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.

We'd do well to listen to this bloke...
https://www.bbc.co.uk/news/articles/c9wqrdkx8ppo

I think the problem with triple lock is the 2.5% minimum increase element of it. It means even if there is no increase in inflation or average earnings growth, pensions would still go up 2.5% even though there is less coming in from taxes (as earnings have not increased). I don’t think the 2.5% measure has been used in a few years though, as wage increase and inflation has been higher than 2.5%.

EDITED TO ADD: 2.5% was last used in 2021. Inflation was 0.5% and average earnings growth was -1%

Of course there will still be a state pension, as long as you have the 70 years of NI contributions it will be paid as soon as you turn 90 , along with your bus pass

Most developed nations have a state funded pension scheme, I would be very surprised if the UK is the first to remove it.

When husband and I were in our 30s we didn't think there would be a state pension by the time we retired. I did have to wait an extra five years for mine but here we are now in our 70s and getting state pensions.

What I will say though was that we made sure to join any company plans, even though we could have done with the extra money and it was a struggle at times. But it paid off and we feel very fortunate to not have to worry too much about paying the bills now. So plan ahead as much as you are able.

You can still work and receive a UBI. Some people will just choose to live on less. Some people will always want more.

lol. WTF does the ceo of blackrock know about plumbers or electricians?

I think people who are pensioners now are financially less literate and had less opportunity for private pensions than the working generations today

Private pensions were more generous in the past. DB schemes were far more common as were final salary schemes.

It should happen now tbh.

Unfortunately its electorally poisonous.

It can’t happen now. It needs 20-30 years notice. If people don’t have income to support retirement because they didn’t think they needed it, they’ll only end up claiming benefits anyway.

The problem if they means test state pension, is that it is a massive disincentive to save into a pension.

I've been paying 10%+ into my pension from my 20s, and it will probably get me about the same as the state pension, if I'm lucky. If that then disqualified me from receiving the state pension too, then that would all be for nothing. Why would anyone bother?

Instead, they will have to keep raising the age, and reducing the amount, IMO.

You mean pensioners who have paid in to something their whole lives, suddenly have it removed with no warning. Not a vote winner- and ludicrous.

If it happens there will be group who pays in their whole lives then loses out though, it’s just a question of which group that is. State pension is paid by the workers of today.

And the money pensioners have paid just evaporates!

Pensions will never be removed but they will slowly be devalued.

We look at the state pension as the only way that the state helps us with pensions, but the state also provides a massive benefit in letting us save before tax. The cost of that to the government is huge. i think that’s a fairer form of pension provision, as the more you put in the more you get out.

Well it’s the same with all means tested benefits, if you have savings you won’t qualify. That doesn’t make (most) people spend all their money to be below the threshold.

They haven’t paid into everything. There is no pension pot. It’s a common misconception. You pay to meet the eligibility criteria of a state benefit (which the pension is) and the rules of that eligibility can change whenever the government wants to.

Absolutely nobody would pay into anything that would take the state pension from them.

The money today’s pensioners paid, paid for pensioners when they were working. It was spent as soon as it was paid in tax. However, there were less pensioners to pay for then. The number is much higher now and will increase.

Depends how they means tested it. Could be a sliding scale like uc.

Tough, legally at the very least if you’ve paid into something you are entitled to what you paid in back

It will just encourage people to save under thresholds and then you have the thorny issue of property.

Yes they would - mid and high rate high earners for example would never want to be stuck on 12k a year and not allowed any savings.

I can't see a situation where state pension entirely stops if you have 12k income from a private pension.

Read my OP. I’m questioning if the SP will even exist, it may be replaced with just the usual benefits ie. There won’t be an age qualifying benefit anymore. Benefits would be paid if people are too unwell to work and have under £16k in savings.

In that scenario people WOULD pay into a pension as the alternative is waiting until they are too sick and unable to work and spending all their money until they have under £16k (or equivalent) in savings.

This is what happened to DH. Hes now seventy six. We live in a small social housing flat. I once asked him how much his private pension should have been worth. Enough to get us out of here was the reply. His also went bankrupt

Makes a change to see someone else actually acknowledge this instead of assuming that boomers spent it on holidays or partied it away OR didnt work at all which are the posts i usually see.