State Pension Age

[ThatSunnyCrow]

https://www.independent.co.uk/bulletin/news/state-pension-age-2037-obr-b3015234.html

Interested in an honest discussion about this. I’m a few years younger so not affected by the changes in the article but I think my state pension age is 68.

In 1946 when state pension age was 65 life expectancy was around 65. So half of people weren’t expected to live that long.

Average life expectancy now is 80 (averaging between men and women).

Current system just wasn’t designed for a world where people were regularly expected to claim it for 15 years.

So how does get around those who are, not ill, but just too drained/exhausted to work? It can’t be both ‘voluntary’ and ‘mandatory’. What you’re talking about is unpaid labour for older adults. In any case, the administrative costs of policing and managing such a scheme would very quickly cut into any savings re Govt expenditure. Plus, I doubt there’s enough voluntary jobs to go around.

On MN everyone’s “elderly neighbours” and non childcare providing in laws are living the life of riley on massive tax payer provided pensions and squillions of .other wealth.

In reality your neighbour is the generational wealth category - top few percent. The current millennials are set to be even richer than their boomer parents if you calculate wealth in the same way. Public sector working millennials (an ever increasing group) also continue to benefit from inflation protected salary based pensions.

Setting policy based on “my neighbour who has plenty of inherited money” or any other identity group is exactly how you exacerbate poverty for the large cohort in any identity group who are not in the top 5%.

Removing the WFA from all pensioners not on pension credit was always going to take it from pensioners living in fuel poverty (about a third). Its too small a benefit to be worth means testing, it could have been made taxable at the individual’s highest rate and an opt out made available for those who want to decline it (which seemed to be every pensioners on MN in those threads). As Osborne found out, restricted small flat rate benefits may make good headlines but it costs at least as much as it saves.

Not for most people. DBB pensions were not the norm in the private sector - where they existed at all they tended to be restricted by grade and sex. Most women had no access to them. Most working people might have SERPs at best to top up a state pension by tiny amounts. Those DBB schemes remaining were scrapped more than a generation ago.

In the public sector DBB continues to be the norm then as now. The differential is by sector, not generation.

This is state pension, the changes in when you receive it are not new and it will undoubtedly continue to increase, for some people the state pension is the only option available, but there is nothing stopping many people retiring earlier, it does however require planning and the necessary dedication to put money away into either a private pension plan or some other way of saving

There is a generational difference, more private companies had DB schemes and public sector had final salary DB schemes.

At the peak in the 60s “Approximately 8 million employees were building rights in private sector DB pensions.”

”Current Day: Fewer than 900,000 active members remain in the private sector, and less than 1% of UK employers offer a DB scheme to new hires”

Final salary schemes in the public sector were closed to newer entrants in 2014/15.

“In the past, approximately 6.3 million active public sector employees accrued benefits in final salary defined benefit (DB) schemes (as of 2019).”

I'm 44 and I've known for a long time my SPA is 68, with the possibility it could increase with 10 years notice. I need another 7 years of work to qualify for full state pension. I'd like to retire at 60 but I need to plan how I'll privately fund the gap. I fear another change to SPA and if I don't know soon it will limit my ability to prepare and mean I will have to work longer - but the working longer I'd imagine is the impact we will all see, that's the point really.

Again today’s pensioners statistically have better pension benefits than younger generations. There will be individual anomalies of course.

@C8H10N4O2 I'm not* sure where you live but the *SE has lots of wealthy pensioners mostly because proximity to London provided good careers with decent pensions and very high house prices so inheritance is a factor that has increased wealth.

I spoke of the entitlement which does exist.The attitude of "I deserve the WFA or triple lock" yet actually they don't need it. This attitude means economic/tax changes are not happening because successive governments are fearful of the backlash in withdrawing or restricting benefits.

If a pensioner has an income of 80-100k per year do they need free everything, prescriptions, travel? They don't pay NI so already their tax burden is lower.

It’s a triple lock on one of the lowest pensions in Europe. If they scrap it (as the 5th richest country in the world), they should increase the pension to the level of e.g Germany.

