Who’s going to pay our pensions in 20-30years if the UK keeps its birth rate low and also restricts immigration?

[AlertEagle]

posted from another forum
Serious question. The UK’s birth rate is well below replacement level, meaning fewer young people entering the workforce. At the same time, the political mood seems pretty anti-immigration, even though immigration is one of the only things that’s kept the tax base stable.

State pensions are paid by current workers’ National Insurance contributions, not some magic fund. So… what happens when there’s a huge retired population and not enough working-age people to support them?

Will the government raise taxes, increase the retirement age, cut pensions, or eventually U-turn on immigration just to prop things up?

Feels like a ticking time bomb no one’s really addressing. Curious what others think, is anyone actually planning for this?

Or are we as a nation willing to give up state pensions if it means less immigration?

Lots of people have lost private pension pots with a crash. Govn pensions are safeguarded by the taxpayer but not private
That’s why investment in rentals became a thing. More long term saving for a pension than relying on rental money
That's what we did after one pension was lost completely.

The majority of people don’t WANT to have lots of children. Reliable contraception is the main reason why most families have only a few children nowadays. People in the past probably didn’t want to have 6+ DC, they had little choice. Obviously cost is a huge part of the reason but it’s not the only one.

Maybe I'm just more frugal than most, but you don't really need a huge pension pot as long as your mortgage is paid off at retirement.
My dc pot should be around 100k when I plan to retire at 60, that will last until I am 67, with a bit left if I keep it invested.(my dh will have his state pension before me, so that will help)
Then at 67 we can manage on our state pensions and a bit of savings.
This will pay for one car, and a few breaks away each year.

Inequality will continue to increase, and the beneficiaries and architects of that will find someone else to blame for people getting poorer.

And people will believe them.

I agree
People really don’t need that much. Our children have left home now and based on how much we currently spend ( that includes work travel and clothes ) we would only need £10k over the state pension and our house is quite expensive to keep.

I’m pretty sure that workplace pensions only go to your spouse? Or dependent children up to certain age? Sadly, a colleague of mine died quite suddenly about a year after retiring & her spouse only lived a year or so longer. So her NHS pension would have paid out very little. Her family don’t inherit her pension. So I think if you have a large private pension IHT should be payable!

Agreed. Well off people have been using DC pension pots as IHT avoidance. Pensions savings are there to fund your retirement, not to hoard money for your children to inherit. Ther

Also you get generous tax breaks for putting money in to pensions, it is an anomoly they have been exempt from IHT. It closes a loophole

Yes, we will have enough savings by retirement for any house emergencies, and will likely inherit a little, even after care home fees, so our priority is just retiring as soon as we can, and continuing to save in our pensions while retired, which people forget they can do, money still grows in drawdown.
I do think in the future those with massive private pensions might not get a state pension.

That’s generally the case for defined benefit pensions, but not defined contribution workplace pensions (which most non-public sector workplace pensions are) - defined contribution can normally be left to whoever you want.

(Yes, I am simplifying here before anyone challenges me!)

The majority of people don’t WANT to have lots of children

I agree though more children are wanted than born in UK currently -- for every 2 kids born another is currently wanted, usually by exiting parents and they often cite money as a limiting factor.

However as time goes on and family sizes continue to decrease and having fewer kids per parent becomes the norm - then that will continue to decline - it's why China relaxing the rules had little effect - partly cost of living partly social norm is now one child.

I don't think pre-natal policies have ever got up to replacement levels anywhere but they mean the decline in numbers are slower - so population still goes down but at a less quick pace so more time to adapt. It's similar to immigration in that way - immigrate rapdily decrease number of kids they have and also age - but we get tax while they work there are a short term stop gap.

The problem there is a point reached where having more kids is a burden population can't accomodate because the older depenents are too much already. Plus as most of the voting population is past child bearing age or wants to be child free - actually getting any support though for parents gets increaingly hard leading to lower birth rates.

If more people decide they are happy not having kids that works out - but if more people want them but feel they can't have them that stokes resentment in large sections of voting population - and may cause emigration if other countries look better losing us more skills.

So there a limited time to act to increase birth rates- and frankly I see no poltical will to do so. So we'll all have to get used to work longer and be poorer, getting tax more but with declining services and get used to immigration proping up population numbers - so more of the same.

I think a lot of us are discussing how much we might need if the state pension reduces in value or is means tested or is raised to 75 or removed entirely, rather than what we need if the state pension continues roughly in its current form.

A lot of the pension advice when I started working 30 years ago was still based on your private pension being in addition to the state pension which is why its hard to remove. People planned accordingly. There wasnt auto enrolment, lots of lower earners weren't even offered access to company schemes etc.

I guess people are thinking of saying to an 18 year old plan as if you need to fund the entire lot yourself.

Imagine your scenario without 2 state pension.

And they don't. My mother will likely go into care soon and I fully expect a charge to be put on the house and I think that's fair.
I'll get nothing but that's the way the cookie crumbles.

Yes and in the past I’m sure elderly relatives have also come and not contributed

You are not wrong. With UC there could be a charge against the house, and the UC could be repaid once the person gets on their feet. Zero interest.

Can I assume you’ve never worked for the Civil Service? I’m on £47k and I put in under £200pcm and they put in around £650pcm 👍

Edited to add- I think that’s why all the Daily Mail readers hate us 😂

Yes I’d love the councils and social housing to do an audit on who is living in properties and take legal action against those who are sub letting and take the property off them.

It's why theyre pushing private pensions so hard. They want to stop the pyramid scheme that is state pensions. I think eventually they will end state pensions and youll just get a form of UC to top up your private pension if you're below the poverty line

@BubblyBath178 if you read my earlier posts the conversation was excluding those in the public sector....

Obviously what private companies pay in is nothing like the public sector...

This. If I can still get a state pension at 68-70 or whatever I’ll be fine with my very small private pension to top it up. My issue will be if they remove it totally. At almost 50 I do not have enough time to get a nice 500k+ pension pot. There’s no point telling me what I should have done 30 years ago. It’s done now. I will happily save what I can from now on forward. I will happily downsize/equity release for extra cash. But if the state pension is totally removed I will not survive without it.

It’s a few years off, but I think you are correct.

People in professional jobs should continue working until they drop dead or become too mentally incapacitated to do their jobs.

People in manual work should retire at 65 or when their bodies start to fail if that's sooner.

You can't have a retirement age that's a decade past the age at which most people start to find manual work unmanageable.

I love the fact that people would rather never be able to retire than have more brown people immigrate to the UK.

Racism is expensive.

I may have this wrong, but don’t brown people also grow old and retire?

You can set up a private pension for your child from when they’re born. The earlier you start paying in, the more it accrues. The government pay in 20% extra too.