45% of working age people not saving toward a pension at all

[FernFaery]

https://www.theguardian.com/money/2026/may/19/britons-not-saving-enough-retire-pensions-commission

Another looming crisis!

You get a council tax exemption in certain circumstances and for very low incomes.

Not here you don’t. Single discount of 25% and that’s it.

If you’re on Pension Credit, for example, it’s likely you’ll get a 100% council tax discount. I think that applies throughout England but I’m not sure about Wales, Scotland and N Ireland.

This thread shows how many people misunderstand Pensions and tax.
You are always a minimum of 6.25% better off with a pension, even after any tax when drawing it, compared with ISA savings.
You don’t ‘pay tax on already taxed money’.
Contributions are either taken from pay before tax ( which reduces the amount of tax you pay) or have a minimum of 25% tax relief added once it goes into your pension if you’re self employed. It’s even better if you are a 40% tax payer.

So few people live into old age any more. Of course people don’t care about pensions. Just live your life and don’t worry about it.

That’s simply not true and there’s no way to demonstrate if it will be true because pensions are subject to changes in future taxes on withdrawal applied retrospectively, as this Government’s behaviour demonstrates. Tax rates may well be vastly different at the time of withdrawal, decades into the future, especially with so many irresponsible people refusing to save when they could and expecting future taxpayers to fund them instead.

ISA savings are already “tax paid” so crystallise that tax risk and will be unaffected by future income tax rises/ other punitive ways devised to raid people’s life savings in pensions, so although based on current regulations pension saving is beneficial (although only marginally so for most given the continual raids on DC pensions to date) it is quite wise to take a hit now in tax to take some money net and put it in ISAs instead where it is less likely to be subject to Governments trying to steal it, invest it in their pet projects or levy extortionate taxes on it which outweigh the deferred tax benefits on contribution.

Ultimately if Governments want people to save into pensions they need to provide a stable system and stop treating people’s savings as a piggy bank to make up the shortfall when the Treasury fails to manage its own budget appropriately.

Oh God can you please save your Four Yorkshireman sketch that you post on every single thread about pensions or the economy. It’s tiresome and just plain silly given the time that you were living through during working age. If you failed to become prosperous in such a time of economic opportunity, easy job market, far more generous benefits with much less stringent criteria, lower taxes, much cheaper housing, university grants, free adult education, MIRAS, etc, then you really have only yourself to blame. It’s nothing like the economic circumstances people are facing today which are well-documented to be the worst ever experienced in peacetime.

I’m guessing you’re one of those who’ve paid nowhere near the amount of tax that would be required to fund your state pension but are furious that any working aged people impoverished by your generation trashing the economy have the audacity to need to claim any money to be able to give their children an adequate standard of living.

You’re here banging on about the poor, poor pensioners (the richest cohort in society) on every thread on these topics, with economically illiterate claims and every time anybody replies and points out that the facts disprove your claims you either ignore them or tell us your tales of woe which - while sad for you - are anecdotes not societal data that refute the well-established economic facts which are that your generation bled the country dry, sold off its infrastructure while taking tax breaks for itself, in many cases didn’t bother to save a penny for retirement despite living through the most prosperous period in history, and now expects generations far smaller in number to fund a long retirement and health services for you which you have neither paid sufficient money to fund as a cohort or provided for your own parents and grandparents.

And instead of being grateful for this, you have the audacity to claim that the younger people having to bear the burden of what your generation did - manifesting in higher taxes, crumbling services (such as education) and infrastructure, and therefore lower productivity falling living standards - is somehow the fault of young people when all of the evidence shows a higher proportion of people are now in work than at any time since the 1950s, and that they work longer hours than your generation ever did, for the lower standard of living that they receive.

It’s boring, and all economic data proves you’re wrong. Living standards in this country are falling relative to what used to be our comparator countries precisely because of what your generation did when it was of working age and its refusal to put long-term plans in place to ensure a decent future for those following. Everyone else is picking up the pieces so maybe the retirees should button it and learn a little humbleness and shame rather than trying to gaslight everyone else.

But there have been instances of pension companies going bankrupt and those who have invested being left with nothing. Not to mention scandals like Maxwell.

It must be absolutely awful to find out you won't even get out what you put in. It's a good idea, if you can, to have your eggs in more than one basket. There's a lot of civil servants at the moment chasing their money on retirement because Capita are slow to pay up.

There are ISAs that guarantee you get back what you put in if nothing else. For some, that feels more secure, and I get that.

Nobody wants to get there expecting a certain amount, only to find it's disappeared, or you have to wait longer than you thought to get it. Nobody wants to spend their retirement fighting court battles to get their money back. And that is a risk. It's a small risk, but it exists. It's easy to say people are risk-averse or too cautious, but given what could be at stake, I do understand some people want the security of savings accounts over pensions.

Do you have a recent example of pension companies going bankrupt and pensioners losing their money? Because laws and regulations post Maxwell should really prevent this

Work shy? You haven’t seen the data on the number of very keen graduates desperate for work then who can’t get any job at all because so many employers are hugely cutting their numbers of employees at entry level because of a combination of: poor UK economic performance relative to peers therefore lack of investment (Brexit); AI consuming entry-level roles; punitive Government taxes and UK political instability meaning there’s a “moron premium” on UK borrowing costs and it’s more expensive and risky to invest here now, with a far smaller easy-to-access market than 10 years ago, and with much higher employment costs?

