What will eventually happen with the State Pension?

[BrainInAJar]

Hello,

I recently turned 40 and have been reviewing my finances.

A lot of stuff online factors in getting the State Pension. I'm trying to be on the safe side though and factor in that I might not get it, not the full thing anyway and maybe not until a much older age than earlier generations.

Just out of interest, what do you think will happen? Will any Government be "brave" enough to make sweeping changes? How much notice will we get? Who will be the first generation, if any, not to get a state pension?

Thanks

If there's to be a later pension/inadequate pension/no pension maybe there should be an option to opt out so we can really try and make provision for ourselves.

There'll be no nhs, no pension.

I realise this won't happen of course..

Ironically the rise in pension age is to support current pensioners whose longevity is greater than expected. By the time the generation that has to work until 71 has reached pensionable age, people won't be living as long due to poor modern diet, lack of exercise and inability of NHS to adequately service such large numbers.

The triple lock has to go. It's not fair that younger generations should have to work until they drop. Some form of state pension should remain with benefits to top it up for those who need more. NB the state pension was never designed to provide a comfortable lifestyle any more than benefits are, the expectation is that those who can save for their retirement do so in addition to the state pension.

@rookiemere the state pension is £11.5k per year.

How comfortable is that?

And older generations worked just as hard, mostly from 16, some of us having taken nothing other than 2 lots of mat leave (which were only 6 months then). Nothing else. Have worked til were 60 and watched our promised pension get further away.

Not comfortable at all I'm sure, but the assumption is that many pensioners will have paid off their mortgage and should have a work pension to supplement the state pension. For those who don't there are additional benefits that can be claimed.

I'd rather try to live on £11.5k per year than work to 71 given the choice though.

I agree 71 is absolutely ridiculous.

However your assumption that the triple lock isn't needed to maintain a basic standard for a load of older people sitting around counting their money is as unreasonable as me thinking the younger generation should work for things if they want them.

@Houseplanter I don't think that old people are sitting around counting their money, where have I said that ?

The hard fact is there isn't enough money to go round. Getting rid of the state pension would be electoral suicide, but somehow expecting young people to work to age 71 is less so ( primarily because less young people vote).

I don't want the state pension to go. I'm lucky enough to have a defined benefit work pension and some AVCs so I should be able to retire age 60, but I have factored in getting state pension at 67 ( I'm 53) as it's not huge sums we are talking about here.

It's about collective generational fairness. It's ridiculous to expect people to work to 71, we all know state pension can't survive in its current format forever.

I'm 59. When I started work at 16 (uni wasn't open to as many back then even) I thought I'd be retiring next year. I took employers up on the pension option thankfully, so I can.
I'm retiring on a civil service old style pension. I left there 15 years ago mentally broken. Have gradually reduced hours in a retail job as I am now physically broken. Some of us have not been dealt a great genetic hand in life... my parents died before 60.
If I get to 67 I may get a full state pension. (One heart attack already suggests maybe not).

I expect state pension will become means tested for those who are now in their 40s and younger.

A friend of mine exists off the state pension plus £100 income a month from a lock up shop. He can save £300 out of the income on a good month! He is very frugal and can fix his own car etc.

I have no private pensions and am 60. I need at least £300 extra a month and that is without a car. Don't know how he does it!

I am planning to save to retire once my state pension kicks in. Impossible before then. Hope to retire age 72 albeit health permitting. I currently work three days (self employed). Later two days health permitting.

To suggest people should work until 71 is utterly daft.

First of all there is so much ageism in the workplace even as early as when people hit their 40s/50s that I can't see how all these jobs for elderly people are going to come from and of course there is the health aspect.

Also I really want to know why I am expected to continue to pay national insurance contribution and income tax if I get no support whatsoever when I need it...

The NHS is in crisis, services are poor and now they are going after the state pension so why should I pay that money every month?

I think politicians should remember that there is such a thing as a social contract.

The UK has really low pension and benefits compared to the rest of Europe already yet we are supposed to just accept constant attacks against our standards of living.

Government needs a reality check and stop wasting tax payer money on rubbish schemes like Rwanda and the VIP lane contracts scandal or MP pay rises and instead spend it wisely to make our lives better.

Basically we need a serious rethink as to how we spend tax payer money in this country and a change of government.

The economy needs to get stronger as we are the second poorest in the G7.

