To think pensions need huge reform?

[aburrsir]

With all of the recent chat over changing politicians and big ideas that don’t go anywhere, I can’t be the only one who thinks that someone needs to bite the bullet with pensions?

It’s something ridiculous like 50% of the welfare budget annually, and this is never going to go away.

IMO the government need to hike up retirement age and scrap the triple lock. There can be provisions made to go along with this to phase this in for those in genuine need (e.g. for the next 10 years those with no private pensions can get a top up to cover the transition period).

I’d rather know “look you can’t retire until 75” now than this constant “it’s 67…. now wait it’s 68…..” that never ends.

It seems that all governments are scared to do such a big change as it will piss off older people (who are the primary voting demographic) but something needs to change as this is just completely unsustainable long term.

We’re better off making these changes to ensure the state pension can continue sustainably in the long term future rather than having this attitude of “as long as I’m alright I don’t care”

We need a gov with long term planning goals and not just short term firefighting. AIBU?

Auto enrolment already deducts 8%, and employer/employee NI contributions an additional 23%, for basic rate tax payers. But auto enrolment only started, what, 15 years ago. So the effect of that is still building up. If you were, say, 21 when it started then you’ve still got more than 30 years before you reach state retirement age. So any further changes will take another 50 years to work though the system in full. Until then the government is lumbered with some form of state pension and some form of indexing, even if the tripple lock is watered down.

Turning the state pension into a ‘benefit’ not at entitlement built up though contributions is to try and create division where none is necessary. The real issue is successive governments inability to create an environment for growth. Because if the economy was growing at 4%, earnings at 3% and inflation at 2%, with auto enrolment or personal pension provision building up, the ‘problem’ of growing costs for state pensions goes away.

As a side note, the NHS costs roughly the same as state pensions with a bit of pension credit. But for ease let’s say it’s 50%. If you take 11.5% (being half the NI deducted) and add it to the 8% auto enrolment minimum pension contribution then you’re at roughly 20%. If you apply that to median earnings for full and part time workers of of £33k, assume a 40 year working life and stock market growth at a long term average of 7.2% you’d have a pension fund of £1.4 million.

Make that growth number 4.5% to account for inflation, and you’re at £750k in real terms, give or take. That ignores any growth in income over the period. Enough to fund a £30,000 a year pension. And that’s what people are already funding, but the state is only underwriting 40% of that today. And if they stopped fiddling around and let people plan, the 60% that has to be funded by the individual would grow, and the state could gradually fund less. But, the NI contributions that are supposed, in part, to fund pensions are being spent on current pensioners and not invested for the individuals contributing today, because that’s not how the system works. Saying that they should pay more is only one part of the picture. Most people’s contributions are already funding the state pension they are accruing.

Isn't it sad that when we feel squeezed it's always the same people who come into the firing line - the ill/disabled, single mothers, the pensioners, the minorities, the vulnerable.

I'd say it's funny how it's never the large scale companies who cleverly evade paying taxes properly but its not its fucking depressing.

And introduce a leaver tax!

I agree. The vast majority of over 60s do not need free prescriptions.
An NHS Prescription Prepayment Certificate costs £114 a year so even if someone is getting multiple prescriptions they’re still affordable for most people.

We do need to tackle the issue of companies evading their taxes, yes, but we also need to identify ways to cut benefits that are going to people who don’t genuinely need them. The two things are not mutually exclusive.

And once you get too frail, you don’t need £200 a week, as you aren’t able to do anything with it.

You still need to eat and pay council tax and utility bills. If you’re very frail you probably have to pay for other people to do the things you can no longer manage. Nobody’s living in the lap of luxury on £200 a week.

How about those that are type 2 diabetic and get that medication plus all their other prescriptions free!! Surely many of them could pay too..

Why is that condition exempt yet people with asthma still have to pay... 😡

Must be something to do with likely hospital admission and knock on effect of someone not taking diabetic meds but surely that's the same for asthma.

I’m in my fifties, no personal pension and absolutely no expectation the state pension will exist when I’m late sixties/early seventies. What I would like is an assurance the economy won’t be absolutely fucked and there wil still be jobs available for me to do in the next fifteen years, and if someone could organise an assisted dying program I could use when I’m too ill/old to work I’d happily use it and not be a burden on the state. Thank you 👍👋

I agree with you.

the government need to stop paying benefits to everyone who just turns up in this country , that would save a fortune .Pension age need to be reduced , the rate it’s going at youngsters nowadays will never be able to retire

And they pay less tax too. Only working age people pay NI!

I’d scrap NI an have a higher income tax… which would work out less for those of working age (no NI) but more for pensioners. As it’s based on income, poor pensioners won’t be penalised!

