Retirement for those born after 1970 is likely to rise to 71 in the future

[Tiddlywinkly]

This Guardian article was a tad depressing to read:https://amp.theguardian.com/money/2024/feb/05/uk-state-pension-age-will-soon-need-to-rise-to-71-say-experts

I fully acknowledge that we are living longer, are having less children etc, but for many, our health might not be up to working for that long. There'll also be a knock on effect as to how much we'll be available for helping with grandkids/ very elderly parents.

I just wondered what other people thought?

Life expectancy figures can be a bit misleading, because they include the deaths of those who died in infancy, childhood and adulthood decades ago when childhood mortality was higher and when many more people died in their middle years from smoking related diseases.

Plus, the average lifespan for men is pulled down by their greater likelihood of dying young in industrial or other accidents etc. If they make it to retirement, they can live a long time.

thanks @5thCommandment

are they the same as a sipp?

No. ISAs are virtually risk free.

SIPPs are based on investments and as such carry a risk that you could lose everything (unlikely) or not end up with as much as you were expecting.

A lot of people will have a shock with contracted out too.
As cant even tell how much pension you would get and working extra years doesnt fix those lower years.

covering the years 60-71 would be an issue when pensions are raising the age you can take them
Probably to stop people raiding it and having none left

AND having saving 6k+ affects unemployment benefits
Which inlcudes LISA
Or normal isas
Older people are likely to have periods of unemployment

And your funds in banks etc are only covered up to 85k in case of collapse

The constsnt change is not great.
Weve had pension funds collapse and be raided etc
Low interest rates

As one who worked their whole life in the pensions industry, I can state as a fact that virtually all pension professionals and actuaries have been saying this since the 1980s (and some hard nose realists were arguing for 72 or even 75).

Why this particular report should actually have hit the public's attention I have no idea.

Basically, the State pension was envisioned as being paid for approx 15 years and so, given life expectancy, the male retirement age was set at 65 (men being the bulk of the workforce) with women retiring at 60 (because, on average, women were 5 years younger than their husbands back then).

Since then increasing like expectancy and changes in society has made a nonsense of these assumptions. This change should have been made years ago, but no Govt (of either party) had the political courage to do it.

Not necessarily. There are SIPP providers who let you invest in "safe" investments such as government bonds and even "normal" bank accounts returning a few percent of interest.

I have a certain degree of sympathy for WASPI women but you're complaining about having to work til 67 on a thread about state pension age potentially increasing to 71 - it's a bit tone deaf. However shit it is for you, it is undeniably shitter for people younger than you.

Most people born after the 70s are paying into private pensions. Whether or not that will be sufficient to enable future retirement at a sensible age is anyone's guess at this point. Many people will probably still need to rely on the state pension, they'll just get it much later.

Yep, I've been an accountant for 40 years, since 1983, and have seen many actuaries reports for company pension schemes, and had many meetings with IFA's (as well as actually "selling" pensions etc to clients back in the 80s when accountants were allowed to!).

The actuaries and pension industry experts have been warning about this for decades, but the general public haven't listened. Successive governments have tried to tackle it, i.e. with SERPS, then S2P and now compulsory workplace pensions, but the general public just havn't bought into it at all, so politicians keep having to back off.

A bit like the OAP care home funding - politicians keep coming up with options for funding it, i.e. limiting it to a fixed amount, but the general public howl with anguish, and rather than risk losing votes, the politicians back off and kick it into the long grass.

People keep complaining about politicians not making long term plans, but when they try to, the public kick back and reject it! That's why politicians make small changes which are often inadequate and don't work.

The general public are woefully educated about all financial matters and it's an absolute travesty. We need far better financial education, preferably at several stages during school years, to incorporate finances into other lessons.

I agree totally.

"None so deaf as those that will not hear" about sums up the UK public's attitude to pensions, sadly.

WASPI women aren’t complaining about having to work longer. They’re complaining about changes made with too little notice to make new arrangements and plan properly, as well as having the goalposts moved twice in less than 20 years. Some of them were months away from their expected retirement date when the second change was made.

@BIossomtoes that's why I said I have a certain degree of sympathy with WASPI women. I do think the way the changes were implemented were unfair.

I was responding to the poster who said

"So they'll work 4 years longer than me (born 1960) - whereas I have to work 7 years past the date I was expecting to retire? And the issue is?"

Because it is obvious to me what the issue is - that we are talking about people having to work 4 years longer and that is shit. The fact that WASPI women were (in some cases) dealt a shit hand does not somehow mean that people faced with a state pension age of 71 have somehow not been dealt a shit hand. It's entirely possible for both situations to be shit simultaneously.

Thanks for clarifying @traytablestowed. However the retirement age of 71 idea is just that - a projection from a think tank. The shit hand dealt WASPI women was grim reality.

It's a very realistic projection. Frankly I'd be surprised if it wasn't higher by the time I reach retirement since I was born in the 80s. My DM and MIL are both WASPI women so I am aware of the "grim" reality of it.

I think the world of work will look very different indeed in 20 or 30 years time. AI will be doing a lot of jobs and I can envision a big tranche of the workforce becoming redundant long before they reach pension age whether it’s 68 or 71. It’s going to be a huge challenge for future governments.

Then we need to accept a drastic reduction in living standards. If more people aren't working, that means less tax revenue, and we'll end up on a downward spiral of not being able to afford the welfare state, public services, etc., which in turn means a smaller economy, thus a vicious downwards circle.

We can't keep increasing taxes on an ever smaller workforce!

Ivortheenginedriver and User1497207191

I completely agree, I remember back in the 90s when doing my degree looking at the impact of the 'ageing population'

Politicians will not deal with it as people want high quality 'everything' but don't want to pay!

I work in Health and Social Care (Social Services) and it is not sustainable but any government that mentions it (Theresa May- 'dementia tax') are pilloried

I think we need to look at increased taxation on ALL forms of "unearned" income, including pensions, property rentals, interest, dividends, foreign derived income, trust income, etc etc.

It's ridiculous that we charge higher taxes on "workers" (mainly via NIC) who are the lifeblood of the country. It's nonsense that a pensioner with £50k of income pays less in taxes than a worker on the same income!

I'd scrap NIC and increase income tax for a start, so that people on similar incomes pay the same amount of taxes.

It feels as if we are moving backwards ineffective policing, lawless youths and working till you drop.

Think of the health an safety measures needed for an aged workforce imagine commuting on the tube in your 80s or indeed anywhere

I think we need to look at increased taxation on ALL forms of "unearned" income, including pensions

I don’t know about yours, but my pension was paid for with money that I earned while I was working. I pay tax on it too.

I think it's more likely that we'll see income tax and NI merged at some point.

The state pension age is currently 66. It’s unlikely to go up more than 1 year every 5 years. So if you are happy to teach in your early 60s, then you will be fine. If not perhaps do some well paid private tutoring? It may not seem it, but you are actually quite well positioned compared with many, and you will be fine.

I said "increased" tax! I know that pensions are potentially taxable depending on income etc. My point is that it's not enough because workers also have to pay NIC, whereas those with "unearned" income don't pay NIC on it.

There needs to be parity. A worker on £50k p.a. should be paying the same total taxes (and NIC is a tax), whereas a pensioner on £50k p.a. pays less because there's no NIC.

Let's hope so. It's a logical answer to bring in more tax revenue from people with the means to pay it, and it's a matter of fairness. People with the same income (from different sources) should all pay the same taxes.