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

Probably contributes to why they have one of the highest life expectancies. There is a certain point when nobody should need to work anymore, time to wind down. Don’t know how many times I’ve heard someone has died soon after retirement here.

@asrarpolar age pension in Australia is income
and asset tested

If you means test the state pension the impact on the economy will be catastrophic. Loads of early retirees cashing in their private pension and savings. The government is already concerned about the amount of people not working. I am in my mid fifties and not well off. Nearly everyone I know about my age who has any savings and private pension would fuck off out of the workplace so they can still get the state pension. Because you do this and none of us will trust the government not to change the goalposts by tightening up on means testing. The rational thing to do will be to retire early.
It is only well off people with large private pensions who would rationally want to stay in work and those with no private pension or savings. You would also destroy the private pension industry overnight.
It is a monumentally stupid idea. And no other western government does this.

@Hmmmmaybe age pension in Australia consists of a basic state pension and then a means tested portion. This is exactly like the current situation in the UK.

@Hmmmmaybe knew I recognised ur name from an earlier thread tonight where u where equally trying to poke the bear. Good job, obviously having a boring night.

@asrarpolar if your assets and income are over a certain level you will get no age pension at all

its tapered - most people get something

it’s a good - but of course not perfect - system

@Butterflyrainbow12 I’m not saying anything outrageous

im saying at some point in time the state pension will have to become means tested to be sustainable and structures will need to be put in place to support and incentivize private saving

the current system is unsustainable

Once the government have sorted out the super rich paying their fair share of taxes, reversed the growing wealth gap and restructured corporate taxes and capital gains, then they can start thinking about means testing the state pension at the expense of the middle classes. Until then they can fuck off and give me what I was told I would get when I was 20 and about to start what I thought was 45 years of work but now turns out to be 47. I have paid enough tax to subsidise the idle and the feckless already over the years thanks.

@asrarpolar what do you mean no other way esteem government means tests pensions?

To be honest I think your posts have been causing the ‘outrage’ you have been implying in your posts that no one is entitled to a state pension as none of us apart from the super wealthy have paid enough then you change tack and say

If people have been told one thing and relied on that it would be unfair to change it So really you agree with all the ‘outrage’ (that you have caused).

Many pensioners will still be tax payers....quite a few of those will be higher rate tax payers.

Very good point. It’s not like they don’t already take a large chunk out of private pensions already.

This. This with bells on. Totally agree with this. Couldn't have put it better myself

There's an awful lot of pensioners who have actually worked very little so are heavily topped up with pension credit and a lot who were self employed most of their lives and also chose not to pay NI contributions. It's a myth that everyone has paid in. Also todays pensions are being paid for by working people but less people are working/ not enough tax revenue being received.

This. This so much

If the state pension becomes means tested people
won’t bother saving money
or will give it to family members etc

The point of paying into a state pension is to receive the payout after. It currently stands as a promise that if you work and pay into the system we will look after you rather than dump you in the workhouse.

I wouldn’t be surprised if it happened but it would have to be a very slow introduction as many people do not have private pensions as it was always a luxury and never a requirement for employers to insist everyone had one. Many employers also would not take up your existing pension when you joined a new office ie I know of many people in their plus mid 50s who have several pensions. Non large and all with penalties if you attempt to combine them. Leaving a lot of people trying desperately in their final years to provide for retirement, kids, uni costs etc.

If it was introduced people need plenty of time to prepare and everyone working, no matter what type of job and including the self employed should be required to pay into a private system to make the means testing fare.

I still think, however, lots of people will blow their money or give it away in good time to avoid losing a state pension they will still be required to pay into.

As a thought MNs
On the Parliamentary petitions page there is a petition against the Government having automatic access to all pensioners banking details. ie…their money….I wonder if this is why?
At the moment HMRC can access your bank, without you knowing, if they have reasonable cause to believe you are committing fraud. ( ie getting rent and not declaring, hav a partner but saying youre single to get more benefits, not paying cgt on property etc etc etc.) With pensioners however the idea is just that you reach a certain age, they don’t have to have any reason that you’ve done anything. They can just look at your accounts. Automatically.
I was signing another petition and spotted this one aswell and was shocked

If you think this is wrong please sign the petition
google parliamentary petitions…..I have no idea how to paste it on.
Anyone who can ?

Very Well said @DontSetYourselfOnFireToKeepOthersWarm

The population crisis is going to impact on future pensioners. It’s not about how much you put in, it’s who’s paying for your pension. People are having children later and fewer of them. By the time my generation gets to pension age there won’t be enough young workers to fund it. Maybe making housing unaffordable wasn’t the best idea. I fully expect to work till I drop.

we ve had those before
They were called workhouses
Pensioners have as much right to housing as everyone else

It’s also worth noting on this point.
The whole justification to raise the state pension age was because people were living longer.
That is no longer the case,

Get a private one, invest properly and aim for a pension that matches your salary. Protect yourself and give yourself the freedom to retire at say 57 instead of 68.

with wage stagnation, cost of housing & private pension schemes which are now less generous thats a bit difficult.

Also healthy life expectancy hasn’t increased so pushing the age out isn’t really fair.

We do have the big demographic shift though so we will all be paying more tax regardless as currently we can’t fund things.

There is currently a huge number of baby boomers being supported by a smaller workforce.

In 25 years these percentages will have changed.

I don't think the state pension will be eliminated, or means tested. But as more people have some private pension income the additional top up benefits will be removed.
And the age increased.

I don't think it will be means tested. I think that the triple lock will be eventually stopped and the amount received just won't keep up with inflation, it's an easy way of eroding something without making any changes. Pension credits will be relied on more for those with anything put away.

The whole pension situation is a timebomb. Many of the work based pensions available to the older generations are long gone. Most people are financially illiterate and don't realise how compounding interest works. I've heard of plenty putting off pension contributions to buy a house or pay for general costs thinking they can "catch up" later but not realising how it will be near impossible. I think many my age and younger wont get to retire.

In maybe a generation or two, there'll be no universal state pension. The basic state pension will be phased out and the pension credit will be beefed up. So only those with small/no incomes/little savings, will get pension credit.

It's why workplace pension schemes are now obligatory and new employees are automatically enrolled unless they specifically opt out. All workers will be expected to save towards their own pensions (with compulsory employer contributions too!), and those who don't will end up on pension credit instead.

The UK tried alternative earnings related pension schemes in the past, first with graduated state pension, then SERPS, then S2P, but all those schemes have failed and have been scrapped to be replaced by obligatory workplace pensions.

I'd say the first stage will be means testing the state pension in the same way that child benefit is means tested, i.e. taper it away when someone has a total income over £50k. Then don't increase the £50k threshold so it ultimately disappears by stealth over a decade or two.