State Pension

[JollyPollysjolly]

my Husband is sure that by the time we reach state pension age (me 45, him 49) that it will no longer exist - or maybe when we reach 100 ha! Anyone with any knowledge that can add to this idea so I can argue back?

No knowledge sadly, but I have wondered this.

Surely there has to be a pension paid out to us otherwise will they be asking future generations to pay into a pension knowing they won’t get one?

Who knows what they will do but I work in benefits for older people and the amount that must be being paid out is eyewatering. Lots of people on these old SERPS pensions, some getting like £300+ a week, many many others with low state pensions being paid often large amounts of pension credit ( especially when also on a disability benefit and receiving extra premiums etc). The figures must be enormous and with people living longer I just don't see how it's affordable. I guess as more people have private pensions in the future, the amount of pension credit paid out will reduce. I think the spiraling costs of benefits for older people and care costs etc is going to be one of the major things affecting future generations. Today's state pensions and all the other benefits are paid by current taxpayers ( I'm aware some of those are pensioners) and there just isn't enough tax revenue coming in to cover it all unless something changes.
However they can't just stop paying state pension, there would be uproar. I guess they will just keep raising the state pension age so that people are forced to take private pensions early and live off that.

I dont know but think if it becomes any olepder than 68 it is effectively a con.

plus obviously many were also contracted out too.
Relatives defferred starti ng it when it was 60. But clearly noone would at 68/70 etc

The rich wont care the poor would get pension credit equivalent. It would mainly affect those working earning 20-40k who didnt build up enough private pension.

private pensions have issues too as they can go bankrupt or if investing yourself the funds wrong etc.

my work one for 13y is only worth 30k but even scaled up for 40y of work still wouodnt be enough.

then theres that most pensions are only covering one out of a couple.

and obviously this generation have to pay '000s for kids at uni too.

I think the state pension age will steadily rise and the state pension will eventually be means tested as a lot of people will have their own personal pensions or workplace pensions.
I think more people living longer will mean that it’s just unaffordable for everyone.

Yes the paying for kids at Uni is an issue. We are supporting two kids through Uni at the same time and shelling out £700 + a month because their loans don't even cover their accommodation costs and despite trying they don't seem to be able to find jobs. We should be saving for retirement but no chance of that at the moment !

There will be one just no idea what it will look like and when you can claim. You can’t make thousands of people contribute, have an online state pension calculator that tells you how many years you’ve paid in etc and then say ‘oh actually you’re not getting that anymore’. It’s probably cheaper to keep it as what is the alternative?
One alternative is to scrap NI from x point, raise tax to make up the loss then tell that generation there will be no state pension while ensuring enough for the last lot to die off. But that will take a couple of generations to save any money so not worth doing.

Im planning for an eventuality where its means tested away.

I'd expect how they will do it is steadily raise the income threshold for a pension credit type means tested amount is available to the lower third or so of pensioners, then simply stop the triple lock on the state pension and allow inflation to gradually render it worthless.

NI is not a pension contribution.

NI money isn't ring fenced for state pension.

They can carrying on charging it and means test state pension at the same time.

Im also very wary of the government raising the age you can access private pensions too. They don't want labour shortages, they want everyone working longer. Im saving separately to ensure i can choose to retire at 65 even if my access to my private pension is delayed later.

If they means test it surely a lot of people will stop paying into a private pension. Why struggle for years to save the money when you can spend it and then get a pension for free from the state?

Yes we're paying almost 1k per child for secondary school bus!
So that could have been 17.5k into one of our pensions..

They are also moving up the ages you can take say sipp from 55 to 57 already...

I guess it would be fairer to up the number of years to make full pension (for teens now) to maybe 45 say but keep being able to take from 68.

As it starts to become ridiculous expecting employers to keep people on.

Well… no one knows what future governments might do.

The reality is, however, that we have an ageing population, and a decreasing birth rate. We cannot afford to sustain the current ‘pay-as-we-go’ pension system as it stands. It will be most of our national spending.

I think your husband probably has a point.

This is of course in conflict with the existence of the triple-lock…

The problem is the generation currently receiving high pensions did not contribute enough for the level of value they receive. But pensioners vote, in their hordes, so its political suicide to do anything about it. They have to somehow make younger working people pay without giving them as much. Its colossally unfair. One answer is wealth transfers between generations (raise your hand if your parents helped with your house deposit/car/childcare costs?!) but will leave a significant chunk, those with lower income elders, shafted.

Pensions are benefits. Like any other benefit the government can pay whatever it likes / can afford.

I am one year away from 35 qualifying years.

This time next year I will be 56 and will have BOUGHT myself a full state pension which I claim at 67.

It's mine. No means testing required.I have paid for this by going to work every day for literally decades. I will take every penny of it from 67 until I die

I'm not much older and I'm expecting to get my state pension, just not at the 67 that it's meant to be. I still need to pay in 4 more years to qualify for a full one too

It's going to be difficult to reduce it given the power of the pensioner vote.

I think successive governments have all known about the problem but have just kicked the problem down the road.

It's now turning into a monster turd that they're all too scared to flush.

This. The cost of pension benefits for current pensioners is enormous. Sadly it’s the current working age generation who are paying for it and won’t benefit.

Yeah, I hear again and again that NI does not fund the state pension. Yet it is implicitly tied to the state pension by the fact that you have to make 35 years of NI contributions to receive the 'full state pension'.
No-one would bother if it didn't affect their pension.

That’s just it though, state pension is just a benefit, none of us are “paying into a pension” when it comes to state pension.

I also think the same thing tbh. I reckon it will become means tested.

There is a lot of nonsense on this subject. The State Pension is contribution based. You have to pay for a fixed number of years to get it. NI contributions were designed to pay for state benefits. Compulsory worked based pensions were only introduced in 2012, until then the only universal provision for the majority of workers, especially the low paid, was the state scheme. Blue chip companies/civil service/local government i.e. reputable employers with a predominantly professional workforce offered final salary, inflation proof schemes. It was great if you had one of these but other private schemes were thin on the ground. Most workers in what nowadays are called "minimum wage" jobs were not in any type of pension scheme because they did not exist. I hate this spiteful, resentful rhetoric about state pensions. These workers paid in good faith. It is not their fault that the government effectively took their money and squandered it on tax cuts for the rich instead of ring fencing it to pay for pensions.

none of us are “paying into a pension” when it comes to state pension.

Those of us who are paying voluntary NICs are paying into a pension.

You've misunderstood the situation. National insurance is a tax. When you pay NI you're not "paying into a pension", you're paying tax. State pension is not accrued, it's the entitlement to claim it that's accrued.

Unfortunately, the government may change the rules at any point in the future, just like they have done in the past - for example when they changed the number of qualifying years required to gain entitlement and the minimum age for claiming.

I'm afraid it's entirely possible that the state pension age could rise to 70 or above or that entitlement would be means tested in the future and not universal. Look at what happened to Child Benefit.

I reckon they'll introduce means testing for the SP, as they do in Australia.