45% of working age people not saving toward a pension at all

Do you have a recent example of pension companies going bankrupt and pensioners losing their money? Because laws and regulations post Maxwell should really prevent this

But there have been instances of pension companies going bankrupt and those who have invested being left with nothing. Not to mention scandals like Maxwell.

It must be absolutely awful to find out you won't even get out what you put in. It's a good idea, if you can, to have your eggs in more than one basket. There's a lot of civil servants at the moment chasing their money on retirement because Capita are slow to pay up.

There are ISAs that guarantee you get back what you put in if nothing else. For some, that feels more secure, and I get that.

Nobody wants to get there expecting a certain amount, only to find it's disappeared, or you have to wait longer than you thought to get it. Nobody wants to spend their retirement fighting court battles to get their money back. And that is a risk. It's a small risk, but it exists. It's easy to say people are risk-averse or too cautious, but given what could be at stake, I do understand some people want the security of savings accounts over pensions.

Oh God can you please save your Four Yorkshireman sketch that you post on every single thread about pensions or the economy. It’s tiresome and just plain silly given the time that you were living through during working age. If you failed to become prosperous in such a time of economic opportunity, easy job market, far more generous benefits with much less stringent criteria, lower taxes, much cheaper housing, university grants, free adult education, MIRAS, etc, then you really have only yourself to blame. It’s nothing like the economic circumstances people are facing today which are well-documented to be the worst ever experienced in peacetime.

I’m guessing you’re one of those who’ve paid nowhere near the amount of tax that would be required to fund your state pension but are furious that any working aged people impoverished by your generation trashing the economy have the audacity to need to claim any money to be able to give their children an adequate standard of living.

You’re here banging on about the poor, poor pensioners (the richest cohort in society) on every thread on these topics, with economically illiterate claims and every time anybody replies and points out that the facts disprove your claims you either ignore them or tell us your tales of woe which - while sad for you - are anecdotes not societal data that refute the well-established economic facts which are that your generation bled the country dry, sold off its infrastructure while taking tax breaks for itself, in many cases didn’t bother to save a penny for retirement despite living through the most prosperous period in history, and now expects generations far smaller in number to fund a long retirement and health services for you which you have neither paid sufficient money to fund as a cohort or provided for your own parents and grandparents.

And instead of being grateful for this, you have the audacity to claim that the younger people having to bear the burden of what your generation did - manifesting in higher taxes, crumbling services (such as education) and infrastructure, and therefore lower productivity falling living standards - is somehow the fault of young people when all of the evidence shows a higher proportion of people are now in work than at any time since the 1950s, and that they work longer hours than your generation ever did, for the lower standard of living that they receive.

It’s boring, and all economic data proves you’re wrong. Living standards in this country are falling relative to what used to be our comparator countries precisely because of what your generation did when it was of working age and its refusal to put long-term plans in place to ensure a decent future for those following. Everyone else is picking up the pieces so maybe the retirees should button it and learn a little humbleness and shame rather than trying to gaslight everyone else.

That’s simply not true and there’s no way to demonstrate if it will be true because pensions are subject to changes in future taxes on withdrawal applied retrospectively, as this Government’s behaviour demonstrates. Tax rates may well be vastly different at the time of withdrawal, decades into the future, especially with so many irresponsible people refusing to save when they could and expecting future taxpayers to fund them instead.

ISA savings are already “tax paid” so crystallise that tax risk and will be unaffected by future income tax rises/ other punitive ways devised to raid people’s life savings in pensions, so although based on current regulations pension saving is beneficial (although only marginally so for most given the continual raids on DC pensions to date) it is quite wise to take a hit now in tax to take some money net and put it in ISAs instead where it is less likely to be subject to Governments trying to steal it, invest it in their pet projects or levy extortionate taxes on it which outweigh the deferred tax benefits on contribution.

Ultimately if Governments want people to save into pensions they need to provide a stable system and stop treating people’s savings as a piggy bank to make up the shortfall when the Treasury fails to manage its own budget appropriately.

So few people live into old age any more. Of course people don’t care about pensions. Just live your life and don’t worry about it.

This thread shows how many people misunderstand Pensions and tax.
You are always a minimum of 6.25% better off with a pension, even after any tax when drawing it, compared with ISA savings.
You don’t ‘pay tax on already taxed money’.
Contributions are either taken from pay before tax ( which reduces the amount of tax you pay) or have a minimum of 25% tax relief added once it goes into your pension if you’re self employed. It’s even better if you are a 40% tax payer.

If you’re on Pension Credit, for example, it’s likely you’ll get a 100% council tax discount. I think that applies throughout England but I’m not sure about Wales, Scotland and N Ireland.

Not here you don’t. Single discount of 25% and that’s it.

You get a council tax exemption in certain circumstances and for very low incomes.

How did she manage not to pay council tax?

A lot of people are living like that. After years of worrying about income (or finding a job!) and putting up with low paid jobs to survive, to have a regular income gives a sense of security.

(and even they would be better off long term, just not short term)

The problem is that if you live a life just on or just above the minimum wage, its unlikely you will have the disposable income to contribute to a private pension, and that is a big problem.

This is not true.

If you are on minimum wage, or close to, you will be entitled to UC. The limit, especially if you rent, is higher than you think. And it is calculated for your take-home pay. So if you pay into a pension - you get more UC so are in actual fact BETTER off by paying into your pension.

Same with self-employed, you declare pension contributions on your tax return and end up BETER off by paying into a pension.

There is such a tiny, tiny, tiny percentage of people that really could not afford to pay into a pension. It's not the minimum wage workers or self-employed, it'll be the people who (jointly) earn ~50k - 60k in the South East, or expensive city and have a mortgage rather than rent.

