To cry over state pension age speculation rise to 75-81

[feellikeahugefailure]

www.telegraph.co.uk/news/politics/georgeosborne/12179375/Work-till-youre-75-or-even-81-under-Government-review-of-state-pension-age.html

Where has it all gone wrong? My parents could buy a home one one income for 3 times annual wage. Dad retired at 55, mum never needed to work and has been claiming a state pension for over a decade since 60. I do a similar job to my dad.

Where I live the average house price is 13 times my wage. My pension I've been paying into for over 10 years will if I keep paying into it for almost 40 more years give me 2'000 a year if it does averagely and 1'000 if it does poorly, and it probably will do poorly. Then no state pension until I'm about to drop dead. Can't afford a house or to put money away for retirement.

I think so much of this is scaremongering.frighten people enough. People will become even more stressed. Get sick. Some will take their own lives. You get the picture. Cynical old methinks it's another way to cull the population.

I think that is the main agenda.

Barefoot - that article seems to say the opposite. That there is a fund for National Insurance, and when it runs dry general taxation is used.

There is currently a surplus in the fund, but it is due to run dry in the mid 2030s, creating a pensions crisis.

81. FFS some poor people can barely walk at that age. Even 75 is too old, so let me see. They are expecting 80 year old fire fighters to climb up ladders and rescue people from burning buildings. I'm sorry but. It's just not viable, and that's not me being ageist. It's me being realistic. When exactly do people get to sit back and enjoy their retirement.

I'm in my early 50s, same kind of position as Cleaty upthread. My current state pension age is 67, but with a very clear warning that it's subject to review. I'm not counting on it remaining at 67, or even 68 - I think it'll be at least 70 by the time I get there if indeed a cash pension still exists.

Here's the reason. The 'baby boom' in the UK had two phases. There was the post-war boom in the late 1940s, then a levelling off, then a further boom in the mid-1960s. I think the crunch will come when the mid-60s boomers, now aged around 50-53, get to state pension age. If it stays at 67 then we'd be retiring at a time when most of the post-war boomers are still with us and collecting their pensions. I don't see that being possible unless the country massively changes its priorities (which is unlikely). So I think we'll be working long into our 70s, and I wouldn't rule out means-tested benefits replacing state pension for us. I'm saving as hard as I can.

Just out of interest mornington - how much are you saving a month/year? Am 47 so in a similar boat to you state pension age wise. Have done very little planning for later because I am stupid, but plan to set aside some money every month from now if I can.

Mrs Hudson. It's not always about being stupid, is it. Many hard working people, can't even afford to live day to day. Let alone save for a future that bluntly you may not have. A morbid but none the less a realistic statement.

No I agree Ilive and I was not having a go at people who cannot afford to think about the future. I have been very head in the sand about a lot of things though - finances included - when though I am not a massive earner or anywhere close (have been a SAHM for a long time and am now working as a teaching assistant!), there have been times in my life when I could have thought about the future and been a lot more careful with what I had. I regret this quite a lot but can only work with what I have / am capable of from today.

Yes am aware that there may be no future. That's a weird one isn't it. Trying to balance out making life today pleasurable with things like trips, experiences etc, against saving (however little) for a future that might not be there. I guess the consolation is that if that is the case, my dc can have the money.

mrshudson I'm 'saving' at least a third of my take-home pay (I take home about £2,500 a month) most months, sometimes a bit more, but at the moment that most of that is extra payments towards paying my mortgage off early. I was in rubbish jobs on rubbish pay as a SP through my 20s and early 30s, so I was a late starter (for our generation) in getting a mortgage and into a job with a decent salary and pension scheme which I still feel lucky to have. I expect to finish paying off my mortgage in about three years' time, after which a third to a half of my take-home pay will go into savings for retirement, depending a bit on what my kids are doing and whether they still need any help.

Many hard working people, can't even afford to live day to day. Let alone save for a future that bluntly you may not have.

Meant to say, I agree with that, and I hope my reply to mrshudson didn't sound smug. I know I'm much more fortunate than so many others who won't have the same opportunities I have to put something by for the rainy day that none of us knows whether we will see.

People need to stop thinking the state will provide for them. Because there is no such thing as the 'state' - only other people working and paying taxes!

Can't remember which poster made this point but I totally agree. The pension age does need to be raised (although 81 is madness).

I'm 37, my plan is try and save money now up until the age of 60. Then move career to something part time / less demanding. I would have no objection to working on the tills at Tescos.
There's no way I or the country can afford for me to retire in my mid 50s like my mum and dad. They are currently mid 60s - retired but able to work in a low pressure job. I expect they have another 20 years ahead of them (obviously their health will decline over time).

