I know this will be contentious - cost of living rise

[qualitychat]

My mum is a pensioner and gets Disability Benefit and Mobility Benefit and Pension Credit. She receives almost what I get in a month. She is moaning about the Government not doing enough about the cost of gas and electricity, which I agree with. The thing is they have said that people on benefits and pension credit will be given lump sums towards their bills. I am a middle earner and so is my husband. We will likely get nothing. Do you not think it will be the ordinary working families who will be squeezed the most if something is not done?

But still not the same thing - which is why you can’t claim UC top ups to state pension.

Paying into a private pension wasn’t expected for the people who are over age 40 now, much less those already aged over 65! The U.K. state pension isn’t low because it was expected and mandated that people would have private pensions, it was set low because the assumption was that most people would be mortgage free home owners by retirement and not need any money towards housing costs. There would be a few impoverished pensioners who didn’t own their home, but that’s where the welfare state would step in. They didn’t want to set state pension for everyone assuming rent costs in old age, because that would be unaffordable for society to fund.

Why should the younger generations, many of whom will never be able to afford homes, pay extra tax so people who don’t live in their houses and will never have to again don’t have to sell their homes? Even worse, why should they pay tax so someone can inherit a property when they won’t themselves?

Also, plenty of older people lost their private pensions when their companies went bust. Private pensions did not use to be legally protected.

This is just ridiculous. There are elderly people bed blocking in the NHS, for no other reason that they are not safe to be discharged into their own homes because it’s unsafe. You probably did read somewhere that if all these patients could be moved there wouldn’t be a bed shortage in hospitals. But this is because there is a shortage of care home places and patients have to wait for an appropriate place to become available before they can be discharged. Not because they don’t want to pay for care. If they are assessed as being able to pay, then they have to pay.

I agree people going into care homes should have to sell their homes to pay for the care. I also think inheritance tax should be much higher.

That’s rubbish I’m afraid. I’m over 40 and all my working life I was expected to pay into a pension. And I did.

Thé previous generation of boomers had much better work pension provisions which is not available at all to me or my generation. Many very generous final salary schemes even if the private sector. Most are gone now but paying out good pensions to current pensioners.

Sorry but if you didn’t prepare for your retirement it’s not because workplace pensions are a new thing. They’re not.

That happened to very few people in fact.

And why should the younger generations be allowed to get to the point where they’re elderly and haven’t made provision for their own care, so have to rely on the state, who in turn impose what amounts to a tax on the funding sources of those who can ? The point of a social care tax is that your own care is funded when you need it. Not saying fully funded - yes if you have your own home then you can afford to pay, but you would no longer be expected to subsidise those who can’t/won’t. The system is broken, partly because there is no compulsion for people to make provision for later life care. There should be.

And many older people who paid into private pensions had no employer contributions.

www.gov.uk/pension-credit/what-youll-get

the above link explains your mum gets at least £185.

at 90 she will get other benefits too. Also if she gets pension credit that will act as a gateway benefit to other benefits like housing benefit (no bedroom tax for pensioners of course).

Uc is intended for people who don’t work who are below retirement age. Uc claimants are entitled to £77 a week. Pensioners get £185 and no work requirements.

Most did. And many had very generous final salary schemes. So no, pensions are not new at all!

32,000 people from Mirror Group lose their pension with the collapse of the firm.
Equitable Life Assurance cut private pensions, including those already being paid to retirees.
The most well-known ones. But about half the workforce are employed by small firms. When they went bankrupt and pensions disappeared it did not garner much publicity.

Not true that most did. The public sector did and those working decent jobs for large employers. But many of the poorest did not have that.

I very much doubt that the younger generation won’t have to fund their own care. They will be lucky if there is still an nhs or state pension.

It’s whether or not the younger generation pays for the current pensioners care that is the issue. or whether they foot the bill themselves.

There will always be some state pension. There has been one since the 1920s and before that there were workhouses for the very old.
The alternative is accepting that some elderly people would starve to death and/or sleep on the streets.

If you're a middle earner no way is she getting the same as you.

And do you agree that people who can’t be bothered to make provision for elderly care should be subsidised by those who have ? We’re not talking about rich people here. A care home costing £3000 a month for local authority funded residents, costs £4000 for a self funder because they’re paying a levy to help local authorities provide care for those who can’t pay. So, a funding pot of say £150,000 from the sale of a modest home would pay for a place in a care home for a little over three years at £4000 a month. In that time, that resident would have contributed £36,000 to the care costs of LA residents, which would pay for another eight months of care before having to throw themselves on the mercy of the LA and hope that they won’t move them to a cheaper facility. A dedicated social care tax would stop this as everyone would contribute to their own care at a rate they could afford, and those who have their own homes would continue to self fund without the state effectively raiding their funding pots.

Again not at all true. The mirror pension funds recouped most of the missing money in the end. The equitable life guaranteed pensions lost value (because they were guaranteed at an unaffordable rate - would never be available now) but the pensioners didn’t lose all their money at all.

the current generation of pensioners have huge wealth in comparison to what the next generation will have. They have really done very well indeed as a whole.

A dedicated social care tax would get the younger generation to pay for the elderly care so they don’t have to sell housing they don’t live in. No thanks.

I'm sure OP would be the first to complain about her mother squandering her inheritance on an equity release.

a universal state pension isn’t inevitable and it’s unlikely that it will be there for my dds generation. The current generation of pensioners have really done very well indeed.

I didn’t say workplace pensions were new, simply that they were not expected nor mandated. Whole entire industries had no workplace pensions at all until it was mandated in 2012. In 2012, only 50% of workers even had a workplace pension, that rose to 80% in 2020.

Thé previous generation of boomers had much better work pension provisions which is not available at all to me or my generation.

Rubbish, you could have joined the civil service, military or NHS. Not all the defined benefit pensions are gone even now. And not all boomers “had much better work pension provisions” due to lack of availability of workplace pensions and lack of regulation of private pension schemes. Many pension schemes went bust and millions lost all they had saved until government regulation was enacted in the late 1990s…which would have been when todays over 65s were mid career in their 40s. How would you feel if your pension when to £0 now and you had to start over? How much to you think you could save from now?

If you insist on missing the point I can’t be bothered arguing. What I’m suggesting is a social care tax which EVERYONE pays into at a rate they can afford. So everyone pays something towards their care in later life. At the moment there is no compulsion for anyone to make any provision for this, so it’s effectively being left to the tax payer to fund those who can’t pay, with an additional levy from people’s private funding sources. It’s not sustainable.

Most people do not save enough to fund retirement.
I am in my fifties and private pensions were sold as top-ups to the state pension.
After a lifetime of saving, the average UK pension pot stands at £61,897.