Are my state benefits guaranteed?
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Sadly not. In fact this is one aspect of the state system which
could be considered a particular worry. Pensions from
companies or individual pensions both have rules and
regulations and agencies whose job it is to ensure people get the
pensions to which they are entitled. Obviously the state system does
not have this sort of monitoring (after all who would do it!) and
the government can change the pension promise whenever it chooses.
The state system has been changed many times in the past, some
changes were made quite recently.
A prime example of the state system being subject to change is the phasing of the
female state pension age from 60 to 65 or the changes made to the
Additional state pension in 1989 (when the accrual rate for SERPS
was reduced) or more recently in 2002 when SERPS was replaced by
S2P. It is anticipated that in around 2007 the Additional state
pension will become a flat rate pension, similar to the basic state
pension. The only thing that is certain is change.
Therefore it should be clear that state pension promises can be
changed at any time. The government has no restrictions on what it
chooses to do with the state system except perhaps that it is
unlikely to do anything that will make it too unpopular in the short
term with voters. However in some respects changes are almost
inevitable if taxation is not to rise to offset the increasing costs
(see demographic timebomb).
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Tell a friend about
Essential Pensions. Send an automatic message to your friends
email account about the site.
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Get the FREE Pension calculators from Essential Pensions.
No money, no
registration, just include one line of HTML in your web page.
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Use our online calculator
to get an estimate of your basic state pension.
Its free and
simple to use you can even include it on your own website!
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Read the guide to
investment in the pensions guide. It explains what you need to
think about before investing for your retirement.
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