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.

State pension won't go.

It affects so many people that all that would need to happen is for a new or existing politically party will just need to say that they will keep it and they will be voted in, regardless of workability or other politics.

Ten years notice is not enough if you are in your 50s and had a difficult life (unpaid caring, poor education, min wage jobs, a lot of couch surfing and travelling). But they only gave ten years notice in Ireland. State pension is only available to people who worked 40 years in jobs where social security was paid. Except the basic pension which is only awarded if you have no savings. So if you care for an old person and they leave you an inheritance it will reduce your state pension. This is very cruel. This is happening in Ireland. 2034 is the cut off date and it was only announced last year. So less than 10 years which is too late for these women.

Any party that removed state pension would be forever unelectable, so none of them will.

They don't need to either - we've got a bulge at the moment with the boomers. Subsequent generations are smaller. With a bit of forward planning we could have written pension costs into fiscal strategies, improved access to and reliability of private pensions etc (most part time employees weren't eligible until recently for eg, many smaller firms never had pensions, many large firms were able to go bust/merge/pretend to go bust and take their pension funds with them during the Brown/Blair market lassitude years). We should have been sorting that out from the mid 1980s onwards. But, we didn't. So we're overstretched now, but in ten years we won't be.

I don't think obliterate them, just put them on a more equal footing to the public sector. Paying in the region of 28 percent into a person's pension every month is not affordable to taxpayers. Paying 10 percent would be affordable.

I agree but it’s better than the 18 months notice the worst affected of the Waspi women got.

I would like to see pensions in the public and private sector aligned whichever way around. I would also like contributions to pensions to be compulsory. I am mid 50s and worked for years without contributing, auto enrolment is a really good thing. I would still like there to be some form of universal state pension. Having contributed to it for others during my working life, I want to see it continue.

I don’t think the state pension will be scrapped but the triple lock will end and eventually the value of the state pension will be eroded by inflation.

I’m trying to plan my retirement without the state pension in mind. I’m going to be very poor if it isn’t available (despite my planning). If I do end up getting it (I am only 29), I’ll be pleasantly surprised.

I’m surprised we haven’t rioted about the state pension age rises yet, to be honest.

Yes, perhaps there could be cutbacks on benefits for those who could work but don’t. NEETS. Or the ever increasing sickness benefits for more and more (what used to be classed as) non disabling conditions.

They would need to look at pay as a whole, if they were to reduce the pension contribution to 10% the pay package for many professions within the CS simply wouldn’t be competitive enough, it struggles enough to obtain/retain good talent. (I’ve carefully said professions because the CS is huge with a broad range of professions, some earn comfortably within the CS, some take a huge pay cut offset by other CS benefits of which the pension is one).

People keep saying this, but really, if you think about it, its going to be very hard to do. They cant just turn round and say, right, pensions means tested from next year, they will have to give at least ten years notice to allow people time to try and save into private pensions. That means, whichever government does it, will get all the backlash, with none of the financial rewards. They'll be voted out at the next election, and whoever replaces them will reap the benefits.

Personally I cant see it being completely removed, but for sure the pension age will keep rising.

I absolutely agree with you. Our present faltering economy cannot support this level of welfare. Subtly the definition of disability has changed - and this is playing out in society with so many more people claiming for conditions which in the past didn't exist. The boundaries of those who should be capable of work but don't have been blurred in my opinion. There needs to be an open debate about this without people resorting to the trope of criticising 'benefits bashing'.

Also there needs to be a conversation about who is actually a poor pensioner- is it the pensioner who has thought ahead and got a small work pension to supplement their state pension - but is liable for full council tax and taxed on their small income over the tax threshhold? Or is it the person who, for whatever reason, relies solely on the state pension and gets pension credit, their full rent paid and their full council tax paid? Add in free dental and glasses, extra allowance for winter fuel, a severe disability addition of £82 per week if you're on disability benefits and carers addition payment if you're caring for someone.

This is where the reality versus the perceived reality deviates - begrudging the so-called boomers having state pensions with the triple lock rise every year is pretty common, but taxpaying pensioners are still contributing to society through payment of income tax and council tax. Also many are volunteering and also doing childcare, so there's the non-monetarised contribution too.

