To think state pension needs to be means tested , most sill claim way more than put in due to life expectancy. The current simply can't afford it anymore, it's out biggest single outlay..

[wishedforchild2016]

Aibu ?. Interested hear opinions for/against..

Far better to reduce the government employer contribution of 26%+ for civil servants or 23%+ for the nhs.

Not sure that will do much for NHs recruitment and retention though....

No. The state pension is around the level of the personal allowance. So the govt doesn’t get anything back on it. They take tax on income above that level like they do with everyone else ?? Not sure where your 25k and 20% came from, unless there are different tax brackets in retirement that I didn’t know about??

This a million times.

Pay them more in their pay packet and less in their pension, it will save the govt a fortune.

@strawgoh so other European countries pay more pension for those that earned more and paid in more. You are aware hardly any countries have our model?

No, it shouldn’t be means tested.

If you means test everything that people get from the state when they are old, all it does is encourage people approaching old age to spend or give away their money so they are eligible for state funding.

People who saved end up feeling like mugs and it discourages future generations from saving which is disastrous in many ways.

What should happen is that the state pension age should go up in line with life expectancy. When the state pension was first introduced, pension age was 60 and average life expectancy was 64. We cannot afford 20-30 year pensions.

It’s really hard to compare they’re totally different systems. Not least as you have to remember that we get tax free pension contributions (employer and employee) and tax free growth so in that sense govt paying far more into our pension than we realise.

Well we should pay more for it then!

people don't want to though

The state pension is really not generous by European standards.

People need to stop comparing to Europe when they don't understand how different the schemes are.

The French are in an even worse financial position than us, as a result of this.

It will always be politically wiser to kick the can down the road for a future government, but the problem doesn’t go away by pretending it doesn’t exist. At some point we won’t be able to kick the can any further, though.

Economically we are already at that point.

How old are you, OP?

It was started to ensure those who were too old to work had something to live off. Not to ensure everyone had the same as everyone else. Bloody socialism!

If you’re able bodied you have the chance to earn all your life, one way or another. If you don’t earn as much as someone else, why should you have the same as the person who earned more and saved more? It doesn’t make sense to me. It discourages people from trying.

What should happen is that the state pension age should go up in line with life expectancy.

healthy life expectancy hasn't changed and yet pension age is now 68...

France also spends 15% of gdp on pensions vs 5% in the uk. France is facing an imminent financial crisis as a result - not sure we should be looking there for the answers.

@MidnightPatrol where do you think we would be with a pension age of 64?

Well I work on the basis that we all get £12,570 tax free. Unless you are saying that those with a private pension won’t get any personal allowance?!?

Any income over that is taxed. If I have £12.5k of personal pension that will use up my personal allowance. And so the government will get back 20% of the state pension above that. The same at the 40% and 60% threshold. So it only costs the government 80% of the state pension if my retirement income is £25k, and 60% of the state pension if my retirement income is £62k, and 40% of the state pension of my retirement income is £112k.

Absolutely not. It was drilled into me by my parents that you worked to support yourself both now and in the future. But you also paid into the pot that is there for yourself and others either in times of need or when you were at the retirement age. Ive done that. Ive also got a private pension, forgoing a standard of living at the time to hopefully benefit in .the future. Ive worked hard for it, haven’t skived and have chipped in for others.

@Labraradabrador I said I favour the European model of linking pension to earnings. Not sure why you think that means I want to implement France's model?

I do prefer their healthcare model though!

That’s only because it didn’t go up for years and years while life expectancy was changing.

Reducing pension tax relief to basic rate would cause chaos.

It would create a situation where many higher earning parents with young children are faced with 40% tax on pension contributions plus tax on withdrawal. This is because they need to salary sacrifice below 100k to qualify for funded childcare. Forcing them to make a choice between paying 40% tax on pension contributions (60%-20%) or 60% and losing funded childcare is not a desirable scenario.

It would also massively disincentivise other higher earners who will in effect be facing huge unavoidable marginal tax rates along with further tax at pension withdrawal.

What was that?

I absolutely disagree. The state pension is there to fund the most basic bare bones standard of living in retirement. People on state pension only have to budget really hard and may have very little money other than to eat and pay some bills. It's not a very enjoyable life. But, it IS a life. Those that want more, and that's probably most of us, will plan for more, and will pay into a workplace pension and maybe a private pension on top. But that's exactly it, they plan it as a top-up to the basic standard of living that the state pension gives. Not in place of.

Those that CAN'T pay into a workplace pension because they don't work becaue they are carers or are disabled themselves in some way shoud get additional benefits in retirement. It's not their fault they can't work.

You would take away all incentive to pay into a workplace or private pension if you wanted to take away those savers' state pensions BECAUSE they are saving. The incentive should always be that putting more in gets more out.

Oh, yeah, let's do that. I've been wondering what to advise my kids to do for a career but I think it would be more efficient if they have just no ambition at all and do the very least they can get away with for their whole lives and then ride out their elder years off the back of other people's contributions.

Much of the west has the issue of ageing demographics and the fact the van was kicked down the road for so many years.