What will happen to those of us who can’t afford to pay in to a pension?

[whatnooow]

I’m starting to get a bit worried about how we are supposed to support ourselves as we get older as we basically live hand to mouth each month.

My DH and I are minimum wage workers and had to come out of the company pension contributions about 7 years ago to be able to get by, day to day. we’re both early 40s and are both knackered already. Another 30 years will definitely kill us off!

Will we just have to work until we drop dead? What if we can’t work due to ill health, but not actually disabled? Luckily we will have paid the mortgage off in about 20 years, but how will we survive, pay bills, buy food etc?

Neither of us will receive any inheritance. Time feels like it’s speeding up and I’m very worried.

The issue is going to be the people who tried to put a little by for the future, and saved a bit too much to be eligible for pension credit-related benefits. A tiny work-related pension from a few years income is only likely to add £40 or £50 pm, but it might take a LOT of people above the thresholds.

My suggestion is that pension income should be tax free up to two-thirds of NMW (about £17k if NMW is £25k for 40 hours), but wfa and other benefits should be clawed back above that. NMW exists for a reason. It is considered the minimum level at which an adult can keep body and soul together.

Every year the Chancellor extends the fiscal drag is taking more spending out of the economy. There's a point at which that crashes the economy because no ordinary person has money to spend on anything beyond essentials. IMO, RR is very very close to the line at which the economy crashes. Regardless of political preferences, I really don't want to be a witness to that car crash.

No worries @1apenny2apenny 😀

I don't think if you own a home when you're a pensioner that necessarily means you'll be fine. You''ll still have the maintenance of the property to pay for, unlike renters. The homeowners also aren't entitled to housing benefit. If you're renting then you could be entitled to housing benefit but the ticking time bomb is the 'after affect' of the government forcing employers to adopt (mandatory) workplace pensions, back in 2012. With a workplace pension and a state pension, as far as I know you won't get pension credit, your HB (f you're a renter) will reduce. You can't have more than £10k in savings to get HB.

Ultimately I think the single people who only have one or two small incomes coming in and who can't downsize if they own their homes are the people who're going to be screwed / struggle. My plan is to buy the smallest house I can (who wants a flat in retirement with the dreaded service charges and ground rent to pay?), start a SIPP, and get a lodger.

I agree with your first points on extra pension & benefits but whilst i think the SP will stay, i think benefits will be reduced for pensioners, not just people on disabilities.
I think the whole welfare thing has to be reassessed, Childcare is set to cost 10bn per year... people on up to 100k can get it.

On crashing the economy, holiday bookings at all time highs and growth in the last 18m has been higher than the 18m prior to the Election.

Wages have gone up more than inflation, there are an awful lot of people who have money, my DD and her partner, doing fairly normal jobs, are on a joint of 110k and long way from London/SE, both under 30yo, mortgage £650.

The trades i know are clearing £200 to £300 per day, after costs, one chippy is booked out for then 12 months! 2 Electricians are turning away work, i need a Gas boiler moved, cannot get anyone to do it - all too busy.

Yes Tax TH should be unfrozen but how? it would cost a fortune! there is also the issue that we have huge demands on spending, not least Defence and now Reeves has to find billions to keep Covid Business rates relief.

We all seem to want more but want to pay less tax.

They are going to keep raising the age for state pension, do you really think you can wait till 72, 74, or even 75?? I'd be saving more in an ISA or making other investments.

They can raise it until 105 it doesn’t mean people will still be able to work at that point. Everyone will just be on disability payments or universal credit instead of a pension. I see a lot of 70+ year olds in my job. While some would be fine to work (and some are), a large majority really wouldn’t.
I even look at my FIL. He’s 72. I guess in theory he could still work. He has no awful health issues. But he needs surgery on his back. He’s pretty deaf even with hearing aids. He gets confused easily (not in a dementia way. Just trying to use his phone or modern technology). His dexterity is pretty poor (drops things easily). He used to be an accountant. So I guess none of these things would rule out him continuing that, I can’t see many people wanting to use him as an independent accountant and I very very much doubt any company would employ him. So if he wasn’t eligible for a pension, they’d just need to pay him either disability or universal credit etc.

A lot of people would be able to work though even though it would be a struggle for them, and with benefits likely getting harder to claim and lower, people are going to have to work even if it will be harder for them or face living on not much. It’s one of the reasons DH and I are saving hard in to our work pensions that can be taken earlier than state pension age and also ISAs, as we don’t think we’ll be able to, and really don’t want to work until state retirement age which could be into the 70s by the time we retire but appreciate not everyone can afford to do this. There will be a big gap between people able to retire at 60-65 and those who have to struggle on until 70+.

But who will employ them? Where are the jobs? Especially jobs that don’t involve learning a load of new technology or involve lots of physical things. If an employer has the choice of someone 18-40 in decent health and is up on modern tech or a half deaf 72 year old who isn’t sure what AI is and walks with a limp and a stoop who will they choose? I’m sure that 72 year could work doing something. But there are also another few hundred thousand 72 year olds applying for those easy jobs. Because even the fit and generally healthy 70 year olds will need to leave certain physical professions and move into “easier” ones.

Well that’s part of the problem isn’t it. Lots will already be in jobs so will just have to carry on working those until retirement age, some will be able to get jobs at least part time, others won’t be able to get jobs and will have to rely on the decreasing benefits which won’t be much fun. Then there’s the issue of AI taking jobs anyway. It will all be a bit of a mess.

