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?

I worked an extra ten years paying tax and deferred my pension to make sure I would be able to afford to live and now I am presented with a bill from HMRC for tax. I know I have to pay it but I can't tell you how it pissed me off.

I'm 53. My pension age is currently 67 but I'm planning as if it will be 68.

I think it will go up but how far can it go?! 70 as a maximum I think.

With autoenrolment which has been in place for 10 years people now in their 30s will have private pensions so the rolling back of state pension might start with them.

@Lilibert456 why have you got a tax bill?

Well that won't be fair on the 30 year olds who have been paying for everyone else's pension their whole working life, will it.

More likely the age will just be raised higher and higher.

I reckon we had the decades warning when workplace / private pensions became mandatory. At least that's how I took it....

I reckon we had the decades warning when workplace / private pensions became mandatory. At least that's how I took it....

Unless if you are on a high wage (with an employer who contributes a fair amount) workplace pensions don't amount to much. Some employers only put in 3%.

People on low to average wages will not have a great amount in their workplace pensions even if they work 45 years. Certainly not as much as the state pension currently pays.

I don’t think it just stopped, probably reduced and then replaced with something like UC or similar.

Exactly. And the tax threshold affects you now, not possibly in 30 years

This isn’t about changes to benefits you already claim. It’s about changes to benefits you may possibly claim in the future

Private pensions have not been made mandatory though.

Not everyone works, and of those that do work, not everyone works for an employer via PAYE. And even for those working PAYE, pension contributions aren't mandatory - the auto-enrollment rules mean you have to actively opt-out, but opting out is still permitted.

(I'm not saying opting out is a good idea, although it may be for some depending on circumstances - e.g. if you are renting and expect to need housing benefit in retirement.)

@pinksocks3 but how high can it go? Raising the age effectively means you have to rely on a private pension unless you want to work until you drop dead.

As a country we are in a dire situation and with AI coming down the line and the huge reduction of jobs the tax take will be a lot less.

We might have to go back to living in multigenerational families, with the working age children supporting their parents until they get their pension.

We're planning on moving to a much lower cost of living country when we retire. We have dual passports.

This. I think it's likely state pension will move towards being a means tested benefit. Those with significant private income will be judged not to need it. Like everything else, that fine for the super rich but there will be a whole group in the middle who end up worse off despite having done their best to save.

Ha. It's not there. It's paying today's pensions.

Worrying how many people dont realise how the system works.

When there are more pensioners and fewer workers in 40 years time, the sums will balance even less

As a country we are in a dire situation and with AI coming down the line and the huge reduction of jobs the tax take will be a lot less.

They'll always find some way to get the money in.

Like with VED, where they offered it much cheaper or free for low-emission (at the point of use) vehicles, and then when everybody has electric cars, they'll effectively get no VED in at all - hence they're now planning to track everybody and charge you per mile travelled.

I think the Silent Generation, the majority of Boomers and perhaps some older Gen Xers have certain expectations about the State Pension that would make large scale changes politically impossible.

The rest of us, however, seem to have few expectations, so until many of the Boomer generation have passed away, I doubt we'll see anything but tweaking.

After that, anything could happen. It may be merged into whatever the UC equivalent is at that time. Or perhaps people will have a UBI and there'll be no benefits as such. Who knows.

I think any changes will be very slow and gradual. After the state retirement age rises to 68 in 2037, the plan is that it shouldn't rise by more than one year every decade unless something very dramatic happens. We know that many people do not have much saved for their old age. Any savings from changes to pensions would probably be almost completely eaten up by the need to increase means tested benefits.

Well the news today is that state pensions may be taxed because the rise from the triple lock is sufficient to push those who are receiving a state pension of £195 plus a week beyond the non taxable allowance.

That means unless HMRC can recover tax owed some other way, via a private pension, pensioners will be getting a letter from HMRC indicating tax is owed.

Pensioners have always payed tax over the threshold.

Yes, but the base state pension has not usually been beyond the tax allowance, has it? So those receiving about 200 plus a week from state pension alone will need to set money aside.

I can actually see the state pension being capped at the personal tax allowance - that would make a lot of sense administratively

Far too sensible. Govt depts don't talk to each other so will never happen.

Just another load of work dumped on HMRC who have been struggling ever since Brown's tax admin mergers and then closure of town centre tax offices.

HMRC already take months to answer simple letters and had to close down their self assessment help lines over Summer, so they really don't have resources to start working out tax due on pensioners with no other taxable income. They'll have to make it "self assessment" and pensioners will have to register and complete/submit SA tax returns, i.e. "do it yourself".

Just like the foul ups now that dividend allowance has been reduced again. When introduced along with interest allowance, the point was to take people (especially) out of SA tax returns when they had only small amounts of interest which forced them to do SA returns. Now they're being brought back into SA because of the dividend (and CGT allowance) reductions, and even more will be brought back in due to the state pension rising above personal allowance!

HMRC is perfectly capable to deduct tax on pensions before they pay them out. In fact, they already do this where the state pension is higher than the nil rate band. All it takes is a tax code.

Not on state pensions, they don't. They have no mechanism for deducting tax from state pensions.

It can be done via occupational pensions because the pension fund managers have PAYE schemes just like an employer, so tax can be deducted according to a PAYE tax code.

There's no way that DWP and HMRC could ever set up a PAYE scheme big enough to cater for the millions of pensioners claiming state pensions!

Why couldn't they? Other countries have taxed national superannuation.

Have you ever had experience of UK government IT / infrastructure? We’d be waiting until 2123 for it to function even vaguely correctly