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.

This is not pensions advice as I don’t know your specific circumstances but I’d look properly into that before you do as you are likely to end up with far less overall even though you can take earlier. For a start you would lose your employer contribution, if you opt out of the pension scheme it’s unlikely they’ll give you the money instead. Also if you were saving outside of a pension you lose the tax relief on the contribution.

This is not financial advice.

I would get a separate private pension to bridge the gap for early retirement or reduced hours. I’m in the Civil Service with a great pension but it is linked to state pension age. I’m bridging the gap rather than switching out. It isn’t ideal but better than a potentially smaller pension by the end.

I think it is more likely that the government will raise the state pension age , rather than means tested it.

it would need to go to 71 then which I think is pretty outrageous

Or they could increase the number of years NI needed to qualify.

Most people work 45 years, so increasing the NI years to 40, from 35, would make sense.

It already happens. Plenty of people get made redundant in their early sixties and move to part time roles because that is all they can find.

Their mortgages have shrunk, children have left home, so financial commitments are less.

It’s almost meaningless though as if someone doesn’t have a full state pension and doesn’t have a private pension they can end up with pension credit instead which is still a cost

Im 63 and can't take my state pension until I'm 67. I have paid into a generous company pension for 22 years. I'm planning on retiring next year (august) and the forecast is £800 a month with a lump sum. I don't have much in the way of savings so will have to be very frugal.

Same here. planning to take my NHS pension at 60 with lump sum. Forecast is around £900 a month so I'm going to have to be very frugal or hopefully find some kind of part time work.

Before very long, the idea of the state paying you a pension after getting to a certain age will be the same as the idea of the state paying your university tuition fees (let alone a grant) for you.

My age-group was one of the very last to be able to scrape through uni without ever having to pay tuition fees.

Interestingly, whenever the topic of tuition fees comes up now - including the regular increases, ostensibly to reflect the true rising costs of the system - the reaction from politicians (a great many of whom enjoyed completely free uni tuition themselves) is not one of apologising that it apparently sadly has to be this way, and acknowledging that it's clearly very disappointing not to benefit like previous generations did; but rather one of anger and accusation: demanding to know just where students expect the state to fund it from, and why on earth shouldn't they expect to pay their own way?

Sadly, I can see state pensions going the same way: not just scrapped before very long, but people (including those who, despite working very hard, have had the lowest incomes throughout their lives) being blamed and insulted for not having made provision for themselves; what CFs they must be for actually expecting a free ride in life courtesy of the taxpayer.

To add insult to injury, this will include a very large group for a period of a few decades who will be paying their taxes for the older folk qualifying for the tail-end of the current state pension scheme, whilst never getting to benefit from it themselves.

I’m think that’s what I’ll do. In 9 years time our mortgage will be paid so my plan is to use that money to put into an ISA. I just feel a bit helpless at moment that I’m not “doing more”.

Yep. Pretty much the case now.

Most retirement dates are flexible. Especially for DC pensions where it's simply a case of what the pot value is when you decide to take it (over 55) DB pensions can often be accessed early though there will be a reduction for every year before the normal retirement date.

And what if you are NHS or teacher and you can't get your private pension till same age as state?

I actually think it’s far more likely that instead of the workhouse euthanasia will become the way that people cope with retirement.

The post I was replying to specifically said they can’t access until state retirement age

I’m in TPS. Can access it 10 years prior to SPA at a reduced amount. As TPS is no longer final salary but career average, I think early retirees will no longer be the norm. I can’t survive on my TPS for 10 years. I can’t imagine teaching at 68 though so need a back up plan!

This is a great analysis and I think exactly where we are headed. There can be a very quick turn in the tide of opinion from "of course the state must help" to "scroungers should look after themselves".

Student finance is a great example of this and it's also happening in benefits generally (even disability benefits which people used to generally exempt from criticism) and also with social housing.

Even making sure children are fed is no longer a "thing" - you see it on here all the time that people should just have the children they can afford. Presumably it's fine for kids to go hungry and more fool them for picking shit parents.

Yes I know sorry I meant to quote them not you however it's unusual not to be able to take a pension early.

Having seen my very modest pension projection, it really ramps up in the two or three years before retirement, so I can't see it being sufficient to live on while waiting for state pension.

I get it, they (pension fund) want me to keep working and paying in, but then it couldn't be seen as an alternative to the state pension.

@Morph22010 For now they do, in future who knows?

The NHS underwent a big change a few years ago with regard to their pension system, whereby they were trying to urge people to agree to move from the current system to the new one.

Of course, the benefits of the new system over the old one were persuasively trumpeted, whilst the advantages of the old one were downplayed or plain ignored.

One of the main differences (pretty much mentioned in passing) was that the new scheme would mean that you had to work extra years before qualifying for your NHS pension.

As it's an actual contracted, contribution-based, salary-linked scheme - as opposed to the state scheme, which is essentially a standard general tax and benefits set-up (however they dress it up) - they have to get the agreement of members. Nevertheless, that doesn't stop them from putting as much spin on it as they like to try to gaslight convince you that all of the wise people will want the 'shiny new wonderful thing' instead of that 'outdated inferior old rubbish'.

Sorry which post are you replying to?

Well that’s completely different to not being able to take the pension until state pension age. Just because you can’t afford to doesnt mean you can’t.

Maybe, but you'd have to factor in lower rates of smoking too. That has curbed a lot of lives early.

Exactly!🤣