To think workplace/private pensions will be used like this in future?

I looked at this the other way - what's the incentive to save to fund yourself in your 60s when the state will pick up the slack via benefits if you don't? Maybe we need to look at a system whereby your entitlement to working age benefits is reduced if you opt out of your workplace pension?

Not if you are employed either, in fact no one is obliged to put anything into a pension

Agree. It's a real risk, and we're walking enough of a tightrope at the moment with the existence of pension credit undermining the case to even pay NI contributions for some.

I think we're more likely to first see nudges so that people who can't keep working til their late 60s claim their own private pensions first, rather than trying to claim benefits. The pensions don't necessarily have to be a comfortable amount to live on for this incentive to exist. They only have to pay more and be less unpleasant to claim than benefits.

As a general point though,any government needs to tread very carefully with means testing any type of state provision. It's a fine balance to avoid people gaming the system. Why would people put themselves under a lot of financial pressure when younger, paying a significant chunk of their income into an occupational or private pension, if it's going to work against them in the future? It's not like paying into your own pension lets you off the hook with NI contributions - you still pay them. Why should people who work hard, are fully paid up with NI contributions, who follow the advice and also pay a lot into their own pension, then find they aren't entitled to get a state provision that someone who hasn't bothered paying into their own pension would get?

@Penko25 yes I know people like that now too. Most of them have a good chunk of final salary scheme under their belt before it was closed to new entrants. People who started their careers later and earn an average wage will not be retiring in their 50s.

I am 52. I started paying into a private pension aged 23, knowing that state pension would never be enough. I originally planned to retire at 50 but life got in the way. Now, I cannot take my private pension until 55 because of legislative change but I will do as soon as possible after that. State pension is not worth relying on and I have no intent of keeping working until I get my state pension

Not If you’re self employed.

I agree. Most people I know are retiring in their early 60s with a gap that needs to be made up to 66/67. I would also expect that in due course state pensions are means tested, i.e. if you have a decent occupational pension a state one will not be available. Await the announcement along the lines of those with the broadest shoulders etc…

We early boomers tended to start work at 15 or 16, DH and I and most people we knew did. A small minority went on to further education. Apart from about 3 years as a SAHM I worked part time, full time, on agency etc., til I was 64. DH continued til 67. He had a few years out due to a major health issue, but took what work he could in later years, we don’t have great pensions. Our lived experience has been nearer 50 years of employment than 35.

4% a year for TPS when I last looked.

I seem to recall it's higher, maybe 5%, ifyou've already left teaching.

I think we will look back and see the current pattern of retirement as a one-generation phenomenon. It just doesn't make financial sense to work for 35 years and then retire for up to 40 more on a decent income. In the future this lifestyle will only be for the rich. The rest of us will need to work longer, perhaps changing career. Personally I find it helpful to consider the current pensioners as a lucky generation rather than feeling hard-done by that I won't experience this.

I'm 50, my SP age is currently 68, I strongly suspect that this could be extended to 70 (my mum is a Waspi and we all know how shafted that co-hort of women was with pension age being changed with little warning)
I'm on target to pay off my mortgage by age 60 and am throwing as much as I can afford into my personal pension.

I intend to work full time as long as I can then gradually reduce it to part time and stick to that as long as possible.

I hope to have a comfortable income for retirement but certainly won't be flush

But boy do I wish I could start reducing my hours now, perimenopause and FT work is exhausting

It’s not a penalty. It’s a reduction to take into account the fact that it is being paid for longer.

It’s not a penalty. The amount is less to take into account the fact you’re receiving it for longer, which is only fair. Lots of people I know with public sector pensions are planning to take it at 57.

I think it depends more on how old & healthy you are when you start paying premiums and whether this insurance is individual or group based- the more people the risk is spread among the cheaper it is. It could also be subsidised or underwritten by the Gov as well to reduce liability for insurance companies and prevent people from losing insurance if their insurer goes bankrupt.

How much would that insurance cost though? And as you get older the premiums would be eye watering.

Most people who stop working before state pension age do so because of poor health. Wouldn’t it make sense to have a long term disability/incapacity insurance that replaces your income, or a decent % of it instead of saving another private pension that is going to have minimum age to access…which is usually SP age minus 10yrs?

@Pinkdaisie ffs there are penalties for doing so.

Exactly!🤣

Maybe, but you'd have to factor in lower rates of smoking too. That has curbed a lot of lives early.

Well that’s completely different to not being able to take the pension until state pension age. Just because you can’t afford to doesnt mean you can’t.

Sorry which post are you replying to?

The NHS underwent a big change a few years ago with regard to their pension system, whereby they were trying to urge people to agree to move from the current system to the new one.

Of course, the benefits of the new system over the old one were persuasively trumpeted, whilst the advantages of the old one were downplayed or plain ignored.

One of the main differences (pretty much mentioned in passing) was that the new scheme would mean that you had to work extra years before qualifying for your NHS pension.

As it's an actual contracted, contribution-based, salary-linked scheme - as opposed to the state scheme, which is essentially a standard general tax and benefits set-up (however they dress it up) - they have to get the agreement of members. Nevertheless, that doesn't stop them from putting as much spin on it as they like to try to gaslight convince you that all of the wise people will want the 'shiny new wonderful thing' instead of that 'outdated inferior old rubbish'.

@Morph22010 For now they do, in future who knows?

Having seen my very modest pension projection, it really ramps up in the two or three years before retirement, so I can't see it being sufficient to live on while waiting for state pension.

I get it, they (pension fund) want me to keep working and paying in, but then it couldn't be seen as an alternative to the state pension.