To think workplace/private pensions will be used like this in future?

[themaskedcat]

Many agree the state pension as it currently works is not sustainable. When it was set up it was linked to life expectancy and there were many workers for every pensioner, but these days it's the biggest cost from the welfare budget and there aren't enough workers for every SP recipient.

The age is going up to 67 soon, and will be 68 for anyone born after 1978. I'm in my 30s and expect the age to be into the 70s for my generation.

But while people are living longer, that doesn't mean people are going to necessarily be healthier and able to work into their 70s. I believe that for many, they will have to use their private pension to 'bridge the gap' from the time they can no longer work until they get the state pension (whatever age that will be). So private pensions will need to be used 'before' rather than 'alongside' the state pension. And that's I think that's why there's such an emphasis on them these days, so people in their 60s will have something to fall back on.

Yes you can. It will have a reduction for each year you take it early but you most certainly can take it before state pension age.

Most are subject to a floor age before which you can't take it at all, unless in exceptional circumstances, and this floor age has been tending to rise.

I retired at 62 and did this, I think quite a few people do

I'm not convinced the current generation will live longer than their parents/grandparents and due to SRP ages they'll pretty much have to fund their retirement with savings and private pensions.

My Grandparents/parents were physically fit, healthy weight, food was generally basic meat and veg, nothing processed.

My GC have to be dragged out the house, driven everywhere as roads are so busy now, could easily spend 12 hours a day on fortnite given half a chance, no playing out on their own with friends. They snack all day, fussy eating pandered to, any veg has to be hidden in sauces etc.

Hopefully I'll be proved wrong but I suspect our longevity peaked with the generation who are around retirement age now.

DH and I and a few of our friends have retired at 55/56 in the last couple of years we must be some of the very last to manage DB final salary pensions.

There are always outliers but overall life expectancy as a group is lower the further down the economic scale you are. It has always been the case in every generation.

Stats pulled directly from the ONS

• Male life expectancy at birth in 2012 to 2016 was highest among higher managerial and professional occupations (National Statistics Socio-economic Classification (NS-SEC) Class 1) at 83.6 years, 5.5 years longer than routine occupations (NS-SEC Class 7) at 78.1 years, and 9.1 years longer than males not classified to a socioeconomic class (Unclassified) at 74.5 years.
• Female life expectancy at birth in 2012 to 2016, was highest in NS-SEC Class 1 at 85.5 years, 4.0 years longer than NS-SEC Class 7 at 81.5 years, and 5.7 years longer than Unclassified at 79.8 years.
• In 2012 to 2016, the slope index of inequality (SII) in male life expectancy at birth between the least and most advantaged socioeconomic classes (excluding NS-SEC Unclassified) stood at 6.4 years, 1.2 years narrower than in 1997 to 2001 (the widest point in the time series) when it had stood at 7.6 years.
• In 2012 to 2016, the SII in female life expectancy at birth between the least and most advantaged socioeconomic classes (excluding unclassified) stood at 4.9 years, 0.5 years narrower than in 2002 to 2006 when it had stood at 5.4 years.

The overall rise in obesity which has escalated in the last 20 years will probably see a further drop in life expectancy, there is a direct correlation between obesity and poverty.

Then there is being alive but being healthy, link to GOV data about HLE. Unsurprisingly the SE leads the way as overall there is more money there.

https://www.gov.uk/government/publications/mortality-insights-from-gad-december-2024/mortality-insights-from-gad-december-2024

The state pension was never designed to exclusively pay for your retirement. You always had to top it up with savings.

Same now but even more so. You wouldn’t want to live on the state pension!

Pension contributions are much better than Lisa. Wouldn’t do that

Well, yes that is the law. You can't take it more than 10 years before state pension age. At the moment it is 55 rising to 57 in 2028. That is the case for any pension exempt in certain circumstances. The reply was to a pp saying that you cantvtake a public sector pension before state pension age which just isn't true.

Because you will have so much more income compared to those who didn't .

I don't understand this mentality. E.g someone spends a life on benefits won't have anything to show for it. They won't own a home or car, no savings/investments/pension, nothing of value to leave their kids etc.

Compare that to someone with a decent income, own house, car, savings ,pensions, holidays to Florida, expensive hobbies, 'nice' things etc.

If you have the choice, which would you prefer?

They were paying 3% of qualifying earnings which worked out to slightly less than 1% of my actual salary

Ah right, not illegal just a shit employer then. I think all employers should have to pay on full earnings. As it stands the only have to pay pension contributions on earnings over £6240 which is ridiculous. Tbey also dobt have to pay anything on earnings over £50000 ish.

