What do you think is the future of the UK state pension?
Discussion
greygoose said:
Is there a smaller working population now? I suspect there are probably more people overall in work as there were far more housewives then who did not work. The trouble is that a lot of the working population are in less secure work or are part time and pay less tax as a result.
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.
There are fewer workers in jobs that create wealth. With so many people in service industries we're just handing round the same money between ourselves. We need to make stuff, grow stuff or dig it up. The example of North Sea oil is plain for all to see. In the boom years, loads of wealth was created and we had loads of money.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.
The’s a good point, at some point it will change but might not have got there yet - will need to find out.
There’s a huge difference there with Norway. Norway has high taxes for almost everyone and uses very little of the money. Take pensions - Norway could use the oil fund to keep them going, yet they moved the pension age to 68 anyway. In the Norway type model everyone needs to pay more tax to cover the cost now, then you can put the oil money aside. during the 70’s in the UK there was particular pressure on the economy and making this hard to do! it’s a different mindset - UK is much more ‘give me the benefits but someone else has to pay (lazy unemployed wasters, or rich tax dodging rich toffs depending on your view). Norway most people are happy to pay their bit. Or take the health service - both are as good/bad as each other from what I have seen. Yet in the UK it is in a huge crisis, whereas here people are mostly proud of it. A lot is just perception.
There’s a huge difference there with Norway. Norway has high taxes for almost everyone and uses very little of the money. Take pensions - Norway could use the oil fund to keep them going, yet they moved the pension age to 68 anyway. In the Norway type model everyone needs to pay more tax to cover the cost now, then you can put the oil money aside. during the 70’s in the UK there was particular pressure on the economy and making this hard to do! it’s a different mindset - UK is much more ‘give me the benefits but someone else has to pay (lazy unemployed wasters, or rich tax dodging rich toffs depending on your view). Norway most people are happy to pay their bit. Or take the health service - both are as good/bad as each other from what I have seen. Yet in the UK it is in a huge crisis, whereas here people are mostly proud of it. A lot is just perception.
DickyC said:
greygoose said:
Is there a smaller working population now? I suspect there are probably more people overall in work as there were far more housewives then who did not work. The trouble is that a lot of the working population are in less secure work or are part time and pay less tax as a result.
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.
There are fewer workers in jobs that create wealth. With so many people in service industries we're just handing round the same money between ourselves. We need to make stuff, grow stuff or dig it up. The example of North Sea oil is plain for all to see. In the boom years, loads of wealth was created and we had loads of money.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.
I think the U.K. was great because tried to keep with the Joneses, specifically tried to be a big player with the likes of U.S. What I mean is we ended punching above our weight instead of use g self generated wealth to have a more modest but consolidated welfare state.
Sure people say the country is great, the NHS offers so much compared to other countries, the benefits are great like nowhere else in the world. This came at a cost we simply couldn’t afford in the long term. The politicians knew it and kept going to the state we are today. A country that does not produce enough to sustain its systems, no political guts to make it right either... instead, the path is heavier taxation for the ones that can’t escape it and change the goal posts. With house prices, etc as they are I see an eradication/erosion of the middle class and a widening of the gap between rich and poor. The private landlord policies for example really hurt those with 1 or 2 small units.
U.K. it’s like a bus, an old one full of people, trying to go uphill. The driver (politician) doesn’t know what to do but orders the ones next to him (middle class) to get out and push, most people (the rich and poor) just stay inside looking at these 2 blokes trying to push the bus up, some even shout “you are not pushing hard enough!”
Pension, state pension when I retire will not cover my weekly food bill I am sure. I make no plans to need it. State pension is dead as well as it is the state... will drag it’s feet in the next 20-30 years. One day it has to go boom...
Sure people say the country is great, the NHS offers so much compared to other countries, the benefits are great like nowhere else in the world. This came at a cost we simply couldn’t afford in the long term. The politicians knew it and kept going to the state we are today. A country that does not produce enough to sustain its systems, no political guts to make it right either... instead, the path is heavier taxation for the ones that can’t escape it and change the goal posts. With house prices, etc as they are I see an eradication/erosion of the middle class and a widening of the gap between rich and poor. The private landlord policies for example really hurt those with 1 or 2 small units.
U.K. it’s like a bus, an old one full of people, trying to go uphill. The driver (politician) doesn’t know what to do but orders the ones next to him (middle class) to get out and push, most people (the rich and poor) just stay inside looking at these 2 blokes trying to push the bus up, some even shout “you are not pushing hard enough!”
Pension, state pension when I retire will not cover my weekly food bill I am sure. I make no plans to need it. State pension is dead as well as it is the state... will drag it’s feet in the next 20-30 years. One day it has to go boom...
CrgT16 said:
Pension, state pension when I retire will not cover my weekly food bill I am sure. I make no plans to need it. State pension is dead as well as it is the state... will drag it’s feet in the next 20-30 years. One day it has to go boom...
I think you may be right. The much trumpeted NHS doesn't look all that good to me. Wait of weeks to see a GP when you're unwell "now" and a wait of months for surgery if you need it - and that's if it's available at all.State pension will surely be means-tested into extinction.
brickwall said:
I expect that by the time I reach retirement age (in a few decades), any state pension will be measly, and likely means tested. It’s unaffordable any other way.
