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

People born in 1970 could have to wait until they are in their SEVENTIES to get the state pension a… https://mol.im/a/13047097 via https://dailym.ai/android

The elephant in the room is a smaller, sicker working population which is ageing. The only thing an individual can do is provide for themselves; because that is certain. Who wants to enter old age dependent on public money? Look at where we are now. Pensioners may be happy with the triple lock, but the medical care, social care, discretionary spending on age related issues is not there. The state pension is not going to fix those things and even now it is the bare minimum. You will not have a good life on it.

Working people want less tax, not more. Their benefits are means tested or strictly limited. It is perfectly possible to stop the current arrangements, cap the amount given and do something else which depends on another metric. Most people forget the state pension used to be very little; don't rely on it now. Even with the triple lock it's very little, not a good life.

For those who don't there are additional benefits that can be claimed

If you retired before 2016 there are, yes. Not if you're getting the new flat rate pension.

If i have to wait till 71 thats 11y for me and 6 for dp longer than my parents generation.
Realistically none of the 70+ i know are in an employable state. Not full time anyway.

Anyway the 70yo working arent going to be the ones earning 100k. (Although some celebs do seem to.

Realistically none of the 70+ i know are in an employable state. Not full time anyway

Well, I'm hoping I am because I'm looking at going back to work to put some more money into my pension (bored with semi-retirement). 70's too early to write yourself off, IMO.

Choosing to top up your pension by working in your 70s is entirely different from being forced to because you have no other income.

DF has finally wrapped up his video transferring services age 90 as his failing memory meant he could no longer remember all the complex steps needed to do it, but it certainly wasn't their only source of income.

Choosing to top up your pension by working in your 70s is entirely different from being forced to because you have no other income

I have no idea why you directed that at me all of a sudden or why my choice to do that apparently annoys you.

@MrsDanversGlidesAgain it doesn't annoy me at all, I think it's great that you want to start earning again in your 70s.

It was your remark about not writing yourself off that I didn't respond well to. I am in my 50s and find my current job exhausting and mentally draining, with office politics and traveling affecting me in a way they didn't use to.

I don't see retirement from it s "writing myself off" I see it as the start of the rest of my life. I may choose to work a wee bit, but I am looking forward to it being my choice rather than being forced to work by necessity to 71 for state pension.

It was your remark about not writing yourself off that I didn't respond well to

That's your issue to deal with, not mine. And I was dealing with office politics and a long commute in my late 60s - two of the reasons I left exjob, so that's not exclusive to you.

Not engaging any further.

You cant put as much into some pensoons once you start drawing them.

My generation missed defined benefit pensoons which os what kept people in a certain job.
So its all about what i have in my own pot. Which has bwen screwed by financial crisis etc.
Individual pensions and new state pension are individual so less about couples..
So any income will drop a lot when a partner dies. (If you dont do whatever word for joint annuity is. )
Its not wrting people off - i know people and they are often napping etc.

For me its more about quality of labour force of 70+ age workers.
They will make more errors so more stress for others.
Dp at 45 already put some cake in the fridge this week!
Actually physical work maybe easier to continue for some as the stress (which is much higher now than my parents jobs) would be hard to live with into 70s.
Work has changed such a lot from a generation ago.
Constant changing jobs so training others. Bosses now dont do any work nor can they help if you have issues.
Reorganisations as noone has the guts to sack people.

The only positive development in my lifetime is wfh!

Positive
Wfh
IT
Uni
Longer mat leave

Negative
Too many students not enough jobs that level
Poor on the job training
Pay into own pension
Raised from 60 to 68 state pension
Private schools too expensive
No assisted places
Housing too expensive both rental and buying
Mortgage based on 2 salaries
Families squeezed into small houses
High bus fares for work or getting to school

Need some positive change

I think future generations will look back and see the past 20-30 years where many people were able to retire for decades with a comfortable income from their pension as a bit of an anomaly. Clearly it's been fantastic for those who had that opportunity but it doesn't seem particularly sustainable given (a) demographics (b) rising cost of living making it hard for people to save for retirement (c) unwillingness of the electorate to pay more tax.

Obviously the rich will be able to continue to have a classic 'retirement', as they have the means to fund it.

But I think for the rest of us there will need to be a move towards people working longer. For many that will mean working part-time and/or in a different occupation for the reasons discussed above. If the government wants to encourage this it will need to invest in opportunities/incentives for people to retrain. We will also as a society need to rethink our expectations about retirement.

Part of the problem in thinking the healthy old can keep on working is that it reduces the available jobs for those coming up behind them.

Also, AI - remember that? How many jobs are there actually going to be to go round? Admin jobs that you can do sitting down and part time may be especially vulnerable to automation.

Anyway, interesting times.

