To think when the state pension is removed, the social contract is broken?

[JulyJulyNovember]

https://www.bbc.co.uk/news/articles/c8e2yp1gg37o

It seems likely that in due course, the universal state pension will be withdrawn. At this point, I don’t see how there will be any incentive for young people to build wealth here.

I don’t think poor pensioners should be homeless, but I don’t think they should be provided for in large, unsuitable council houses or in nursing homes where places cost thousands a week. We are moving to a more individualistic world.

It’s impossible to solve. Many people who save and have a modest pension would be worse off than a person with a state pension, pension credit and social housing.

In fact there was a thread recently with a poster saying she was going to access her pension, spend it down and then claim pension credit and housing benefit as that would make her better off. Posters were spluttering but if one person’s thought about it then you can bet the floodgates will open in due course.

That's what an elderly lady I know was told by her Greek friends who had wonderful pensions.

The fact that Greece has had to be bailed out three times by the EU (because the country was bankrupt) seems to have been ignored. Greece may have paid for the first bailout by 2031 !

The UK State pension is basically a Ponzi Scheme.

I really feel for Gen Z (which both my DC belong to). They have been shafted at every turn. Earlier generations got everything - a booming economy, plentiful jobs, cheap and plentiful homes, inflation that has made those homes very valuable, student loans, state pensions, a somewhat functional NHS - and all that is gone. DH and I are encouraging our two to start pensions at 18, because they're going to need them. The social contract is already broken IMO.

But that's the thing - you still qualify for the basic pension even if you never paid in a penny! There are millions of pensioners up and down the country claiming from a system they never paid into - or their contributions were so paltry that they don't count.

My own DM only worked for six years in the late 60s and early 70s and then she was a housewife. Yet she is entitled to - and claims - £184.90 every week and she's 78 so she's already been claiming for 18 years and she's in fine fettle so I have no doubt that she'll go on claiming for many years yet. Of her friends, they are all the same - none of them worked for 35 years - not one.

I think the social contract is already broken, for the reasons @cheezncrackers said above.

I’m a millennial, graduated in the financial crash… but my son is graduating now. He ‘ticked the boxes’ of what he was supposed to do- work hard at school, get a part time job in sixth form/at uni, go to a decent uni and get a 2.1…. And now he is really struggling to het a job, no hope of getting on the housing ladder, and when he eventually does he’ll be paying for bloated pensions which he’ll never receive. His generation is buggered.

I agree re the triple lock being withdrawn, but the social contract as I understood it was broken a while ago. Too many non contributors nowadays, with growing numbers. I don’t mean those who are too sick and/or disabled to work, my DH had several years of sickness benefits. But for generations his family, like most in the past, had worked and supported themselves.

As well as the increase in age, the State Pension has also gone up quite a bit, as an older pensioner, I am very aware! Anyone retiring in the last 10 years gets over £50 a week more than older pensioners on basic pensions, and of course the difference keeps increasing due to the triple lock. Lots of info on New and Basic State Pensions on government websites. Also, younger SAHP got NI credits when receiving child benefit, unlike my cohort, meaning many older mothers have reduced SP in our retirement. My SP is around £120 a week. I have a small Occupational pension, so don’t receive Pension Credit,

What is the alternative to “nursing homes that cost thousands per week’ for elderly people with dementia, Parkinsons etc? I have relatives in these and once their savings have been run down and the house is gone the council takes over the payments. The cost of care is still well over £1000 per week - because they are privately run, profit-making businesses.

Re pensioners in "large unsuitable council houses" or "nursing homes costing thousands per week" - these feel like system issues with few alternatives.

• If we move an older person from a council house into a one-bed private accommodation (ground floor) - housing benefit probably won't cover the rent. I'm not sure whether you've looked recently, but the price and availability of private rentals is terrible. People with full time jobs struggle to pay without assistance.

• Re the nursing home, what is the alternative if the person needs complex care?

Older people need housing, food and care. With an aging population there's going to be a lot more older people in the future. One of the key issues is spiralling costs of basic necessities that have vastly outpaced people's abilities to save. If you're older and you don't own a home/have significant savings then you're in huge trouble. Unfortunately, that's going to be more and more of us. The UK is losing its social safety nets.

It’s an absolute disgrace. The majority of a national insurance payment goes towards state pension

When I started working I essentially entered into a contract with the government that once I had made all 35 years contributions I would be eligible for a state pension. I’ve got ten years left until I have made all contributions - so how can they justify taking all that money off all of us and reneging on their agreement? What about employer contributions too? Disgusting.

Im absolutely completely and utterly done. Andy Burnham is not interested in going for the super earners - his mates - he’s interested in squeezing the £50k plus earners out of more and more tax and now taking pensions off us. I already repay all child benefit contributions because of my earnings. But earning less now with tax increase and now potentially no state pension. Just stop it completely to people who haven’t paid national insurance.