Fair enough. My post was really in the context of some of the things written on this thread - eg: people saying they cut their cloth and only put the equivalent of £100 per month towards a holiday. Or only spend £300 per child at Christmas. They may well be ‘cutting cloth’ and not going on really expensive holidays - but the fact remains that there’s still choice there. That £100 could be paid into a pension. Or £50 a month towards holidays (perhaps go once every two years rather than annually) and £50 in the pension. It really is a case of every little helps, particularly if you start paying as early as possible.

I’m not underestimating the challenges. I worked for several years for no immediate financial gain because our nursery bill was the same as my take home pay. I stayed in work purely for the future pension and to keep my hand in. There are frequently threads from women who aren’t prepared to do that - and fair enough, that’s a choice. But the point is, it is a choice. It seems strange to complain about something when other choices are available to you.

And if you read my earlier posts you will see we agree.

My point is that there are more options for pensions now but people need to start realising the importance as soon as they start work and make contributions as far off as it seems. I did not do this and realised my mistake too late. I chose living for now rather than preparing for what was to come.

When looking at moving jobs I looked at what my take home pay was and not how the company pension contributions would affect my overall package. Biggggg mistake.

BUT the fact does remain that people living on the minimum wage will struggle with making pension contributions and there does need to be a realistic failsafe for those people.

I am not talking about those who have the money but choose to spend it elsewhere, but those who are on the breadline throughout their working life and genuinely do not have the money to make private contributions to a pension because they struggle to eat and pay bills NOW.

And this is why I despair when I read threads from women saying it’s ‘not worth their while’ returning to work after having a child. Or spend decades in menial or part time jobs. ‘I’ll only just earn enough to pay for childcare’. ‘If I go to work, I’ll end up doing all the housework too.’ ‘My dh earns lots more than me so it’s not worth it’ …. etc etc…

We’re not talking about women born 1920s, 30s and 40s now, and the barriers they faced without equality, not being allowed to join pension schemes etc. This is 2026!

I totally understand that the younger generation face economic challenges - I have 3 young adult children myself. The one thing I’ve drummed into them is to start paying into a pension as early as possible. Even if they can only afford a few %. It means cutting back elsewhere, though of course it’s deducted at source which saves on tax and lowers the NI contribution.

I totally get that it’s tough, every generation faces challenges. For dh and I it was the mortgage interest rates, which averaged way higher for years than anything we’ve seen recently. Plus no subsidised childcare at all. It was tough. We went without holidays, ate beans on toast when needed. The one thing I’m so glad we never compromised on was working and paying into occupational pensions. Once you understand how compound interest works - plus the fact you’re essentially getting some ‘free’ money, it’s an absolute no brainer. We cut our cloth in every conceivable way - but pension contributions would have been the very final thing if we’d had to.

When my mum was starting out in working life (she is now 87 and has always been working class and a manual worker) , the pension landscape looked very different from today. The modern State Pension only came into force in 1948, after the Second World War, when the National Insurance Act created a flat‑rate pension for everyone who paid in. Before that, there was no universal state system, and even after 1948 the payment levels were modest, so most people still relied heavily on their own savings or family support.

Workplace pensions were also nothing like the norm for ordinary working people. In the early 1960s, actuarial data shows that around 65% of men in full‑time employment were in an occupational pension scheme but coverage for women was far lower. Many employers simply didn’t offer schemes to women at all, especially in retail, clerical work, factories, and part‑time roles. Even when women were allowed to join, they often entered much later in life because schemes required long, unbroken service and excluded anyone who took time out for childcare or caring responsibilities. Civil Service, Nursing and maybe banking or local authorities perhaps being the exception.

That’s why women born in the 1920s, 30s and 40s, like my mum and grandmother, often ended up with only a small workplace pension, even if they worked hard all their lives. This small pension was enough to deny them any state top up benefits and in real terms left them worse off than if she hadn't contributed.

The opportunities simply weren’t there when they were young, and by the time schemes became more common and more inclusive, they were already well into their working years and didn't have the disposable income to contribute as they wished. In my mums case this was aggravated by the fact that she divorced and she paid married women's reduced rate NI conts.

Their pension outcomes reflect the system they lived through, not their effort or commitment. Sounds like your mum was lucky but it wasn't the norm. Luckily companies must now offer pension schemes and they must contribute if you do. The problem is that if you live a life just on or just above the minimum wage, its unlikely you will have the disposable income to contribute to a private pension, and that is a big problem.

No, most people don’t. Some do, but not most. Not even nearly.

Or, save £80 quid for a holiday and £20 into a pension.

My parents are nearly 80. They paid into private pensions and workplace pensions. My late grandmother was born in 1920. She had a workplace pension.

As I said previously, when we are pensioners, we are fully aware the government will not properly look after us because we have spent our lives seeing government support removed or reduced in every aspect of our lives.

The government ‘pays’ two big pension related costs:

1. it pays the state pension (and pension credits, and
2. if allows you to pay in tax free (and take out 25% lump sum tax free).

Thr cost of each of these is huge. If you don’t pay into a private pension you are only benefitting from 1, not 1 & 2.

The expectation that you prepare for your old and trying to reduce your reliance on the state is oppression? I think I have heard it all now.

We are probably moving towards a financial environment in which the state provision is threadbare, at best, in which if you have not been able or bothered to set something aside for your older years during your productive earning period, you should expect communal accommodation without any luxuries and with very limited comfort. Bleak prospects.

No, it's no more oppressive than any other deduction, less so in fact as any deductions will attract tax relief. We don't really have a choice if we are to prevent a financial catastrophe in future decades.

Brahumbug They are compulsory?