Who is going to pay for your state pension/ care in old age?

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Apparently birth rates are falling, and this is putting future pensions (and I would imagine general tax income) in jeopardy as the population will proportionally age.

What's the solution? Should we just write off our paid for "right" to a state pension and state support for care in older age?

Does this change your view on public investment in supporting people to have children if you otherwise thought this was a personal choice and you should support/ pay for your own children?

AIBU to think that NI contributions for "pension" is essentially government mandated mis-selling and state pension will go out the window in the next few decades?

Nail on the head. I started work in the early 80s and can identify. Easy access to the GP, quick hospital appointments, in and out of A&E within an hour or two, lots of libraries, lots of cheap FE college courses to upskill and take professional qualifications as well as O and A levels, cheap and frequent public transport. I was on a very low wage, but could still afford to rent a small flat, run a modest car, etc. Food, clothes, days out, pop concerts etc were all cheap as were pub/club nights. Roads and pavements were swept, crime was low, etc.

My first job was the Monday after I left school on the Friday, wage so low I didn't even pay NIC, for full time, started making the tea and filing and taking the post. I put myself through college to get the required O and A levels to get accepted as a student for the professional accountancy body and then put myself though the exams via a mix of self study and local college evening classes, all whilst working full time. It was readily possible back then - the opportunities were there for those who wanted to take it. Even with paying for my own courses, exam fees, etc., I still had money left over from paying rent and running a car to go out socialising, going to concerts, etc., all from earning below the NIC threshold!

Wages haven't gone up anywhere near in line with housing costs, costs of living, costs of socialising etc., over the past 2-3 decades. Over those years, adult education has virtually been eliminated, public sector seems more obsessed with looking after their staff rather than providing services to the public, state pension has been put back several years, taxes have risen massively, etc.

Things have definitely gone downhill massively between the 80s and today in virtually every way for workers. I'm not surprised at all that today's youngsters feel alienated - everything must look to be falling apart around them - I really worry for the future in lots of respects unless something is done about the way today's youngsters are being treated.

“Not necessarily. It depends on the numbers and your time horizon. Let’s take an example:
Option 1: Prioritizing a pension

• Contribute £5,000 per year into a pension, 7% annual growth, over 30 years.
• With tax relief, that £5,000 becomes £6,250 annually invested.
• Final pension pot ≈ £650,000–£700,000.

Option 2: Prioritizing a house deposit

• Save £40,000 for a 25% deposit on a £160,000 property.
• Take a £120,000 mortgage at 4% over 25 years.
• After 30 years, assuming house appreciates 3% annually: property value ≈ £360,000, mortgage largely paid off. Net equity ≈ £330,000.
• Plus, you’ve avoided paying ~£12,000/year in rent over 30 years (~£360,000 total).

So, while pensions grow faster due to tax relief and compounding, buying a house provides leverage and avoids long-term rent costs.
The optimal strategy? Contribute enough to pensions to get employer match, while saving for a deposit. You capture the best of both worlds.”

How much was his rent, utilities, food & clothing bills, commuting costs, etc.?

Or was he living cheap at home with you?

So why have you given me such a hard time? I hope nobody makes you feel how you have made me feel - it’s really shitty. It’s clear my life has been a waste and that you consider me useless. Just remember not everyone’s life turns out as perfectly as yours.

Depends what field it is. Something like IT doesn’t necessarily need formal qualifications, it needs practical evidence of competency.

Tell that to people who lost out with the Robert Maxwell pension scheme scam, or who invested in Equitable Life, or any of the other many pension scheme failures. Yes, today we have the FSCS but many lost out huge amounts before the compensation scheme came into force. And even with the FSCS, they take years to deal with failing/failed schemes meaning lots of people die or have their retirement plans severely curtailed before they get their pension payments/compensation.

I've got a client in that position at the moment. Five years since the pension scheme collapsed, he can't retire at the age he planned, as whilst the scheme "fund" is supposedly safe (and would be covered by the compensation scheme if not), it's frozen due to a protracted legal/court dispute, so he can't take the tax free lump sum, and he can't start to take the flexible pension draw down. None of that is his fault. He didn't chose a "dodgy" scheme - it was a scheme from a big well known pension firm, fully regulated, fully compliant with the Financial Services laws/rules, fully reputable, etc., but his particular fund has got tied up with irregularities/legal disputes.

