Pension is NOT a Benefit…why can’t you get it right?\u201d<\/p>\n
Sadly, we did get it right.<\/p>\n<\/div>\n
Don\u2019t believe me?<\/p>\n
It\u2019s the Government that decides these things and in 2016 it made its position brutally clear. \u201cThe State Pension is described in legislation as a ‘benefit’ in order to root it within the existing social security framework as a statutory scheme paid out of monies in the NationaI Insurance Fund.\u201d<\/p>\n
That was in response to a petition entitled: \u201cStop UK Government and Departments from labelling “State Pension” as benefits!\u201d<\/em><\/p>\n It argued that as the state pension has usually been contributed to over many years, it seems wrong to title it as a \u201cbenefit\u201d.<\/p>\n The petition failed.<\/p>\n Older people who take pride in never have any claimed state benefits during their working lifetime understandably don’t like the idea of being given one when they retire.<\/p>\n I totally get that.<\/p>\n Especially since most will have made decades of qualifying NI contributions during their working lifetime, and feel it is theirs by right.<\/p>\n I only wish it was.<\/p>\n Unfortunately, as the Office for Budget Responsibility makes clear, NI contributions are only \u201cnotionally used to pay for the state pension and other contributory benefits”, including the NHS.<\/p>\n Note that phrase: \u201cother contributory benefits\u201d. That’s what the state pension is.<\/p>\n READ MORE: Extra \u00a376 a month being handed to some state pensioners – check your eligibility<\/strong><\/p>\n<\/div>\n As for the National Insurance Fund, I wouldn\u2019t get too excited by that.<\/p>\n Reader acecanna<\/b> argues that \u201cthere is a NI Fund used to pay pensions it is the nearest thing we have to a hypothecated tax\u201d.<\/p>\n The definition of a hypothecated tax is one where the revenue is ring-fenced for a particular expenditure purpose.<\/p>\n NI is indeed the nearest thing we have to a hypothecated tax, but it covers a heap of benefits as well as the state pension.<\/p>\n As this site makes clear: “It is not a genuine hypothecated tax. It is a book-keeping exercise.” Ouch.<\/p>\n Sadly, reader Sparhawk<\/b> also gets it wrong when stating that the state pension is a contributions-based scheme, not a benefit. “Private pensions are also a contributions-based scheme, and they’re not benefits.\u201d<\/p>\n Unfortunately, state pensions aren\u2019t like private pensions, precisely because there is NO personal money pot built up. Instead, it\u2019s a social contract. We pay in and expect to get something back, we just cannot decide how much. We get what the government thinks it can afford.<\/p>\n Not what we\u2019ve paid in.<\/p>\n This means that some get less than they have paid in. Others get a lot more.<\/p>\n It shouldn’t have been this way. There should be a nice big pot of money dedicated to the state pension, sitting there waiting to be claimed.<\/p>\n There isn’t and never will be. Today’s state pension is funded by today’s workers and that’s a real problem, as society ages and the ratio of workers to pensioners shrinks.<\/p>\n Express readers are right to be worried by the fact that the state pension is defined as a benefit. Unfortunately, it is.<\/p>\n<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":" [ad_1] For years, Express readers have reacted with fury to claims that the state pension is a benefit. They believe it is an entitlement, because they have made contributions towards it for decades, via their National Insurance contributions. Newsflash: they\u2019re wrong. It gives me no pleasure to write that. If the state pension had been …<\/p>\n","protected":false},"author":1,"featured_media":8782,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/8781"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=8781"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/8781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/8782"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=8781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=8781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=8781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}