Who pays for the pension shortfall? 6 June 2018
In John Walbaum’s New Year’s eve blog he said “The gold-plated pensions generation owes it to the next to create an equitable and sustainable way of providing for income in retirement.”
The latest numbers published by the Office of National Statistics (ONS) show that the UK has accrued pension liabilities of £7.6 trillion – rights that have been built up in the past but not yet paid. This is a hefty bill that needs to be paid to cover the shortfall from the past, which will have to be met by the workers of tomorrow. These same workers also must worry about saving for their own pensions, paying off education debts and struggling to get onto the property ladder. Government advisers have been warned that the state pension will run out by 2035. According to reports from the Government Actuary’s Department the fund which takes in national insurance contributions and uses them to pay state benefits, is under strain from the UK’s ageing population and will reduce from around £25bn today to zero by the mid- 2030s. National insurance contributions are paid by employers and employees and are paid into the state pension fund to secure their entitlement to future state pension payments. The Actuary’s Department have said that to “continue paying the state pension, national insurance rates would have to be around ‘5% higher’ for the fund to break even.”
For more information read John Walbaum’s article.
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Class 3 National Insurance contributions 18 June 2018
Voluntary contributions do not always increase your State Pension. You can find out if you will benefit from paying voluntary contributions the Future Pension Centre, which has recently updated its contact details.
Contact details for the Future Pension Centre:
Telephone: 0800 731 0175 Textphone: 0800 731 0176 Website: www.gov.uk/future-pension-centre
Before you decide to pay voluntary Class 3 National Insurance contributions, you should get information about your State Pension entitlement, including the number of qualifying years you have to date.
Further information Application to pay voluntary National Insurance contributions (CA5603)
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Government will have to justify planned increases to State Pension age 22 June 2018
A petition to reverse government’s decision that will increase State Pension age (SPa) for millions has resulted in 12,354 signatures. As it has exceeded 10,000 it requires a formal response from the government.
The SPa is due to increase to 68 between 2044 and 2046 but in July 2017 the government’s review proposed a new timetable to bring this forward seven years to between 2037 and 2039, in line with continuing increases in life expectancy.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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