Not saying that people shouldn't make their own arrangements, and I've got my own schemes, I advise clients re pension investments, etc., but NOTHING is guaranteed, and I'd generally advise pensions ALONGSIDE other investments, home ownership etc., not instead of. At least with owning your own home, you've almost guaranteed house price inflation, you're not paying rent to someone else, you're almost certainly guaranteed a roof over your head, you're "free" to have pets, children, make modifications, decorate to your preferences, etc. I'd certainly be prioritising your own home before prioritising a pension scheme, but ideally, do both, weighted towards your own home in the first instance and then start shovelling into pensions after the first few years once you've got your home and start having spare money to invest in pensions.

You didn't need a degree to get on, either. You could work your way up much more easily. In my factory days, some of the older folk in more senior roles left school at 15 with not even a CSE to their name. My own father worked his way up from the ground floor to senior management like that. Much harder to do now.

cleary though someone needs a place to live.

what next, skip food and heating for a pension or you deserve to live in poverty in old age?

Yep, I totally agree with that. Money in a pension can go down as well as up, and there's always the possibility of collapse. You ma not even get back what you put in. Even just a savings account alongside is better than nothing.

or my mum, who never saw a penny of her pension as she died of cancer at 53. We shouldn’t have to sacrifice life entirely for a pension should we?

I disagree. Knowing you own your own property is a huge relief when you retire - at any age really.

Don’t be ridiculous. Clearly it’s more fiscally sensible to make tax free contributions to a pension.

Than have a house?

fiscally/ tax free is neither here nor there if you don’t have anywhere to live.

I don't get child benefit because I earn too much. My children are privately educated and my company provides private healthcare. My children cost the taxpayer a lot less than I am contributing, trust me.

I'm not suggesting people without children shouldn't get the state pension but if it's rationed in the future I don't think it is necessarily unreasonable to take contribution to future workforce in to account. Ie on average, my children will be working to pay for everyone's pensions. If you didn't have children you didn't contribute anything to that workforce. And yes they may have paid taxes in their working life, but so did I.

"Contribution to future workforce"? 😆
Ok, so can your pension be reduced if your "contribution to the future workforce" turns out to be a murderer or pedophile?

And it's not a guarantee that the pension will grow faster either. Some people bandy about compound interest like it's a given, but ultimately, pension schemes are an investment that carry risks. The small print on reputable pension contracts state that there is no guarantee you will get back what you put in, let alone big returns. Pension predictions are just that. Predictions. Not guarantees.

An excellent post, thank you.

The contribution to future work force in a personal level is the same as making it dependent on how much tax someone paid. Should a high earner get more pension than a low one because they paid more NI? No.

But future workforce is relevant to pensions (and society). It find it bizarre to deny this and don’t really understand the reluctance to support those who do contribute to it by making it easier/ more affordable/ less detrimental.

Well, actually, yes I have contributed to that workforce as a whole. Perhaps not your children, but not only have I contributed through taxes for the state education of the vast majority of children who are not in private education, in order for them to be educated to a standard that helps them become the 'future workforce', I also work with those children in my job to help them reach that standard.

So yes, I have, and am continuing to contribute to the future workforce, despite not having been able to add to it by giving birth.

I personally prioritised getting a house over starting my pension early and in some ways I'm already benefitting, my mortgage is half of what rent is now, I've only just opted back in to the work pension at 34. Yes my pension pot is non existent practically at the moment but I have 34/35 years until retirement age, I could sell the house if I wanted to at retirement, which would be a tax free pot, but I would have to pay for rent. I will be mortgage free mid 40s so could pay even more into a pension pot for 20 years while not paying rent or mortgage payments. I also understand how compound interest works. Yes I've missed out on employer contributions for a good few years, but my house value has increased substantially and if I was renting my outgoings would have increased to doubled in that time. It's no always the worst decision to prioritise a house over pension for a little while

What if your children don’t work and live on benefits their whole lives? You won’t have contributed much to the workforce then.

Or simply sick or disabled? 🤔

Nothing in this life is certain or clear-cut as some would like to think...

All those paying taxes ARE contributing to the future workforce, though. Our taxes go towards state education, nursery places, etc. it is not my fault if the government does not choose to use my tax money to further assist the future workforce.

Not only do I willingly pay for the future workforce to be educated, my taxes will hopefully also be ensuring that future workforce continues to be protected by the police, rescued by the fire services, treated in hospital. Why would anyone consider that I have not made a contribution to the future workforce because I have been unable, through no fault of my own, to add to its number? My contribution is in the money I pay to give them the best chance of becoming the future workforce. Why isn't that enough?

👏 👏 👏

I agree with you, I disagree with the pp saying she should have had more for having children.

Pensions should be based on contributions - ie higher rate tax payers should get more
those who have financially sacrificed for decades to have the children others can’t or won’t should also get more