Means testing State Pension

[CuriousMariette]

Do you think the time has come for this to be introduced? I don’t think the current system is sustainable as many people are living too long. I know it’s not fair and would be political suicide but Pensioner’s didn’t even suffer a 80% furlough during lockdowns. I say this from a place of having “paid in” as people say for 30 years plus already and would likely not receive a State Pension in this scenario.

@monfused

Anyway, it seems from other discussions most people are quite happy with where we are.

I don't understand why though? I think it's shit & getting shitter & worry for my dc & their generation in general. I'm really not happy.

I agree, but your darling children and their generation had better get more political! Eventually a demographic tipping point will come when enough of them (a) exist, and (b) start doing something. At that point they had better start taxing the bejesus out of my generation!

We had a revolution first.

I still don't think it's the English way regardless of who had one first 😆

@monfused

Anyway, it seems from other discussions most people are quite happy with where we are.

I don't understand why though? I think it's shit & getting shitter & worry for my dc & their generation in general. I'm really not happy.

I haven’t been happy in the 34 years of my adult life we’ve had a Tory government. Get used to it.

Eventually a demographic tipping point will come when enough of them (a) exist, and (b) start doing something.

I'm not sure we will ever get to the point where there are more young people. Certainly not the way it's going. Fortunately mine have EU passports so they maybe need to escape!

I'm sure it works well. But the problem with suddenly removing a benefit that people have paid into is that it causes a massive disincentive to those currently working. The social contract of NI in this country (someone referred earlier to the link between the state pension and NI contribution years) isn't something you can rip apart easily.

I've been a payroll and HR manager for many years, mainly retired now but keep my hand in, and you are so right. Interest in pensions has taken many knocks, Maxwell, Equitable Life, Gordon Brown have all knocked people's confidence in investing in their future. If we want people to provide for a decent retirement they need to have confidence it will be worth it or the will say, as many have said to me, "It isn't worth it." "I'll never benefit anyway, it will just stop me getting benefits." "I need the money now." "I want the money now."

I've talked to people about it and sometimes when you point out they are getting free money from the govt and their employer they come round to it but lots don't.

Get used to it.

Did you mean to be so rude @Blossomtoes?

I'm also not really sure how playing top trumps over how long someone has been unhappy is useful to the conversation but crack on! 😆

@monfused

We had a revolution first.

I still don't think it's the English way regardless of who had one first 😆

I think the English might be like that laid back person who never loses their temper, until they do and then God help everyone.

@monfused

Eventually a demographic tipping point will come when enough of them (a) exist, and (b) start doing something.

I'm not sure we will ever get to the point where there are more young people. Certainly not the way it's going. Fortunately mine have EU passports so they maybe need to escape!

Thank god (and my Irish grandfather) so do I, my previously outlined retirement plans will mostly be taking place elsewhere :p

@monfused

Get used to it.

Did you mean to be so rude @Blossomtoes?

I'm also not really sure how playing top trumps over how long someone has been unhappy is useful to the conversation but crack on! 😆

No I didn’t actually. I don’t think I was rude. I was just pointing out that whatever government is in power someone will be unhappy. 🤷‍♀️

I think the English might be like that laid back person who never loses their temper, until they do and then God help everyone.

Perhaps

How would my other in law afford her third holiday abroad each year though?

Thank god (and my Irish grandfather) so do I, my previously outlined retirement plans will mostly be taking place elsewhere :p

Im sure it's the wisest option.

@monfused

I think the English might be like that laid back person who never loses their temper, until they do and then God help everyone.

Perhaps

Scary when those people lose it, I'm not sure if they are worse when they lost it or if it is the shock element but I used to have a boss like that and the first time I saw it happen I was in shock.

my FIL had no pension as he didn't work for most of his life. He did however get 100K from my MIL when they divorced (for his share of the house). He was living with his parents for a while but now has moved to Thailand (and has a Thai wife). I have met him once when he flew back to see his dying mum. He is very happy and lives in a large house in Chiang Rai with a rescue duck, pet dogs as well as his wife's family. There are cafes there and beautiful nature and temples. He doesn't speak Thai at all, his wife speaks very basic English. I don't think there is any place in the UK where he could have such a retirement for 100k and zero pension.

