If you are younger than 48, do you expect the state pension to still be around when you get to state pension age?

[daisym00n]

When people talk about raising the state pension age, the argument is usually that it will never happen because pensioners are more reliable voters.

But actually aren’t today’s pensioners the least likely to be affected? These things take years to implement. Any major change to pension age or entitlement is usually phased, so the people who’ll get hit hardest are the ones who are in their 40s/50s now, not those already collecting it.

If the current pension is unsustainable, it’s people currently under 50 who’ll feel the pain when the government turns around and says “sorry, there’s just not enough left”.

Part of me thinks I’d rather they were upfront now, rather than kick it down the road again. If there are big changes coming, I’d rather have 15+ years to plan around it not be blindsided when I’m coming up to retirement.

I’m not factoring the state pension into my own retirement planning at all. I just don’t believe it’ll be what we’re told it will be by the time I’m old enough to claim anything.

Anyone else thinking this way?

Oh the government, especially if Labour will find a way to make you pay so the benefits get to go to their voters. Can see a 'deprivation of capitol' brought in for this type of planning.
"Well you had a pension option available so we'll just work out your SP as if you have it, regardless of whether you do"....

I do think that is true to an extent. I'm in my late 30s, live in an expensive area (South East), two young children etc but fortunately my dad always drummed into me the importance of paying into a pension. So I set up my employee contribution as 10% of my salary (employer contributions on top) when I first started working and have kept it that way ever since. I have never noticed the loss because I never had it to start with.

Certainly when DDs were in nursery our financial situation was extremely difficult. I was bringing in £20 a month after nursery fees so basically working for nothing. But it wasn't nothing because I was keeping my pension contributions going and my pot was building. It would have been very easy to say I needed to become a SAHM as it was pointless working for no money each month. We still live relatively frugally, beans on toast is a regular dinner for us and I've been driving the same old car since 2012.

Putting away something.... anything is better than doing nothing. If you opt out of your company pension you are throwing away free money from your employer. Even paying the minimum is better than nothing and the earlier you start the better.

I’m not so sure. I think there’s a real shift of thinking which will only continue in the future. I think in the past people were generally far more compliant and bought into the social contract. You worked, you paid your dues. That’s gone now, for all sorts of reasons. People are far more wised up to the system and know how to game it. Tax credits were an example: brilliant idea in theory, to top up wages for lower earners. But of course when people deliberately only work part time and keep their earnings low because then they get topped up … not such a great idea.

I’ve got no skin in this particular game as I’m nearly 60 and will take early retirement then with a great defined benefits occupational pension. But I’ve paid literally hundreds per month into it. If I were 30 years younger and could see the state pension being means tested, I’d seriously think about opting out, paying a smaller amount into a private pension as an ‘extra’ and not doing myself out of a state pension - which of course I’d also be contributing to through NI contributions.

you can only push working people so far before they decide to act in their own interests rather than just paying for everyone else

I’m 46 and suspect there will be some sort of means testing by the time retirement age comes around. It’s political suicide though which is why they are averse to getting rid of triple lock / any kind of reduction. The cost is unsustainable though.

I’m that age, it’s frustrating as it’s always used the state pension figure added to my what my personal pensions projected to be.

It’s also frustrating as my girls are older so never benefited from any nursery savings, I didn’t pay enough in a pension during those nursery years to ensure we could survive and pay nursery fees. We also having to support while one at university. We could only afford to finally buy a house 15 years ago and made a choice for a 30 year mortgage, so we will still need to cover this when my husband is due to retire. But these are all choices we made - at the time being informed there would be a state pension.

I think im beginning to feel that it will be means tested, changed jobs back up to full time and trying to put in as much as I can into the pension. It’s hard as we both pay a lot of tax and not really seeing an improvement to society and probably the only benefit I would receive being probably removed.

Todays pensioners are paid by todays contributions. There is no savings account. You cant pay more out than goes in at any point, so you need to balance workforce headcount contributors with pensioner numbers surely?

Its the same issue as our tax system, net contributors are very few so its pretty much on its knees.

There will be NO old age pension in 20 years time or beyond, or it will have been reformed to perhaps pay council tax or similar for pensioners. Please dont think there will be means tested or otherwise. No government will touch it as a voting issue, I think it will go pop all by itself.

This is what I was getting at really.
There seems to be a general feeling on MN at least that no generation has ever had it as bad as the current 30 somethings and really, it is a load of rubbish.
My dad also drummed into me the importance of a pension and I started paying in when j was 20. You are right, if you pay in from the beginning, you really don't notice over the years. Yes, house prices were lower back then (I know someone will point this out) but I paid into my pension throughout maternity leave (6 weeks on 90% of pay, 12 weeks on SMP), nursery fees (no subsidies), childcare (no flexible working) and mortgage rates hikes of up to 15% at one point.
So yes, house prices were lower, but a lot of life as a working parent was much more difficult than now with none if the help offered to today's working parents.
Sadly, I know they won't want to hear what i have written as it does not feel into their narrative that no one has had it more difficult than they have.
So although it's easy to point the finger at boomers (i am not one BTW but I have seen some truly horrible posts about 'greedy' pensioners), a solution is there for the taking if you choose to do so. Which is what a lot if 'greedy boomers' did.

I think they will adopt an Australian style model of minimum 10% of your salary is paid into pension. The first £x is tax free and then the rest gets tapered tax relief.

