To give you the pensioners facts

[Moier]

So many threads about pensioners being well off.
I've just had my forecast.
I turn 66 in November .
Those born after September 23rd 1958 will not get the winter fuel allowance no matter what credits you are on.
Esa etc etc.
My forecast us £221 per week.
Also pensioners still have to pay rent.
Council house tenants will still pay bedroom tax.
Pensioners won't get council tax reduction.
Unless you have paid into a private pension .. pensioners will be the poorest they have ever been.
And we waited an extra 6 years for bugger all.
Stammer is the theif that has stolen all our golden hours.

Why would I look? Because I knew pension plans existed. Also, most of my career was in the public sector (did not stop my civil service contributions being lost).

Lucky you that you knew about such things and that your workplace enabled this.
Working in a corner shop in a pit village was a bit different.

There were problems in earlier days due to lack of proper regulations, but there have been far more stringent safeguards for the last 30 years or so, including compensation schemes when firms go bankrupt or in cases of fraud. So, what happened decades ago isn't really an excuse for people not making their own provisions over the past 20-30 years.

Yes, incidences like Robert Maxwell put some people off contributing to pension schemes, but it's a numbers game. The vast majority of savers have done incredibly well over the past 20-40 years of saving into pensions. It's only a very small minority who lost "all" of their pension monies, and even then, most still had a decade or two or three to mitigate the losses by continuing to invest.

Sorry, but to say "look at Maxwell" and others as an excuse not to make your own pension provisions is just that - an excuse. Fair enough, people planning to retire 20 years ago may well have been badly impacted by schemes like that going bust, but that's history and people retiring today have had 20-30 years of potential savings under much better regulation and protection. If they really didn't want to risk pension fund collapse, they'd still be relatively healthily provided for if they'd paid into savings accounts instead, especially tax free ISAs which is a common alternative to formal pension scheme investments.

If I have one hope of the recent WASPI pensions changes and other pension scheme collapses of decades ago, it's that people make more attempt to look after themselves pensionwise throughout their working life. Hopefully, the relatively modern compulsory workplace pensions will get more people investing for their own future and taking more responsibility for themselves. Even better with free investment advice from the Govt funding "Pensionwise" that removes the excuse of people not wanting to pay for professional advice (which in many cases isn't needed anyway these days with the pre-packed diverse pension funds!)

Nevertheless, many people do not have the wherewithal to save for a pension. I am thinking of those stuck on the minimum wage, those in the gig economy, those who are self-employed, those on zero hours contracts. Such people are going to be reliant on a state pension, paid for from their taxes (income tax and NI), they may be 'involuntary' contributios but they are still contributions, and that is a perfectly reasonable way to build a pension, and governments should be prevented from ending such provision.

@taxguru I’m pleased pension information has been so much more widespread than in my younger days. So many of we older pensioners didn’t work in places with pension schemes, or couldn’t join as part time workers. Pleased to say neither DC or their partners (early 50s) will be relying on state pensions, they have all made good provision.

I'm seeing people who never "paid" into a private pension, but who "contracted out of SERPS" back in the 80s, with pension pots of £100k or more. That's not bad for not actually costing them anything, and these are people who've been on pretty low wages. Just compound growth from the 2% of NIC that was diverted to a contracted out private pension instead of paying full NIC to the Govt. Anyone (anyone employed and earning enough to pay NIC) could do that and like I say, it didn't cost them a bean. They paid (say) 8% NIC and 2% into pension instead of 10% NIC. The more you earned, the bigger the payment into your pension scheme. NIC started at a much lower rate in those days (as little as £32 per week in 1983) so most workers could "save" into a private pension under SERPS contracting out. People retiring in the next say 5 years will also get full state pension assuming they've been working (or otherwise eligible for NIC credits) for the typical 40-45 year working life as the contracted out years are few enough for the non contracted out years to be enough to qualify for full pension years. Basically a pension pot of £100k for nothing but filling a couple of forms in. The "gig" economy didn't really exist back then - most workers worked pretty regular jobs and were taxed under PAYE. Widespread self employment and "gig" economy is a pretty recent thing.

Yes, I fully appreciate the "bad old days" of part timers not being allowed etc., but realistically those old rules stopped late 70s or early 80s, so whilst, yes, they badly hit older people, i.e. those already long retired, it doesn't really apply to those who've been in the workplace for the last 40 years, i.e. from mid 1980s onwards which was when there were widespread rule changes throughout the 80s.

You are suggesting that paying tax and NI are free? I.e. don't cost the person any money? You also seem to say if you were on a low wage and got that 'free' pension from just 'filling (in) a couple of forms', you don't deserve it, which I find obnoxious. Are you saying that the only people who deserve a pension are those who have a private one?
We set up the welfare state so that all should pay in as they could and would receive at need - the NHS works on the same principle. We agreed, we have never shown any sign of disagreeing, so why is it wrong to have contracted out of SERPs or to have been on poor wages and paid NI and tax into a pension? I don't understand your reasoning.
I mentioned the gig economy and being self-employed as work patterns which will affect pensions in the future - but many women are in the position of having worked part-time, or for cash (my mother went charring and did a bit of babysitting, never making enough to hit the tax threshold), or off and on, as children appeared and went off to school - they will all have broken NI records and no chance of a private pension (most of which are of little value unless you are able to save very substantial sums, beyond the reach of many struggling to pay mortgages and put food on the table).
A large number of people still rely on receiving the state pension as part of their retirement income - and this is not wrong.

@Grammarnut

I think you're reading something I didn't say nor mean. I never suggested it was "wrong" for people to benefit from contracting out of SERPS. I was merely pointing out that lots of people have benefitted massively from it without it costing them anything - their "deductions" were exactly the same whether contracted out or not, but those who contracted out are generally better off, now, in or approaching retirement, than those who didn't! Nothing wrong with that. It's exactly how and why contracting out was set up. Lots of people did the right thing. Likewise nothing wrong with people paying into their own private pensions - it's what they've been advised to do for several decades if they don't have a decent workplace pension scheme.

My point is that lots of people missed out by not taking advice, not researching, not making themselves aware of their options, etc. To an extent, they only have themselves to blame, if they're wanting to blame someone, if they didn't make their own arrangements for a pension enhancement above and beyond basic state pension.

Obviously, some couldn't afford to pay more in, but my point was that "contracting out" didn't cost them anything, so they could have been building up a separate/private pension pot at no cost to themselves.

As for s/e and lack of affordability, even tiny amounts, paid in regularly over a 30-40 year period builds up to a hefty pension pot due to the compound effect, investment growth, and tax relief. Loads of people who started paying in just £20/£25 per month a few decades ago now have pension pots of £100k plus.

My teacher's pension pot is about 100k - it pays me just over 3k a year. I can't live on it - my pension is broken because of childcare responsibilities and being made redundant at 50, and doing supply (I was not allowed to pay into the teachers' pension scheme, though I could have bought missing units - had I the ready cash).
I opted out - it makes little difference to my pension, again, a broken work record, so I have c.25 qualifying years.

Paying NI is not "building a pension". It is paying tax.

Also isn't the UK teachers pension a DB scheme? So you don't have a "pot" as such.

The point made I think is that for a period of time you could contract into the additional state pension (SERPS etc) and pay 10% NI. Or you could contract out and pay 8% NI and 2% into a defined contribution pot. The value of that pot now might be (say) £100k and it cost net nothing.

Whether you'd be better of with SERPS on top of the basic pension is a different question.

The poster referencing their teacher's pension is reasonably clear that for reasons x,y or z they were ineligible for the DB scheme for all or part of their career.

Their contributions for that period were invested on a DC basis.

Are you addressing me? No, I do not have a real pot as a teacher, but my contributions entitled me to the income generated by a certain amount; that income is not enough to live on. NI is indeed a tax - it is meant to pay towards state pensions and your state pension is determined by how much NI you have paid. It's simpler to see this as paying into a pension which you will receive, since it is based on what you pay. Most people do not have the wherewithal to pay for a private pension outside of work-based pensions. And such pensions have a bad reputation since one failed catastrophically twenty years ago.

This is unhelpful. I am aware that I can pay £20k into an isa each year, but knowing this and being able to action it are two different things. If you have an annual income of £20k and have rent, tax, water, gas, electricity, childcare, food, petrol etc to pay for, there isn't much left over for pensions and savings.

You don't have to scroll far on mumsnet to find threads that have posts from women who have opted out of pension contributions because they have more immediate and pressing expenses. Telling someone they should've done better or planned better without knowing the full circumstances of their income and expenditure isn't helpful at all.

Paying a tax to residents a benefit in kind. Or like it's said an insurance you pay in and then claim it when you meet the criteria

And teachers pensions are no longer DB

There is no longer any link between the amount of NI you pay and your state pension. NI is now just another tax. State pension is based on number of years of "NI Credits" - you get credits for various reasons such as years of caring, unemployment, or earning above the NIC threshold. Doesn't matter whether your annual wage is £9k or £900k - you get exactly the same year's worth of NIC credit. Part time low earners can earn enough to gain an NIC credit, but not actually pay any NIC, i.e. the earning range between roughly £6.5k and £12.5k per year.

Obviously an occupational pension will depend on how long the person has been working in that occupation and their level of earnings. People who've not consistently worked in it all their working life, or those who've been part time, won't have "built up" the same level of occupational pension as those who've worked full time consistently for most of their working life.

It's nothing like insurance. People who don't "pay" taxes like NIC, can often benefit exactly the same as those who have. There are lots of "benefits" that aren't earnings related in any form at all. And usually where there is an "earnings related" benefit, there's also a similar non earnings related benefit alongside covering the same thing. I.e. earnings related and non earnings related unemployment benefits, universal education/healthcare, pension credit alongside state pension, etc.

For a fair part of the 80s and 90s, workers could "contract out" of SERPS at no cost to themselves at all. They'd have exactly the same deductions from wages, but some of it was diverted into a personal pension scheme instead of going to the government. As mentioned upthread, so peoples "contracted out" private pension schemes are now worth around £100k, and given the changes in state pension rules over the last few decades, those people are still eligible for full state pension too! So basically £100k that cost them zilch, nada, nothing.

Even paying in small extra amounts to a company pension scheme often meant employers would match it or even more, so an employee paying in just a tenner a month may find the employer also paying in a tenner, or more, so maybe £25 per month in total going in, month after month, year after year, decade after decade. You're soon up to a pension pot of tens of thousands with compound investment growth.

Fair enough that the smallest of employers tended not to have pension schemes, but lots of major employers of low earners certainly did - such as supermarkets, factories, etc., as well as most of the public sector. Perhaps those working places with no such scheme (and usually no other perks either), should have thought about changing employers?

As said above, I hope all the media attention re waspis, state pension age increasing, poverty in old age, WFA removal, etc., makes younger people think and make themselves more aware of the importance of planning for their own old age and retirement.

This.

i know you say you werent talking about yourself because youve got "millions" in the bank but you certainly implied you were talking from your personal situation.

To those who you claim you're speaking in behalf of, I say this:

You've had over 40 years - maybe nearer to 50 if you left school at 16 - to build up a pension. Why have you just relied on being able to live on a state pension? That's madness.

I worked PT for a charity for a few years whilst my dc were small which didnt have a pension scheme so i skipped a few years but as soon as i was back FT in a job with a pension I paid AVC. to make up.for it.

How much is your rent? If you are on a very low income then you should be able to claim Housing Benefit to cover it.

State pensions are protected by the Triple lock. As PP have said, you also get free bus travel and prescriptions.

Claiming that Starmer has "robbed you of your golden years" is rubbish. He's made WFA. means tested. Personally I think the threshold should have been higher but its ridiculous that people like my mother or my MiL with £100k plus in the bank got it.

Finally, if you really are going to be so badly affected by the loss of £350 per year, you could get a PT job. I'll be working until 67 so 66 to me is still working age. Even if you got a MW job for a few hours a week you'd easily make a few K a year which would help towards your bills for the next few years if you budgeted correctly

Interesting info. Super interesting that people conveniently don’t mention this information. Obviously as it doesn’t fit into the woe is me / oppressed narrative

Totally agree.

Yes. Much what I said about NI - that your pension is based on how many credits you have earned, and, unlike private pensions, NI takes into account things other than paid work. This thread has been pointing out that having a privately funded pension is beyond the means of most (my private pension would pay me £800 p.a.) and that workplace pensions have not always been portable and may not perform as well as one hoped (e.g. my teachers' pension that pays me 3k p.a.). So what was your point? If it is that you must work your whole life, from 16 to 68 to have a worthwhile pension, then that is pretty obvious. If it's the ongoing complaint that some people who have never, or rarely, worked in paid employment, get the state pension for 'free', then I don't accept that point, since whatever they did they will have paid taxes of some sort, they are as unavoidable as the other thing.

Ah , a rare member of the real world.

Entirely agree!

I agree. We lived in a pit village when our DC were small. Most of the miners’ wives who I knew then didn’t work, especially those who rented NCB houses, they were cheap. I took the DC to the toddler group in the local Miners’ Welfare club, and got to know quite a few other mums. It was a different world, I don’t recall even thinking about pensions back then.