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.

Because they won’t have the benefits of UC tops ups, child benefit and they will incur extra expenses for things they can’t do anymore, like taxis because they can’t drive, or cleaner/gardener/handyman because they’re too old to manage without help. In addition, in retirement you have a lot of time on your hands so spending on socialising and trips goes up. Finally, adult children cost alot more than little children, they need to live at home at times, need help with a house deposit. Extra medical costs not covered by the NHS.

The figures are based on the spending patterns of retirees today and what that gets them. It shows what the money is needed for.

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1. Most people on the figured quoted will not be eligible for UC top ups. Working families with a mortgage are unlikely to be on universal credit
2. pensioners who need help with mobility would be eligible for attendance allowance
3. Adult children cost more than little children? How absurd! How anyone can argue that is beyond me. They are adults! You don’t have to pay for their daily living like you legally have to when they are actually children. Helping with house deposits is a luxury and not a god given right and something many can’t do. Many parents stop financing their adult children at 18.

Yes precisely, if they announce changes to take effect in the future - and pick a start date that would affect a cohort that sees retirement as another lifetime away - there will be little fallout for a very long time.

A bit like with the announcement of changes for women in the early 90s - people at the time saw it as something that would happen long long in the future. Many people say they were not even aware of the changes - if that’s true, it’s probably because the women affected were in their 30s and didn’t think, understand or care about pensions as it was light years away

@TheOtherBoleynSister
Most people on the figured quoted will not be eligible for UC top ups. Working families with a mortgage are unlikely to be on universal credit

The ONS figure itself stated that these households are, on average, in fact in receipt of around £3k/yr in benefits “Median equivalised household income in the UK before taxes and benefits was £38,900, increasing to £41,900 after taxes and benefits.”
I mentioned child benefit and/or UC as possibilities, especially since UC now includes JSA and ESA. Working families with a mortgage usually are aged 25-44 but these are also the age groups most likely to not be homeowners but to be in private rented accommodation. This makes it more likely this age group would be in receipt of benefits. (See image)

pensioners who need help with mobility would be eligible for attendance allowance
Attendance allowance is for assistance in the home with supervision and self care for your own safety, the example given is blindness. You can’t get it for a gardener or home repairs or driving or cleaner due to simply being old and arthritic.

Adult children cost more than little children? How absurd. They are adults! You don’t have to pay for their daily living like you legally have to when they are actually children. Helping with house deposits is a luxury and not a god given right and something many can’t do. Many parents stop financing their adult children at 18.

They can cost more. Support at University costs around £20k per year per child. Fleeing domestic violence. Job loss and bankruptcy. Early onset cancer or other serious illness. Accidents and injury. Drug addition and mental health. There are many events that can cause an adult child the need to return home for parental support and the parents are then paying the costs to house, feed and get these children back on their feet. Yes parents are not legally forced to help their adult children, but the reality is that they do and that costs money. Yes, helping with a house deposit is a luxury that 55% ( a majority) of first time home buyers in the UK get. This not even counting the costs parents take on to support their grandchildren.

It wasn’t the changes made in the 90s that upset us, it was the second hit when we were on the verge of retirement. The legislation that means no change can be made with less than ten years’ notice was a direct result of that.

To avoid IHT, we have given DC the full price of a house under the SDLT threshold. Now one of us needs to live six years.

Intergenerational wealth transfer is always going to happen, whatever Rachel Reeves wants. When the time comes, we'll transfer our bigger house into DC's name and move into the smaller house. We'll pay the duties.

What if your child wants to live somewhere else?

We'll work around it.

Legislation can be changed at any time.

Not without public uproar. Look at the changes they made to WFA, then multiply it by a factor of thousands.

True. This is how a minority is made vulnerable and the majority don't stand up for them. Those within ten years of retirement haven't a hope of plugging the gap if they were relying on the old system (this is what's just happened in Ireland and no doubt it will happen everywhere because it's an easy way for governments to save money at the expense of a small, vulnerable cohort). The older and younger cohorts will be hit at a later date, separately. If only people would stand up for others this divide and conquer could be conquered.

You shouldn't have to pay it. No one should. Two reasons: 1 You already paid tax on your home when you bought it. It's envy tax. 2 People say it's "social justice" should think about the logical conclusion: next the revenue will be taxing able bodied people for having four good limbs, two good eyes...

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You haven’t paid tax on the increase in value which is where the majority of most people’s wealth comes from. That’s money that’s never been taxed.

We all pay tax multiple times on the same money anyway. You buy something with money already taxed and then pay VAT.

There’s no way I’d try to dodge IHT. If a share of £1 million tax free and 60% of the rest wasn’t enough for our kids something has gone badly wrong with our parenting.

