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.

My 70 year old mother has a teaching pension of 12k a year with her state pension on top. She's a home owner and keeps moaning about how poor she is, no mortgage! Don't think she knows how lucky she is!

I am planning on leaving my current job at the age of 50yo as I need light at the end of the tunnel and can't cope past that. I will have a pension (not till 66yo) of 7k a year. Then at 67yo I will hopefully get my state pension. I will obviously need to work between 50 and 66 but whether this is a minimum wage type job with no pension I don't know.

I'm hoping that with no mortgage I can manage on 7k a year and state pension when I do retire.

I'm happy to have a frugal existence. As long as I can heat my home, eat, buy basic clothes as needed, own a dog and a bike I think I will be happy. I'm not bothered about holidays. Id like to be able to afford netflix still!

If they means-test the state pension it'll mean I can spend more money now and not bother saving it. Wayhay!

I wouldn't want to be told that I'd paid 35+ years NI conts but won't be getting the state pension just because I'd deferred some of my earnings for retirement.

Part of the problem is N.I, it is often just lumped in with general taxation, but people think they are "paying" for their retirement.

It has suited governments of both colours to keep this myth going as it stops people at the lower end realising what their real rate of tax is.

For example someone on the absolute highest rate pays about 43% of their income in tax and national insurance, and those on the lowest pay about 31% of their income (after the tax free allowances).

The NI bit hides this ( oh and those on the lowest levels pay a larger percentage of their income in NI and it kicks in at a lower rate too)

I think the government either has to acknowledge the National insurance is not an insurance scheme or get those at the higher end to conribute the same percentage of income as lower (7% vs 11%).

Lurked

That's the rolling figure based on the 3 months to August 2015 and is noted to be a six year high. Going a little further back, the % is lower.

Eg from 2014:

The latest figures for average wage rises also conceal a marked divide between workers in the public and private sectors.
Those in the private sector are now enjoying average annual rises of 2%, including bonuses.
By contrast, those in the public sector are only seeing rises of 0.9%.
The figures also exclude the estimated 4m workers - around 15% of the total- in the UK who are self-employed.

From this:

www.bbc.co.uk/news/business-27047966

But public sector workers are still recieving lower pay rises.

Also it needs to be addressed that when we talk about public sector averages and private sector averages that the averages of the private are dragged down by the number of people earning the minimum wage in the private and realtively few in the public.

Noted, lurked.

Each sector has its advantages - I've worked in both. But sometimes on Mn those who work in the public sector can make assumptions that things are rosier than they are for the private sector (have been on a thread where posters were convinced that final salary pension schemes were still common and that generous maternity pay was the norm, for example)

I don't imagine things are rosy at all, I imagine that most of the "pay rises" have been beneficial at higher management levels and the average is pulled down because others have had smaller rises and others haven't had a pay rise at all.

Sorry, lurked, that wasn't specifically aimed at you

I notice the rises also included bonuses which again are probably more for more senior staff.

I haven't had a pay rise for 5 years. And we don't get increments either.

(lurked - I think this
For example someone on the absolute highest rate pays about 43% of their income in tax and national insurance,

shoudl be changed to

For example someone on the absolute highest rate pays about 47% of their income in tax and national insurance

Upper tax rate is 47% (45% tax, 2% NI) and you lose your personal allowance so I suppose you could argue the marginal 47% is higher but it's not 43%. Basically the state steals half the income (plus indirect taxes) from those it needs to keep happy to feed the poor which is very short sighted of the silly state.

Deo, I took my figures from the hmrc website and tax calculator. Are you saying that they are wrong?

Also your point about the state "stealing" your money made me laugh. Salaries are calculated by firms with the basis of how tax you pay involved. Lower rates would probably mean you'd actually be paid less but get the same in your hand.

You can be all marie antoinette about it if you like, but in this as in so many other things you are wrong. Back to your tacky mansion with you.

I went back and checked my calculations and again I'm proved right.

www.moneysavingexpert.com/tax-calculator/

Someone earning £200,000 a year recieves £116, 586 after tax and NI .

116 586/200,000 = 0.582 x 100 = 58.2 % so at the highest rate of tax Deo, you actually only pay 41.9% of your income in tax and NI. Your argument above suggests that you don't fully understand the incremental nature of the tax system, which is extremely amusing.

Also on £200,000 a year you pay £7,271 in NI which is about 3.6% of income, I think this should be at least the same level as others pay, its fairer.