I think I will end up working until age 75 albeit part time. Self employed. Due to cost of living I need to save a certain amount before I would feel comfortable. I am 60and already part time. But disconcerting but not much choice!

ditalini · Yesterday 18:48

Part of the problem in thinking the healthy old can keep on working is that it reduces the available jobs for those coming up behind them.”

Unlikely. The UK doesn’t have enough young people.

I agree, and we already have a critical skills shortage in lots of areas, which will get worse.

We need as many people as possible back working in some capacity.

We need to find ways to discourage people from retiring early. Maybe that's making workplaces more amenable to part time and flexible working, maybe it's changing the tax/nic system to make working more beneficial, maybe a mixture of both and other initiatives.

I'm 50 and frankly, I have given up any expectation of seeing my state pension. My health isn't marvellous; I will be lucky to work another 10 years, let alone 21 years. I've worked full time with no break for nearly 30 years. I'm saving as much as I can and paying into a private pension. I'll work as long as I'm able; when I can't work any more and once my money runs out I will have to go onto whatever state benefit is available at the time.

Agree with this.

Or I'll happily get a refund on my NI contributions and use that instead.

In fact, that would better for me as the likelihood is that I'll pay more in NI than I'll get in state pension.

Except NIC isn't only used for pensions! It's also partly used for the NHS, sickness, maternity, unemployment and other benefits, etc etc.

It's basically just another tax. The sooner we realise that it's not "insurance", the better!

A systemic review of everything welfare related is needed. Far more incentives to get people working and keep them working. The number of young people (eg 35 and below) who aren't in work or only work part time is quite astounding, partly due to the massive increase in this age group not working for health issues. Mental health provision needs to be far far better, and also an understanding that in some cases, social anxiety and other issues don't necessarily make a person unemployable particularly with remote working and jobs which aren't people-facing.

Extending free childcare - great, but it needs to be workable for the childcare providers too. So many are shutting down because the money they receive from public funds doesn't cover their costs.

Ultimately there needs to be far more incentive for people to work to capacity. I would love to see a higher NMW, or in an ideal world perhaps a universal income whereby everyone gets a basic level of income enough to survive, and then if you work, you get those earnings on top.

It's been said before; there's no magic money tree. We need to grow the economy and spend money wisely. Means testing the state pension won't work. People will game the system. No way would I pay hundreds every month into my occupational pension if I knew that would mean I'd lose my state pension (which of course I'm also contributing to through NI)

If a normal full time wage gave you enough money to afford a decent place to live that would be a big incentive to work I would think.
Otherwise you might as well just spend your life in your childhood bedroom working part-time 🤷🏼‍♀️

I'm on the 68 band too.

I have a very good public sector final salary pension but they are a rare beast now.

Plan is to retire at 60 get a part time job until 68 then...expire, probably. 😆

@Gloriosaford couldn't agree more!

Ultimately, people need to be tangibly better off working than either not working or working part time and getting topped up by tax credits. That's the incentive. Of course there are other benefits to working, and if someone has an interesting role then they'll experience other rewards as well as their salary. But at the end of the day, if a 30 year old isn't going to be measurably much better off in full time work, having to pay all their own rent and other bills, you can see why they may as well think sod this, I'll work the minimum I can and live at home.

It's bonkers that in a cost of living crisis it's actually really hard to recruit people and some industries are desperate for staff. If by filling a job vacancy, someone was instantly significantly better off than being unemployed or under employed, then that would solve a big part of the problem

Never a truer word spoken in jest!

What will it take to get a government to properly regulate the housing market (such that ordinary working people can access affordable secure and adequate places to live) when the government is comprised of wealthy people who have a vested interest in keeping prices high?

@lizzowhiz

It's bonkers that in a cost of living crisis it's actually really hard to recruit people and some industries are desperate for staff. If by filling a job vacancy, someone was instantly significantly better off than being unemployed or under employed, then that would solve a big part of the problem

We have a perverse tax/benefit system where people who work longer hours or extra shifts, or take a promotion, can be virtually no better off because of loss of benefits and/or high marginal tax rates, i.e. tax/NIC and student loan deductions plus loss of say, child benefit or free childcare.

We've had several years where doctors and dentists intentionally did fewer hours or fewer shifts to avoid the penal 62% tax/NIC rate on incomes over £100k AND the punitive pension rules. At least the pension problem has been dealt with for doctors, but it should never have happened in the first place, it should have been foreseen!

Personally, I believe the maximum "loss" in terms of lost benefits and increased tax/NIC/student loan/workplace pension deductions should be capped at 50%, so that for every extra pound someone earns (at whatever income level), they'll always come out with at least half of it, i.e. 50%. That gives a real incentive for people to work more, do more hours, take promotions, etc. There shouldn't be any circumstances where earning an extra £1 leaves you with only 25p (or in extreme cases, actually costs you more and you end up worse off!).