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.

The state pension could be uncoupled from NI and be part of general taxation. Then the SP could be means-tested to take in savings and assets. Age and residency might be necessary qualifications.

This is how it works in Australia, but it’s always been this way.

There would have be a massive lead-in to do this, and I’m not sure a UK government would take the political risk.

To earn astate pension of 12750 a year you need to have saved a pension pot of approx. 300k.

Not if you die at 70. At £12750 a year you’d have to live 24 years to get to £300k

This is the race to the bottom mentality. It is true at the margins that means-tested benefits discourage savings. But the rest of us should be aiming much higher than minimum state benefits and be proactive in providing for ourselves rather than rely on the State. Other countries are far ahead in this regard.

With how expensive rents are now, it is rare that it is fully covered by UC.

Given that wealthy people live on average much longer than poorer people, means that once again the wealthy will receive much more state pension in total than their poorer counterparts.

It just reinforces wealth inequality further.

They’ll have paid more in, won’t they?

Not necessarily. Some people are born or marry into wealth, and pay very little in themselves.

'They'll have paid more in'

And they'll be taking money out that was paid in by those who didn't live long enough to get anything out at all - and those people are likely to be lower paid workers.

They'll be taking money they don't need, with the knock on effect that they will be contributing to the poverty of others - leading to them dying younger, purely so because 'they want their money back'

My wee sister lives in OZ and last year she paid up the missing years for her UK state pension

Australian pension is means tested.

And whilst it is, doesnt mean to say everyone sits on their arse saying what's the point. They still get on with their lives, accumulate wealth and prosper.

The mentality in this country is " why should I work and pay if I dont have to and will be better off on the state "

Only have to see the amount of threads of people trying to protect property from being sold to provide for care

I take it you’ll be turning yours down, then? I worked for well over 40 years, over 20 of them as a higher rate tax payer. I continue to pay tax on every penny of my occupational pensions. You bet your life that, after decades of taking nothing from the state, I’m going to claim my pension.

@Blossomtoes I would actually, because I think I have enough to be okay with what I've saved and I'm not big on holidays, stuff, pets or experiences.

My OH however agrees with you and is currently ranting at me that this would mean that every sacrifice we have made financially would be wasted and that it would allow others to spend recklessly and then claim their pensions, which I can also understand.

I'm mostly concerned that the generations that follow us will have nothing of the sort of lifestyle that we currently enjoy in their old age and that we should be doing whatever we can to stabilise their futures.

You not claiming your pension wouldn’t make a happorth of difference. Your bloke’s absolutely right.

@Itsmetheflamingo - exactly! Blokes like Fink are a big part of the problem. BlackRock are bastards - asset-stripper, disaster capitalist, private equity pirates.

How much do asylum seekers, refugees and migrants cost the Australian government? Do you deport foreign criminals, or do you imprison them for years, then let them stay and claim benefits? What's OZ housing situation like for their citizens? What are wage levels like? Australia's child poverty puts the UK to shame. People are pissed off.
For those who think the state pension won't exsist, do you honestly think that we will make citizens work until they drop while handing benefits to non citizens? There will be anarchy.

Most of us will need the state pension. Private pensions are crap. W’ve always paid into private pensions on a variety of incomes and have always worked full time. The return is shit. Without state which at only £12k a year is more than any private pensions we’d be poor.We don’t live frivolously, could never have paid more into our private pensions than we have raising children and will have paid off a mortgage.

I don’t think they can feasibly means test it. To get the state pension equivalent via a private pension would require a massive pension pot. I think the outcry would be too great and you could potentially people who have never worked claiming massive state pensions whilst those with a small private pension miss oout. Even people in their 30’s could have potentially been paying into it via NI for 10+ years. The government website does tell you how many years of contributions you have left in order to get your full state pension so it is different from other state benefits in that way. It would have to be a tiered phased out approach if anything.

And what about those in big houses?Why should they keep those and get the state because they haven’t got any private provision.

Our entire welfare system is totally unsustainable and takes no account of changing demographics since the 1950s. It needs a total overhaul but that’s so hard to do politically people who are trying to get elected (from all parties) lie to us and tell us they’ll protect the system.

State pension has to change. It was never designed to be paid out for 20-30 years. Why should people who have good personal pension provision receive additional money from the state?

Having said that it will be very slow to change and there’s no evidence that I’m aware of that any party has said they’ll scrap it. Just the usual scaremongering sensationalist nonsense from the media.

As a general rule I think financial literacy in this country is very poor. The importance of pensions and investing should be taught at school and mandatory pension deductions from salary should be increased so people are starting contributing as soon as they’re earning. The younger you start the easier it is to accumulate a decent pension long term.

If they’ve paid into the NI contributions then yes they should get the state pension like everyone else. Why shouldn’t they?

I’m referring to the op saying only those that have no private pensions or savings should get state pensions.

Why should those who have just frittered money all their lives or haven’t worked have a comfortable retirement on the state whilst those who have gone without to get a crappy worse pension pot and savings has nothing from the state?

“The only retirees who will have a comfortable life will be public sector workers. And the private sector workers will be paying for that.”

Can you explain this? I’m struggling to see why the private sector workers will be paying for public sector pensions. Public sector workers will be caring for your loved ones in hospital. Arresting the baddies in your neighbourhood, teaching your grandchildren. You write as though they’re scrounges so I’d love to hear more about what you mean.

Not all those in the public sector have good pensions either. Those in the lowest paid jobs will have pensions way less than the state pension, under £1k a month.

Define comfortable retirement? Isn’t the state pension £12k a year? Not exactly comfortable if that’s all you have to live on.

The welfare state is designed as a safety net. State pension age was set at 65 because that was the average life expectancy of a man at that time. It was designed for a world where someone my age has a 1 in 3 chance of living to 100. But the financial model hasn’t changed.

I’m not saying this is fair - it’s not. This current generation of pensioner is the golden age of pensioners. We’ll never see it again. Great for them, sucks for us.

But numbers aren’t fair. Taking a cold, hard rational look at the numbers we all know the system needs to change.

If we want the welfare state to survive into the future we need to be realistic. Stop seeing it as a free for all that someone else can pay for. That attitude has led to the mess we’re in now and it will only get worse.

I think you need a reality check on private pensions.