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?

And let's not forget that the public sector actually contribute to society.

Why raid those pensions instead of pemalising people who never, ever contribute to society and are a permanent burden by choice. Look at lifestyle criminals, who cost a fucking fortune to society, not just financially for prison spaces but for police resourcing, insurance companies, human misery.

Certainly in the NHS if you're earning much above minimum wage the pension contributions are 9-10%. I recognise this doesn't match the benefits, but it's not buttons either. Pension threads always seem to imply that the public sector contribute virtually nothing for their "gold-plated" pensions.

There’s no doubt that the triple lock will have to go - cue torrential media coverage about starving pensioners. Look at the bloody ridiculous furore about means testing the WFA. The British electorate is utterly two faced on this issue.

Absolutely. Not denying that they are more favourable than some private pensions. But I certainly contribute more than the 5% I would be on auto enrollment.

I’m under no illusion that I will receive it in any meaningful way. I am in my thirties.

The triple lock won’t last forever, then its value will probably be inflated away, justified by people being able to use auto-enrolment contributions to make up the difference / overall average pensioner income won’t appear to drop.

Then they’ll means test whatever is left.

I assume this will happen just around the time millennials are due to receive it - as we seem to get hammered with everything else with full force.

They've got to means test it. 1 in 5 households with a member over 65, has a household wealth greater than £1m. These people should not be receiving a state pension and it's scandalous that they currently do. It needs means testing in a way that does not create a cliff edge, as is the problem with many other state benefits.

Wealth and income are not the same thing. Any means testing would have to be income based.

@Fargo79 the issue with means testing it, and particularly for existing pensioner households, is that the state has spent decades telling people they’re ’paying in’ through National Insurance.

The state pension has been part of people’s pension planning - and given most people have a relatively small private pension, there’s going to be a significant margin over which the life-long effort of saving privately for someone on a lower to average income (and possibly higher) isn’t going to look much different to the amount the state will need to fund for those with nothing and no housing.

The government needs to reposition it as a state benefit vs something you’re funding through work if they want to start means testing it - even just to get past the psychological barrier.

@Fargo79 Are you including the value of the house a person or couple live in in that figure? Because there's no faster way to wreck the economy than that. You do realise that a fairly ordinary terraced house with three bedrooms in most of the south east is "valued" at nearly three-quarters of a million quid or more?

I’m late 40s, I’m basing it on there being nothing by the time I retire.

Yes say:

• £500k house
• £500k pension

Take your tax free lump sum, you’d get an annuity of £26k a year (which is taxed).

So nice to have £1m of assets of course (and unimaginable for many younger people) - but not quite the luxury lifestyle one might expect hearing that number.

I think someone in this situation would be annoyed to lose ~30% of their expected pension.

Who's "they"? It's a private member's bill that barely squeaked through the Commons and is touch and go at best to make it through the Lords. The Government is neutral on it and allowed a free vote. Half the Cabinet opposed it as did the leadership of most opposition parties.

I think that, whilst that is probably what will happen, it risks severely changing the whole way that the state pension is viewed.

At the moment, it is technically a benefit - of course it is, as it's money from people's taxes that is paid back to those considered in need of it (in this case based purely on age) - but it's generally seen as 'earned' in an overall sense.

With unemployment benefit, people hope not to be out of work and thus to ever need it. With PIP payments and costly NHS treatment, in an ideal world, people would hope not to ever need them.

But when it comes to pensions, everybody hopes to be able to do their 'stint' of working years and then be able to retire to enjoy life and the fruits of all of their hard work. Your pension is widely seen as your 'reward' and entitlement.

Many of those who have paid the most in taxes during their working lives will utterly resent the fact that they end up with much less of a 'reward' than those who haven't been able/have effectively chosen to pay in far less for several decades.

Instead of pensioners generally being considered as worthy and having earned what they have, and the suggestion of an older person who only has their state pension to live on eliciting sympathy and bonhomie from others, I can see people who get state pensions becoming considered as social pariahs, wasters, lazy, freeloaders etc. - the same way as many 'opinionated folk' blanket-view people on unemployment benefits already. Sadly, I think that there will come a time when those on the SP will deliberately keep quiet about it and feel ashamed, rather than freely admit it as a badge of honour that they've served their time, as they often do now.

