What do you think is the future of the UK state pension?
Discussion
98elise said:
The problem is that the state pension is about 8.5k per year. The equivalent pot you would need to get that would be 170k, assuming without inflation. To combat inflation you wound need a much bigger pot.
If it was means test what would be the incentive to save into a private pension if it effectively lost you a 170k pension pot?
Personally I think the qualification age will go up.
I agree. The rises already put in place (men from 65 to a max of 68, and women from 60 to a max of 68) means that the whole thing is in far better shape that it was. It still needs to be pushed further, and I suspect today's 18 y/olds won't get a state pension until 75 or higher. If it was means test what would be the incentive to save into a private pension if it effectively lost you a 170k pension pot?
Personally I think the qualification age will go up.
DickyC said:
DOCG said:
...The current system is based on the illusion that NI contributions are funding your own retirement when in fact they are paying for the current pensioners.
The Western world is one big Ponzi Scheme.How long can it continue?
Dixy said:
Fortunately the generation who stole all the pension money also abused antibiotics so there will be a huge pandemic that will inevitably wipe out a higher proportion of wrinklies.
Public support for euthanasia is high enough now that it’s inevitable, that should save the NHS a few bob that can be put towards pensions.On a serious note I’m 33 and I don’t expect to see a state pension before 68 at best and even then I expect it will be means tested which means I won’t get anything. I don’t mind too much so long as the means tested element doesn’t reward irresponsibility too generously like every other benefit.
It’s complicated.
On one hand to live in a fair society all should be treated the same, this means some basics should be universal such as basic healthcare, basic pension, etc. Off course if one earns more he would contribute more but in a fairer way than now.
I think a basic rate of tax for all is fairer but will lead to a big budget deficit. The reason I think it’s fairer is because why should a lower band person work 1 day of their week (just an example) to pay their taxes whilst a person on a higher band will have to work 2 or more days of the week just to pay their tax. This feels unfair to me as time cannot he bought and is in limited supply on ones life.
Yes have a minimum income for exemption but above that standard rate for all. Also have a look at current benefit fraud and too much NHS overspending, etc. It seems to me that it’s just easier to tax more and more the supposed high earners without really looking to benefit fraud or encouraging lower earners, unemployed to actually better themselves and start earning their pay. Also the NHS free for all in certain areas is unsustainable. Certainly focus more on basic health and dental care and introduce a small token tax at point of use proportionate to individuals finances. I would have no issue with paying a £5 tax to see my GP for example it would free up time wasting on non emergency care. if you are on benefits ok that could be waived or for ones with longer term care.
Anyway many ideas, I think state pension age will increase to a point that retirement will cease to exist in the generations to come. I fear that this will also make average life expectancy fall. Who knows?
On one hand to live in a fair society all should be treated the same, this means some basics should be universal such as basic healthcare, basic pension, etc. Off course if one earns more he would contribute more but in a fairer way than now.
I think a basic rate of tax for all is fairer but will lead to a big budget deficit. The reason I think it’s fairer is because why should a lower band person work 1 day of their week (just an example) to pay their taxes whilst a person on a higher band will have to work 2 or more days of the week just to pay their tax. This feels unfair to me as time cannot he bought and is in limited supply on ones life.
Yes have a minimum income for exemption but above that standard rate for all. Also have a look at current benefit fraud and too much NHS overspending, etc. It seems to me that it’s just easier to tax more and more the supposed high earners without really looking to benefit fraud or encouraging lower earners, unemployed to actually better themselves and start earning their pay. Also the NHS free for all in certain areas is unsustainable. Certainly focus more on basic health and dental care and introduce a small token tax at point of use proportionate to individuals finances. I would have no issue with paying a £5 tax to see my GP for example it would free up time wasting on non emergency care. if you are on benefits ok that could be waived or for ones with longer term care.
Anyway many ideas, I think state pension age will increase to a point that retirement will cease to exist in the generations to come. I fear that this will also make average life expectancy fall. Who knows?
Dixy said:
Fortunately the generation who stole all the pension money also abused antibiotics so there will be a huge pandemic that will inevitably wipe out a higher proportion of wrinklies.
I don't understand your statement that the pensions money has been stolen. Who stole it? Where do you think that money is now?R,
TwigtheWonderkid said:
I agree. The rises already put in place (men from 65 to a max of 68, and women from 60 to a max of 68) means that the whole thing is in far better shape that it was. It still needs to be pushed further, and I suspect today's 18 y/olds won't get a state pension until 75 or higher.
I think you’d need a major advance in medical science to justify that - like a far less destructive cure for cancer. The advance in life expectancy has ground to a halt.Shifting it to 75 would just move a lot of the pension cost onto benefits, as not many people are able to work productively to that age. My dad has a driving job at 70, but there’s no way he’d still be able to do his computer based role.
Dixy said:
As DickyC said just one huge Ponzi scheme.
Our grandparents drew out what our parents paid in and our parents have stolen what we pay in.