Would that be an option for many Brits? As long as you have £17k in your bank account and are over 50, you can qualify for a retirement visa. I get that if you have kids, that would be less of an option. my FIL had 4 kids but most of them aren't on good terms. But perhaps for childless retirees or retirees whose children have emigrated, that may be more common. I think many people in my generation (I am in my 20s) wouldn't have kids and I am only planning on 1 child. I actually think the chance of my child staying in Uk is quite slim...

@rookiemere

Yes *@user1497207191* that's what I meant - scrap the higher rate of tax relief on pension contributions, not all of it. I had it in my head that this might have happened already but maybe it was a manifesto pledge instead.

As far as I know, no party has proposed this.

Even the most recent Labour manifesto which proposed 45% tax for earnings over 80K, didn't remove the high rate tax relief - so in fact higher earners would have received more tax relief on pension contributions under a Corbyn government.

Hi @daimbarsatemydogsbone

As far as I know, no party has proposed this.

Even the most recent Labour manifesto which proposed 45% tax for earnings over 80K, didn't remove the high rate tax relief - so in fact higher earners would have received more tax relief on pension contributions under a Corbyn government.

The idea has been knocking about for years, at least since George Osborne's time.

Eg
www.unbiased.co.uk/news/financial-adviser/could-higher-rate-pension-tax-relief-be-scrapped

@onlychildhamster

my FIL had no pension as he didn't work for most of his life. He did however get 100K from my MIL when they divorced (for his share of the house). He was living with his parents for a while but now has moved to Thailand (and has a Thai wife). I have met him once when he flew back to see his dying mum. He is very happy and lives in a large house in Chiang Rai with a rescue duck, pet dogs as well as his wife's family. There are cafes there and beautiful nature and temples. He doesn't speak Thai at all, his wife speaks very basic English. I don't think there is any place in the UK where he could have such a retirement for 100k and zero pension.

Would that be an option for many Brits? As long as you have £17k in your bank account and are over 50, you can qualify for a retirement visa. I get that if you have kids, that would be less of an option. my FIL had 4 kids but most of them aren't on good terms. But perhaps for childless retirees or retirees whose children have emigrated, that may be more common. I think many people in my generation (I am in my 20s) wouldn't have kids and I am only planning on 1 child. I actually think the chance of my child staying in Uk is quite slim...

I know someone who plans to retire to the Philippines with his wife who is from there - she has an NHS pension as she has many years of NHS service and family there so they should be fine.

[quote AuntyBumBum]Hi @daimbarsatemydogsbone

As far as I know, no party has proposed this.

Even the most recent Labour manifesto which proposed 45% tax for earnings over 80K, didn't remove the high rate tax relief - so in fact higher earners would have received more tax relief on pension contributions under a Corbyn government.

The idea has been knocking about for years, at least since George Osborne's time.

Eg
www.unbiased.co.uk/news/financial-adviser/could-higher-rate-pension-tax-relief-be-scrapped[/quote]
Yeah - it's always "could this be next?" and it never happens.

The English haven't had a revolution. The civil war was just a lot of posh boys arguing over who gets to stay up after lights out. Unfortunately it dragged in the rest of Britain (sorry about that).

DGR The Whigs certainly have a certain resonance with politicians these days!

We have actually had two real revolutions: the Civil Wars and Interregnum of 1640-60 and the Glorious Revolution of 1688-89

I'd say yes but at a high threshold. Like say anyone who has income of £50k+ per year clearly doesn't need a state pension on top!

@pradavilla

I'd say yes but at a high threshold. Like say anyone who has income of £50k+ per year clearly doesn't need a state pension on top!

So how do you then stop people taking a lump sum out their pension pot so it keeps their pension income below the threshold?

Retire early use up their private pot before getting the state pension.

Many ways for people to get round it then throw into the mix the cost of actually means testing. Will cost more than it saves.

I think you can't do this without compensating people part way through a career who havent saved enough with state pension.

They don't have enough time left to make up the missing amount even if they are reasonable earners as the compounding makes a huge difference

People with an income of over £50k are often working in the private sector and as a result have a crappy defined contribution pension. The state pension is the only guaranteed income they have in retirement. There’s no gold plated public sector pension for them, unlike the likes of hospital consultants who are retiring early as their pension pots are worth so much and they don’t want to pay the resulting tax bill.

Another issue with means testing is how do you value what people have in investments ISAs, and other shares.

Not to mention it becomes a disincentive for people to down size their property. If it means they then loose out on pension because they then have too much money in the bank