UK Pensions Policy - Social Term Paper

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What has been achieved by the new State Second Pension is that not only will the disabled be able to lead better retired lives, but the chronically ill would be able to afford the cost of care for their illnesses under the additional benefits offered by the scheme, and in addition, the lower and middle earners will now be able to build up a good amount of money for their secure futures. (Pensions Explained, what is State Second Pension?)

The New Stakeholder Pensions were introduced by the New Labour's Pension Strategy plans in 2001, and this was a new form of private pension scheme that would not only be a part of the government's general pension policies, but would also maintain it's 'private' policy label. The primary objective of this new stakeholder pension was to bring about a change in the existing ratio of 60:40 of the state and private pension provisions to the ratio of 40:60 by the end of the year 2050. What is required for the successful implementation of this scheme is this: any company that has more than five persons in its employ must comply with the regulations and requirements of the new stakeholders pension plan. In order to comply with this it is necessary for the company to provide all its employees with details of this scheme after identifying it as a legally registered scheme under the plan so that the number of people who would join in these schemes would increase significantly.Buy full Download Microsoft Word File paper
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Term Paper on UK Pensions Policy - Social Assignment

The legislation that traditionally covers the previously used occupational as well as personal pension schemes is applicable to this new scheme too, but the difference lies n the regulatory standards and the framework on which it is based. When an employer has been able to identify a stakeholder pension scheme and has been able to educate his employees on the various details pertaining to this scheme, he is then required to provide his employees with reasonable access to persons who are in charge of representing and selling this scheme. The employer would also be required to deduct contributions to this scheme from the employee's wages if requested to do so by the employee himself, and pay this amount into the stakeholder pension scheme. However, the employer is not expected to make any monetary contributions towards this scheme; it is the sole responsibility of the employee. In the case of the non-compliance of the employer, he would have to pay a hefty fine of up to 5,000 pounds, and up to 50,000 pounds for non-compliance from a company.

The stakeholder pension scheme is one that has been surrounded by controversy, even before its inception in the year of 2001. The point of debate was whether an individual already paying into the 'occupational pension' scheme would be able to pay into the stakeholder scheme as well, at the same time. Another issue of debate was the question of the maximum charge possible for the stakeholder pension. Another important issue of controversy was whether this new scheme would be of benefit to those persons with annual earnings of 10,000 to 20,000 pounds for whom a well-planned occupational scheme may be unavailable or inapplicable, and for whom personal pension schemes may not be of good value. The government was able to deal with these controversies by allowing partial concurrent payments of pension schemes by employees, and this benefited those who were actually outside of the originally intended target group of people. However, the policy in itself was a success and quite a few people have joined up as part of the New Stakeholder Pension Scheme brought out by the New Labour Party as part of a whole range of new and better pension policies for the pensioners of the UK. (Stakeholder Pensions)

The scheme of State Second Pension that is meant for lower and middle-income earners served to double the benefits that these people were receiving under the SERPS schemes, and higher earners were allowed and encouraged to continue with the present schemes that they were paying into, that were those of personal and occupational pensions. There was, however, a gap between these two groups of people, and the stakeholders scheme was created to fill in this gap. The person who enrolls in this scheme would have to be earning between 9,500 pounds and 21,600 pounds, since these amounts would contribute towards the 'disposable income' of the individual. The disposable income of a person would in effect allow him to save for his future. But in the case when he is unwilling to make this sort of contribution towards his own future due to various reasons like, if he changed his job frequently, or if he was at that time in his life unwilling or ineligible to make such a large investment, or even if he was at that time put off by the high rates of personal pension schemes, he could contribute towards the stakeholders scheme which did not require high investments and was therefore appealing to this particular set of individuals.

The charges towards enrolment in this scheme would be not more than the charges being paid for the charges he would pay towards a personal pension scheme wherein he would pay the costs of operational management wherein the charges would be restricted to within a rate of 1% of the total value of the members payment. The advice about the scheme would have to be provided by the employer to his employee, and this would bring down the cost of his paying for a separate advisor. The payment schedule was also altered in a manner that would even allow small investors to pay into their own pension fund, whereby contributions of less than 20 pounds would also be accepted, and the frequency of payments was also not strictly regulated, and this allowed an individual to pay according to his affordability and convenience at that particular time. The government provided a single integrated tax scheme for the person enrolling in the stakeholder pension scheme, and this allowed him to make payments of more than 3,600 pounds without fear of repercussions. (Stakeholder Pensions)

It was from the month of October 2003 that the newly formulated 'Pension Credit' replaced the 'Minimum Income Guarantee' of pensioners above the age of 60 years in UK, under the New Labour's Pension Strategy. The new 'pension credit' plan is nothing but a plan that would make sure that persons above 60 years are guaranteed an income of above 105.45 pounds per week for a person who is single, and of 160.95 pounds per week if living with a partner. This scheme allows for an aged person to make full use of his years of saving money for the purpose of retirement funding, if he had saved money before his retirement, he would be offered additional money to the tune of 15.51 pounds per week if single, and 20.22 per week if living with a partner. However, the scheme is based on accurate calculations of weekly income of those aged 60 and above, after deductions, and this entails the listing of certain typical income schemes.

These are the various pensions that the individual has applied to, like for example, the State pension that is based on contributions to the National Insurance, the personal or private pension that is provided by private pension companies in order to make a provision for a second pension plan for an individual, and the work pension that is provided to the employee by an employer of a concern or business establishment. In addition, if the person is a part of a CA or an Invalid Care allowance, that is actually a tax free benefit for those people who offer informal care to others, or part of a Bereavement Benefit Scheme, then his income level will be taken into account while deciding on the amount of pension credit to be allowed him. If the person has any sort of additional earnings from nay other job, then this will also be taken into consideration. Certain types of incomes are however, exempted from the Pension Credit benefit.

These are 'attendance allowance' that is paid to a person, who cannot take care of himself, the 'Disability Living Allowance' that is paid to a person who is disabled in any manner and needs help in taking care of himself, the 'Housing benefit' that is otherwise known as a renting rebate or allowance wherein the rent payer gets a special concession from local councils in paying his rent, and the 'Council Taxes benefit' that is also paid by local councils towards the council tax that is to be paid by an individual. Therefore, the amount of money that will be paid into a Pension Credit Plan will… [END OF PREVIEW] . . . READ MORE

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How to Cite "UK Pensions Policy - Social" Term Paper in a Bibliography:

APA Style

UK Pensions Policy - Social.  (2004, November 3).  Retrieved September 28, 2020, from

MLA Format

"UK Pensions Policy - Social."  3 November 2004.  Web.  28 September 2020. <>.

Chicago Style

"UK Pensions Policy - Social."  November 3, 2004.  Accessed September 28, 2020.