If that 72 year old is renting and doesn’t want to work or can’t, isn’t entitled to the full state pension, has no savings or under £10k and has no workplace pension, then they will get pension credit and this will cover their rent (happy to be corrected if I’m wrong about pension credit and those circumstances).

there is no guarantee pension credit, sickness benefit or even a state pension will be available in 20-30 years time! Do NOT rely on these. Save what you can and invest wisely.

They would get housing benefit. That would cover rent if they have a local authority property but probably not private rent since private rent is generally more than LA properties

The fact is, unless the country is absolutely destitute these things will exist in some form. Will they be amazing and allow people to live in luxury (or even to the level they do now) possibly not no I agree with you. But unless there is some provision for both disabled and elderly people you will have thousands or hundreds of thousands suddenly homeless and they will actually be dying in the street.

Reading comments on here, if anyone even so much as mentions the possibility of benefits being reduced for ANY disabilities everyone goes insane about how disgusting that would be. But yet everyone seems quite happy for pensions to be cut. Even though a lot of elderly people are disabled by their age. People seem very happy to suggest state pensions being means tested. But if it’s suggested that PIP should be as well? There’s uproar. In my opinion, ALL benefits should be means tested. No one earning 100k a year should be getting PIP. A pensioner with an income of 100k shouldn’t be getting a state pension.

I picked a stupid career when I was young. I didn’t realise the downside of self employment. I have no “workplace pension” that everyone goes on about. It’s hard to save into a private pension when you don’t earn a penny if you’re sick or want a holiday. I “lost” over a weeks pay at Christmas. The theory is you “save” for your own days off. But never having a set salary and knowing how much tax you need to pay and how much time off you’ll need if you’re sick is hard. Especially now I’m getting older I realise what a mistake I made. Everyone shouting about how selfish it is if you dare go into work with a cold. But I can’t afford to take a week or two off multiple times a year because I’ve got a runny nose or a cough! I can’t work from home. My job is slowly disabling me. I’m under a specialist for my back. I won’t be able to do this job until I’m 72. I’m doubtful I’ll make it to 60 to be honest. And at that age any job I’ll get will be minimum wage. If they’ll employ me at all. I do however have a property that I’m more than happy to downsize and use that to fund my life. But when that runs out, unless there’s some form of state help, I will be homeless. And I’m pretty sure there are thousands in a similar situation.

We will go the way of the USA in this regard.

Means testing and homeless housing shelters or complexes if you like, for those who rent but cannot afford the payments any longer.

Rent for this will come out of the SP.

Either that or live with children.

In a few years time, we will have an extreme (imho) right wing Govt, they will not fund welfare as it has been for the last 70 or so years and as they say, once its gone, its gone, benefits lost dont come back.

Its what we all want!

The priority will be rearming for the foreseeable future.

You will get likely housing benefit. They will only pay up to a certain amount though. I work in benefits for older people and they don't generally end up homeless. Local authorities tend to find them affordable accommodation.

Do any of you guys know what will happen to those of us who don’t own property/generation rent? Can anyone tell me?

im worried sick about this

i can’t afford a home with my low salary (plus having chronic illness with good and bad days)

Even if I have huge private pension it will eaten away by rent

ive seen people say no point of saving pension if you will never own a home

i seen so many say with low birth rates especially no guarantee of housing benefit in future

and I know I’m not the only one, so many are in same position

do any of you guys have any advice?

Do any of you guys know what will happen to those of us who don’t own property/generation rent? Can anyone tell me?

No-one "knows" but you will get lots of conflicting advice.

I can only suggest that you try to build up your pension & savings the best you can.
Yes, I know there is the argument that if you have savings or an income it will make you intelligible for some help or benefits but I would always want to try to look after myself rather than rely on the state.

So you think that EVERYONE who claims benefits now will live in a form of homeless shelter? Single mothers with kids? Disabled people unable to work? Anyone unable to get a job that earns enough so currently claims universal credit? Pensioners with very not enough private pension? If someone is on short term (6 months) sick leave and don’t have enough income they’ll need to move into one? Someone accidentally gets pregnant with another baby they can’t afford so straight into a homeless shelter the entire family goes? If this is the future of this country then honestly whether I have enough pension is the least of my worries. Maybe once I see these huge homeless shelters being built in preparation I’ll start worrying.

However you say once they’re gone benefits don’t come back. But the 2 child benefit cap has just been lifted. So sometimes things do come back.

Also I don’t have children (got myself in debt trying to have them. Just had a lovely few failed rounds of IVF instead along with lots of miscarriages) so I shall await my homeless shelter life in old age!

@Jennajenjen I would do a combo of savings and pensions (if you can’t increase your workplace contributions you can set up a private pension - a SIPP) but also ensure you have some disposable money for fun stuff. Two of the many grim realities in life are that none of us are guaranteed tomorrow, and that some won’t get to retirement age.

In the 80s lots of people said the exact same thing to me, even financial advisers.

There is no chance the state pension will disappear, it may become more means tested and the government hopefully will manipulate things so more people pay more into private pensions.

Even if there is no state pension there will still be the equivalent of Pension Credit.

Pension credit pamphlet says you get free dental and glasses and can apply for housing benefit and council tax discounts. Every little helps

You can move between depts, you’ll have access to internal jobs. I’d recommend the civil service, great pension and very family friendly in my experience.