To think this is a real possibility in the future? (State pension)

[TheOtherBoleynSister]

I am 34 and ever since I started working people have said don’t rely on there being a state pension. So I’m pretty pessimistic about it.

I honestly believe that for people under 40, the universal state pension (paid regardless of income or capital to those who have paid NI for a certain number of years) won’t exist. That there will be no qualifying ‘age’, and instead older people will be the same as the rest of the population when it comes to benefit eligibility ie. Have to be certified as too ill or physically unable to work, and get UC if income is low and savings are below £16k. In other words, being a certain age won’t entitle us to any benefit like it does now.

In this awful very bleak future, older people who can no longer work, who have savings/money above the threshold or private pensions, will need to rely solely on the money they have unless or until they get to the point where they now qualify for benefits.

Of course I don’t want this to happen, but with all the stories about the cost of pensions and the rising number of older people it feels inevitable. But the reality is many people’s private pensions won’t be nearly enough to last (but maybe they will be forced to spend them before any help), and there’s also talk in the press of some wanting to do away with ‘generous’ public sector pensions (which are not as generous as they used to be, albeit they are better than a lot of private schemes).

I am quite aware of pensions due to older relatives and friends who are of that age, but many people my age haven’t a clue about them or how they work. I do think we will be seeing a real disaster in less than 30 years, but people don’t care as it’s someone else’s/ tomorrow’s problem.

No.
That bill is for people slowly dying in agony of illnesses like cancer or paralysis.

If you meant your comment as a joke, then perhaps an emoji would have helped.

The Assisted Dying Bill is ... er, dead.

I think it’s because the generation with a pension age of 68+ are those in their mid-40s or younger, who think retirement is light years away and they’re more worried about mortgages, childcare etc etc. So they didn’t take notice of the changes or bother to protest. Most people don’t care about their pensions or state pension age until they get to their 50s and it’s not so far away.

I think that most people using the pot analogy for state pension and public sector pension may imagine that once the pension holder dies the remainder of the ‘pot’ is an asset paid to beneficiaries. It is not. Under public sector schemes there are specific rules about widow/widower pensions and amounts paid to dependant benefliciaries.

You don’t get an annuity of say £20k a year whilst keeping your pot to pass on as inheritance when you die. Neither state pension or public sector pensions are realisable cash assets. You are just guaranteed an income for as long as you live. If you die earlier than projected you have no right to claim what you paid in but didn’t receive.

Private pensions and defined contribution schemes are different. Your savings might not be enough to leave capital in tact if you live longer than average and may be reduced but if you die younger than average your total pension pot is a realisable asset.

Inherited wealth is a significant part of the problem of wealth inequality. The state pension was not designed to allow the already wealthy to claim state benefits to increase asset wealth. It’s just ‘free money’ that they don’t need that pays for luxuries or is saved. To others its essential to pay everyday expenses. This is the issue that needs to be addressed.

There will come a point though when the benefits system will have to change. With more and more people claiming PIP and DLA, I think it will eventually be given to only the most severe cases.

The perfect storm will be over in 15-20 years with the majority of boomers dead, the youngest of them will be well over 80. That will be accompanied by the biggest intergenerational transfer of wealth in history.

I don’t think it’s fair to just carry on as we are and dumping all the problems on the younger generation.

So you think this should be the first younger generation not to have to pay for older generations’ pensions? What’s so special about them? Their parents and grandparents have all done it.

Very true but they are very much in the minority. I have taken early retirement simply because my brain would not retain the ever changing tasks involved in my (low level) admin role. They will now likely fill my role with a youngster. And good luck to them, they could have done that years ago.

Their parents and grandparents had access to affordable housing a free education.

The burden is much greater now than it used to be, due to a greater number of pensioners, people living longer and the triple lock etc . When today’s pensioners were working their taxes paid paltry pensions to a much smaller number of pensioners.

I do not think we should stop pensions though, as there are many people do rely on it as their sole income. And people may be living longer but they’re not necessarily living healthier.

I’m just pointing out it is very different now than it was 20+ years ago.

Education is still free. If you mean higher education only 5-10% of them had access to it.

The youngest boomer is currently 61 so they will not be over 80 in 15 years.

I understand your point and it is true that people before have always paid for the previous generations pensions. But now we spend much more of our GDP than they ever did when they were paying. Pension spend in 2007 was around 3.3-3.7% it is now 5% and set to rise to 6.2% by 2037. This all means that there will be less money to spend in other areas of the economy. Spending on working age adults and children has flatlined in the UK for many years but spending on pensioners has been ever increasing.

I don’t know what the solution is it’s a very difficult problem to solve.

Well that's 5-10% more than do now.

What’s so special about them? Their parents and grandparents have all done it

it’s the demographics.

There are already more over 65s then u15s, it’s uncharted territory

how else do you make your money grow

In the end, you don't. It is not a law of physics that money has to grow.

more people who invest in the stock market the more money companies have to grow and make more money
Money does not make money in the absence of real-world physical inputs, notably labour, and also in particular a functioning society. Our society runs on oil - which is not a renewable resource.

You have an unexamined belief in perpetual economic growth and "progress".

The youngest boomer was born in 1964. They will be 62 this year and 82 in 2046 - the timescale specified was 15-20 years.

Boomers are the bulge in the snake. The next 20 years will see a peak in demand for pensions then it will die away again. As they die there will be a huge cascade of wealth to younger generations.

Define wealthy

No I invest on the basis of history because we have nothing else to go on other than made up nonsense. Maybe I’m wrong - doubt it tho.

The state pension was not designed to allow the already wealthy to claim state benefits to increase asset wealth.

Then why was it designed to be universal? It’s only in the last few years that it’s been designated a “benefit”. The wealthy repay it in tax anyway.

You pay tax on anything over the state pension.

How far back does your history go? And over what geographical spread?

States go bankrupt. Societies do collapse. Entire civilisations vanish from history.

If you are just looking at the history of Western Europe and its diaspora over the last 500 or 600 years, you are not looking far enough.

Money depends on oil, and the supply of oil is shrinking.

State pension age in 1908 was 70, life expectancy was less than that. In 1946 is was lowered to 65, the average person at that time lived to 66. Half the population weren’t expected to live to see retirement age so would never get a state pension. Those who did weren’t expected to live very long.

Life expectancy today is over 80. Completely different demographic. Aging population, people have fewer children. It’s just not sustainable.

They’ve been saying this since I was a child 40 years ago. Still we have the same levels of unemployment that we ever did.

I know, my P60 tells me that!

Every “crash” since 1929 has seen not just a recovery but consistent growth. You can (and should) invest globally very easily. But look you do you and best of luck to you. I’m happy to take my chances on the stock market.

So what are you suggesting, who doesn’t get it?