Then once that's been in place for 20 years they'll pull the rug because all working age people will have at least 20 years of contributions (and many will have many more years to go) and then they'll 'abolish' the pension so it sounds like no one is getting it anymore but in reality they'll just wrap it into whatever universal credit is called at that point and, in effect, the pension as we now know it will be means tested. People who have never worked will get it, and people who have 20 years of their private pension but as a low earner will get a partial allowance / top up and anyone who has a private pension pot worth £X or more (indexed to inflation) will get nothing - apart from their "own" private pension of course, which is their own salary which has been mandatorily salary sacrificed

It sucks but I have to say I do think Australia's model is good, and it's the way forward. No doubt people huffed and puffed when it was brought in (1992?) but as someone for whom it's always been the way / the rule since I've lived here it's just a fact of life and it affects EVERYONE (who works) equally. We all pay our 10%, whether you work in KFC part time or you work in an investment bank. Your pension pot is what you make of it during your working life.

There is a state pension, called the aged pension, but I assume as the population grows older the numbers claiming dwindle year on year and now mandatory pension contributions have been in place for 23 years, in another 10 years or so the numbers of people with inadequate personal private pension should be really quite small.

Ps Australia started 'small' with mandatory 3% per year and it's grown to the current 12% over the last 23 years, I suppose to give people time to save, plan, cut expenses, get promotions, move career etc.

The UK just needs to bite the bullet and do it. The folly of auto enrolment was allowing people to opt out.

I'll just die at my job or get ill and die. I've been a Low earner/carer for so long now I can't see I'll ever have enough to retire.

The people who don’t plan and save for it will get it, the ones who work hard, don’t spend and prepare won’t. Just like everything else.

I think they will adopt an Australian style model of minimum 10% of your salary is paid into pension. The first £x is tax free and then the rest gets tapered tax relief.

Isn’t the lump sum or income from a super largely tax free? Can’t see a UK government going for that one!

I actually like the Australian system, but can think of so many barriers to it working politically here.

I think they will adopt an Australian style model of minimum 10% of your salary is paid into pension. The first £x is tax free and then the rest gets tapered tax relief.

Will they do the same for those on benefits? Take 10% for a pension?

Haha that would be good, and fair! I'd like to see it tbh.

I don't think you can take a lump sum in Australia, apart from in the event of terminal illness etc. I may be wrong about that but I've never heard of it. and I think unfortunately it's taxable just the same way as it is in the UK - you get a certain amount of tax free 'super' (pension) saving each year and then the rest is taxed incrementally. And then you're taxed again when you get it paid out (assuming your 'super' pays out over the nil rate band each year of course, which for some people it won't, although again as the population grows older and as time passes since the law was changed and people have more and more years of mandatory contributions it will be rarer for pensioners not to be fully self supporting and paying tax on their pension each year, unless they've only ever worked part time in a low income role).

Why do you think it wouldn't work in the UK, out of interest?

Why do you think it wouldn't work in the UK, out of interest?

I think it could work in the private sector (if we could persuade employers to up their contributions), but can’t see the public sector downgrading their pension schemes and we still have a lot of public sector workers. It would really feel like a two-tier system.

I also think there’s such a long lead time to actually get the scheme properly running - what has it been, 33 years in Australia so far? - that I don’t think it would survive that long in the UK without changing for the worse, based on how many changes the UK has made to pensions legislation over the same time period here.

Tbh, bringing public sector pensions in line with private sector is well overdue. My friend is the same age as me (58) and lived in a shared house with six others when she was training to be a teacher. Literally of of these teachers have retired early, the first one when she was 55 and the last one just this year at 57.
Of course, it will be justified by posters telling me it's necessary because of the stress (like the rest of us are skipping to work every day at the same age), the low pay (that is nonsense - £30k starting salary?), and they will have forfeited some value of the pension by retiring early (obviously, but judging by how commonplace it is, it is clearly still worth it)

This. My MIL has never worked a day in her life poor FIL had to work two jobs. Many women back then were housewives.

I suspect it’ll only be for those who haven’t worked hard and paid in all their lives 😡.

It’s such an emotive topic. Older generations were explicitly told by the government that their state pension was something they self-funded via their NI contributions. They were misled.

I think everyone now knows that - at best - its a taxpayer funded state benefit and - at worst - a kind of State-sanctioned Ponzi scheme that Boomers have benefited from at the expense of younger generations who will pay in and get nothing out.

I agree with the OP that the government needs to come clean sooner rather than later and outline the long-term plans so that people can plan. It’s not fair to just pull the rug out from under people’s feet based on an arbitrary cut-off date. It also creates hostility between generations which isn’t helpful.

Given the amount NI both I and my employer has paid for the last quarter of a century I bloody hope there is still some sort of pension from the state at the end of it!

I'm early 40's and beleive i will get a state pension. But imagine it will be much later in life that i will get it, probably up 70/72 by then.

My biggest concern is if they up the age you can access private pension.

I am also worried about this. I feel strongly that your private pension is your own invested money (albeit it is tax preferred). It seems unfair that the Government can restrict when you access this. I also think it is discouraging to pension investors when the opposite should be happening

But the teacher's starting salary wasn't 30k when the early retirees retired. Not sure anyone has said it was because of the stress, it was just the way things were.
Also, if you were offered this, would you take it? As much to the point, there are arrangements about present pensions that benefit you but might not be around for younger workers. Will you magnanimously hand it all back?

Thought not.

Of course I wouldn't - would you?
That doesn't make it right or fair though.
Retiring 12 years early at the taxpayers' expense when we are short of teachers is crazy - i don't know how anyone could think it acceptable tbh

Yes I'm very much expecting it to be there ! .
I'm 48!!