To think the govt should just scrap state pension

[DexyMidnight]

... For new entrants.

Everyone born after say, 2006, should pay less NICs and be mandatorily enrolled in an Australian style pension where you must pay 9.5% of your pre-tax salary into a pension fund. Even part-time, term-time, ad hoc workers.

I worry often about whether the state pension will exist when we are older. Will it be means tested? Can it go on with an ageing population?

A solution along the lines of the above would let the younger generation know where they stood.

@Yabbers. Not strictly true. Just depends o how your SERPS pension was invested. Currently any contracted-in proportion of your state pension is fairly small by comparison. My SERPS pension started off my private pension & will give me far more than the small amount it would be if I had left it as part of the state pension.

My dh is not a well man. As it stands it looks like he is going to have to give up work soon due to ill health which is at least 10 years before state pension kicks in.
Because of this he has been paying 40% of his salary into his private pension for a few years which obviously has had an impact on our current living.
This pension pot is not in the hundreds of thousands and tbh is probably the equivalent of less than 10 years of the average persons wage.
We do not qualify for any benefit as we have savings.
On paper it might look like we are ok, savings, private pension etc but we are in our 50s so this will probably have to last us until we reach the age of 67/68 when the state pension kicks in ( if he lasts that long )

I’m 41 and the Government have raised my retirement age to 68. My husband is expected to retire at 67, which is going to be tough for someone in the postal service...much like nurses, firefighters, builders and others in very physical jobs. I expect my 13 year old will be told to retire even later...I think eventually, people will die before having chance to claim it. Sorry for being morbid.

I don’t think it’s morbid to state the facts and one fact is that when the state pension was introduced people weren’t expected to last a few decades on it. People are living closer to 100 more and more, largely thanks to healthcare that just didn’t exist previously, and that was never in the original financial forecast.

Unfortunately just being alive isn’t the same thing as being fit enough to work. It’s an issue that needs far more thought to deal with. Even a private pension and property doesn’t necessarily safeguard you as medicine advances.

I don’t pretend to have solution but I also know the government doesn’t either and successive ones appear to be crossing their fingers that it’ll sort itself out.

State pension £8767 pa. For people retiring now it is. But for woman aged over 66 and men a little older, it's not much more than £6000.

Something that didn't get much publicity when they raised the value of the state pension was that those who were old enough to be already receiving it didn't get any increase.

I think they should abolish NICs and increase the tax rate enough so they get the same amount in. Then we could all stop fussing about “ooh I paid in I should get out”. Because you’re not paying to use the NHS and you’re not paying into your state pension. It’s all just tax. And we all pay tax for some services we don’t use, and at some point in our lives we all benefit from services we’re not paying for.

If you look on www.gov.uk & have your National Insurance number you can see exactly how much NI contributions you have paid each year & it explains what the money contributes to

Secondly, you can see when you are eligible to receive your state pension & how much you should receive

With today's technology there is no excuse not to know the facts (not so easy to find out in pre internet days)

I believe that the state pension will continue to exist, but the age may continue to increase
Not everyone can afford or have the means for a private pension

Some people are living longer, but perhaps in poor health.
I know people who have already been retired 30 years

Even if you have contributed 30+ years, you keep paying NI if you are earning

It depends @MereDintofPandiculation. Some over 65-s who are already retired might be getting the state pension contracted-in elements & even graduated pension. When thecnew pension came in (S2P) it was at the then level of the state pension. Some recipients at the time might have been receiving an employer led pension as well as if that was contracted out their state pension could well have been less - but their occupational pension made up for this.

@MereDintofPandiculation that’s not accurate. The basic state pension for pre April 2016 retirees is closer to £7K than £6K and doesn’t account for SERPS.

Basic state pension for pre. 2016 is £129.20 per week, but there’s up to an additional £176.41 per week. So far from the existent claimants being left behind, some have almost £16K per year! Obvious not all, but it’s misleading to suggest older pensioners all get less.

Erm I'm 33 and the current 0-15yr olds will be paying my state pension. So no. Yabvvvu.

If there is no state pension. What are people supposed to live on in their 80s, 90, 100s ?
Health usually starts to decline

We should be celebrating that we provide for our elders
Not trying to remove all support

Do any of you know any older people ?

Wouldn't they be living off their DC pension? And if that was insufficient, they'd qualify for state pension or a pro rata portion in accordance with their needs?

Their children’s pension? Seriously?

Not strictly true. Just depends o how your SERPS pension was invested

Then you are the exception rather than the rule. There's a reason they stopped it.

No I think Dexy means defined contribution pension, not their dchildren's pensions - or a means tested pension if the private pension isn't enough.

Means testing would cost more than it saved. It almost always does. It’s essentially a civil service job creation scheme. Anyway abolishing the state pension would be political suicide.

DC = children’s pension

Yes I meant defined contribution pension not their 'dear child(ren' s) pension' 😂

I'm not suggesting anyone be left in the gutter I'm suggesting that, if it's inevitable that the state pension will be means tested in future, wouldn't the right thing be to reduce NI and tell people : 'you're on your own, we're going to make you save for it' and then the state pension could be fir those who really need it?

Firstly they will never get rid of the state pension, they cant. The lawsuits would bankrupt the country multiple times over. However I genuinely expect to never retire I'm 38 and believe I'll work into my 70's and basically work to death, even with private pensions they will be raided for tax again and again to be worthless.

"if it's inevitable that the state pension will be means tested in future, wouldn't the right thing be to reduce NI and tell people : 'you're on your own, we're going to make you save for it' and then the state pension could be fir those who really need it?"

I don't think it is inevitable that it will be means tested though - if people don't want it to be, they can vote against it.

I think the system needs to change. People actually need to pay into it and not just through NICs especially as many get them paid for them. It needs to be sustainable and people need to take personal responsibility.

Isn't life expectancy stagnating? It seems unfair to cite "rising life expectancy" as a reason to increase the pension age when this doesn't apply to the generations facing this.

I've read a number of reports on recent studies showing this - and I think there's also a suggestion it will start to fall. I guess this is linked to similar studies suggesting a fall in standard of living expected. So, with the increasing pension age, many people are looking at dying well before any pension is payable, presumably quite a few will have to claim disability benefits instead.

I think the Australian system is fairly reasonable for what it's worth, likewise their healthcare system.

Bit of a problem is the fact that the State Pension paid out from Day One before anyone had contributed anything. Today's contributions fund today's payments.

It is not and has never been a pension. It is retirement benefit.

Very good post, Katmarie.

@SoonerthanIthought it won't be on anyone's manifesto but that's not to say a party won't get in and then introduce it. A la Lib Dems