There won't be one at all with the rate we're going. There aren't going to be enough working age people to fund it. It'll gradually dwindle to nothing and families (i.e. women) or charity will pick up the fallout. People forget that welfare as we know it is an incredibly recent invention and is by no means a given

Those like @Darkling1 and @Autumn1990 who have prioritised buying a house will have to do as my PILs did when their pensions weren't keeping up with inflation (before the triple lock was introduced) and take the equity back out of the house as income. They received an extra £800 per month until the second spouse died and the reverse equity was redeemed out of the house sale. But anyone banking on an inheritance will be disappointed.

My aunt, who was born in 1907, was saying this when I was a child in the 1960s. Yet here I am collecting the pension she said was doomed.

I don’t think they can means test it without causing riots. People have been paying NI with the understanding they will get a state pension, and planning their private pensions with state pension planned in too. If they want to means test it it needs to be for those who haven’t started paying NI or into workplace pensions yet. I think the state pension age will raised to 70, and the triple lock taken away.

We spent a significant amount on welfare at that time as it was the post war period of course. But there was also a baby boom. What's different this time is the birth rate. There aren't enough people making a net contribution to fund endless pension entitlements

Equally, though, it's a way of avoiding being liable for any care costs in old age - if your house is no longer owned by you, and so you have nothing to sell to pay the costs.

Then this raises the issue that, if the government have had to reduce the country's pension bill to balance the books, but there are also far more people now needing care with no means to self-fund... something isn't going to add up.

IF the Government had any sense they'd overhaul the tax / NI system from an individual level and roll NI and income tax together. That would, over time, break the link between contirbutions (I've paid my NI so you can't take away my pension) and the state pension as a univeral benefit. That in turn would give time for a complete overhaul of state pensions - over a long enough time frame for people to plan It'd also mean that everyone would pay the same level of tax for a given income, unlike the present situation where pension (and other unearned income) doesn't attract the NI 8%/2% uplift that earned income does.

They couldn't take the WFA away so I think state pensions are safe for the time being.

I think pension age currently is 66 , then in a couple of years to 67 with 68/70 on the horizon .
I also read if it's going up past that then they have to give 10 years notice , hopefully didn't dream that !

They will keep doing what they are doing now for many years which , long term, will mean they will have to pay very little to the majority of people.

I don't receive anywhere near the flat rate they constantly harp on about. ☹️. I was able to finally draw my state pension 3 years ago - supposedly flat rate - but I am punished by over £40 a week because I was contracted out for 10 years and then was self employed - paying full S.E contributions - for the last 17 years of my working career. Thankfully, I'm ok financially - have 2 other small private pensions - but I do get very irritated by the government constantly making out that everyone on flat rate is getting £230 plus per week - 😂- when there are loads of us who worked incredibly hard - and earned well so paid heftily into the system even allowing for the contracted out amount - for 45 years plus who definitely don't and yet if we had sat on our backsides would have qualified for the full amount. 😡

Interestingly, my DH who qualified for his state pension 5 years before me and was contracted out for the same 10 years receives over £200 per 4 weeks more than I do. He, of course, is on the old rate.🙄. Hmm!

Best case scenario is that it'll go back to only being awarded a few years before the average life expectancy e.g, if life expectancy is 80, state pension awarded at 75. Worst case scenario is it just won't exist.

As usual those of us under 40 will be thrown under the bus to protect today's pensioners. Holding older generations to account for their generation poor choices just won't do, don't you know?

There won’t be enough equity to rehouse me and cover living costs. I went for the house as I wanted secure housing, I have assumed I will get my pension in my late 60s and whilst I won’t be rolling in it I would be ok. If they start taking housing value into account when giving out the state pension people will downsize sooner and spend the cash or give it to their kids. It will also lead to an increased care bill as what’s the point of staying in your own home if the money has already gone.