State pension

I am 40s and on benefits. Not sure what I can do to do prepare.
I am not likely to get to pension age anyway so....

I bet lots of people don’t realise that higher rate tax payers pay 6% less NI than basic rate payers either.

Just keep deducting NI from retirees income - or as a PP said, roll it into the overall tax rate rather than splitting it out. I bet lots of people don’t even realise pensioners don’t pay NI, I only realised recently and I’m sure I’m more financially literate than most. I’m sure if I asked 10 friends right now, only one would know it.

I have to pay tax on share dividends and don't fill in a self assessment, I just ring up and tell them each year and it's taken via PAYE, you can do this up to £10k.

Sorry 60k of debt but may as well be 60m since never a hope in hell of them paying it off

Don’t start making me even more livid about the 50% participation uni drive, I still remember seeing adverts in our local paper to train as a paramedic or ODP on full pay, only a few GCSEs required (same people that trained that way still working today) and now a young person wanting to do the same is obliged to start saving for their pension 5 years later and 60m of debt to boot. Honestly who thought up this shit, and then when the government complains of a skills shortage 😫

Yes, most people with multiple income sources that push them into higher rate tax. Maybe not if your income is simple, i.e. occupational pensions and state pension only, but everyone renting out a property (BTL), or with interest/dividends higher than the zero rate allowances, are typically within self assessment due to the complications of multiple income sources. Even if not, winter fuel allowance clawback is being adjusted via PAYE codes now, so again, pretty simple and no great stress for HMRC who already know income, your age, etc., and know you're getting WFA if claiming basic state pension.

Run that past me again, everyone earning over £50k is already submitting a self assessment?

I don’t understand this as a response to my post.

As I said, it won’t be the logistics of means testing which is a barrier - it’s likely that will become easier with tech advances. It’s the fact it would be politically and financially disastrous. The Pensions Commission 2025, set up to specifically look at the future of pensions and the increasing costs, made it explicit that private and occupational pensions are encouraged so that people have additional provision
alongside the state pension. Auto enrolment was established to encourage people to be in work place pensions. And that’s worked - hugely more people now pay into occupational pensions than previously. It would be a financial disaster to disincentivise people from continuing to save into their own pensions.

If any form of means testing ever comes in, it would only ever be for exceptionally wealthy people - and there are actually a comparatively small number of those. And that’s a big ‘if.’

the vast majority of people will continue to be encouraged to make additional provision because at the end of the day, even with the triple lock, the state pension is just a basic income. It may keep a roof over your head but many people quite understandably want a higher income that that in retirement. They will happily pay a big chunk every month to have that security. They won’t if it won’t leave them any better off. They’ll either just enjoy having considerably more of their earnings in their pocket and spend more money in the here and now or put it in a savings with a good rate of interest which they can access and spend when they choose!

True for people who could only save small pensions, like now. But people saving a "huge" amount each month would be saving for pensions of tens of thousands per year, i.e. planning for an income of £40k, £60k, £80k per year or more. If they "need" that kind of income in retirement, they're not going to give it all and spend it all now instead and end up living on pension credit of £12.5k in retirement are they??

But yes, people who could only save small amounts and maybe get an extra few K per year in pension probably won't be incentivised to save if it means they wouldn't be eligible for pension credit. Just how it is today!

Nail on the head.

Sadly, far too many people don't understand how the jobs market has changed since they were young. It's not today's youngsters who've caused the drive for 50% of them to go to Uni - it was politicians and employers (including public sector, so, again, politicians!).

Like the older posters on threads re youngsters getting part time jobs, with them saying "I got a paper round", "I got a Saturday job in a greengrocers", "I got a pot washing job in a pub", "I got a bed making job in a B&B". Yes, that was then. Where are all these local independent small businesses today?? Very few people have a greengrocers shop, most B&Bs have closed, kids aren't allowed to work in pubs anymore (not that there are many), virtually no paper rounds anymore. Travelodge and Tesco don't take on school kids!

You are wrong. I've looked after parents/in laws with dementia and I'm an accountant with a few dozen elderly "tax return only" clients. I've seen it "play out" for the 43 years I've been an accountant! There's no "way out" just because you become confused etc - HMRC still want tax returns, so people find a way, like I say, friends, family, accountants, IFAs, carers, etc. Some of my clients I've had 25 years since before they retired, some are now suffering dementia - I still do their tax returns - it obviously takes more time but we get there in the end - we have to! Likewise with those struggling with banking and paying bills etc - people cope - they have to - friends, family, carers etc.

My point was that means testing would be at a relatively high level, probably those affected WILL already be doing tax returns, i.e. set it at £50k higher rate tax threshold - everyone with income more than that is already doing a tax return. State benefits clawbacks would just be another box to tick.

We've already got the winter fuel allowance claw back via tax returns.

I'm not assuming anything. You are just reading what you want to read.
Something has got to give before the current system implodes. Not just pensions. We can't all have what we want, particularly at other people's expense.

Except nowadays many employers wont even consider a candidate for a basic admin job WITHOUT a degree so those youngsters are FORCED to get themselves into debt just to be in with a chance of getting a job that could have been walked into in the 90s by someone with just GCSEs. I have no degree and am job searching now. Plenty of jobs are off limit to me even with 30+ years of experience just because I dont have a degree. Now imagine if I also didn't have the experience. No chance.
Going to university is no longer a privilege, its a necessity that leaves youngsters in massive debt as they start out.

I'll add that caring can start small, "could you give a hand to do curtains" with a slow creap then its changing beds etc.

Older people's vulnerability can also change overnight, with a stroke or fall

You are also assuming all older people own their own house. Many don't. The people paying rent are probably the people who need state help far more than those few who live in 3/4 bedroom houses.

Would you really advise vulnerable elderly people to take in lodgers?

Would young fit people want to lodge with elderly, and risk being put into a live-in carers role.

It isn’t the logistics of means-testing which will prevent the govt from doing it. It’s the fact it would be financially disastrous (as well as political suicide for any govt.)

As many pp have pointed out, it would be a perverse incentive. Why would people give a big chunk of their earning away every month into a pension (in addition to the NI they have to pay!) ? Far better to just keep their money, have more to spend in the ‘here and now’ rather than end up worse off because they’ll lose out on the state pension.

people have the choice about whether to pay into a private or occupational pension. They will make the choice that works in their favour!

It might not be expensive to means test when absolutely everything sits in the cloud - it might be very easy indeed in a few years time.

It's coming whether we like it or not.

That is possibly true - although if you use AI enough to see both the strengths and limitations, this should worry you 😂

Worry not, it will all be automated like everything else is soon enough.

We are 63 and 55 and we have always assumed we wouldn't get it as that was the safest assumption. I think we should abolish NI and tax all income, no exemption for over 67s. If your income is £30k a year you should be taxed on that income regardless of what age you are. Dh will continue to work after 67 (he enjoys it) - he should still pay the same taxes as everyone else - that's fair.

I suspect that you don't have a very elderly parent, and so you haven't seen this play out.

Even previously very capable 85+ year olds simply aren't able to manage tax returns. It causes huge stress despite help from family members (for those lucky enough to have them). It's not a sensible solution that very ordinary middle class pensioners should all get an accountant.

As a pp says, the threshold will start high and then never move. We've all seen it play out too many times before.

This is a non-starter.

I'm not remotely missing your point. Its one example of the choices that might be available to people. A lodger might be another.
Expecting taxes to cover an ever growing bill isn't a solution. If it was, we wouldn't be having this conversation.