Surely to keep that statement aligned our grandparents stole from our parents who then stole from us. Or was the grandparent generation allowed but our parents are not?Our grandparents drew out what our parents paid in and our parents have stolen what we pay in.
Welshbeef said:
Surely to keep that statement aligned our grandparents stole from our parents who then stole from us. Or was the grandparent generation allowed but our parents are not?
The difference is they died relatively young after retiring, quite a few died in the wars, and they had a big generation of working people to fund them. Whereas now the retirement age didn’t shift much, and a much smaller working population to fund it. Hence the problem. Quite a lot of people will probably be retired on a protected pension longer than they were working. Apparently a think tank led by Ian Duncan Smith (you gotta laugh) has recommended increasing retirement age to 70 for all those due to claim state pension after 2028.
I'm due to hit state retirement age of 67 in 2029, but was going to go aged 60, knowing I'd have 84 months until state pension kicked in. If it moved to 70, that turns into 120 months. All my calculations and contributions have been geared to 84 months, and there's no way I can pay in enough over the next 3 years (aged 57 now) to make up that deficit.
Seems very unfair, to move the goalposts so late on people who are actively planning their retirement. What if you've already retired, on the basis of getting your state pension in 2029 or 2030, and then it gets kicked 3 years down the road?
I'm due to hit state retirement age of 67 in 2029, but was going to go aged 60, knowing I'd have 84 months until state pension kicked in. If it moved to 70, that turns into 120 months. All my calculations and contributions have been geared to 84 months, and there's no way I can pay in enough over the next 3 years (aged 57 now) to make up that deficit.
Seems very unfair, to move the goalposts so late on people who are actively planning their retirement. What if you've already retired, on the basis of getting your state pension in 2029 or 2030, and then it gets kicked 3 years down the road?
TwigtheWonderkid said:
Apparently a think tank led by Ian Duncan Smith (you gotta laugh) has recommended increasing retirement age to 70 for all those due to claim state pension after 2028.
I'm due to hit state retirement age of 67 in 2029, but was going to go aged 60, knowing I'd have 84 months until state pension kicked in. If it moved to 70, that turns into 120 months. All my calculations and contributions have been geared to 84 months, and there's no way I can pay in enough over the next 3 years (aged 57 now) to make up that deficit.
Seems very unfair, to move the goalposts so late on people who are actively planning their retirement. What if you've already retired, on the basis of getting your state pension in 2029 or 2030, and then it gets kicked 3 years down the road?
The system is going to be unfair for someone. They should have moved the pension age with life expectancy but didn't for too long. Now they are, but it means bigger jumps and so it changes how some people planned. I'm due to hit state retirement age of 67 in 2029, but was going to go aged 60, knowing I'd have 84 months until state pension kicked in. If it moved to 70, that turns into 120 months. All my calculations and contributions have been geared to 84 months, and there's no way I can pay in enough over the next 3 years (aged 57 now) to make up that deficit.
Seems very unfair, to move the goalposts so late on people who are actively planning their retirement. What if you've already retired, on the basis of getting your state pension in 2029 or 2030, and then it gets kicked 3 years down the road?
The state pension was set up after the war, it was always an annual revenue based system not annuity, they started to pay out on the same day they took money in. it needed to be this way as the country need to sort out the war generation and the commitments made to them, it was never sustainable without continuous growth.
The future has to be an individual annuity base on contribution, unfortunately while this is being set up some one will need to pay both.
My pension contributions went to pay my Grand Father and Father, and the thinking was my son would pay mine.
This short coming was recognized at the time, as proven if you look at the system the British set up in Malaysia and Singapore in 1957, this was and is an individual annuity system. It only paid out to people who paid in, this system is still in place today and works really well, in Malaysia people are currently retiring at 55 with a full pension based upon their individual contributions.
I summary its all the fault of the Germans for starting a war.
The future has to be an individual annuity base on contribution, unfortunately while this is being set up some one will need to pay both.
My pension contributions went to pay my Grand Father and Father, and the thinking was my son would pay mine.
This short coming was recognized at the time, as proven if you look at the system the British set up in Malaysia and Singapore in 1957, this was and is an individual annuity system. It only paid out to people who paid in, this system is still in place today and works really well, in Malaysia people are currently retiring at 55 with a full pension based upon their individual contributions.
I summary its all the fault of the Germans for starting a war.
NRS said:
Welshbeef said:
Surely to keep that statement aligned our grandparents stole from our parents who then stole from us. Or was the grandparent generation allowed but our parents are not?
The difference is they died relatively young after retiring, quite a few died in the wars, and they had a big generation of working people to fund them. Whereas now the retirement age didn’t shift much, and a much smaller working population to fund it. Hence the problem. Quite a lot of people will probably be retired on a protected pension longer than they were working. The main mistake Britain made was not keeping some of the oil money and putting it in a fund for the future of the country as Norway did.
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