Not comfortable at all I'm sure, but the assumption is that many pensioners will have paid off their mortgage and should have a work pension to supplement the state pension. For those who don't there are additional benefits that can be claimed

So it looks to me like you means test the SP of those who have private pensions and then hand out topups to those who don't. That saves money, how exactly? and that's before the cost of all the bureaucracy to administer means testing. As for a policy based on 'assumptions,' and what people 'should' have I'd rather have one - if we have to have it - that's based on research and actual facts and figures.

There will be an increasing number of pensioners retiring who rent.

I know I could not possibly manage on pension credit. I eat healthily which isn't cheap then personal spends have to be factored in.

I could manage on pension credit. But I have never been well off.

Nor are today's politicians.

Ignoring wage rises/inflation, a 4% return on 8% p.a. on a £30k wage for 40 years produces a fund big enough to finance a £15k p.a. pension for 20 years.

The trouble with the online pension forecasts is that they're deliberately understating eventual pensions to persuade people to invest more, and most pension funds charge pretty high charges which erode the effect of compound interest. They also use "average" annuity rates for the eventual pension (again which include pretty steep pension firm charges). They're basically showing "worst case" scenario of high inflation, low return, and high charges!!

The answer is to choose pension funds within minimal fees and also not to take out an annuity upon retirement - transfer the fund into a SIPP and do draw down, whilst still benefitting from investment returns (compound interest again) during the drawdown years.

Nail on the head there!

Politicians are obsessed with spending and cutting.

They're missing the glaringly obvious that we have to grow the economy, and not by Blair/Brown's "smoke and mirrors" of the service economy (invisibles) and moving money around so that it's spent more frequently giving the illusion of a growth in GDP.

We need to get more people back to work, get more part timers working longer, manufacture and export more, import less. Get the economy growing by "real" trading activity.

We need to stop spending money on gimmicks like statues and sculptures on roundabouts and in hospital car parks and start spending on building factories, investing in tech firms, investing in agriculture and fishing, demolishing/repurposing all the derelict town centre buildings that are rotting away.

Get people working (and paying taxes, spending etc) on the public jobs that need doing, like litter picking, repairing roads, etc.

Create proper childcare options so parents can work, and can work more and longer.

Get business banks lending to viable businesses like they do in other countries - in the UK, you're not going to get a business loan unless you own a house and have equity for the bank to charge against, i.e. house value far higher than mortgage.

We're in one hell of a rut that we've been in for around 30 years and no politicians seem capable of making the big/brave decisions that need to be made.

My MIL rents and is on pension credit. She survives, keeps a car and saves a little, but lives in a rough-ish estate with very low rent. But she never does anything, just stays home all day - no personal spending, clothes, friends, lunches holidays etc. She says she's happy, and I belive her, but she survived in an abusive marriage with an alcoholic for many many years, so she's used to having little money and having to stay home.

Put simply, it's survivable, but not the life I would want for myself, and not the "retirement" most people imagine.

Another thing to consider is "active" and "inactive" retirement, when you retire younger (late 60s) there is a lot you want and can do. However, once you get to a certain age it often feels like "god's waiting room", where you're alive but barely leave the house due to declining health. Made worse if family live further away and cannot visit regularly, or you have no close family.

I wonder how long it would be survivable if the triple lock went. I can see more and more elderly people in fuel and heating poverty as their income effectively shrinks, with declining health as a result. The NHS they thought were there won't be.

What a dreadful thought.

In the last few years state pensions have increased. Older retired people get less than people just retiring.
@PickledOnionsRodger I grew up poor and we all socialised in each other peoples houses. I still do this a bit. Meals and coffee at friends houses, board games, etc, rather than going out.

Non sense you will see benefits cuts in masses before means testing the pensioners.

If you expect to be comfortable on a state pension and it's your only means of income you'll have a tough retirement. £203 PW (if you meet the eligibility criteria) currently isn't a lot to keep you fed, watered and homed. Company pensions and personal savings are vital - I know in a COL and with low pay jobs this is almost impossible. But the time to start thinking about retiring is well before you need the money. And yes, I know it's beyond difficult for many.

I certainly don't think anyone wants to go back to the days of pensioners being in poverty.
Remember the days when they were advised if your cold inside put on a woolly hat.

The answer has to be increasing manufacturing and the boosting the economy.
It's worrying that so much of the counties infrastructure is foreign owned, stuff like power stations, railway operators and steelworks (what's left of them).