Rajab Al Zarahni

6 hours ago, sandyf said:

It is not as straightforward as that. This is the top level legislation that refers to various other regulations.

 

Persons not ordinarily resident in Great Britain

3. Regulation 5 of the Social Security Benefit (Persons Abroad) Regulations 1975(b) (application of disqualification in respect of up-rating of benefit) and regulation 21 of the State Pension Regulations 2015(c) (entitlement to state pension for overseas residents) shall apply to any additional benefit payable by virtue of the Up-rating Order and to any up-rating increase as defined in section 22(1) of the Pensions Act 2014 respectively.
http://www.legislation.gov.uk/uksi/2017/349/pdfs/uksi_20170349_en.pdf

 

This regulation quite clearly stops all overseas residents from up-rating but we know for a fact that some are, so there must be some other regulation that over rules the text below. We also know for a fact that the DWP refers to a reciprocal agreement so it seem fairly clear that those that do receive the up-rating do so under an agreement with the country concerned. Each regulation seems to refer to some other regulation and I gave up trying to find the text that refers to these agreements.

 

 Entitlement to state pension for overseas residents
(5) In all other cases, a person is not entitled to up-rating increases where, immediately before the up-rating increase comes into force, they were—

(a) entitled to a state pension under Part 1 of the 2014 Act; and
(b) an overseas resident.
https://www.legislation.gov.uk/ukdsi/2016/9780111141151

I don't comprehend the essence of the point you are seeking to make.

I agree that there are regulations and legislative provisions preventing the up-rating of pensions in certain countries but not others. These have been made by the UK government and its predecessors. Pointedly, the same UK government is the only sovereign power that can change such regulations and legislative provisions. 

The essence of my point is that changes to these up-rating provisions are not contingent upon any reciprocity agreements or treaty obligations with any foreign power. 

You stated: " We also know for a fact that the DWP refers to a reciprocal agreement so it seem fairly clear that those that do receive the up-rating do so under an agreement with the country concerned"

Do you really believe that the Thai government, for example, has forbidden the UK government from updating the state pensions of its citizens residing in Thailand ?

We have a number of bespoke reciprocal agreements with a variety of different countries. The UK government has elected to use the fact or absence of an extant reciprocal SS agreement as a marker to divide countries into those where it will pay pension up-rating and those where it will not. It is not the content of each of these agreements which determines this but simply the existence of such an agreement. 

9 minutes ago, strikingsunset said:

500m GBP to resolve this - it’s peanuts in the scheme of things


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The total spending of the UK government in the current fiscal year is anticipated to be £817.5 billion.

1 hour ago, sandyf said:

As far as I am aware all proper company pension schemes were automatically contracted out, the employee had no say in the matter. The water gets muddied where companies arranged a group pension scheme for employees which were in fact personal schemes rather than proper company schemes.

Anyone who has never contacted out would have the returns from the state additional pension schemes showing on their pension statement, which are.

Graduated Retirement Benefit - 1961 - 1975 ( No contracting out on this)

SERPS - 1978 - 1997 (This is when contracting out for company schemes started.)

SERPS2 - 1997 - 2002

Second State Pension - 2002 - 2016 (Additional pension was discontinued April 2016)

There were a small number of company pension schemes that were not contracted out. For these, the member paid the full NI rate contributing in full to the State Second pension as well as the company pension.

30 minutes ago, lungbing said:

I think that refers to pensioners that are still working should pay NI, not all pensioners.

That's also my understanding

3 hours ago, steve187 said:

could you link that info or give a breakdown of the amounts, and is that under the old system

Yes it's under the old system and as at 2018 and comprises £125.95 Basic State Pension and £172.28 Additional pension( SERPS, SP2, Graduated Pension ).

19 hours ago, Rajab Al Zarahni said:

What about those who made the maximum contribution to SERPS  and contributed for a lifetime of work up to retirement. They would certainly get a pension beyond the personal allowance of £11800 ?

Just for information.

Having looked further into this it appears that potentially someone with a full basic pension who had contributed the maximum SERPS contributions would get a pension of  £15507.96/year ( £298.23 weekly). 

2 hours ago, champers said:

The maximum state pension payable for a single man is £164.35 per week. That is less than £11800 p.a.

That must be new state pension. The figure could be much higher under the old system which would include basic pension, SERPS,  SP2, and Graduated Pension. Furthermore, the figure will also be higher for those who have deferred and elected to take income rather than a lump sum.

10 minutes ago, denby45 said:

Paying tax on private pension is not relevant to the argument. Also I do know there is no facility for the government to tax your state pension at source. It is always paid gross and is supposed to be reconciled if you go over your personal allowance. I know many pensioners but I don't know any that get enough state pension to pay tax on it. The reason I asked about the numbers of pensioners is because I cannot find any figures online.