We'll have to disagree on the ethics of that. And as for fairness, it's unfair that only the very rich can profit from their investments when people who saved hard for an ordinary home can't choose who to pass on the profit to. My neighbour left her home to a dear friend who cared for her and was renting, and now the poor carer has to sell the house to pay the tax, and can't afford to buy a home with the residue. Her friend wanted to make her secure for life. But because of the tax she's going to be a drain on the welfare system as she'll need rent assistance once she reaches retirement age (next year). She may be homeless by then because rents are rising and outpacing welfare supports. This is not fair.

•it's unfair that only the very rich can profit from their investments when people who saved hard for an ordinary home can't choose who to pass on the profit to.•

IHT kicks in at £500k for a single person and £1 million for a couple, then it’s 40% above that. In many people’s eyes that’s pretty wealthy. Could your example really not find a property for £500k + 60% of the rest?

Do you think the very rich don’t pay tax?

That story doesn’t make sense @MarriedTwiceOneGrownUpDaughterI get she may have to sell the house however their will be residue that she can live off, she won’t then get benefits as my understanding was that it was a max £16k savings rule. Perhaps there are other things she can do, move to another area. This is what many of us have to do although on Mumsnet it appears that you shouldn’t have to do it if you are lower paid or on benefits which doesn’t make sense.

As regards people ‘living off’ their investments, tax is paid on money going into those investments, on appreciation and upon taking out as income if from a pension. Only ISAs are tax free. Plus there’s risk you’ll lose money if the stock market crashes.

I could argue that given the current state of the world it is harder being a lower to middle income earner with no benefits. Lose your job and you could lose your house everything. Benefits on the other hand untaxed money increasing each year, if you’re a genuine PIP person then you’ll continue to get it. Social housing owner - rents manageable, repairs paid for etc. No wonder NEETS see a future in benefits, if you can wait long enough you might get a house, secure income and all you have to do is turn up at a job interview.

Meanwhile the rest of us pay increasing tax and are told we might not get/shouldn’t expect a state pension!

What do you mean by ‘because of the tax she’s going to be a drain on the welfare system’?

The recipient won’t be eligible for welfare or rent assistance if they’re inheriting a house, assuming the residue is over £16k.

IHT kicks in for a single person at £325k if they don’t leave to direct descendants. So the recipient will still be getting at least £325k which is enough for a property in many places.

So there is something fishy about this story.

Agree, I think IHT is one of the fairer taxes that exists. No one is entitled to someone else’s wealth, and many people don’t inherit at all.

The threshold are also pretty high - a couple leaving to their children have a threshold of £1million before any IHT is paid.

In the future there is going to be a big wealth gap and inequality between those who inherit and those who don’t.

As others have said you only pay inheritance tax on money over £325k. So your friend is going to have a minimum of £325000. Even if you allow a bit of that to be eaten up by solicitors fees or similar she’s still looking at having over £300k. Unless she lives in central London she should be able to buy a flat for that. I sold a flat in outer London for £320k a couple of years ago.
So even IF she lives in central London but refuses to move area so can’t afford to buy she still won’t be able to claim benefits while having £325k+ in the bank.
(If the house is in central London it’ll likely be worth a hell of a lot more than £325k and you only pay tax on the money over that so likely end up with a lot more than £325k)

It's Sunday (family time) and I may have missed a few comments, but I'll just sum up a response to those I've seen: Deceased neighbour's friend is in Ireland, where the rules are that anything above 30k must be taxed at 33 % unless the recipient is the deceased's child. This woman is a friend. Another thing: the exemption for a child is 400k, not enough to buy a home in Dublin where the deceased and her friend lived. Friend doesn't want to move out of her community where she has a job, friends and family. She doesn't want to be a drain on the welfare system, which she will be when she retires because she will need welfare top up on her rent. She is lucky to have a good landlord but he's elderly too and no doubt if he passes or goes into a nursing home his family will sell the home she's renting (think it's a very small bedsit, but in Dublin it costs at least 1k+ to rent even a bedroom room in a shared house). So this woman, whose friend wanted to make her independent, will be a drain on the welfare system. She's too old to emigrate, upskill for a great new career that she can do in retirement, marry a millionaire... She's not rich. A rich person would have prepared for this well in advance, investing spare money but she has no savings to invest. She can barely pay her rent, lives a very basic life with no frills, only free hobbies (Parkrun, sea swimming) and hasn't had a holiday in years.

One more thing: someone mentioned Universal Basic Income and I responded saying I was in favour and giving reasons why. Here's a good article on the subject (thanks DD for sending me this):
https://www.americamagazine.org/short-take/2026/03/23/universal-basic-income-ai/

Well she’ll be able to have lots of holidays now.