The state pension won’t suddenly stop, will it?

[TeapotCollection]

I’m 51. We were talking about pensions at work and someone who’s about to retire said there’d probably be no state pension when I retire

This can’t happen can it? I can imagine the government saying in a few years that anyone born after <date> won’t get it but surely it can’t suddenly stop?

It used to be women got state pension at age 60 and men 65. This changed a few years ago for women 67 and men 66. I worked towards getting state pension at 60 but now have to wait till I am 67 (5 years time). I think they will up the man’s age limit next to maybe 70 with women following after.

I could see the amount given being tapered to how much you have paid in to the system overall. Spain pays benefit levels for unemployment depending on how much you have paid in on a sliding scale.

The treasury has an income of about 1 trillion annually.
Pensions are 112.5 billion
Defence is 45.9 billion
A trillion is a £1,000,000,000,000

State pensions aren't that much really.

I think when the government changed the age from 60 to 65 for all women they gave 10-15 years notice.

I can easily see this happening with the introduction a few years back of auto enrollment. In fact I'm surprised that it didn't happen at the same time that became compulsory (so anyone born after X date who had thus been auto-enrolled from the start of their employment life would no monger be eligible for a state pension). But it would be a bitter pill to swallow without a commensurate reduction in NI, and I can't see that being affordable.

I imagine the age will be pushed back to a point where at least half of us will never get it because we'll have died first.

But most also used to leave school at 16. Now you must stay in education until 18, and the vast vast majority are expected to do a degree, any degree. So people are also entering the workforce at 22/23 rather than 16-18.

State pension can't stop suddenly because:

1. Government has to give decades' worth of advance notice so that people can make private provision for their old age.
2. If so many people were suddenly thrown into poverty in old age, the government would still have to provide them with financial benefits, so all but pension in name.

I think if Labour gets in they’d prefer to tax pension income.

A swift google tells me that in the UK 28% of over 55 year olds currently have no pensions other than the state pension, with 32% of women (vs 20% of men) falling into this category.

If you remove the state pension entirely, how exactly will these people live once they stop work? This isn't a problem which will go away either - people on min wage / near to it don't (can't?) prioritise their pensions and will not have the chance to build up any meaningful pension contribution during their working life.

What is much more likely is that they will tighten up the rules on when you can claim it, e.g. more years NI contributions, push back the age at which you can claim it etc.

The WASPI women were given plenty of notice back when the changes happened - I remember my mum discussing it with me (she was one of the WASPI women) after reading it in the newspapers / seeing it on the news in 1995, and making sure I understood to take a pension out as soon as I could once I was working, so this isn't something which 'just happens', any government would have to give sufficient lead in time (15/20 years) to ensure that people could have the chance to make alternative pension provision arrangements, and even then it would be phased in according to ages, rather than a sharp cut off. I do remember my mum wasn't very happy about it back in 1995 - but there wasn't much she could do about it, she couldn't argue about the equality of it, and so she resigned herself to working (in her case) an extra 2 years.

Pension income is already taxed!

I do not have a great knowledge of how pensions work but if the government changed the amount/qualifying years/retirement age. Surely the deficit would be picked up by pension credit, so no one loses out but it comes from a different budget.
Also if the retirement age is pushed to 70, would more people go for medical retirement in physically demanding jobs e.g. I doubt most teachers would want to go to 70, but cite stress/anxiety in late 60s.

No, probably will start to taper out in a few decades time.

The government introduced workplace pensions a few years ago, so when today's youngers start coming up to retirement, they should have a workplace pension, which will substitute the state pension.

The state pension will then disappear and those who've not had a workplace pension will have to rely on means tested pension credits instead.

Pension income is taxed already? If you go over the personal allowance, whether earned income, pension income or investment income etc etc, it is all subject to the normal income tax rules and taxed accordingly.

If you just have state pension then you don't get taxed, because it is within your personal allowance, not because of a special rule about pensions being tax free.

If you have personal pensions over and above the state pension, which are more than your personal allowance is, you will be taxed on them, potentially right up to the top bandings.

Taxed properly then, at the same rate as workers, i.e. impose NIC on pensions or scrap NIC and increase income tax instead.

It's nonsense that a pensioner with the same income as a worker pays a lot less tax, and yes, NIC is a tax!

Stupid comment of the day. They will never have paid in tax for their pension on this basis, therefore they wont be considered out of pocket like the rest of us paying in good faith (good faith, snigger, but you know what I mean)

@throwa many countries have no pensions. You work till you can't, and then you die. I mean we think health care is universal and that if we don't have the NHS and ask questions about how will anyone be able to afford treatment if something goes wrong. In many places around the world, there's not such thing as free healthcare either.

@throwa

If you remove the state pension entirely, how exactly will these people live once they stop work? This isn't a problem which will go away either - people on min wage / near to it don't (can't?) prioritise their pensions and will not have the chance to build up any meaningful pension contribution during their working life.

Compulsory workplace pension schemes were introduced a few years ago. Workers have to actively opt out if they don't want to contribute. Part of the rules are that employers also have minimum contributions to pay unless the worker has opted out. Anyone starting work today would be insane to opt out of their employers' pension scheme,

It didn't stop them deciding to change the women's pension age (I agree it's fairer to all retire at the same age) - particularly the extra year that was suddenly added to many women in their late 50s.

@user1497207191 but NIC is primarily for receiving your pension as a state benefit so that's why you no longer pay it

I think removing it would cause a revolt among all, including those with decent private or workplace pensions. They pay the most into the tax system and their pension is what they see they get at the end from that input. Take that away and they'll want to know what they actually get out of the tax system they're paying 40% plus of their income into. They'll be financially fine but will raise some significant objections to the amount of tax etc they pay, people without the pensions will be fucked financially and will still need to be supported somehow.

Well yes, that's what we'd end up with once workplace pensions have been going a few decades. Their pensions will be dependant upon their pension funds which will be dependant upon how much they, and their employers, have paid in.

Those without workplace pensions will have to rely on means tested pension credits.

Background about the change in state pension age for women on the Ombudsman site:

https://www.ombudsman.org.uk/publications/womens-state-pension-age-our-findings-department-work-and-pensions-communication/background-relating-changes-state-pension-age-women

Formalised in the Pensions Act 1995, to start in 2010 and be phased in between 2010-2020.

So that was 15 years' notice of a change that would be phased in over a 10 year period (so up to 25 years' notice for some of those affected). And that was for a change delaying their retirement age by 5 years. Imagine how much notice would need to be given if the state pension were abolished altogether? You'd need to know from childhood.

Part is used for the NHS and it's for ALL state benefits, not just pensions, as it goes towards unemployment and sickness benefits too! OAPs still use the NHS and many still get benefits other than their pension!

Now that most companies are legally obliged to offer company pensions, I could see a change to that where everyone, employed or self employed would have to have a private pension and those who had this from the beginning of their working life are told no state pension.

However, DH and I are 54, and due to my pt work and his low income, even though we know we should have put money into a pension, we simply haven't had enough money over the years. My company pension only started a few years ago, and I don't earn much so it won't amount to much, and DH is self employed, and we have never been able to afford to put anything in a pension for him.

I know there will be a pile on to say we are irresponsible and foolish to rely on the state pension, but that will be our only option. I bet there are many others like us.