State Pension

I am just about to start taking from my private pension savings. The last few years tgey have automatically gone into a 'safer' pot, more bonds. 2 of my pots didnt drop by too much over the Truss cock up, the 2 smaller ones did. However although the size of the pots is smaller, annuity rates are much better, so if I go for annuities I will get much more that I would have done just a few years ago. If I go for drawdown, I will only take a fraction this year with the remainder staying invested. So its not as catastrophic as portrayed in the media.

Life expectancy for men now is 79, it was actually 70 (overall) in 1950.

Our economy is far larger and we haven't just come out of a world war, introduced the NHS and built 2m houses.

This idea we cannot afford a decent pension is just right wing bollox, its all about spending priorities, scrap NI and fund it by slashing public services or have a decent and fairer society?

The vast majority of workers in this country will never get a pension pot of 200k or 300k, which would be just enough to get an equivalent amount of the SP, double that if you want a reasonable retirement.

Remember too that private pensions are not guaranteed, they are invested in markets, property bonds etc all volatile, bad news if you had to take your pension in 2008, 2020 or after Truss wrecked the economy.

Many things have changed since the state pension was intrioduced in the 1940s.School leaving age was 14, with only a small % going onto further education. Life expectancy was 64, now it is 81. If you worked in industry, mining or factories, you would have been lucky to see retirement at all. Now, many people go onto further education and don't start work until they are 21 or 22. Life expectancy has risen to 81. I think the state pension needs a sliding start date. If you started work at 16, you get the pension at 66, if you start work at 22, it seems logical that you receive the pension later. 71 or 72. Couple this with the amount of years NI is paid. Then look at the loophole Gordon Brown introduced. If you are self employed, you can register as a limited company, pay yourself just over the NI threshold so you pay a tiny amount of NI, then take the rest of your income as dividends, reducing the amount of tax and NI you have to pay. The increasing costs of pensions and health care fir our aging population is a real dilemma for any government. My advice would be to make sure yo pay into a private pension.

Sorry, you are wrong. You have to claim your pension . You can delay claiming your pension and receive an enhanced pension as a result.
https://www.gov.uk/new-state-pension/how-to-claim

Nonsense, these are people who should be in work, reducing migration, paying taxes plus their treatment costs and benefits will far out strip any savings plus of curse they will go on to claim SP... & of course mean either far higher spending on the NHS/Social care and longer waiting lists for everyone else.

I don't think you've thought this through?

NoisySnail

You do not need to claim state pension. They write to you informing you when it will commence and the amount to be paid.

@katedan i don’t think you can be right about that. I know 1971 has been talked about a lot recently as a cut off year but people at 52 and less are still working and need to - if their pension is axed, there would be riots

That is the current arrangement but that won't exist for anyone under 53

@ArseInTheCoOpWindow yes, unrealistic in my view for most

A lot for people to put away on the current low incomes.

Noisysnail - I thought the general rule was that a pot of £100,000 = £5000 a yr so £500,000 would be £25,000 a yr

@katedan A pension pot of half a million gives you £15k a year. You need a lot of money to replace the state pension. More than most people can save.

I am in my late 40s and i don't think anyone under 53 will get a state pension, no one should be relying on it and should have private/work pensions. Obv this does not include those on disability benefit etc who will still get a state pension

It depends on their circumstances. If they're renting they could qualify for some help with their housing costs, if the younger partner has limited capability for work related activity or is a carer, that would increase their entitlement too.

This is not true.

My State Pension started last month. I didn't have to make a claim. I received a letter at the end of 2023 telling me the date my pension would start and asking for my bank account details to input online.

Then in February I had letters telling me how much I would get every 4 weeks.

which is exactly the point. Just because SP age rises to 70 doesn’t mean people can physically or mentally keep going.

I'm so glad to be able to take my NHS pension at 60 in a few years time. It's the thought of being able to retire a few years early that is keeping me going ! I feel for those who don't have that option especially with state pension age rising as well. I worked for over 35 years as a Nurse, my physical and mental health has suffered and I hope I can have a few years of just working part time before reaching state pension age.

TLDR. But fully expecting pension age to be 70 for me (born 1980) and probably means tested too.

What annoys me is the link between other pensions and state age pension. My colleague is retiring early at 55 with his (albeit reduced to cover the extra years it must pay out) occupational pension. But I'm younger and my state pension age has risen, so I won't be able to do that until 2 years later (or 3 / 4 / 5, depending on what they settle on changing it to.)

So both state and occupational pension are working against me.

I am a pensioner. I do pay tax, and will continue to do so for many years. But not because I am in receipt of state funding other than SP. Because I was self-employed for most of my peak earning years, I made other arrangements. Currently, our other arrangements deliver about £40k pa which split between two people means tax at 20%. This is not a whinge fest, but it's not a gloat either. We should be able to afford a comfortable retirement; plus, the downsize card is still available.

And there's no reason why well to do pensioners shouldn't pay tax. But it bites at a stupidly low level of annual income that doesn't encourage people to save to improve the quality of life in their first, most active years of retirement.

The point I was making is that the state pension is getting quite close to the threshold for paying income tax. If tax thresholds are fixed to 2028, and inflation or earnings increase rapidly, then it is not hard to see a point in 2027-28 where the state pension hits 12,570 pa, and the state pension is paid out of one government pot and siphoned back in. So we go back to the years when pensioners were almost always poorer than anyone else in society. You may consider that is a desirable outcome.

Exactly. We all know that. Why shouldn’t pensioners pay tax?

And?

What’s your point?

But the reality is, that if you have an occupational pension from your working years, either DC or DB, you will most likely also qualify for the state pension. However, if the state pension continues to increase on the triple lock mechanism, and tax thresholds remain fixed until 2028, then we are only a few pounds per annum or a big leap in inflation away from having people with only the state pension finding themselves liable for income tax. The income tax threshold is £12,570, and this year's single person's state pension is not quite £11,500. A modest amount of interest income on top of that, perhaps the proceeds of a downsize that released £200k would put you close to paying income tax. With any kind of occupational pension on top, then most pensioners are close to being tax payers.

Except a lawyer earlier stated legally, certainly for OP anyway, the Govn cant take away state pensions.

Agree, plus
if you contribute nothing you get the minimum state pension and then apply for top ups which brings you literally to just a few pounds a week short of the full state pension.
Govn site and others available online to crunch the figures.

Tbh, with all this talk of the "sick note" culture etc at the moment, I would not be surprised if no one ever retired, and the DWP would make everyone work until the day they dropped. All these countless WFH jobs that will suddenly appear when loads are booted off of sickness benefits... I am sure the same will be done for pensioners.