Reduce benefits to people who are just workshy - sorry but why is someone on universal credits earning the same as someone working. I appreciate there are exceptions with disability but there are a vast amount of people simply choosing to live on benefits. This is just contributing to the unbalanced society we have with less people working. Put the 2 child cap back on and stop giving benefits and houses to illegal migrants. Sorry but this is the only way that the country will survive.

There are millions of pensioners up and down the country claiming from a system they never paid into - or their contributions were so paltry that they don't count

Prove it. Where's your evidence, @cheezncrackers ?

I’m older than your mum, I worked from 1962-1969, 7 years, then from1976-2006, 30 years. See my earlier post, I get around £120. Low pay, some part time, meant I opted for reduced rate NI for a good number of years, my mistake!

My SP will go up to the same level as your mum’s if my husband dies before me, her pension will be based on her husband’s contributions if she is a widow.

Pension credit will be removed first

if the raise the pension but freeze pension credit level it will only be a couple of years before very few are eligible

that would help

They need to get rid of some of the ridiculous private pension benefits and use that money to shore up the state pension.

There should be a reasonable amount that you are allowed to save into a private pension tax free because that reduces the burden on the state.

But after you have achieved a certain amount (say equal to the state pension) it should be taxed more heavily.

The middle class are/have piling/piled vast amounts of wealth into pensions because of the tax benefits.

There is a better balance point between encouraging people to save privately for their futures and allowing them to accumulate giant tax free pension pots.

A shift to a means-tested benefit may be more appropriate. Perhaps, in part, linked to disability benefits. Currently a lot of older people have sizeable private pensions and/or assets, and I'm not sure it's the best use of our money to be giving a state pension to all of them.

So you want to have the state take control over people’s earnings and say how they can save?
you further want to take people’s earnings from them to give to others who are not earning?

But then people will shift their savings money into more offshore accounts, shares etc it’s better to know where it is and then it gets taxed when you draw down

they are going to need tax receipts from pensioners as well as workers in the future to provide for the pensioners who couldn’t be bothered to save themselves

The state already does both of these.

To replace the state pension as an individual you need something like an extra 250,000 to 300,000 saved.

I am 55 so to save that extra according to AI I need to save 1667 a month between now and age 68, which isn't possible. For a lot of people of my generation there was no pension provided through work until auto enrolment so it is quite a tough ask to pay extra while still contributing to the pensions of those who reached state retirement age already.

This is just an example but it shows that ideally it would be phased in and in my view shouldn't impact those who are already at state pension age or who reach it very soon.

They will just raise the age to 70.

Well no of course you don’t want it to change

but it’s fine for younger people

isn’t this the problem

Keep it for me me me
but take it away from them them them

I think we will see vaster disparities between wealth and poverty.

Those that can afford to retire and will work and save towards it, and those in the squeezed middle opting out of saving anything at all because they'll be scarcely better off than spending everyhthing they have, not saving, and then being eligible for full government support.

It's exactly as you've said - there is an implied social contract that we all do our bit and when we are too old and knackered to work we retire and enjoy a quieter pace.

To me, state pension and being looked after in old age is on par with the NHS healthcare system - noone chooses frailty any more than they choose a disability so it's unfair to offer means testing on one and bot the other - it need to be a sweeping policy of care.

The problem is that it's more expensive now, and there needs to be recognition that there are people making billions off of it, from private care homes to junk food and drink industries etc.

There is also the jobs market - how will the youth get employment when the older generation, at the top of their earnings potential and very well aware that they won't be reemployed elsewhere, won't want to leave the workforce because they can't afford to.

And then moan about NEETS.

It is not a Ponzi scheme. A Ponzi scheme is a deliberate fraud on investors, which has to keep growing in size or it will collapse. It is likely that the funding of the state pension will stabilise once all the boomers have passed through.

Besides, how else could you organise it? When the government wanted to introduce a proper state pension in the 1940s, they could hardly have said that people could not start receiving it until they had paid a lifetime of contributions towards it. That would have meant that the first pensions would not have been paid out until the 1980s. So, it has to be funded by the next generation.

@echt my Mum would be one of those millions, as I suspect would most of her friends be. There are loads of babyboomer women who claim state pensions that they made very little contribution into because so many of them didn't work after they got married and had children.

@GasPanic say what now? The money I contribute into my private pension has already been taxed. It comes out of my taxed income. When I do claim it, the income I get from it will also be taxed.

If at some future point government decides to completely stop the state pension, surely it also has to significantly reduce the amount of national insurance people pay along with general taxation, after all, they wouldn’t need as much money so how could they justify continuing to expect people to pay