What do you think will happen to the state pension in the future?

[Darkling1]

I’ve heard people say that it may be means tested in the future. I’m in my late 20s and wonder what the state pension will look like years from now.

I’ve recently started to invest a small amount into a SIPP each month. I can’t help but worry about the state pension, especially as the age keeps rising.

I think the age of state pension will continue to rise over time. I can see it being pushed to 75 by the time I’m eligible to claim.

What do you think will happen to it?

bearing in mind that current workers are basically paying the pension for today’s retirees I think that is going to come a point where people are going to protest about paying their national insurance contributions because why would they pay for people now in the knowledge that they may not get a state pension themselves when it reaches their time? Going forward I can see that people would want to save their money privately

I think it will become means tested. If it is like Australia then I wouldn't have an issue as it is pretty generous in terms of house value and savings that they test you against.
Knowing our fecking Government though my worry would be a really low threshold. I hope we'd all riot if that were the case.

This is why auto-enrolment was introduced in 2012. Gordon Brown killed the traditional final salary schemes that covered (mostly) skilled people by removing the pension dividend credit in his first budget, and companies responded by moving to DC schemes. Public sector pensions are still fairly generous, but some younger employees -- junior doctors, for example, might welcome pay increases now rather than 25-30% employer pension contributions.

I think the triple lock has to go, but it will still have to remain linked to some measure of inflation or average wage. Despite all the frothing here about wealthy pensioners, our state pension remains among the lowest in Europe, and single or divorced women on the pre-2016 rate are among the poorest people in society. My late DM worked until she was 78 as a mental health carer because if she hadn't, she would have lived hand-to-mouth.

I don’t think they will be able to push it much older. Too many people will be too ill. There are too many people like me with a house but no private pension because we’ve prioritised the house, I guess if it goes much older I’ll just be poor in my old age. Anyone renting who is older may as well just claim benefits.
Society/economy isn’t working for most people atm

they can’t means test it as this would disincentives people to save. The triple lock has to end. It’s totally unaffordable. Public sector pensions will be slashed. They are also totally unaffordable. There is no way the pitiful amount people in the public sector save into pensions is enough, and private sector workers will not be happy if we have no public services as all money goes to pay public sector pensioners pensions other workers can only dream of.

It will gradually shrink as more people understand the absolute need for workplace pensions saving.

Auto-enrollment workplace pensions came into being for most in 2018. I expect them to start cutting the state pension as soon as most people have 10 years paid into a personal fund.

I think they might increase the requirements in terms of years NI paid from 35 years for a full pension. Anyone starting work at 21, can pay in at least 40 years NI and possibly 45.

There is a reason it’s the lowest in Europe. In most European countries there is no such thing as a separate occupational pension. The occupational pension is added into the state pension. When you add in occupational pensions the UK is bang average of European countries when it comes to pensions.

Why do you think they are so keen to legalise assisted dying?

In the future it will be either your family looks after you, be destitute or die. Maybe you will get 5-10 years of pension payments then it’s up to you.

I can see the age going up and up, until it's similar to when it first started: wherever age was set above life expectancy, so your pension was effectively an additional 'reward' for enjoying a longer than average life.

Of course, life expectancy - back then especially - would have also been affected by the job you did; so working-class manual workers would probably have died younger than those in middle-class office jobs. Hmm, I wonder which of these groups most MPs fell into...?

Call me a cynic and a doomsayer if you will, but I can well see the assisted dying laws being massively extended so that, eventually, the option is routinely considered by elderly people wrt their financial circumstances, rather than purely based on health and illness.

I don't know enough to contradict you on that @Woodchipping but I have read elsewhere that other countries' private and occupational pension systems are much superior/lower-cost. The Netherlands is often quoted in this regard, and their system is considered fairly similar to the UK.

Unfortunately, they’re going to have to make economies somewhere. I think they’ll means test the pension, even though it’s unfairly biased in favour of those who haven’t paid in as it is: people on pension credit get more than those on a state pension that they have earned through years of NI contributions. Like everything that has the dead hand of the treasury weighing on it, they’ll get it wrong, and even if the thresholds are reasonable to start with, they won’t be changed and with inflation will become ever lower. Consider that someone on the state pension alone will, unless they do something about it, be drawn into paying tax by 2027/8 - I don’t see how they can justify that, if those on pension credit are exempt.

