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

[itsadlibitum]

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?

You have to apply for benefits if you can’t afford to manage without
I always planned to draw down my pension from about 57 onwards so that I could work less stressful roles or just less until 67 when I retire
It just means I’ll have a less comfortable retirement than I should

Yes, I too would be unhappy but I know that NIC is just another tax and not some kind of personal insurance/savings scheme. I do think it's name should have been changed a long time ago because it's certainly not an "insurance" scheme at all.

Re children, yes, incentivised, but we need to incentivise the "right" kind of people, i.e. those more likely to have kids who'll work and contribute, so the incentives should be aimed at current workers, i.e. more free childcare or tax relief on childcare costs, etc, and find ways of making life cheaper for workers, i.e. cheaper housing costs, tax relief for commuting, etc. Put workers into a position where they can afford to have children.

NI should be combined with income tax and everyone over the threshold should have to pay it (not just employees under 66).

State pension should be renamed Old Age Benefit.

Yep, fully agree, been saying that for years. A lot of the "tax planning" over the past few decades has been around artificially changing the "type" of income to avoid NIC and before that, when we had different tax rates for different income types, people were trying to reclassify income. Just make it all the same rate for all types of income AND gains. Much simpler, less opportunity for planning/avoidance.

Or, as it was originally named, “old age pension”. The Tories changed it to benefits as they did with family allowance etc.

@Dexterrri think you misunderstand NI and are unreasonably annoyed.

You did not pay into a pension scheme with a guaranteed pay out at a NPA for the scheme. There is no pension pot identified as yours on which interest can be calculated because you never had such a scheme.

NI funds other contributory benefits like JSA and maternity allowance.

NI funds the previous generation. Current payment funds SP, JSA, MA etc. hence the problem of shrinkage in those paying NI and expanding cohort of those entitled to support.

She didn’t say life expectancy, she said healthy life expectancy, which is different.

Well, @itsadlibitum despite your attempt to start another generation battle, I will be working full-time until at least the age of 70 (4 years away) and I'm currently stashing almost 25% of my after-tax income in pensions/savings for my older age, as well as paying the equivalent of at least 2 families' worth of UC in tax.

So I'm pretty well-set.

It's the 1 in 4 young people (yes, 25%) between 18 & 25 who cite "mental health" as the reason they are neither in education, training or work that we should be worried about. And the parents who pander to that.

On your last point, I think it’s a vicious circle. Not being able to find a job and being unemployed is bound to harm one’s mental health.

That’s if they didn’t have mental health issues already, and let’s face it, these young people have had their vital adolescent years disrupted by Covid. I think we underestimate the effect that’s had.

It's the 1 in 4 young people (yes, 25%) between 18 & 25 who cite "mental health" as the reason they are neither in education, training or work that we should be worried about. And the parents who pander to that.
Totally agree, no point in procreating if the offspring are going to be economically inactive for spurious reasons. They need to be radiators and not sponges. Neither do I understand why NI can't continue to be paid by people of pensionable age if they are still working. We know that our NI contributions don't go in to our own little retirement pot so why shouldn't they carry on being deducted and go in the general benefit pot?

these young people have had their vital adolescent years disrupted by Covid. I think we underestimate the effect that’s had.

You know, my father was 11 when his father was killed in WW2. He got on and made a very productive life, despite the grief of his mother and his own loss.

My mother saw her father go off to war when she was 10. He returned, but she couldn't be sure he would. They both experienced the bombing of the UK. They both experienced rationing until the late 19540s. That is, they experienced being hungry quite a few times - not through poverty, but rationing.

They both got on with things and got educated, worked very hard, raised a very productive & successful family.

So I am getting a bit tired of the huge allowances we're supposed to make for 18 year olds who were kept indoors - as were we all - for a couple of periods of 3 months but suffered no food shortages or bombing, and most of whom did not suffer even serious physical effects of the virus.

My son had a difficult time at uni due to COVID. The 2020/21 academic year wasn't the best for him. But it's been 5 years.. He's gotten over it and is working well now.

The world is different now to war time. Of course living through that was difficult, no one can say it wasn’t, but the one thing that did happen was communities came together and supported each other. Loneliness and isolation are known to have massive effects on mental health, and a lot of people developed mental health issues from that aspect of it.

And in the years after the war, little was understood about mental health so those with PTSD didn’t get the help they need. I don’t think that’s a period we want to hold up as something to aspire to.

Where are the jobs for the youngsters you despise? Unemployment is currently the highest level for several years.

Yes and it’s also a double whammy for those who have an ever increasing retirement age. In the past, those who worked past 65 (or 60 for women) paid no NI.

Now, people working will be paying NI until 67, 68 or whatever the state pension age is.

There will be a massive intergenerational wealth transfer when us Boomers shuffle off!

But not all Boomer parents were well-off. My late DM got the shite end of a 1970s divorce and while there was a happy interlude for her in the 1980s; she was left high and dry when she was widowed with nothing in the early 1990s. She worked as a carer in adult MH until she was 78, and retired with a tiny house that her kids helped to buy when she was almost 65. State pension and pension credit plus a miniscule NHS pension. DM was fortunate to remain in decent health until she died very suddenly in her sleep. The triple lock was created to help such people, and yes, it has passed its expiry point, but it was needed when it was introduced.

Yes absolutely, triple lock was actually created too late. Pensioner poverty used to be be a big problem due to many pensioners having zero private pension and relying on state pension alone as well as family help.

Nowadays most pensioners do have private pensions, and many have benefitted massively from the property price boom and been able to downsize and release a lot of equity.

There are still some poor pensioners of course but as a whole the pensioners now are in a massively different situation to pensioners 20-25 years ago.

That’s a bit of a double kick in the teeth for everybody who didn’t have parental support growing up and then doesn’t get it when they die either
But you get to watch everybody else who did did make further leaps and bounds ahead of you. Unless they do something significant with the inheritance tax situation.
Yay 🥳

@ElizabethReed The proposed changes to IHT from April 2027, and the freeze/fiscal drag on thresholds to 2031 will bring a huge swathe of quite ordinary homeowning families in the SE within the sights of HMRC's IHT collectors. A modest three bedroom house that might cost £250k in the Midlands or the NE would probably cost twice, perhaps three times that in London or a Surrey commuter town like Guildford.

I'm sorry that you seem to feel you lacked parental support when you grew up; that is very sad and unfortunate, but most parents try their damnedest to give their kids a good start in life. I believe that politicians do much more damage by interventions.

If NIC is "just another tax" and doesn't contribute to the pension then why do we all have to contribute by paying NI for 35 years to get the pension and why do they allow you to buy years when you haven't paid enough??

Regarding care costs coming out of a person's assets. What if a person before this just gifts and transfers all their assets to their kids

You’re not sorry that I haven’t received parental support at all because it’s given other people unearned income and a significant advantage over those just trying to make their own way in the world which is precisely what I intend to do with my children.
Politicians are self-serving. They’re not doing it to try and level the playing field on my behalf. I’m well aware.
But some of this unearned income definitely needs to be clawed back into the coffers.

It would be seen as deprivation of assets. Also gifts are subject to IHT if the giver dies within 7 years.

You do realise there are lots of ways to get 35 years on your NI record without paying anything?

You can get years for having children under a certain age, being in full time education, or being on benefits, in fact it’s possible to have 35 years on your record never having worked or paying penny of NI.

And plenty did.