When will people realise that pensioners have paid for their state pension.

[notsafeanymore]

Every time there is a debate about the cost of living pensioners get a bashing.
And some have also paid for a private pension.
It's people who have never worked that should be targeted first.
I'm not on about the disabled. It's people who are benefit cheats and have never worked.

Strictly speaking, people drawing pensions now were paying for previous generations pensions.

The issue is that there were loads of boomers paying those pensions for a far smaller demographic of pension recipients.

Now we have this huge cohort taking pensions (which they are absolutely entitled to) from a dwindling cohort of Gen X and below. And the boomers are living much longer than the generations they financially supported. It’s not viable long term.

I say this as someone in her sixties who will be drawing my pension in the next few years, but I am very worried about how on earth my adult DC will be taxed in order to support pensioners as we live to an increasingly old age.

It isn’t blaming pensioners to point out this isn’t a sustainable scheme.

You’re muddling up a few issues here OP. Firstly, current pensioners are having their state pensions paid for by those people currently in work. Paying national insurance isn’t like paying into a savings account that you then draw down when you hit 67. Current retirees may well have paid NI all their lives but that was to fund the pensioners at that time.

First 2 posts have nailed it

I’d be really surprised if the contributions people made over their lifetime cover the amount they draw in their retirement. It’s just not enough.

Yes, I’m afraid @WhereverIlaymycatthatsmyhomeis right. None of us are paying into our own state pension, only a private one (if you have one). Pensions were based on the idea that the population should always at least be at replacement, but preferably growing. Now we’re way under replacement and people want it to shrink even more, but don’t realise it’s a problem for supporting our aging population. Pensions are the government’s single biggest outlay!

Some have paid, some haven't. My DM gets a full state pension and well over half of her contributions were due to receipt of child benefit while she was a SAHP - she worked full time from 16 to 19 and then part time from 50 to early 60s when she received her state pension at around 62. Many women of her generation are in a similar position, rarely working full time so tax/NI contributions from earnings were small.

This is also the generation who could buy family houses on a single low wage, that are now worth significant six figure sums with many also having final salary pensions that paid out from age 60.

You're wrong.

Some pensioners have paid something towards their pension, healthcare and social care needs as well as those free bus passes, free prescriptions, winter fuel payments and other perks.

Some have paid nothing at all.

Most have not paid anywhere near enough for what they are costing.

Most have sufficient assets and resources (usually housing) that they could afford to receive less and pay more in for the services they use.

As one of the wealthiest age groups in the country, who are the largest recipients of government money through different channels, the group needs to pay more.

First two posts nailed it. It needs to becomes means tested, the country cannot afford to pay half of the welfare bill on state pension anymore.

Never, because you're wrong.

Pensioners as a cohort did not pay in enough to cover the pensions they now receive as a cohort. This is a fact. Some of them were individual net contributors. Others, more, weren't.

The group of people who now claim pensions includes benefit cheats, so the two groups aren't distinct and there is in fact an overlap. There aren't a lot of people who've never worked at all, but again the current crop of pensioners includes them.

£30,000 salary: £1,394 per year
£45,000 salary: £2,594 per year
£60,000 salary: £3,994 per year 1]

According to a quick google, after 35 years, that would be worth £200k. There’s no way that covers retirement, let alone anything else that NI is supposed to cover.

What annoys me is when people speak of the triple lock like it’s a lottery win. A percentage of not much is still not much .

No, even simple maths confounds this. I’m paying about £800 a year to get my full pension in 14 years.

do tell me where I can put £800 now per year to get £12,547.60 per year in 14 years time?

even with compound interest I’d likely get one fortieth of that (maybe).

They didn’t pay for the pension, they paid for (or met conditions such as claiming child benefit, income support or JSA) to gain entitlement to it.

Removing benefit from those who have never worked or have ‘cheated the system’ (how do you actually cheat the system) would barely make a dent in the welfare bill as nearly 50% is pensioner cost

Much of the rest probably housing benefit/childcare/to prop up workers.

@hattie43 A percentage of too much is still too much.

The issue is OP, that the idea is that pensions are paid by current workers.

This was fine when people had lots of kids and died relatively young - you might have ten workers for each pensioner.

But now we have a growing population of retired people, living far longer - and a shrinking pool of workers and a collapsing (collapsed!) birth rate.

We currently have around three workers per pensioner. That will drop to two workers per pensioner within a decade.

This means the funding model is unsustainable.

13 million people are in receipt of the state pension. It’s not sustainable - and yet the cost of it keeps growing even on a per person basis thanks to the triple lock.

Where on earth did you get that from? It’s completely not true.

I don’t think I’ve ever seen it described as a ‘lottery win’, but workers tend not to have inflation based annual salary increases…

Even if it’s only a small amount, when multiplied by the 13 million old age pensioners as a non means tested benefit, it becomes quite a big number in total cost to the state.

That the state pension isn’t a huge amount - most people pay in an absolute pittance compared to what they take out.

They should give everyone a decade and just reform the state pension. It’s time. Even if they stopped all the disability benefits, it wouldn’t make a dent in what the country actually needs money wise. Pensions would make a hefty dent. Someone needs to just bite the bullet and get it done or there won’t be a country left soon.

What exactly is a benefits cheat?

someone who commits fraud and claims what they are not entitled to?

Thats not a failing of the structure is it as committing fraud is breaking the law and not built into the system.

Can anyone give an example?

They haven’t. My GMa got a state pension for 38 years. She worked in a low paid job for 7 years. My mother gets a state pension (23 years and counting. She worked FT for 9 years and pt for 16 years. In 2 years she will have been claiming pension for as many years as she worked. My dad did some sort of top up so she would get a bigger pension but it’s unlikely that what he put in is a drop in the ocean compared to what she took out. On the plus side my other dgm, both dgf and df only took about 8 years between them.
The pension needs to be changed to a truly contributory scheme.

The problem is, OP, that the current generation of workers are also paying NI just like current pensioners did, but their pensions will be far less generous in the future. This is why people get cross about the triple lock.

It's generational unfairness.

Then the govt needs to start being honest with workers and say upfront hat the pension will start to decline in year XXXX and people must make alternative provision..

But it must also be related to the number of years NI paid or where is the motivation to work?

I'm 63. I got my first job (weekend cleaning) on my 13th birthday so I've worked for 50 years. I have 45 years NI paid in, plus 37 years higher rate tax. I took having my retirement date moved from 60 to 67 without whining. I still work full time but I'm tired..

I have earned my £12k a year.

Do you think that free childcare for people earning nearly £100,000 is too much? I do.

I’ve just posted this on another thread. The pension is a social contract, you pay now in the expectation of a return. The problem is demographics mean the numbers don’t add up. However, to renege on a contract is err… problematical.

Oh, and when I started work in 1978 basic rate income tax was 33%.