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?

Healthy life expectancy hasn't changed much in years...

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?

That's a complete exaggeration and even if it was true it's not a good thing.

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.

What made her think that? Demographics were pretty different the for one thing!

Working and paying tax and NI for over 40 years, as well as contributing to an occupational pension?

If every single pensioner had done the above then we would have more in the coffers?!

52.6% of Britain in 2023 are taking more than they contribute.

How many are pensioners?

Today’s workers have always paid for the generation above. It’s nothing new.🤷‍♀️

I think they’ll increase qualifying NI years for the pension. Maybe to 40. I think the pension age might be pushed out as far as 70 (as it was when it first started).

I think at some point the triple lock will change. Not sure how though.

I think pensioners who have prioritised homes over pension savings will end up having to use their homes to earn income, perhaps by taking lodgers or perhaps by downsizing (though that doesn’t release much) or taking one of those equity release policies.

I think single women pensioners might have to buddy up like the Golden Girls.

Im not sure if men would do that? Perhaps.

We might see the development of a cohort of pensioner flat sharers.

Today’s workers have always paid for the generation above. It’s nothing new.

But what's changed is that in the 60s it was 5 workers to 1 pensioner, now it's 3:1 & we aren't far off 2:1.

I think they’ll increase qualifying NI years for the pension. Maybe to 40

This won't make much difference. My pension age is 68 but I've paid since 16 so that's a potential of 52 yrs of contributions. i'm not unusual.

It wont exist. Everyone will be expected to work much longer and sort out their own pension. If you are ill or disabled with no family I dread to think.

The state also needs to access that house wealth for health & social care. House value isn't included for care in the home but that's what the majority have. We can't afford it either.

Perhaps not but the basis on which that happens is the expectation that today's workers will receive the same benefits in turn and that is unravelling.

No government that tries to mean test the state pension will be electable. Everyone who has paid in their full amount will feel(understandably) entitled to it and those who haven’t yet will refuse to pay for a state pension that they themselves won’t get but those who don’t work do.

it will be a case of continuing to up the age limit and trying to break the triple lock

it will be a case of continuing to up the age limit

I don't think young people will be happy with this either though

And yet you read all the time about people who don’t have the 35 qualifying years and therefore get a lower pension.

Maybe they will do something like tie amount of pension to amount of qualifying years? So someone with 50 qualifying years will get a higher pension than someone with 25 qualifying years.

Now that the narrative has turned to the disabled and their cost to the welfare bill it is interesting that Sky news is now openly reporting that pensions, as part of the welfare bill, account for around 48%. Some of that welfare (ie tax payers money) goes to the wealthy. Surely cutting pension to the wealthy would cause less social impact - plunging hundreds of thousands on a limited income into poverty - than disability cuts?

Nobody wealthy relies on state pension. Nobody who aspires to being wealthy will stop saving into a private pension to get state pension. It makes about as much financial sense as choosing to be on low wages to qualify for benefits when you could earn far more. I really don’t think we will see high earners giving up their careers to work as self stackers or delivery drivers on minimum wage zero hour contacts with top up from UC.

@CaptainSevenofNine that's probably truer for older generations though.

I understand that but earlier generations started work at 15 / 16 whilst now it is more like 22. There's 7 years the younger generations have gained.

But then the government would have to be honest about it and scrap NI contributions (without making up for it by increasing taxes elsewhere). I know they bear little relation to pensions nowadays, but that was always the justification for them as something much more special and worthwhile than 'just another tax'.

I think people will say, not at all unreasonably, that they shouldn't be expected to both pay for decades towards their pensions AND have to sell their houses/release equity to, erm, also pay for their pensions.

I really don't think that any government can spin it that they give you a pension out of the sheer generosity of their own hearts; so you must keep on paying your NI contributions but still feel guilty for asking for anything back 30, 40, 50 years down the line.

Surely the scrapping of free university tuition fees and loading a whole ton of debt on to young people for all their working lives must have nudged the balance somewhat, compared to the years when uni tuition and grants were given out free?

I understand that but earlier generations started work at 15 / 16 whilst now it is more like 22. There's 7 years the younger generations have gained.

I paid NI from 16 with a weekend/holiday job. That's quite normal. Earlier generations certainly had more mothers not working/working p/t.

We have already asked young people to pay more for education, accept stagnant wages, high housing costs, pay more tax (frozen tax bands), have no or fewer dc, have less generous private pensions & now no state pension. Well you can but we need them and they will just go elsewhere.

I think it will rise to 70 and that NI will become a different tax that is also payable on pensions so more tax is paid on any extra over the tax free allowance.

I don't think actual means testing works as its a huge disentive for low or even middle earners risk having to a lower standard of living now, and then losing state pension and then being in the same position as someone who didn't save/contribute.

if anything happens to significantly change things I think they’ll have to give decades notice otherwise all those relying on a state pension will be supported by pension credit so there goes any savings . If you don’t give people adequate notice they won’t have time to build up a private pension .

University fees are a contentious issue. I don't think students should have to pay fees but do think only the top 10% should go to uni.

do think only the top 10% should go to uni.

But then employers need to stop asking for degrees