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?

To balance the books there needs to be more tax on the unearned wealth, basically the rise of house prices and untaxed investment dividends, not the already stretched younger workers.

It’s not the wages it’s the expenditure that cripples the young. The older want a better health service and to keep the triple lock then there needs to be a way to tax from the demographic as well.

Once you get a voting population that has more renters than home owners they will vote for a party that puts their needs first. And that is going to happen.

Agree with pp that it's all worryingly bleak.

I’m in my 30s and have no expectation that there even will be a state pension by the time I get there.

But if the AI revolution is as expected, the #childfreegeneration-ers might be onto something, as it may well be that we end up with a huge rate of unemployment in the next generation as jobs are replaced and they won’t be funding our pensions anyway.

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

Most pensioners have private pensions now, schemes haven't got more generous.

Perhaps the means testing will be the same threshold as winter fuel, 70k household income?

It’s not the wages it’s the expenditure that cripples the young. The older want a better health service and to keep the triple lock then there needs to be a way to tax from the demographic as well.

Agree

Just considering means testing seems reasonable once everyone has had the benefit of employer contributions. As that came in in 2018 it would be for all those born around 2000
although appreciate zero hour contracts have impacted that

Raise retirement age to 70. Freeze pension increases.

Also if you are child free then you aren't worried about passing on an inheritance to children, so that will fund some of the gap. Child free folk will be fine.

Plenty of cheaper countries still to move to.

Pensioners are taxed once their income, which includes the state pension, gets over £12570.

What they don’t pay is national insurance

But if the AI revolution is as expected, the #childfreegeneration-ers might be onto something, as it may well be that we end up with a huge rate of unemployment in the next generation as jobs are replaced and they won’t be funding our pensions anyway.

This as well.

Freeze pension increases!

I assume you don’t mean forever

Also if you are child free then you aren't worried about passing on an inheritance to children, so that will fund some of the gap. Child free folk will be fine.

While I agree with this, there needs to be a better way of releasing money from any property than there is at the moment. Equity release isn’t great, and there really aren’t many decent downsizing options.

Other than downsizing and equity release, how would one release money from property? What "better way" could there be?

Give an example of what type of job

When the state pension was introduced 80 or so years ago at 60/65 the average life expectancy was about 65. Now life expectancy is 82. People also now start working later on average. This is fundamentally why the system is fucked. People pay a bit less time and draw out for a much longer time. It needs to be rebased to a retirement age closer to 80.

It really is bleak. I’m 35 and my parents are in their 70’s. I could never have the wealth they have acquired and have done everything right, gone to uni, worked. They gave me a massive deposit to help and it was still hard. I think their generation was the last on the gravy train to the top, it’s now coming back down…fast.

When the state pension was introduced 80 or so years ago at 60/65 the average life expectancy was about 65. Now life expectancy is 82. People also now start working later on average. This is fundamentally why the system is fucked. People pay a bit less time and draw out for a much longer time. It needs to be rebased to a retirement age closer to 80.

This is nonsense as you are arguing the fact that healthy life expectancy hasn't increased. Life expectancy is 80 ish. And people may start working later (i've paid NI since 16 & i'm not unusual) the majority of current pensioners didn't pay in anything near enough.

I really love my job and I would like to work as long as possible. But my big fear is that employers simply won't employ me because of my age. Are employers going to change their prejudice toward older employees to reflect a changing society?

ignoring not arguing!

who will be employing all these 80 year olds and then what jobs and progression is there for the young?

Pension age is already 67 for a lot of middle aged workers

Many are inputting into a private pension on top of workplace to retire closer to 60 than 70.

People are just going to either fund it themselves, or live on job seekers until state pension. Or find, stay in employment.

Just as uni has to now be personally funded, an earlier retirement will need to be.

This is why they are tightening PIP and sick allowances, to stop people thinking “I’ll go on sick until state pension age” - they know people will game the system. So tighten those rules first, then change the pension age again.

Of course healthy life expectancy has increased considerably. Previously people died now they don't - so they must be healthier, unless you're going to argue that dead is healthier than alive. People in the forties didn't all just drop dead at 65 they would have been ill in the run up. People have got used to the idea they should have decades of retirement, if you want that you need to contribute more to a private provision.

Exactly. Child free and thanks to my (boomer) husband don't even need a state pension.

Of course healthy life expectancy has increased considerably.

Has it? In recent times? Can you link to that data please?

Previously people died now they don't - so they must be healthier, unless you're going to argue that dead is healthier than alive.

Do you understand the definition of healthy life expectancy?

@krustykittens There is no retirement from work on age grounds. There is your capacity to work at the required level which can be a reason to move an older employee on.

Employers won't employ people with long term health conditions either. They get put on warnings and end up leaving.