Thanks mornington. My agency job as a TA (if I get long term work) pays about £10,500 a year (if they agree to the £70 a day I am going to ask for!) but I am hoping to move on to freelance translation once I have got the exam out of the way and built up some experience. Am hoping that then I will earn more. Am also hoping to top up my TA wages in the meantime with extra work I can do during the school holidays or in the evenings.

I don't know why it has taken me so long to worry about the future . I am sad that I didn't have the confidence to go for something much more stable/lucrative when I was younger. Am advising my dc to become as financially independent as possible.

You sound very organised/determined mornington. I am impressed. Good luck with your plans.

Hi

Even if there is a surplus in the NI fund, it is still paid by current NI payers, not past NI from current pensioners.

As sad as this sounds, I started to plan my retirement in my teens. I chose a career path at 17 that I knew would give me a job guarantee with a fairly good pension (nursing) it's not high pay but it's safe and reliable. However without my baby boomer parents I would have struggled to get on the housing ladder, they have contributed towards my deposit while income has paid my mortgage. I hope to have paid my mortgage by the time I retire, then downsize and use the equity to bump up my mortgage. In reality what will happen is the price of houses will collapse and I'll be left with a mortgage bigger than my house!!!

Yes I do understand that bit Barefoot, but given 60% of the population is of pre retirement and therefore working age , if you set retirement at say 65 , that's quite a large chunk of the 65 million or so of us paying NI , so if we increase that payment a little then will it maintain the surplus ?

Nope. NI has been increaeed, by stealth, significantly. It now kicks in at a lower level. It used to reduce after a certain threshold, now it doesn't. It also has been used to fund other benefits.

And the fund is invested in gilts, which of course carry very low interest rates and have done since the crash.

Shove, there is more going out of the fund than coming in, the opposite of the case in the 1990s, so the surplus is reducing year on year.

I don't think my first post was super clear and accurate, though, so apologies!

Gotcha! So the answer is basically to increase national insurance, right?

Well, national insurance is just tax on employees. It was a stroke of marketing genius many decades ago to split it off.

Pensioners and people who live on dividends or interest payments pay income tax but not NI. Personally I think an income tax increase is more equitable.

The article seemed to suggest that the problem was a relative decrease in wages since the 1990's of 11% , so in turn lower NI contributions , that's why I questioned if an increase in that contribution would avert the crisis .

I heard a former politician who now works in pensions say that the expectation that a manual labourer or nurse, teacher etc could not be expected to work until 75 but that people will need to adjust their employment to suit their abilities, eg work in a call centre or less physical job. I know there's a problem. It does need to be tackled in order to to prevent a time bomb. I guess I'll have to keep up the occupational pension and hope I can still see a bit of retirement. It does make me sad.

Apologies if this has been pointed out already upthread, but:

The '81' figure is from this, "Royal London, the pensions provider, has just published research suggesting that today's workers will need to retire as late as 81 to enjoy the same standard of living enjoyed by their parents." Take that all apart - 'as late as' (so for many it will not be that late) and 'same standard of living etc' (many of our parents have very comfortable lifestyles - but many don't. I don't expect to have two cars and a 4 bed house in retirement (nor do i have them now), although a lot of older people do have those things).

That is not a government source, nor a think tank source. There is no suggestion at all that the State Pension Age will rise to 81. If you are under 35 now, you are likely to receive your state pension at 68.

"People need to stop thinking the state will provide for them. Because there is no such thing as the 'state' - only other people working and paying taxes!"

Claptrap there is such a thing as the"state" this argument is just the same as the Thatcher: "There's no such thing as society". The state clearly exists and provides not just for people who need it for subsistence living but for a massive amount of other things which benefit many of the "haves" to a far greater extent than the "have nots", failure to acknowledge this is farcical.

So there is a state when you need the rule of law, protectionist trade policies, subsidies for industry, industry bailouts, long term infrastructure planning etc. But when someone has paid a third of their income in tax for 35 years it doesn't exist?

It makes me feel sick. My mother died a few months ago at 70 (after 10 years of cancer), my father at 57 (after a stroke at 44 leaving him paralysed on his left side). I am 43 and doubt I'll be allowed to retire until I'm at least 68. I really would like some chance to retire and have a bit of good health before I die!

The majority of individuals are net absorbers of state resources, not net contributors.

Taxes and NI are used for education, health spending (huge, but efficient compared to insurance based systems), other benefits, roads etc. You can't equate a third of income paid for, what, 40 working years with coverage for two decades as a child/in education and two or more in retirement and expect it all.