Pensions - A Benefit or Not?

Peter Morris
January 31, 2025
Old Age Pensions Are A Benefit
The first thing I have to say, is the title immediately above is ‘totally’ incorrect.
Why?
I’m 68 years old, I'm a pensioner. I’ve worked and paid taxes and National Insurance contributions for around 52 years. I once sat and worked out just how much I’d actually paid over the years. It’s a pretty much impossible calculation really, due to changes of earnings, different rates of taxation and NI contributions during that time.
But I worked it out based on ‘today’s’ value (when I did the calculation), multiplied by the number of years worked. The rough total wasn’t far short of a million pounds....
Of course, that takes no account of ‘other’ taxes I’ve paid over the years. VAT, excise duty (car tax), petrol, council tax…The list is endless. Every single penny anyone earns is taxed, then taxed again, and then taxed again. It’s a relentless circle, which you cannot break free from.
I’m told that whatever tax or NI contributions I’ve paid over the years was ‘only’ paying for ‘old people’ at the time I paid it. There was nothing ringfenced or kept aside for ‘me’. I’m told that now therefore my old age pension is a ‘benefit'.
Is it not logical that with the amount of money I’ve paid over the years that it’s a right? Something that I’ve contributed to for my entire life? But no, I’m made to feel like a scrounging git for having the affront to claim my well earned pension, having been lucky enough to having lived long enough to claim it (not everyone does).
How many people work their entire life and croak before they ever get to claim a penny? Young people today begrudge old age pensioners claiming old age pension ‘benefits, while clearly not thinking in the long term; they are going to be in the same boat one day. But they only care about themselves today, in the here and now.
The old gits can just die (but do it quietly).
Now, we have the enigma of the Government taxing pensions - money that people have saved and paid into over the years of their working lives. Yet again, people who have paid tax for ‘everything’ for their entire life, being taxed yet again.
I didn't know for sure, not having got there yet, but given the desire for UK governments to take every penny they can, I had to check on funeral costs - surprisingly, no, they aren't taxed. At least not yet. Let's not give them ideas and we'll say no more on that aspect.
But I had to do some checking - few people, from what I can see, have ever considered the state pension to be a benefit. Especially not after paying into it for so long...how can it be?
The answer is in the official name.
According to the Department of Work and Pensions (DWP) it is a 'contributory benefit,' and always has been. As Michael Caine might say, not many people knew that. Alright, its officially a benefit but that doesn't make treating it the way it is or those who get it the way we are, right.
Calling it a contributory benefit is something of a contradiction in terms - benefits are, or should be, something given to those who need help. Not something people pay into throughout their working lives.
The question has only arisen lately because of the publicity over the Triple Lock, designed to make sure pensioners (many of whom don't have an additional private pension, which is the one that gets taxed) so the state pension is their only income. The media frenzy that has stoked opinion surrounds headlines suggesting pensioners get hundreds of pounds more, while those in work aren't getting anywhere near the same. So let's look at that.
After taking away the winter fuel payment from most pensioners, Rachel Reeves said that pensioners would still be getting over £400 more. Sounds great - except that doesn't come in until April 2025, after winter can reasonably said to be over. And most importantly, it is the increase spread over a year, until April 2026. It comes to just over £9 a week.
Not so much really, is it.
But those headlines sparked a reaction from those in work, especially young people who aren't getting that £9 a week. Misinformation or disinformation? Either way, it stokes a further adverse response against the old.
And that's the part that is really wrong.
© Peter Morris, 2025.
Additional information by Kevan James
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