Many early retirees will get less than those claiming benefits

by Paul

Many people in their fifties and early sixties have already retired having made sure they have a 30 year contribution record, are not making any present claim on the state and now find themselves short of the new 35 year requirement.

I fully accept that anyone who finds themself in such circumstances will get at least as much, and quite possibly a larger sum, than would have been the case under the old system. However, anyone of a similar age and with a similar contribution record who is presently claiming benefits will be continuing to get NI credits which should put them comfortably over the 35 year hurdle by the time they reach retirement age.

How can it be fair that those who believed in good faith that they had secured their full pension and who are presently no burden on the state (and might actually be paying a significant amount of tax), see their contemporaries who are making a claim on public funds end up with a higher pension?

The solution is actually very simple. For the first decade or so that the single tier pension is in force, in the years covering their last five birthdays before they reach retirement age, a maximum of five years' NI credits should be offered to those who are no longer working who need them to bring their contribution record up to 35 years. After the mid-2020s (when those presently in their fifties have all reached state pension age) adequate notice of the new requirement will have been given to all potential early retirees and the concession could then be withdrawn.

Anything less than this is unfair to those who are presently being told that they will have to dig deep into their own pockets to buy additional years after they have acted in a wholly responsible way. In many cases these will be people who have retired early on modest incomes for any number of reasons, including poor health, but they have nevertheless made what they thought was proper provision for themselves without intending to make any claim on the state prior to drawing their pension. They now see the prospect of others who have not done this - for whatever reason - getting preferential treatment.

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