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?

You have most definitely been part of the story @BIossomtoes .. Actually you nearly qualify as one of my closest friends!

Oh that’s lovely. Thank you.

Despite the rhetoric, I don't think immigration will get any lower. Reality is with so many elderly, there is an even greater need for migrants who do care work. Reality is Brexit meant an increase in immigration from areas such as Asia as doctors/careworkers and nurses were needed. Also agriculture and hospitality is largely dependent on migrant labour too. Also a significant proportion of births (20 per cent I think) have mothers who are foreign born. So if not for immigrants, birth rate would be even lower.

It might not have a huge impact, but I've certainly read posts online from women who've had only 1 child due to not being able to fund childcare and / or university for a second, so it could have some impact. And these are the people we want to be having children as their children are more likely to than some others to become tax payers.

What’s unfair in my opinion though is the people who never work and never will do and aren’t affected by this.
Where as people who work all their lives have to work longer with no prospect of having a retirement.

A little off topic , but how are people from abroad who work in care for example, background checked ? Do they get a DBS check ? How do they check people from Asia for example?

My job requires security clearance, it’s quite in depth. But I’ve often wondered how they check people who come from abroad , including my job.

On the other hand we are told AI will take all our children’s jobs so what work will there be for them to pay their taxes from?! What’s the point of having all these children if there is no work for them?

Robots can do the old age care.

Don't be!

One of the reasons we are in such a mess is because the country has been run down.
So not only do we have issues funding state pensions but we haven't the money to fix the infrastructure and the under staffing in public services - 3 years to hear a court case?
Stroke patients put in corridors?

We failed to keep up with mtce, charged health degree students - now we have to replace and rebuild, costing far more and import nurses etc.

"All row together?" the rich say they'll leave the uk if taxes go up, the m/c's say they have no more money and poor, well, they are poor!

Growth escaped the Tories for 14 years but the moment a Govt comes in that increases taxes in an attempt to fix some of the issues, its all disaster and mayhem - without any alternative.

I don’t think immigration is as linked to this as you are thinking. Sounds like a good argument but it’s not a solution to such a huge huge problem..

Yes

oh don't worry about that, long term unemployment reduces life span by around 10 years, so will only be claiming pension for 3 years, if that.

Feel happier now?

I was told 30 years ago that there would be no government pension for me and that I should join the work one or start my own, so I would be very surprised if anyone got a pension in 20 to 30 years time that they haven’t funded themselves.

No one official told you that though. As it stands the official line is that there will be one. People can assume/believe there won’t be. And I agree that sensible older people will advise younger people not to rely on it and to start their own.

The problem with saying there definitely won’t be one for ANYONE in 30 years is the same as telling people there won’t be one for you personally unless you keep up your NI contributions. There will be a “pension” (call it whatever if you want) for those that do not have a private pension. The same way there is pension credits now for those that have never paid in. It may not be officially called state pension, but there will money paid to people of pension age the same way there is now.

I don't think this will be a problem as life expectancy reduces due to enviromental toxins and lifestyle factors. I think we will all die a few years off 70.

I’m sorry to disagree but I was 20 and a specialist in pensions visited and briefed everyone at my work . I thought everyone knew this ?
im only 50 now but by the time I retire any state funded pension will be so tiny that it would be impossible for anyone to live on it , to the point it may as well not exist.
i imagine those who are eligible for benefits may receive more but the rest of us? No .
this problem predates immigration, there is simply not enough money.

Not really. Why would I feel happy that some people never working or intending to ? ( I’m not talking about disabled people for example)

Wheres your evidence to support that fact? I don’t believe it’s true. You may think it is but it isn’t.

Does raising pension age cause job blocking? Young people unable to get jobs due to people having to be made to work 3-5 years longer?

Also what about those people in physical jobs - they would be fit enough (some will be) to do that physical job at 68

As I said I’m not disagreeing that the state pension in its current form is unlikely to be around in 30 years. My point is that is not the OFFICIAL line. The government still say it will be around. The government are still recommending people who have gaps in their NI contributions pay THOUSANDS to top it up so they are entitled to their pension. THAT is still the official line. While you might have had great advice from an independent pensions advisor (and I agree it’s great advice) do you actually think this was a country wide thing? That someone similar visited every single workplace in the past few decades? What about self employed people? Did they visit them? What about stay at home parents or carers? Did someone visit them and tell them they wouldn’t be getting any pension?

I’m not disagreeing that people with high private pensions may not receive a state pension. But for pretty much everyone I know they will not have enough to live on without it. So whether it’s called a pension or not it doesn’t really matter. But people who are older and do not have enough private pension will receive money from the government in some way. And yes those people who earned enough to gain a good private pension will be unlikely to get anything.

My parents worked. They received a state pension. I have an aunt who never really worked. Was married at 17 and then was a housewife and then a stay at home mother for two kids then back to just a housewife. My parents paid in their full NI contributions in order to get a pension. My aunt did not have enough. My parents got their pension. My aunt gets pension credit. Whichever way you want to phrase it they all get money from the government because they are a over a certain age.

I see what you are saying, my parents were teachers ( my dad was a university lecturer) they had obviously paid in for their pensions and paid ni , what they receive now is a pittance! It really is shocking but then they missed the best time for pensions as they only retired 8 years ago!
the government are never going to take a public line because they don’t want us to know that our ni payments are funding pensions for previous generations because they are so behind.

they don’t want us to know that our ni payments are funding pensions for previous generations

They’re not doing a great job of hiding it. I knew it when I started work - 53 years ago.

I think a lot of people are well aware of it. But they muddy the waters when they tell you how many years of NI you need to pay in order to qualify for the state pension.
They shouldn’t be telling people they can “top up their NI years” by paying (in some cases) thousands in order to get the pension and then say actually you weren’t paying that for your pension.

I got quite disillusioned with pensions and cashed my SIPP at age 55 ( am self employed) to give to e HMRC (a vast sum - 45% tax on 75% of the fund) and the children for housing and will work until I die. If I reach age 67 I will get about £12k a year before tax and that will be subject to my highest marginal rate of tax just as my father's was and his NHS pension - he paid loads of tax on his pensions and died at 79.

No Xenia, it won’t be subject to any tax, your personal allowance covers your state pension. All your taxable income will derive from your private pension(s).

From a personal point of view, re having children: We have one dgc. Our dd has no plans to have any more at the moment. The cost of & the shortage of childcare is a big issue. Then there's the increased costs throughout their lives with having more than one, cost of living worries.
A lot of friends/relatives my age say their dc only plan on having one child at the most, due to cost. It seems like having dc will be the privilege of the well off.
One friend has 2 adult dc. One of them will emigrate to Austrailia with their Australian partner if they choose to have children, as they believe they will have a better life there. The other one has no desire for children due to the state of the world, bleak outlook re health care, education, lack of housing, lack of well paying jobs due to AI.
I think a lot of youngsters already have a bleak outlook of what lies ahead re the issues I've just mentioned and have no desire to bring a child into it.

No, the state pension IS taxed - not at source but it is taxed if you earn over your personal allowance which I will so the state will take at least 40% of it from me, even 45% of it as I will work until I die. IN fact as ou probably know a lot of professional wokmen now don't get a personal tax allowance at all and every penny of their earnings are taxed at full rates.

However I agree that those who only have a state pension and no other income at all will indeed have income below the personal tax allowance and state pension then not be taxable. Sadly for my father and for me the state takes almost half of it away in tax.

(I don't have a private pension)