To think pensions need huge reform?

It would be interesting to see how much I would have if all the NI that I paid had been invested in a FTSE tracker going back to 1980.

The French have only just put it up to 64 and that was after a gigantic row so it's still being phased in!

OK, just pay us to use all the things we have created for you younguns. Like roads, pavements, electronic stuff, hospitals, schools etc.

Said it before but this is what I would do with pensions.

Starting April 2027, every newborn is given a years tax-free allowance ie £12570 and is placed inside a SIPP 100% in equities. The trade-off is that there will be no state pension for that person. The tax-free allowance will rise year on year by inflation.

You would be able to change providers if you so wish but obviously, the money would not be available until state retirement age ie 67. I would keep that set forever. When the time comes, you would only be able to buy an annuity.

If you never put a single penny into that pension, 5% growth (low for the stock market) over 67 years will net you just under £354,000. Buying an annuity with that would give a lump sum of £87,500 and annual payment for life of £19,600.

10% growth over 67 years (about average) will net you just under £9,800,000. Buying an annuity with that would give a lump sum of £2,450,000 and annual payment for life of £549,000.

If you add just £50 a month for those 67 years, the figures are phenomenal. You would have a pot of £14,600,000. An annuity with that would give a lump sum of £3,650,000 and an annual for life payment of £818,000.

You could fund a decent amount of care out of that if you needed to, so costs would reduce there too.

I would add a proviso that you have to pay back whatever the seed money is the year you retire out of your tax-free lump sum.

Eventually, State pension costs would be self-funding and cost the country nothing.

I'm sure there are flaws in my plan but it seems simple enough to me.

Demographics are the biggest issue; in the 60s we had 5 workers to 1 pensioner, it’s now 3:1 and not far off 2:1.

There are already more over 60s than under 15s which is staggering.

@Cucurella I don’t really understand your response. Again the vast majority of today’s pensioners have not paid enough into the system vs what they take out. That matters when the demographics are as they are. The fact that some younger people may inherit a house in the future is a separate point and doesn’t change it.

I know which I would put my money on. But we aren't allowed to say that sort of thing on MN.

And once you get too frail, you don’t need £200 a week, as you aren’t able to do anything with it

People to frail to do anything with it will need to pay for help around the house etc. Pay for taxis, that sort of thing.

So they will need it.

Or it could be because we are in economic strife & there are continuous threads about benefits. More & more people seem to be realising that pensioner benefits are a large part of the benefits bill & we are in new territory with the demographic shift.

Or it could be bots

Average life expectancy is 78/82 roughly, I don’t want to work until I’m 75 and I doubt I’d be physically able to, given the sector I work in.
I started working at 13 (Saturday/Sunday job) and have worked throughout my adult life, the only time I have had off is when I had my children, which totalled 24 months for the three of them.
I have a private pension that I’ve put a small amount into from the age of 18 but my pension forecast is still a low standard of living if I retired at 67.
Not sure what the answer is but making 70+ year olds work is not the answer.

I don’t disagree with this. But you could use that argument to suggest that those who have contributed most should be the ones who get it, not the ones who have contributed very little or nothing. By the time I reach SP age in 7 years, assuming I continue working, I’ll have paid tax and NI for over 50 years. And getting SP has been factored into my retirement planning, this will be the case for many people in their 50s and 60s and there isn’t time to make it up.

My parents didn’t own their own home so I’ve never inherited anything, however the next generation will, as is the case for most of my friends children. There are many people in their 30s, 40s who will inherit a lot of money from property. Every generation has its financial challenges, they differ.

Yes, the pensions bill is huge. But so is the bill for other benefits. They need to address why so many young people are claiming benefits and not working, it’s not a good long term strategy for the country or for those individuals.

Why do so many people disagree with the facts that today’s “boomer” generation are well off statistically as a group* and it’s largely due to huge housing gains & workplace pensions.

*this doesn’t mean every single boomer is rich or owns a house etc

Yes. Three pension-related threads started just today. Perhaps more that that I haven't seen.

Cool. So office workers have to work til they die? You do realise that not all office jobs are a doddle and require a lot of mental dexterity?

I'm 57 and constantly tired. Very high pressure financial services job. I'm done with it.

YABU. Most employers don’t want people in their 60s, let alone 70s, and there are loads of jobs people won’t be capable of doing at that age. Who is going to employ all these older people?

Agree. Particularly ‘enjoying’ the anxiety about making sure state pension age is uncoupled from their big fat private pension being released. God forbid they should have to work till they drop. Just happy to see those who have scraped by in poverty, therefore with no private pension, breaking their bones doing cleaning work or factory work at 75. The lack of empathy is horrifying. ‘Living the high life.’ FFS.

The vast majority haven’t paid enough tax for their pension which matters when the demographics shift

yup. and a hint of "take the money off them not me"

What other benefits would a 66 year old homeowner get?

Whilst undoubtedly pension reform is needed I’d like to see other benefits tackled first. Pensions are a contributory benefit that people have paid for all their working lives (I know not directly for their own pension) and are taxable. It’s right that people should receive support in later years.
Other things, like child maintenance not being taken into account for UC etc should be tackled first.

People in their 60s are being forced to use up their savings as they can't find work. Imagine being 69 and having to go cap in hand to job centre plus for 400 quid a month and then having to jump through all their "job hunting" hoops. Maybe even have to join a back to work program because you lost your job at 64 and have spent all your savings, private pension, and can't get the state pension until 70.

I wont be around but I would love to hear all the whingeing and moaning from those who complain about the pensioners getting .....errrr....an old pension,, realising that still having to work in your 70s is not a great life. Just remember you lot are the ones that want this 🤣🤣

Couldn't have put it better myself.

I know lots of older people who don't work for money but probably still could and to be honest it's largely beneficial to society. People who can use the time to look after their grandchildren, volunteer, spend money in cafes and museums ... Forcing up the retirement age might not actually be the best thing for society more widely.

Amen to this!
Also there is a crisis looming for over 54 year olds who rent -Sky Money this morning
What do people think will happen if pensions are pushed back further but people cant work?
Sling them out on the streets?

I do have to laugh that its always huuuuge houses, huuuge cars, huuuge trolleys of food from M&S , Boomers , selfish pensioners Bingo time again !