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.

Not so us. State pension is better by far.

@1apenny2apenny I’m not saving specifically for the gap as we have military and civil service pensions so we feel sufficiently covered and thus why I think if means testing comes in we won’t get it (for now, if those change going forward we’ll change our approach) but I basically ignore state pension when I’m doing our retirement forecast.

yes @gina9757anyone who has a workplace pension can factor that in however I would say that typically this is part of your salary and only guaranteed whilst you are there. I feel we need a universal income for retirement, it’s VERY unfair to expect people to keep working when they’ve worked all their lives. Basically working so others dont have to. The problem is it now seems if you have anything you get nothing. Working hard isn’t paying anymore, people on benefits should not have comparative incomes to those working

Of course the state pension will be abolished (eventually). It is utterly unaffordable.

We’re in for a seismic shift in how we all earn, pay tax and receive benefits.

Only if you vote for governments that will abolish it. When I was a child in the 1960s one of my aunts was predicting the end of the state pension. Here I am 60 years later collecting mine.

We now have a generation that doesn’t even want to work for itself, let alone pay for the elderly.

Do we? I see people working all the time. Am I hallucinating?

Same here - I can remember the end of the state pension being talked about when I was in my forties and I am collecting mine. Thanks to the triple lock it increases substantially every year.
The government which gets rid of it will be a very brave government (has to be put in the manifesto) and will not be voted in.

It doesn’t have to go in any manifesto. Any government can do it at any time.
And a subsequent government would not reverse the decision.

But they darent as wouldn't get in next time.

It can’t. Since the Waspi debacle it is now illegal to make any changes to the state pension without a minimum of ten years notice. A major change would have to be in a manifesto so don’t vote for any party that proposes it. I know politics has degraded in the last decade or so but it isn’t the Wild West.

Completely agree with you @TheOtherBoleynSister, I’m 42, DH is 48 and all of our retirement planning is based on us not being eligible for state pension.
I too think that it will become means tested like elderly care is and that we will be expected to exhaust private funds before being eligible for state pension. There is a reason auto enrolment was pushed through (which makes RR 2028 announcement re salary sacrifice even more bizarre but fingers crossed they’ll row back on that).
There is so little understanding of the (ponzi scheme!) structure of state pensions within the general population it’s scary. There is simply not enough population replacement or economic growth to sustain it, I firmly believe it will be phased out and existing benefits will be used instead within my lifetime.

I believe Universal basic income is the only way. Not just in future but now.

The problem in this country is so many tax thresholds, linked benefits, it’s a confusing system. I am not just talking about physical money. There’s this and that and then discounts and freebies.

You go over and all of sudden you’re screwed. So once people figure out how to survive in a band they tend to stick there. Hence productivity is capped.

This has been said for the last 50 years and it still hasn’t happened

They’ll just change the law.
It’s coming.

People will support it.

I think you’ll find they won’t. Nobody over 50 will vote for a party that proposes it and they’re the ones who get out and vote.

@BIossomtoes but it wouldn’t be introduced for those about to retire in the next 10-20 years, they’d likely have to introduce it for a younger generation that a) would preserve the older vote (to a degree, obviously many would still disagree) b) give people the chance to prepare. Not sure what age that would be, but look at the Waspi argument, I think government would need to avoid that again.

And then I suppose when you reflect on that, politics is so short term with government worried about the next election makes you wonder if they would take the risk if it doesn’t fiscally benefit them now.

Agree something has to change but will be gutted as I was looking forward to getting something back having worked hard and paid into it all my life!

As a life long renter retirement will be tricky to negotiate but never been in a position to buy a property.

I think it will always exist because

1. Voters won't stand for it being abolished
2. OAPs won't leave the workplace. Youth unemployment will rise.
3. Means testing it away will be seen as yet another tax on the working electorate.

We saw how an attempt at benefits reform and Winter Fuel went down with Labout last year. Admittedly I think if they tried to reform it now, they'd get it through, and that demonstrates times may change.

But many people believe that you support the state and then the state supports you. If the state pension becomes means tested, what next? Healthcare? At a certain point, it becomes a bigger shift from paying in when you work and getting a support when you can't, and idealistic idea of a society working together with an ebb and flow of contributions and drawdowns, to a fundamental mental shift that many people will be expected to work to literally just prop up those that can't. Some might see that as fair, but many won't, and that's when people hide money, commit fraud or just refuse to work because it isn't worth it.

I can envisage the state pension age going up to 68 well ahead of schedule then 69 being penciled in. My youngest ds is 32 and I expect he'll have to work up to 70 before any state pension. However he knows he might not get it so as well as his workplace pension he pays into a SIPP. He says his mortgage will be repaid by then so his costs will be lower. He's also chosen not to have any DC so won't be paying out uni cost there. I suppose he will also inherit at some point.

Have a look at how other countries do it. Australia have some great ideas when it comes to pensions, healthcare and IHT (I particularly like their IHT model, it’s ludicrous that we allow £1m worth of house to passed on tax free, but I digress).

Canada I believe have universal pension but claw it back through tax if your income is high enough. Would be easy enough to implement particularly with MTD for income tax.

But these changes need to be announced years, preferably decades in advance. But in order for that to happen we all need to wise up and realise the current system can’t continue.

Based on a lot of these comments I don’t see that happening anytime soon sadly.

State pension will eventually essentially go, yes. It's an unsustainable pyramid scheme.

State benefits will only go to people signed off as too ill to work. This will be much tightened compared to now too.

The US doesn't have a state pension. We will be more like the US. Anyone under 30 relying on getting a state pension and not having a private pension will have a rude awakening.

Canada I believe have universal pension but claw it back through tax if your income is high enough.

That already happens here. I and every other pensioner now pay tax on every penny of occupational pensions. There’s going to be a point very soon where the state pension exceeds the personal allowance and there will be the ludicrous situation where the state pension itself is taxed.

Oh that's really sad, you can't imagine what you'd do without a job? Don't worry about not having a pension then you can just keep working

The idea with UBI is people would work part time, start their own small businesses, volunteer in their community, raise their families, and enjoy hobbies. It's a bit idealist and I don't see it happening with the politics of this country being how it is. But it sounds nice to me!