There are no easy answers and I wouldn't want to be in government, having to make these decisions. But I think that some form of universal basic income has to be the way forward, so people who choose to work and get a 'reward' for doing so. This government is going down a very dangerous and dubious road where the perception out there amongst working people is that they're being disadvantaged compared to those existing solely on benefits.

People need to stop relying on the government for a pension. All companies have to provide a pension and people stupidly opt out. Our future generations have to be taught to look after themselves. My children didn’t even know there was a benefit system the just though you had to work to get any money and this is how it should be. I’ve talked to my children about their future very early in life and taught them they have to learn to be self sufficient. And before I get jumped on I’m talking about able bodied people.

Can you explain why out of all the benefits people receive that the state pension is the one that is unaffordable?

I do not think that the state pension will disappear altogether. However, what the government is already doing is bringing it into tax. As tax thresholds remain frozen this means that for anyone with a private pension, more and more of the state pension will disappear in tax.

Why do you think the US doesn’t have a state pension?

Yes, most Americans receive a state pension through the federal
Social Security program, funded by payroll taxes. It is not a universal basic pension, but a contributory system where individuals generally need 10 years of work (40 credits) to qualify, with full retirement age at 67 for those born in 1960 or later.

Key details about U.S. Social Security:

• Eligibility: Generally requires 40 credits (10 years of work).
• Retirement Age: Full benefits start at age 67, though reduced benefits can be claimed at 62.
• Average Payment: In 2022, the average monthly payment was approximately $1,657.
• Types of Benefits: Includes retirement, disability, and survivor benefits for spouses and children.
• Taxation: Benefits may be taxed if total retirement income exceeds certain thresholds

While Social Security is the primary "state" benefit, it is rarely enough to live on exclusively, leading many Americans to rely on private employer-sponsored pensions or personal 401(k) retirement accounts.

But the government doing this would never be voted in again. Which is why no one will do it. Honestly no one will do it. Society will collapse before this is done.

What makes us human & not animal ?

Is how we treat our sick & elderly

In the modern world, we take care of our sick & elderly. Therefore there should be a state pension available for all people of a certain age.

However, this does mean that younger people must continue to contribute.

Otherwise the alternative is too horrible to think about.

It’s not the only one, but the triple lock is rendering it impossible.

They will do it because society will collapse if they don’t.
There will be cross party agreement and support from the public too.

You live in fairyland if you really believe this.

You live in fairyland if you don’t!

Plenty of jobs in the public sector for those begrudging public sector employees their pensions - which they contribute to from their lower paid jobs.
Not a public sector employee btw but these threads always turn in to public sector pension bashing . Better paid PS employess also risk AA tax too.

The problem with means testing any sort of benefit, whether it’s state pension or anything else, is that there’s a very fine balance to be held to avoid people gaming the system. Eg: some people deliberately keep their earnings low, maybe choosing to work just 2 or 3 days a week, because they know that the top ups they’ll get in benefits won’t be far off what they’d earn if they worked to full capacity.

it would be similar with the state pension. If people knew they’d lose state pension if they paid more into a private pension, people will act accordingly and avoid paying in so much.

The absolute fundamental problem as has been said countless times on MN is that we’ve long gone down a route in the UK where there are too many perverse incentives. There is no where near enough incentive for people to be financially independent. Or to work harder, aim higher, get promoted. I remember back in the 1990s, people I knew would deliberately keep their earning low so they would be eligible for tax credits. And so it’s gone on for the last few decades.

if the state pension is ever means tested, people will make damn sure they spend their money rather than doing the supposedly wise thing of investing it in a private pension or savings. They’ll effectively be ‘punished’ by losing out on the state pension.

tbh all this is an argument in favour of universal basic income. Pay everyone basic rate which enables them to survive, roof over their heads, feed themselves etc but not an amount that allows for things over and above the basics. . Then anything earned on top is theirs - they don’t lose any of the basic income. I think you’d quickly find all the people who game the system would soon be incentivised to earn more, and thereby pay NI, tax etc which ultimately is what’s needed economically.

I am not bashing public sector pensions, but am concerned that they are unfunded and the amount is over one trillion.