Yes! I’ve been working towards a retirement age of 57. I’m currently counting down the months (6 years 2 months). I’ll be really pissed off if I have to wait an extra year to access my private pensions. It’s bad enough that I can’t take it at 55 (which would definitely be my preference).

I can see both sides. I am 66. I was pleased when the pension age for women was increased initially because it gave me the ability to have equity with men and allowed me to make-up some of the seven years I had off with the children. However, despite being fit, well and active (still working) I found that at 63/64 it became harder to puĺl a 45/50 hour week. I have a cushty desk job but it's intellectually demading.

I transferred to the public sector, in London, aged 43 earning far less than previously. I transferred 20 years into the LGPS in 2013 and locked half my oension into final salary but that was luck.

I am eligible for my state pension in October and will retire and am ready to. I'm a planner so am pensioned up to the eyeballs. I started work aged 20 and have 46 years years of pension contributions, contracyed out for some of the time but meet the 35 year threshold.

I absolutely agree that I have no need of free prescriptions, flu jabs, eye tests, wfa, etc, and find those aspects ludicrous.

The best thing younger people can grasp is the benefit of compound interest. Whack it in as early as possible. I couldn't actually join the company scheme in the early 80s until I was 24!

@TheyGrewUp

The best thing younger people can grasp is the benefit of compound interest. Whack it in as early as possible.

Difficult when housing costs are so high. Wages havn't kept up with housing costs for the last 2/3 decades, plus high costs of utilities etc.

I saw some statistics that housing costs have quadrupled over the same time period that wages only doubled.

The young are being tightly squeezed unless they can live with parents in an area where they can find decent jobs. Those who have to move to cities for work barely have anything left over to "whack" money into pensions, even if they only live in HMOs or pokey flats - rent is still stupidly high.

I’m one of those affected, and I’m not up in arms. We can’t afford to pay pensions for 25 years+. Something has to give.

The triple lock is unaffordable - that should go first.

Point taken but I'd still venture that 3% from the very beginning folds into the budget. 3% at £27k is £67.50pcm less tax relief, plus employer's contribution. Alternatively about £15.50pw.

Young people do have it hard (house prices are part of why I think IHT should be abolished and CGT should apply to all assets transferred on death including houses but that’s a separate conversation). But I really don’t like the mentality that it’s too hard to save into a pension. Theres a video I referenced on another thread yesterday, Meaningful Money on YouTube. Idea goes that for £6 a week you can make a lot of money over the long term. Annoyingly I can’t find it to link to it but i really don’t like the attitude of its pointless I’ll just ignore it. It shouldn’t be a case of prioritising buying a house over a pension.

Agree

@ThatSunnyCrow

It shouldn’t be a case of prioritising buying a house over a pension.

I think it's more a matter of prioritising somewhere to actually live, i.e. a place to rent, rather than buying a house for those at the start of their working lives. My son had to pay over £1,100 per month rent for a small flat because there was literally nothing else he could get a sniff of. Of course that's plus utilities etc which I think totalled around £1,500! He finally managed to get himself into a HMO house share, but even that's costing £1.2k per month but at least includes bills but is a tiny basement flat. When you add commuting costs, food, etc., there's really not much left for actually living and socialising, hobbies, and clothes etc. He started out having joined his employers workplace pension and contributing a few percent more than the minimum, but has had to scale it back to the minimum only, and is now thinking about stopping it completely. He's actually got a good graduate job and isn't on minimum wage, but still can't afford to save and is living a "uni" lifestyle living on tinned beans and pasta.

Yes, it's new and I'll be having to work an extra year, although mine is still 67 on the government website. I now think mine will be upped to 68 as I'm 54. I'm absolutely gutted, and I realise that sounds ridiculous. But I don't get any benefits, don't earn alot and now have to work an extra year! Argghhhhhhhh!.My company pension is tiny.

Current system wasn’t designed for a world where people were regularly expected to claim benefits as a lifestyle choice but here we are!

When I started where I currently work the retirement age was 60. I’m nearly that age now and can’t imagine wanting to retire anytime soon.

Does yours not say something like this? This screenshot is a download from the Gov.uk website nearly 6 years ago, it still says the same now.

Image didn't show so trying again: