To think the state pension is a benefit

[hettyGreek]

I've noticed alot of "The state pension is not a benefit" groups that have sprung up on Facebook etc.

I understand that these people "paid their stamp" and all that was asked of them. But this NI money was not put away in a saving account for them, it just went into general taxation. If it had of just been put away in a savings account the state pension would be far far less than it is at the moment and no triple lock.

Aibu?

Of course people blow their pension pots. Most people do not get large pensions.
And children supporting their parents? What about the fifth of women who do not have children? Do they just starve?

People in their 50s have to work till 66 or 67 years of age for their state pension. So only 1 or 2 years before younger people. And many have been working since 16 years old.

Yes, some have worked since they were 16. Lots more haven't, and even those who have are likely to take far more years of a pension than the generations above, whose pensions they paid. This is just a fact. As for only 1-2 more years than younger people, if you think those of us in our 20s and 30s now are actually going to be getting state pensions at 68, I have an exquisite seafront property in Wolverhampton I'd like to sell you.

I am 51, I highly doubt I will be able to retire when I have been told.
Those who have worked since 16 are likely to be working class and live far less years than the average. So no, they will not cost a lot. The people who most benefit are actually well off people who are far more likely to live to a long age, and to pay for private healthcare to extend their life. But generally well off people benefit far more from the welfare state overall, than poor people do.

You need to define your terms, I think. What's 'a lot'? It isn't necessarily the same as 'less than more affluent pensioners' and you seem to be conflating the two. While there is a class divide wrt life expectancy, raising that doesn't address the issue of whether younger pensioners and those who will be entitled to pensions in the next decade or so are going to have more pensionable years than those whose pensions they paid in the past.

There will of course be individuals with no or few pensionable years, as there have been since pensions were introduced. But given the average life expectancy until fairly recently and the fact that average lifespans below 70 are a minority even amongst working class communities in the UK, this doesn't change the point that this is a cohort who are going to be taking more pensionable years than they paid for in all but the most deprived communities (and think about what the average lifespan was in those communities a generation or so back- this goes back to the point about not paying for as many pensionable years).

Yes over 70. In Blackpool men live on average till 75.2 years of age. Hardly a grand old age. By not a lot, I mean an annual pension of £4,000. Like many people, I paid into my pension to top up the state pension, not to replace it.

"the average private sector occupational pension pays out around £3,700."

Ah, when you said 'a lot' I assumed you were talking about pensionable years. Regardless of what anyone's intentions were or views on the matter are, those claiming pensions now and due to soon are, on average, going to be taking more years than they funded for the generations above when they were paying (though at 51 I wouldn't bet my house that I don't own on you being in this cohort, and I'd certainly not assume my private pension would pay what I hoped, but maybe).

This means the generational contract talked about upthread, and given by some posters as a reason why younger generations ought to pay for their retirements, is very different to what it was. These things aren't really in question.The issues are, should we (continue to) fund retirements for certain age cohorts that are greater and longer than the retirements they funded themselves: if so, how do we go about it and if not, what are we going to do instead.

This is a rather simplified model, but bear with me.

Option One: Raise the retirement age, and then reduce the pensions.
Outcome: More older workers in employment and more younger workers out of employment. Retired population has limited spare money, so only spends on essentials.

Option Two: Keep the retirement age as it is, and pay pension based on years of input.
Outcome: Older population retires and frees up jobs for younger population. Retired population has time, health and money to lead an active life, thus putting money into the economy, and creating jobs (leisure, education, services, etc). Younger workers (being in employment rather than on benefits, or having more senior posts) have more money so also spend more, putting money into the economy and creating jobs.

If you go with option B, payment based on years of input, a lot of pensioners are going to be on considerably less than they are now. Pension credit means that even if you never contributed anything you still have a minimum income. I know you said your model was an over-simplification, but I think it has to address the non-contribution based pensioner benefits to be at all realistic. They're such an important part of the landscape.

Two words for OP Piss Off. Not very constructive I know!

I see paying National Insurance the similar as any other type of insurance like house insurance, you pay a nominal amount each month and you then make a claim when necessary and in return you receive a 'benefit' in this case with NI you can claim for state pension, JSA, Maternity and bereavement. In the case of house insurance I cam claim for furniture, cash etc. to certain limits depending on what I have paid in and so are some of the NI benefits which are contributions tested.

I am not so bothered about the generation thing to be honest, if someone worked and paid their NI and also did well and made money in other ways then good for them but they are still entitled to their state pension from moment of retirement to when they die irrespective of how long they receive it for. I am sure when I retire in 35 years time there will still be the same generation argument going on.

Older people were told by the Government that National Insurance was a Government insurance scheme. You paid in, you got certain benefits when you need them. So those of you who think it is weird for people to see it this way, this is exactly how the Government used to explain it.

Spectre - you raise the two ways of goind this in Europe (the UK as usual is a buggers muddle between the two options). Either very very high NI as in many EU states and a high paid into pension/benefits system and just about nothing if you don't pay in OR you pay a small contribution just in case you need state benefits later but you probably won't need them - a kind of life insurance model.

We definitely have a mixture of the two and particularly those older people who use life savings to buy back lost years of NI to get a bit closer to a full (i./e £7k a year) state pension it is a bit unfair on them to say they have not "contributed".

I am not so bothered about the generation thing to be honest, if someone worked and paid their NI and also did well and made money in other ways then good for them but they are still entitled to their state pension from moment of retirement to when they die irrespective of how long they receive it for. I am sure when I retire in 35 years time there will still be the same generation argument going on.

The generation argument will be quite different because the people at retirement age will have funded the generations above them to retire for many more years than those at retirement age now did for their forebears. So 30 year olds then won't be saying the same things to 65 year olds as are being said now. The problem is the numbers. I don't find talk about entitlement and contributions particularly helpful, it just gets emotive. The reality is that if we want to pay for people to retire for more years than has ever been the case, particularly when the majority haven't paid in anything like enough to cover their own retirement costs, that money has to come from somewhere. It hasn't come from the contributions already paid.

Your analogy with house insurance is interesting and also very different to this scenario, because that's predicated on most people not needing to claim it. Whereas the vast majority reach pension age. If as many people claimed on home insurance as claim state pensions, either your premiums would have to be much higher or you wouldn't get a great deal back when you claimed.

Correction- I don't find talk about entitlement and contributors very helpful, sorry. Not contributions.

Indeed - we can either have a just in case but most people wont' claim (benefits, pension, sickness cover) or we can have a high premium system where if you pay in take out or our current muddle that you pay in but if you don't the state pays you almost as much anyway in benefits so very little difference between whether you bother to be careful or not.

So the measures we are taking - retirement ages up to nearly 70 (even mine is 67 and I am one of the older posters) etc should help a bit. I supose the very bad diets of the 60% of Britains who are over weight etc will help too as they'll die off. Keep up the donut and colas everyone and aim for 20 stone.

The issue for me is that when I started paying NI it was very much sold to me as an insurance policy to cover health, pension and working age benefits. The changes over the last 20 years have massively eroded the safety net for working age (limiting access conditions, no uprating of capital limits, relative falls in contribution based JSA, withdrawal of mortgage interest support etc, etc). Cuts to access to health and social care and charges, especially for the disabled, have also been concentrated on working age (despite the fact that the vast majority of health spending is on post retirement age people). The income related element of pensions NI has also now been abolished but those retiring over the next 15 years are protected - this is a further disadvantage to high earning youngsters who will be paying for those protected who retire over the next couple of decades.

I come from the land of the deep fried Mars Bar. Life expectancy difference means Scots are drawing a lot less state pension. I think the regressive nature of the benefits system is not thought about enough.

Everyone pays tax. Even those getting JSA JSA is only taxed if you get a job within the tax year and it takes you above your personal limit and then its usually a case of just having your tax code adjusted for the next tax year or even the one after that, my sister had an £83 underpayment for tax year 2013/14 and it only this tax year 2016/2017 that she had had her tax code adjusted so they can claw it back.

Its not at all like the tax my pensioner husband has taken out of his private/state pension every month or the tax I have taken out of my salary every month.

I remember about 30 years ago when I started working ( I think it was then) when there was a massive difference if you were between jobs and had NI contributions in the amount of your unemployment benefit and those who had no NI contributions. However we increased and increased the level of benefits to ensure those who have never worked and ditto pensioners on pension credit and housing benefit now have very much the same. Now we did that because we are kind as a nation and wanted benefits for even those who never did a day's work in their life to be civilised. However the downside is that the incentive to work has gone from the benefits side of things anyway.

I would rather we were more straightforwarfd and moved to abolishing NI, increasing income tax a bit and just having basic benefits with no difference between whether you worked or not or a universal payment to everyone out of work or in (but much less than current benefits cap).