I’m mid 30s and can’t see the current pension still being the same by the time I retire. I pay hefty into my nhs pension so hopefully I’ll have something worth having by the time I retire and I will not be working as a nurse till I’m 74

I hear you. I can honestly see that happening.

I was only able to start saving into a private pension after I bought my house and after I bought what I needed for the house. I was enrolled into my workplace pension from the outset, though. I couldn’t afford to save each month towards my house deposit and fees and invest into a private pension at the same time.

Even now, I can only afford to invest £39 each month into my private pension. It’s better than nothing, I’m sure. I hope I can increase this amount if my career progresses in the future.

My DC are 24 and 26. One of them was looking at some documents yesterday and I'm sure it said her retirement age will be in her mid 70s. The government will keep pushing it back so that they don't have to pay - hoping people will drop dead before they are able to claim. It's a fucking joke. Who wants to be working in their 70s, and what employers will want a OAP workforce? That's even if there are jobs in 50yrs time with AI and robots taking over.

we also rent a HA house as have never been able to save what’s needed for a deposit so will be paying rent in my old age unless I come into money somewhere but at least it’s a secure home

Re public sector pensions, I saw an article a while ago where there was a suggestion that you could opt for a higher salary now but lower pension contributions - that could be something I'd be interested in and it brings down the cost on the tax payer.

Sadly I think you're right.

I don’t think the option would be given as that would be too complicated, but when you look at the junior doctors complaining now, and they get a massive pension included in their salary which they happily overlook, why not cut their future pension and pay them a bit more now.

This would mean that we’d bring forward the expenditure into current expenditure which could be an issue, esp when politicians like kicking funding crises cans down the street as far as possible. Pros and cons.

This, the only recipients of a state pension will be those who have never contributed through NI, all people who have paid NI through their entire working lives will get bugger all once retired unless they have a workplace pension.

I don’t know but they are going to have to change the current situation that seems to be that those who look after themselves, pay tax and save are being told they need to work longer and not get the state pension whilst those on benefits are literally getting from cradle to grave with little/no responsibility. Many workers are living in private rental, how the hell are they supposed to save and how will they afford rent when they retire with no pension whatsoever.

Any young person with any sense will be looking at which country is offering fairness and the ability to work for good reward and a reasonable retirement. The UK is currently only attractive to those with £££££ and a good accountant/offshore and those being supported by the taxpayer via benefits.

It should never be the case that someone who has worked their whole life is worse off than those who haven’t and are on pension credit.

Exactly this. I can’t understand how people can be so naive.

I think they will cancel the triple lock at some stage and raise the age to 70. Means testing would stop people saving, so seems less likely. One "plus" is that we have stopped increasing the average life expectancy due to more unhealthy choices, so they won't need to pay out for as many years.

Simple maths that we all need to save more into a pension and from am early age. I certainly wish I had thought about it and made more contributions in my 20's for it to have more time to grow. That ship has long sailed though!

Sooner or later the triple lock will need to be watered down. The age it becomes payable will gradually creep up.

An ageing population with a working age population where a high proportion are low paid and/or on various benefits is a perfect storm.

I fear for its future.

This is quite an interesting take. Genuinely interested to hear how much you think public sector employees contribute? I don't mean to come across snarky btw.

Personally, I have dipped in and out of public sector and private. I currently earn below the national average salary and contribute 6.5% of my wages, which is higher than anyone on auto enrollment paying the minimum. In better paying public sector roles this has been a higher %

Granted, they are better than most private sector pensions. But my salary is much lower for the job I do than I would fetch in private. The pension compensates for this. Take that away and you'll find there's less incentive for people to take public sector jobs below market rates and salaries will have to increase.

I think I read somewhere once that part of why pensions were brought in was to get older people out of the work force and to make room for young people.

So with that in mind, I don't think it's as simple as means testing. Older people, who may not be in the best health, just won't retire. Which means costly redundancies or image problems for larger firms sacking them. And they still won't have money to live and/or there won't be jobs for the young, so in some capacity the state will pay for them.

What pisses me off is that there never seems to be a holistic look at complex problems.

Couple of examples:

• obesity health issues.

Not caused by fruit and veg consumption, but no balls to tax junk food companies. -New houses being built, but no thoughts to mandate a much higher level of actually affordable 2 beds rather than a tokenistic number (because profits are in the 4 beds), nor any view as to how walkable these estates are to infrastructure or how the existing infrastructure will work I.e. are there enough dentists, doctors, school places.

My point is that until you address complex problems as a whole, it's difficult to look at how affordable something like state pensions are.