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?

I’m mid forties and I grew up under the illusion stare pension was all you needed. My parents didn’t have private / work pensions . So I didn’t start a pension till early thirties. Then I worked part time so my contribution was low. About 5 years ago I realised dh (who is 8 years younger than me) had paid steadily into a pension since mid Twenties and paid in more than my monthly salary. I now pay over half my wage into my pension and I’m continuing to increase it. I am worried it will be gone by the time we get there.

People like to pretend that the problem can be solved in large part by bashing 'scroungers' but really, the state pension makes up such a large portion of the welfare budget that it would barely touch the sides.

True, they need to scrap the triple
lock.

We need to restrict illegal immigration. That's it.

But most people could afford to save something. Anyone who has any level of discretionary spending i.e. buying anything beyond the bare essentials needed to live (and I fully appreciate that not everyone does) COULD save into a pension - they just may not prioritise that over stuff they want now.

I’m not yet 50 but I very much doubt there will be a state pension when I get there. I think we are all going to have to make sufficient private provision. And the fact is, not having dc makes that much easier.

I don't really think about it because the idea of someone else paying it out in future just feels so foreign to me. I am trying to work and earn while I can now. No guarantees beyond that.

I also pay into a private pension which my employer matches by 7%. I was long advised not to depend on the state pension by relatives.

The future looks bleak for everyone. Personally, I would prefer to be given a state pension pot and have the right to choose when I exhaust both this and my life. I have no desire to be kept alive through modern medicine whilst suffering the indignity of incontinence and needing help to dress and shower.

Many people live for today, they won't forgo nice things ( extras) to save for something which may or may not happen. many people don't even live to see their state pension. I have had five friends die over the past couple of years, only one made it to state pension age and even then only a year or so of getting state pension.

Assisted dying. We will be killed by the state, and this will be good and virtuous

True - but then they shouldn’t be complaining if they do make it to state pension age and don’t have what they consider enough money!

They retired at 60 and 65, had smallish but enough fins salary pensions and didn’t need to give me much for uni or housing.
So to attempt to give our kids something close to the start we had we are looking at £200k NET per child (I got around £30k all in)
To have a retirement at anywhere near the same time and standard as our parents looking at pension pot of £800k-£1m

To me this is a crucial point as well - and @duvetsmuvet also made similar.

I've been saving into a private pension since my first job aged 22 (admittedly small amounts for much of that time as was relatively low earning then part time). DH earns more and has also saved since his first job. We have a reasonable pot at the moment with at least 25 years til retirement. We will try to increase savings levels as mortgage, uni fees etc allow.

BUT I still don't think we'll have the level of income in retirement as our parents did, because they had defined benefit, final salary schemes. In order to achieve the same level of comfort we would need to save a whole lot more. I didn't really realise this until recently and felt that because o began saving young, as my parents did, I would have a similar level of income/comfort. But of course looking at my forecasts, I won't.

So yes we need to do more to educate and support people to save in a private pension, and we need to explain how pensions work cos our generation has a much worse deal than our parents.

I do not think most people oppose immigration per se. Most people recognise the need for immigrants with the skill sets we need, who will respect UK laws espouse British values and become net contributors either in economic terms (highly skilled, highly paid and highly taxed) or social terms skilled in their field (eg Health and Social Care) earning a wage and doing a job that needs to be done.

What nobody wants is large scale immigration by people with no/low skills, who are incapable of doing jobs we need and who will always be net recipients of the state. Where such individuals enter the country illegally, commit serious crimes and do not respect our values, opposition increases

It is not difficult to separate these groups of immigrants.

@Squarestones and that's before you factor in wage stagnation and housing costs.

But most people could afford to save something.

I suppose they could but if they are renting, have given up the idea of children and just want to live life for now I am not sure I can judge. Plus saving something won't make
much difference will it?

Exactly. Tax relief helps those who already have money to save, but it does little for low or middle earners who can’t afford to put much in, even with incentives. . My son is 30. Astronomical rent, repaying student loan, bills and food cost taking up far more of salary proportionally than say when I was 30. His workplace pension is the basic 8% of salary. Most workplace pensions are not enough to cover for later life.

He's lucky. We've helped him set up a private pension and are paying into it until we are both retired in the next 5 years to give him a head start. We'll give him money for a house deposit out of our tax free pension allowance. Great for him but what about those who dont have parents who were fortunate to not have to pay uni fees, could afford to buy property which has gone up ridiculous money since the 80s, had decent work pensions and could afford to add to them. He doesnt want our money to buy property, have a decent pension, have a reasonable quality of life, he wants his own, like his parents had.

There'll be no state pension or it will be severely restricted I suspect by the time he is 65. Yet, there’s no shortage of cash when it comes to paying £130+ billion in dividends to shareholders from former public services, writing off £billions in corporate tax avoidance, funding multi-billion pound contracts for private consultant companies like G4, Serco, Capita

Absolutely. We need to get more people into work (am not bashing disabled people)

They need to make it easier for youngsters to pay into a pension as soon as they have a job. My teen has finished college and will have a year off to work. He hasn't been auto enrolled into his work pension so we have to sort that out. He could have been paying little bits into a pension since his first Xmas job at 17. He's already maxed out this years LISA.

@happystrummer and it not particular good for society that your success in life now depends on what your parents can give you vs your income/job.

This is why I've said on other threads that state sanctioned killing of citizens must never be allowed, whatever the reason. It's too risky a slippery slope. (If someone with capacity genuinely and voluntarily wishes to end their own life eg in cases of terminal illness, that is a different debate.)

I have relatives that had normal public sector jobs that live in houses now worth 1m plus who retired in their late 50s & early 60s on amazing pensions. Thats unthinkable today unless you earn hundreds of thousands.

I think things will look very different but I can't imagine it. Maybe immigration will be restricted to people qualified to work here, UBI may be a thing, state pension may be means tested, private pensions may be better, who knows, I'm sure someone will come up with something.
The boomers will have died off so it will be Gen X and millennials needing pensions, are there less of those?

Assisted dying. We will be killed by the state

I think that is wishful thinking & we likely can't afford to give everyone a dignified & controlled death. People will be left to rot & starve tbh.

No it’s not
but it’s another consideration when having a child
another reason for lower birth rates

or have a baby and basically say, here have a life of hard work, little reward but you know Mr&Mrs Greybeard in detached No.9 you can feel good keeping their pension payments going!

not really an incentive is it?

I think there comes a point where raising the pension age is pointless.

Thats not to say I dont think it will get to 70 but I doubt it would go further

So to balance the books
increase taxes
reduce welfare spending

at some point for those born after 2000 onwards who have had the benefit of employer pension contributions ( compulsory for all from 2018) we might see means testing of income

Yes agreed.. there's a whole heap of generational inequity which is just getting worse.