Economics, eh? Never mind.

Just that “they’re all lazy”, I’m sure.

As stated earlier in the thread the proportion of GDP spent on all working aged benefits combined has not changed substantially in decades. It’s moved between just under 3% and 4% of GDP depending on economic cycles. The percentage of GDP spent on welfare for the over 65s however, although they are only 15% of the population, has moved from under 6% GDP to nearly 9% (an increase of nearly 50%) and is expected to continue to rise further. And that’s without even including the 85% of NHS cost that is spent on this small proportion of the population…

When we include the expenditure on the NHS the working aged expenditure on health and welfare has risen from 2.5 to 5% GDP over this time period (mainly due to medical advances, since the welfare expenditure has been largely static), and the amount on health and welfare spent on over 65s has risen from 10% GDP to 18% since 1985, despite the over 65s being 15% of the population.

Nobody in this age cohort has any excuse for the false claim that the country’s economic problems are because of the younger generations of working age because the data proves categorically that this is not the case.

It still goes on. You might find this interesting reading:
Thousands of pension scam victims receive compensation in £80 million payout https://share.google/iSOWuVxZmgSpRNFJ1

Spare me. I’m a lone parent to my children and have been since they were babies. Both have disabilities, as well. I still work, and still pay into a pension, and wouldn’t dream of making the excuse that I can’t possibly do so until a man comes along to save me.

To make what’s happening to the UK economy and why services are underfunded now even clearer, I’ve replotted the data in my graphs above to show spend per person as a percentage of GDP, to reflect the numbers of people in each age cohort (and included children this time).

It’s pretty clear that disabled children or allegedly lazy adults of working age aren’t the problem here…

Please could I nominate @DrRylandGrace for Secretary of State for Work and Pensions...

More seriously, some jobs need much more skill, statistical nous and intellect than the run of the mill Party hacks (whatever rosette) can muster. In tough times, we need them more than ever.

Possibly as a result of claiming pension credit ? If on the old state pension with no other income she would have qualified for PC, which entitles the claimant to help with council tax.

The point that resonates with me is that Governments should not retrospectively rewrite the accepted rules to encourage pension savings just because they can't make their spending plans work without doing so.

All my pension savings are DC because I was self-employed from age 35 to retirement. I started planning it 25 years ago, and until November 2024, it was both the family pension and a safe haven for money to cover our care in our dotage, with the residue left to our kid.

We didn't need/intend to take a lump sum, but when it was endlessly discussed that DC pensions would lose the right to take out 25% tax free, and that anything left over would be subject to IHT, we took the money and instantly gifted it down a generation.

It's buying a modest house from a landlord quitting the market because the Renter's Rights Act imposes too many costs and burdens. So in under two years, this government has managed to damage its voters (the insecure lower-paid working people) twice-over. Fewer houses for rent, and a failure to scalp the sensibly self-providing middle class professional. Two own goals. Bronx cheer.

Your late grandmother was an exception because in the 1920’s pensions weren’t regulated and workplace pensions weren’t universally offered to female employees. Where they were, the majority were subject to being rendered worthless if an employee left the job or got married.

I hate to bang on, but I was an analyst/marketing person at one of the largest pension funds on Wall St in the 1980s, and then worked very close to the City for the rest of my work life. I'm not an economist or even very numerate, but I was very good at my job, and I heard the ins and outs and ups and downs of big companies' decision making processes from the lips of the people taking those decisions. Across all sectors of the market, from pharma to property to retail to construction, media and telecoms, banking and insurance.

I just wondered where your figures are from? Working age benefits are 4.2% of GDP as of 2025 aren’t they? And then non pension incapacity and disability is 1.7% to 3.2% of GDP on top of this. Pensioners are 55% of the total welfare bill. Which is just over 10.8% of GDP.

Sadly they are not down and out yet, so the older family home is still in their sights.

This is a scam, not a pension fund going bankrupt

There is, as has been pointed out endlessly, a post ww2 bulge in the population. It was the largest cohort ever born, and it coincided with a science and medical boom in knowledge, not least because of the skills and education given to the baby boomers. Idiots in government destroyed the grammar school education model, and those behind them decided social justice was more important.

My grandfather left school at 14 in Coventry and retired as chief standards engineer at the aero-engineering company that is now BAe, via a broom, the drafting office, night school and a lot of work and some good fortune, being the right person with the right skills in the right place. It's an impossible leap now.

Pensions are a massive ticking time bomb which no political party will touch as the older generation are the main voting pool.

They need to re direct investment to the younger generations in this country. There is massive changes with work coming as AI is going to take lots of white collar jobs and we are absolutely not prepared.

Politicians have completely failed in preparing our country for the ageing population and it is the younger generations that are going to suffer due to this.

I agree with most of what you say except "they need to redirect investment to younger generations". The younger generations need to think for themselves and decide where their best interests lie. Good decisions are shared decisions. Unless there's a significant buy in to a plan, it won't succeed.

Figures are from ONS, DWP etc. The graphs I posted even stated specifically the proportions of costs such as NHS/ social care costs that are attributed to each cohort which again are validated from the official published data.