Since the introduction of the triple lock in April 2011, prices (CPI) have increased 60%, average wages have increased 66%, and the triple lock has resulted in pensions increasing 89%. This is despite the triple lock being suspended in 2022-23 when the recovery from Covid meant wages increased by an exceptional 8.4%, but pensions were increased by the inflation rate of 3.1% instead.

The triple lock as it is currently formulated is unaffordable.

Welfare spending as a percentage of GDP has remained more or less unchanged over the last 50 years (it's consistently been between 10 and 12% of GDP since the mid 70s - it's currently forecast to be 10.6% of GDP in the 2025 to 2026 period according to government figures). We are not spending vastly more than we were at any point in the last 50 years and indeed are actually spending less than at some points in that time. And we spend a totally average amount compared to similar countries. Many countries who spend vastly more on welfare have better economies than ours. We aren't being dragged down by vast increases in welfare spending by any means at all. We are being misled on this point.

A higher retirement age also has a knock on effect to those younger trying to get jobs.

Compared to the 1960s welfare including pensions is almost twice as large relative to GDP - so I’m not sure what you’re on about.

Sort of. But access to private pensions is usually limited to 10 years before state retirement age so that would need reform

I expect it’s probably about four times more than in the 1940s, how far do you want to go back? It’s abundantly obvious what they’re “on about”.

A lot of current pensioners had very good workplace pension schemes. These are rare now and the auto enrolment total contribution rate is only 8% so future pensioners won't be living the high life.

You can't live comfortably on state pension only, particularly if you're renting or still have a mortgage but also because of the cost of living many people are in a catch 22 where they can't afford to pay more in. Today's youngsters are screwed.

I'm not working full time until retirement age. I'm already exhausted and there's more to life.

It's not good for companies either to have people who are ready to retire struggling on. They're more likely to have health issues and sickness and if they've lost all desire to work they're not likely to be hugely productive either.

But the reality is most haven’t enough private pension to survive on, many will still have mortgages so they will need to stay in work which blocks off the young from jobs.

Retire and return in the NHS needs to be re thought out. I know loads of HCPs who have retired and come back promising that they have valuable experience to share.
The reality is that they just cannot work as hard in their 70s, they are often off sick and a lot of their practice is outdated.
IME they are often a huge distraction, they are working for the social side, rather than to achieve.
Equally important, they are blocking jobs from newly qualified staff. 500 new nurses in Wales cannot find work.

Best post I've read on Mumsnet recently.

Absolute nonsense
Special classes NHS retired at 55 -60 in the 95 section -70 year olds 😂
Begged to come back or do R&R during Covid because so many staff left the NHS and there was zero budget for upskilling
People retired as soon as they could as it was so stressful

There are no jobs for NQ because so many have been made redundant and posts slashed
If anyone left they simply no longer recruit
Whole teams gone and so that speciality is no longer offered .

Do you think a NQ can do the work of an experienced specialist with years of training?
Those left are doing the job of 3-4 people
Do get your facts right and stop ageist clap trap

Indeed. But those who do have sufficient private pensions or want to use them to retire early and bridge until state pension age should be free to do so

WTAF
So we have gone a full 360 from " how dare they retire" to " blocking jobs from the young"

Couldnt make it up!

You are most likely right ref the public sector and other large companies that ran final salary schemes that became unaffordable and so gradually closed. I was in one for a few short years. Would be amazing to have one of those!!!

But many current pensioners didn’t have decent pension availability. Especially those of us women with “ ordinary jobs”. Again like me I started work in the seventies and my company did not have any pension scheme on offer. I was over 30 before the company I worked for offered a pension scheme to all its staff no matter their job. Yes no doubt there was private provision I could have joined but quite honestly pensions weren’t any sort of topic of focus or conversation. Mind you - despite the rhetoric - all my pay was used up each month on basics so I didn’t have any spare cash. No cash either for holidays etc or several years either we weren’t awash with money to spend. Consequently nothing went into any private pension for over 13 years work life.

Also many women had little or no protection in the workplace when becoming pregnant so the pensioners of today didn’t all have gilded lives but often breaks in employment and nowhere near equal pay etc. which all affected private pension possibilities.

Im past retirement age but still work albeit not full time as the company pensions I have are a bit rubbish. It’s shocking how low they can be! I am definitely not giving my employer the best, I am knackered! and I just don’t think humans today are really meant to work later and later. I also pay tax as pension - unlike many benefits -Is counted as taxable income. Which I think is fair enough. And no matter how it is described formally ( a benefit) I disagree, and separating pensions from “true” benefits would reduce the ageist, deafening, pensioner bashing that feels incessant currently.