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

Wage growth in the last 20 or so years has been non-existent. It's not sustainable. It's all very well to say that train drivers, doctors etc are 'greedy' for wanting above inflation pay rises but it's what everyone should be getting. When I started work back in the middle ages there were two pay rises a year (imagine!). a cost of living rise that matched inflation and then your actual pay rise. Then some bright spark brought in 'performance related pay', which meant they didn't have to give you a pay rise at all if they didn't want to. A friend of mine in the Civil Service hasn't had a pay rise for seven years. How did we let them get away with taking it all away from us?

Sadly all of the economic data on the topic completely contradicts your assertions. Never mind though, eh? Who cares about facts?

@user1497207191 excellent post. It's another example of how people will inevitably game the system - why would someone work longer/harder if the financial advantage isn't proportionate to the extra hours and effort they put in?

That horse has bolted. We would have to go back 80 years and do what Vienna or Singapore did. google "Vienna public housing" and weep.

There will be riots in the streets if people don’t get their state pension that they’ve paid into. I’ve so far paid in for 22 years and to get nothing would be a slap in the face. I think a compromise would be to extend the amount of years people pay in from 35 to maybe 40/45. Most people start paying in between the ages of 18-21 so to increase it to 45 years, with a retirement age of 68, you’d stop your contributions between 63-66.

I also think you should be auto enrolled into workplace pensions and there should be no option to opt out. I’ve got 16.5 years of a public sector pension so far and will have approximately 40 years worth if I stay until retirement age.

@beguilingeyes

It's all very well to say that train drivers, doctors etc are 'greedy' for wanting above inflation pay rises but it's what everyone should be getting.

The problem is that everyone else has to pay for it, though. You know, the people who aren't getting big pay rises. That's why people say they're "greedy"!

I’m not sure what you’re talking about. There’s no ‘plan’ to do this. Mine’s already been raised so I won’t retire until I’m 68.

If you are public sector though, you are already being paid by the taxpayer, public sector pensions are a huge part of government "expense". Unless you are very well paid, I can guarantee if you have also received NHS healthcare, you will be a net taker. Stopping contributions at 63-66 is also not tenable, you need to continue to pay to cover your adult social care needs in later life. Basically everyone needs to pay more, not less.

But private firms contribute to employees pensions. Why should public sector be treated differently?

And l was public sector. Ds gets more from employer contribution than l ever did from the public purse.

Ok, next time you want a doctor don’t cry if you can’t get one. We shoukd pay them what they are worth, which is a lot.

No one has "paid in" for their state pension. They paid tax that was due. That is all. I pay tax for all sorts of things I don't see a return on.

But it’s here if you look.

Exactly, it's just another tax!

But you get "credits" or "qualifying years" without paying NIC, i.e. unemployed, disabled, parents with young children, part timers not earning enough to pay NIC., etc - all get "qualifying years" without paying a penny!

NIC is just another tax.

Agreed, but in the public sector case, the government, the taxpayer, contributes a hefty % into your pension every month, way more than private sector does for it's employees, and additionally, then, the government, the taxpayer pays you direct when you retire, on a guaranteed sum, from an "unfunded" taxpayer pot. It's a weird circular system. Very different from the private sector.

@ArseInTheCoOpWindow but that is NI credits not payments.

The state pension is not based on what you actually contribute.

@ThePeaAndThePrincess
Sadly all of the economic data on the topic completely contradicts your assertions. Never mind though, eh? Who cares about facts?

what are the economic facts - what are you comparing? It is not always easy to compare societal conditions for different time periods which impacted financial circumstances either.

No idea. Birthrate is now so low that there won't be any tax payers to fund pensioners.

I am amazed the government isn't panicking about birthrates.

Well, they could start providing properly subsidized child care if they did.

Why would they? No government is capable of looking long term. After all successive governments had decades of notice that the biggest generation alive would all reach pensionable age at the same time. When did they start preparing? When the oldest of them were 50 and that was only to equalise it for men and women. It took until the eldest were 66 to raise it for men.

Edit - no clue where that gif came from.