Agree with others that

a) bridging the gap between retiring and getting the state pension happens now. Having been made redundant at 61, I know how hard it can be to find a job in later years

b) 8% over the full length of a career, compounded up, builds up. The important thing is to pay in constantly. Don't go part time unless your DH can pay into your pension as well as his. Easing back on the career when DCs are at school is far more costly than most people realise.

I think the point is there is a middle group with just the same higher income in their working years who decide to spend rather than save in a pension.

Unless the suggestion of means testing means looking back at a lifetime of HMRC records to decide who could have afforded to support themselves in retirement but decided not to, rather than looking at what savings/income people have when they hit retirement age and paying out on that basis.

All my Nursing friends are taking their big lump sums at 55 and retire and returning. My fb feed is full of them taking amazing trips. My sil has set aside her lump sum as house deposits for her kids.

Exactly and I agree. It's easy for people to think they are doing ok but actually if the percentages are all just on the qualifying earnings it's not great. I'm now paying 8% with employer matching that so much better now.

Because there is always a group who don't care about their DC's, who can't think beyond the end of next week, refuse to pay taxes and will work in the black economy (or not work at all) rather than contribute to society.

My pension is linked to state pension age so I’m screwed no matter what. I need to top up with a private pension if I want to retire early. And I do. It isn’t a lot for topping up but I can see how poorer people won’t afford it. I refuse to work into my 70s even if I get a £50-60k/pa pension at the end! Early retirement please! 🥹

@Pinkdaisie ok let me rephrase that. Effectively I will be unable to take it early because it will not be affordable to take the hit and do so for me and I suspect many others. I am starting to take the idea of doing less work at work very seriously to ensure I can sustainably meet the longevity of work career that is now expected of me. Things like taking desk and screen breaks very seriously to ensure I avoid the muscular skeletal issues with desk based work and sedentary behaviour which I am already experiencing!

Indeed. That generation had the best of everything and that won't happen again. It was just a blip. Please don't think this is a criticism of that generation it's not, it's merely an observation.

Although, if you are on a low income now then you probably won't be expecting much in retirement - people tend to want to maintain their lifestyle in retirement and so keep a comparable income. The less you can live on now the less you'll be aiming for in retirement

The problem will come when those who are currently getting their income boosted by Universal Credit etc find it stops at State Pension age and their full State Pension excludes them from Pension Credit.

But while people are living longer, that doesn't mean people are going to necessarily be healthier and able to work into their 70s.

1900 - 1942
The modern state pension began with the introduction of the Old Age Pension in 1909. It was paid from 70, a ripe old age at the time

According to data from the Office for National Statistics, the life expectancy in the UK around 1912 was around 51 years for males and 55 years for females.

1942 - 1980
It was funded by National Insurance contributions paid by all workers, although initially married women were excluded. The State Pension Age was 60 years for women and 65 years for men.

In 1960, the average life expectancy in the United Kingdom was 70.61 years. Men could expect to live to age 66.6, while women could expect to live to age 73.1

In 2025, the median projected life expectancy in the UK is 82.84 years. The upper 95th percentile is 83.93 years, and the lower 95th percentile is 81.71 years

People are living longer, overall more healthy.

According to data from the Office for National Statistics, the life expectancy in the UK around 1912 was around 51 years for males and 55 years for females.

This wasn't because most adults died in their 50s though, it's because of higher infant mortality rates.

I think it is more likely that the government will raise the state pension age , rather than means tested it. Then anyone not able to work can claim disaster benefits for the gap and everyone else can work or self fund.

I also think more people will work part time.e in retirement. I plan on getting a job for 2 or 3 days a week in a garden centre at retirement age, assuming I am physically capable. The desire to enjoy your retirement travelling and doing sports etc just isn't likely to continue being a thing for many.

People have been drawing on private pensions pre state retirement age for years. Also saving in ISAs to bridge the gap. I’m a public sector worker and we get a decent pension but older people under can draw the money under the old scheme at 60 and most do. Younger people often have a small private pension or a plan of some sort to drop hours at around 60. If not an actual pension then savings or downsizing or hopefully reducing expenses so they can manage on less.

I think the “she’s worked hard her whole life and is entitled to her pension” narrative is harmful to retirement planning. People get it into their heads that “working hard” means they don’t have to do any planning as they have “paid in their whole life” to the state pension and therefore it’s someone else’s fault that that won’t be enough to live on. The state pension is basic and kicks in at a time that lots of people will be struggling to maintain full time hours

New state pension is far more than basic UC unless those people are getting the extra disability elements of UC added as well.

That's how it is in Australia. Everyone has 'super' that can be accessed at 60. Once you get to (67?) if you don't have enough money left to fund yourself, you can access an old age pension. But it is means tested.