 

Den 

Paying tax on private pensions is relevant because the tax code would be increased to reflect the additional income from the state pension.

3 minutes ago, champers said:

Anyone on only a state pension will not reach the threshold that is their tax allowance (£11500 ?).  Must be tough going on state pension alone.

What about those who made the maximum contribution to SERPS  and contributed for a lifetime of work up to retirement. They would certainly get a pension beyond the personal allowance of £11800 ?

3 hours ago, DILLIGAD said:

This seems to contradict your saying.




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I am completely lost in trying to understand the substance of your point ? Please explain.

5 minutes ago, Oxx said:

 

So, I was right.  There is no investment whatsoever in gilts.

 

Gilts are simply held short term as an alternative to holding cash, which makes sense since the returns are fractionally better.

Technically, I believe you are right as at today . From my understanding the NIF did originally have gilt holdings then in 1981, HM Treasury arranged to create "NILO" stocks specifically to meet CRND's investment needs when there was no other way to do so. HM Treasury issues non-marketable NILO (named after the former National Investment and Loans Office) stocks on the same terms and conditions as the marketable parent gilt issue(s) to which they relate. All transactions in NILO stocks were dealt with on the basis of the current market price of the parent gilts. NILO stock that were no longer required by CRND were purchased and cancelled by the Treasury.

In January 2007 the NIF  sold off all its gilt holdings, presumably as NILO stocks and created the debt Management Account Deposit Facility.

It still has an investment account facility and still receives modest increases but I can find no information on investments. I think the probability is that the government top it up at the level of bank base rate. 

14 minutes ago, mommysboy said:

Yes, this is very confusing. Treasury grants were made. You would have thought some investments would have been offloaded.  Maybe the fund account is more notional or actual funds not easily liquidated due to obligations.

 

There was definitely a shortfall though.  Part of this is the economic malaise of the country, but it is also the demographic issue beginning to show. 

 

It just seems obvious to me that the current pension needs to be cut, contributions raised, and the pension age upped.  But these things are usually phased in over years and even decades. 

There are a number of other things that have been put forward including the disturbing suggestion of levying NI contributions on people over pension age.

II think it was David Cameron who promised us " a bonfire of the QUANGO'S" This in fact never happened  but it is clear that the economy of the country is sinking under the weight of its own administration.  This would be my starting point. Every year we have initiatives to streamline services or make them more efficient but rarely ,if ever, do we here of a service being abolished. Why for example do we meed ACAS when we have had no significant industrial disputes warranting its intervention for at least 20 years ?

If people are living longer and we need to spend more money on pensions, that we don't have, then stop spending the money  on promoting ballet dancing initiatives in Ethiopia ! 

1 minute ago, sandyf said:

Yes but how much is left. In 2009 we know there was a surplus of around £59 billion but 12.8% of income tax was used in the 2014/15 tax year to make up the shortfall between available NI and the state pension liability.

As at the 29.03.2018 the investment account had a balance of: £26,527,000,000.

14 minutes ago, Oxx said:

 

Do you have a single shred of evidence to confirm what you assert? I'm guessing "no".  There is no "investment" in gilts.  Zip, nada, zilch.

 

The only person mythologising here is you.

Here is the answer for those who are interested in the dreary detail:

National Insurance Fund Investment Account

This Fund, which dates in its present form from 1975, is by far the largest of those managed by CRND. The Social Security Acts of 1973 and 1975 established a new Scheme of social security contributions and benefits, replacing the National Insurance Acts and assimilating the Industrial Injuries Acts. Under the 1973 Act, two separate funds previously comprising the National Insurance (Reserve) and the Industrial Injuries Funds were wound up and their assets transferred to the National Insurance Fund (NIF) on 1 April 1975.

The NIF is intended to be the 'current account' of the National Insurance Scheme, holding sufficient funds to even out fluctuations over time in the movement of contributions and benefits and to provide a source of finance to meet exceptional demands, for example in times of high unemployment or a sickness epidemic. By virtue of section 161(3) of the Social Security Administration Act 1992, HM Revenue and Customs (HMRC) transfers money to the Investment Account on days when it has a net inflow of cash and draws from the Investment Account on days when payments exceed receipts.

Following a review by HMRC, HM Treasury and CRND, a change to the NIF investment strategy was approved in December 2006. This change has resulted in lower administrative charges to the NIF. The change was effected in January 2007, when all the Investment Account’s gilt holdings were sold and the proceeds placed into the Debt Management Account Deposit Facility. Since then, the earnings of the Investment Account have been much more closely aligned to the Official Bank of England Rate (Base Rate).