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

Yes but there are then generation x to be supported by millennials, z and alpha which just about adds up, then those millenials have some tiny generations to support them. Which doesn't add up. Also there are over laps. The youngest boomers and older xs will be retired at the same time, and the youngest xs and oldest millenials will be retired together.

Yes but there are then generation x to be supported by millennials, z and alpha which just about adds up, then those millenials have some tiny generations to support them. Which doesn't add up. Also there are over laps. The youngest boomers and older xs will be retired at the same time, and the youngest xs and oldest millenials will be retired together.

Exactly plus many of the younger cohorts retiring won’t have the same funicular security eg private pensions, owned out right homes so will still “cost”.

Well people will be contributing to their own pensions from April if the Govt don't put the Personal tax free allowance up!

The increase in pensions with the triple lock will push some recipients of the State Pension only in to the tax bracket. As there are no means to deduct tax at source from the state pension some pensioners will have a tax bill to pay in April 25!

If that makes any of you gnashing your teeth over the Country looking after old people feel any better!

Gen X/early Gen Y is actually very small, particularly in comparison to boomers. The birth rate dropped off massively in the late sixities to early eighties.

This is the peak @Spendonsend. There have always been overlapping generations. It’s looking worse now because a big generation of workers is becoming a big generation of pensioners so there’s a double whammy of people claiming their pensions while simultaneously paying less tax.

It’s really annoying that successive governments haven’t planned for this. After all it’s been obvious for decades that a huge rise in the post war birth rate would eventually result in a high level of demand for pensions. The time to address it was 50 years ago, it’s too late now.

It's not even "contributions based" anymore. You can get full state pension despite never paying any NIC, i.e. "credits" are given to the unemployed, disabled, mothers of young children, workers on low wages below the threshold, etc etc.

NIC needs scrapping and increase other taxes instead.

I’m already a tax paying pensioner, most of us are. We get our state pension in full and tax deducted via PAYE from our occupational pensions. The state pension will still be less than the personal allowance in April.

Yes Blossoms I'm aware but the State Pension on it's own will push some pensioners into the taxable bracket, those without an occupational pension to use as a vehicle for collecting the tax!

That was the point of my post!

From September/ October when the annual increase comes in it will push some pensioners into the taxable bracket.

The money is out there - it's just in the hands of a parasitical asset-owning rentier class who don't pay income tax, barely pay tax at all and instead just passively increase their wealth by doing next to nothing. Sort out the wealth gap and we can stop having these kind of discussions altogether.

I agree there is huge disproportionately between income & wealth taxes which does need to be addressed but many are happy with the status quo.

If that makes any of you gnashing your teeth over the Country looking after old people feel any better!

🙄 And this is why the gov gets away with not having the conversation & planning for the future.

I'm factoring in 70 myself. I don't think any government would cut it completely but increasing the age is likely. I'm a bit older now but though, currently mine is set at 67

Why don’t current working pensioners pay NI?

How? As long as the state pension remains lower than the personal allowance where are those people without occupational pensions getting the extra money from?

The problem with means testing is that it's a fine balance to avoid people gaming the system. Why the hell will people work hard, pay shed loads in NI, build up savings, if they know that in effect they'll be penalised for being responsible, whereas Mr Smith next door blows everything on holidays and gadgets while he's younger and then gets a pay out when older?

I am building up a good occupational pension - because I pay hundreds of pounds every month into it. I'd think twice if I knew that when I'm older, this might mean I don't get a state pension (which of course I'm paying NI contributions for as well!)

I agree. The majority of adults don't pay anywhere near enough tax that makes the current model sustainable. They might think they do, but they don't.

As other posters point out, fewer people are paying more for less. I'm not sure it's fair therefore that the state pension gets taken away from those that actually have paid a fair whack over the years.

Who knows what this country will be like in 30+ years time. Got a feeling it ain't gonna be pretty though.

Then these reforms will probably have to start with 18 year olds now so the system changes for the future, not for older people who have planned their futures on there being a state pension, whether you like it or not everyone who has paid their contributions is entitled to a state pension.

Oddly enough I was talking about this with DS(17) last night. We concluded that he should work on the assumption that when he retires there won't be a state pension, and he should plan his life accordingly.

Are they? Or is it just a case of Stockholm syndrome, where they are told so often by a media and political system controlled by that same class that questioning wealth inequality is just jealousy, that there is no alternative to our current system of capitalism (despite the evidence of the 40's, 50's and 60's), or that the rich are just better than us and so deserve it (like the divine right of kings), that they now unquestioningly believe it?

@DontSetYourselfOnFireToKeepOthersWarm
who are you defining as rich? the global elite? forget them as they are mobile. Many “normal” people in this country have lots of asset
wealth, CGT & dividends etc are not in line with PAYE. Many people won’t vote for that system to change imo.

I dont see who is paying the pensions of the millenials though?
Im not saying this isnt a peak. Im saying i dont see how the issue disappears once the peak has moved through
There are more millenials than boomers right now and less people coming behind them.

"i think the state pension should be means tested - it astounds me that people don’t think they should find their own age....
but the problem is that it’s baked into peoples ideology in the UK and many people don’t seem to be rational about it"

I know a lot of people here think that everyone over 60 is a thick, entitled Boomer but the State Pension started in some form in 1908 and in it's present form after WW2. We didn't suddenly demand it to piss off young people, it has been there all our lives. When I started work in 1979 my expected retirement age was 60. It's now 67. I've already worked for 45 years. I do have a workplace pension that I got at 60 and am not expecting a life of champagne and diamonds when the State Pension kicks in.

@beguilingeyes things change though don’t they. My family got family allowance or something similar which was universal when I was young, that has now changed. Growing up in London I knew loads of families in social housing, who qualifies for social housing now?! As a young adult I didn’t expect years of wage stagnation but what can you do.

It’s really annoying that successive governments haven’t planned for this

it is really annoying but anytime pensions are mentioned you get “I’ve paid in for X years, my neighbour next door has never worked” & if you mention birth rates it’s “too many mums with 5 dc or too many dc in general”.

"Some" pensioners already have state pensions in excess of the personal tax free allowance. I have several clients in that position because of earnings related state pension schemes, particularly the graduated pension scheme, but also a few old SERPS pensioners. They get "full" state pension at normal rate and then a state pension "top up" of earnings related state pension.

They need to complete a SA tax return each year to calculate and pay the income tax on their pensions, with the tax due every January.