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?

Haven’t read the full thread yet. But I’m in my mid 40s with no significant private pension. I’ve quite frankly stopped worrying about it. It seems to be that the more you save the more you lose.

My parents always told me to make sure I work and pay my NI or I won’t get a state pension. Then in my 30s I discovered that even if you don’t you just get pension credit instead. Which often leaves people better off than those on state pension.

Everyone says you don’t pay towards your state pension. Which I get in theory. But yet they advise you to “buy” any missing years in your NI. I have a few missing years due to uni etc. Like fuck was I buying them (would have cost me about 4k) for them to say in 30 years oh no sorry actually that 4k didn’t mean anything you’re not getting a state pension now.

I have a house. I plan on selling that and downsizing and living off any profit when I retire. But people on here would have that all taxed away as well. But do you know what I actually don’t care. I’ll spend every penny I have then I’ll go on pension credit. I cannot do any more. I have never claimed any benefits. I started work at 16 (with a break for uni in my 20s). I save what I can in my small pension. (I work in self employed health care so no employer contributions or even benefits like holiday or sick pay so I pay for my own insurances for if I’m sick.

I know people who have never worked who aren’t worried about retirement as they’ll just get pension credit B and other benefits. So once I’ve spent all my money I’ll just join them.

No sympathy is sought by me @BIossomtoes. I was self-employed so there was no organisation to pay mat leave, sick pay, pensions/benefits or IT support, hence I used several years experience in the financial services sector to work through our options. And the only reason that we're not knee deep in glossy travel brochures is that we can't go anywhere sunny ATM because of skin health issues!

@Dearg

Personally, the idea that triple lock will take state pension above personal allowance also makes no sense to me. I would peg it so that didn’t happen.

Increasing personal allowance across the board isn't affordable.

Giving OAPs a special higher personal allowance isn't politically acceptable.

So the only way for your plan to happen is to scrap the triple lock and peg basic state pension down to the personal allowance.

Or, they could just tax the difference, as they do now for pensions who have enhanced state pensions.

The NHS isn't the only public service. What about infrastructure, security, defence, education, etc??

@taxguru You misunderstand what I mean. I meant to say peg the pension so it never rises higher than personal tax allowance I think we are on the same page here.

And yes of course they would tax the difference. Any pensioner who has income more than their personal allowances has a requirement to pay tax now

The idea that pension triple lock is greater and that it then requires more pensioners to process tax returns and HMRC to administer that with costs involved is just nonsense to me.

When I started you could go at 60, then 65 and now for me it’s 68. My mother went at 50 (same job high stress) and I’m going part time at 52 and I will have retired by 55. No 68 year old could do my current job - I’m exhausted on a daily basis - just no.

I can not see the new people coming in as having the same pension - currently they are paying in the same and will get about 1/2 the value of mine.

Someone on minimum wage is paying, what, £3k or so in NI and income tax a year, but I imagine is also a relatively heavy user of the roads (paid for on the whole by the taxpayer), public transport (subsidised), education and training, I suspect use proportionally more police resources as a cohort than 60 year olds, probably draw on Local Authority resources for housing at a similar level to the elderly, and use more local authority subsised sports facilities and parks. Can that all be covered by less than £3k... I'd guess not :)

But they probably spend on clothes, going out etc adding VAT into the pot

tax isn’t just income tax

They wont be a net contributor. But plenty of older people are not either. You need to be on over £41k to be one. A lot of the most vital jobs pay way less than that.

It is a moot point really. Pretty much blaming people for not earning enough.

Without the Universal Credit, the minimum wage would be lower. Labour costs would find an equilibrium. No employer who wants to make a profit at the end of the year is going to pay more than the work earns. So if my DH is not making a little margin on every hour on every person he employs, to cover the office and rent costs etc, plus a bit for him, who found and sold the work and who will take the risk of the whole shooting match going wrong as a personal debt. All the risk ends up at DH's door. There is a cost of being in business, and I don't see any understanding of the risk he takes daily. It's not insured when he says I will do that job for £x00.

Quite seriously, if you have never worked for yourself, without an employer and a guaranteed pay cheque each month, then you really do not have a clue about what the word precarious means.

This particular government is not the worst I've experienced, but they really seriously do not understand the reality of life for the small businesses that employ about 80% of the population.

Unless the micro and small businesses are doing okay, and getting by, then there's half of fuck all to redistribute. Sorry to piss on any parades.

100% this. Essentially Pension Credits.

Life expectancy will start to reduce soon, the people living into their 90s now are tough people who lived much more active lifestyles.

state pension will probably be replaced with the LISA

It's not a future I want to live, hence I started planning what I DID want 35 or 40 years ago. There is no quick fix; everyone earns the retirement they deserve and the sooner governments hoist that in, the better.

Obviously if they’re on minimum wage they won’t be in receipt of education because they’re working. Why would they be any heavier users of the roads and public transport than any other age group? Housing? Don’t make me laugh. Where I live subsidised leisure facilities are long gone. You might have a point when it comes to crime although those who commit crimes are hugely outnumbered by those who don’t. So basically roads and buses.

What about people who don't earn very much? Don't they deserve a decent retirement too?

Roads and buses are hardly the costly bits of LA budgets. The cost is social care, whether elder care or juvenile. Roughly £50K per capita young or old it ploughs through the money raised from council tax-payers faster than most people can earn. I am decently successful and still a net tax-payer in retirement, but the bit above what I cost and pay in income tax doesn't touch the sides of an expensive EHplan, and there are thousands in every local authority.

Exactly that. The biggest cost to local authorities is social care, not something healthy 18 year old have much call for.

Frankly, they need to understand that they are on thin ice and do better for themselves. I explicitly EXCLUDE the intellectually and physically disabled, but not the obese or the wimpy.

Oh come on. As we discovered during Covid the people most essential to keep the wheels turning are the lowest paid. How short memories are.

Of course they do, if they save for it.

The people in the lowest paid jobs are the ones who brought your shopping to you during Covid... the ones who were with your elderly relatives when you were not allowed to be. The ones who emptied your bins full of empty hand sanitiser bottles, wet wipes, and masks.

We NEED people in the low paid jobs for the world to function.

Not everybody can "do better for themselves". Not everyone is capable of doing a high paying job. Doesn't necessarily make then any less deserving of a decent retirement. And remember somebody has to do the low paying jobs.

Nobody brought my shopping during Covid, ever. I went to Lidl every Tuesday pm myself, masked and bought a week's groceries. I emailed the butcher and picked up the order 24 hours later from the parking area.

And @Nosferatu, I don't buy your patronising spiel. Most people can make a decent go at a decent life; some need a bit of help to get there. Those people are unlikely to be working for Goldman Sachs, but they can still hold down a job that's valued by their community.

And some of those vital jobs just don't pay much.

The staff serving you will have been low paid. You relied on them for your groceries. They were essential.