It's actually not.I read I detailed report a few months back (can't recall who from!) that showed the figures. The move that's already been made, moving it from 60 for women and 65 for men, to a max currently of 68 for both, has made a huge difference to the figures. Some tweeking to move the max to 70 for those currently under 45 to give them plenty of time to adjust their projections makes it viable for the medium to long term.
The issue is, governments now see that people are resigned to big hikes in age so by moving it to 70 for those in their 50s and 75 for younger people, it can be a real cash cow and release funds to divert to other requirements, like schools and hospitals.
rockin said:
I think you may be right. The much trumpeted NHS doesn't look all that good to me. Wait of weeks to see a GP when you're unwell "now" and a wait of months for surgery if you need it - and that's if it's available at all.
State pension will surely be means-tested into extinction.
That’s a bit unfair on the NHS. You’ll see a doctor if something is reeeaalllyy wrong with you quite quickly and surgery for anything truly urgent is done fairly quickly in most cases. My Nan had an emergency op a few weeks ago and the NHS was superb, if she’d needed a knee replacement no doubt the wait would have been much much longer, I don’t really have a problem with that. Quite rightly emergencies are prioritised, unfortunately due to resource constraints we’re now in the realms of grading emergencies which isn’t so great.State pension will surely be means-tested into extinction.
I agree with the comment that means testing seems almost inevitable. I think anyone my age (33) planning their retirement finances around the state pension as it is will be sorely disappointed.
djc206 said:
I agree with the comment that means testing seems almost inevitable. I think anyone my age (33) planning their retirement finances around the state pension as it is will be sorely disappointed.
I think i'd agree. I'm 32 & having started a family recently I've started to take planning for the future a bit more seriously. Fairly resigned to the idea now that i'll probably have to 'work' until i'm dead. Here's hoping that uber-flexible part time working in many industries is the norm by then.Audemars said:
I have given up on the state pension personally but it would annoy me if it was means tested.
I didn't drive around in a £500 car on a £150k+ salary in my 20's so that a PCP junky in his M/RS car on £30k per year could bankrupt himself and collect the full state pension.
Presumably you drove around in a £500 car on £150k+ so you could lecture the internet about the evils of car finance? Specifically the Personal Contract Plan?I didn't drive around in a £500 car on a £150k+ salary in my 20's so that a PCP junky in his M/RS car on £30k per year could bankrupt himself and collect the full state pension.
Besides which the feckless are already unduly rewarded by our benefits system, means testing the SP would just be an extension of that.
Groat said:
Well I think it's great. Paid into my bank every fourth Monday (paid in yesterday). And going up by 3.9% next year too! Excellent!
The triple lock is one of the biggest political cons of the last decade, especially at a time when public servants have had their wages held. Its a total disgrace. I have an SNP friend going on about how west minister has screwed pensioners. Unfair about moving up age, unfair about removing trip lock etc. Should just tax people about 80k a wee bit more. Doesn’t seem to realise the sums don’t really work, or which age group a huge % of the wealth in this country is located. And that triple lock is just moving even more wealth into that group as they get a bigger pay rise that most.
The Leaper said:
Having paid income tax and NICs for 46 years, which amounts to a large sum of money, I agree with Groat. And so would all you youngsters if you were in the same position as Groat and I.
Yes I would think it's great if I get an above inflation rise.Doesn't mean it's right.
Maybe if the triple lock was removed then the government could afford to curtail the ever increasing state pension age.
I doubt there will be any major changes because as the population ages so does the voting demographic.
Politically unwise to ef up a quite large proportion of the electorate.
As this population blip appears to come as a shock to those educated at Eton, I often wonder whether they have taken into consideration the immigrant population that will reach pension age but lack sufficient years to qualify.
With regard to some earliier post....when somebody plans for retirement they take into account: their state pension, any defined benefits, a possible annuity and then save for whatever they need to provide an income. For the gov or anybody to take away one of these component parts would be inconvenient at best.
One should consider that once retired it is not possible "increase the pot" as there is no earned income with which to do so.
Politically unwise to ef up a quite large proportion of the electorate.
As this population blip appears to come as a shock to those educated at Eton, I often wonder whether they have taken into consideration the immigrant population that will reach pension age but lack sufficient years to qualify.
With regard to some earliier post....when somebody plans for retirement they take into account: their state pension, any defined benefits, a possible annuity and then save for whatever they need to provide an income. For the gov or anybody to take away one of these component parts would be inconvenient at best.
One should consider that once retired it is not possible "increase the pot" as there is no earned income with which to do so.
We need to start govt individual pension policies for state pension. Everyone commenced building a pot.
I simply don’t get why originally it was set up as a gift to all those over retirement age just because of the war...
The govt need to calculate what the true up position is and then say over 70 years or longer every year we chip away at that legacy position.
There is no way it is acceptable to have situations where by two people earned the exact same value in working life one paid in and made life compromises to do so the other spent it all and had a far far better standard of living. Then come retirement time oh sorry you’ve got a lot you don’t need state pension while the one without here you go take that pot plus more financial assistance.
I simply don’t get why originally it was set up as a gift to all those over retirement age just because of the war...
The govt need to calculate what the true up position is and then say over 70 years or longer every year we chip away at that legacy position.
There is no way it is acceptable to have situations where by two people earned the exact same value in working life one paid in and made life compromises to do so the other spent it all and had a far far better standard of living. Then come retirement time oh sorry you’ve got a lot you don’t need state pension while the one without here you go take that pot plus more financial assistance.
HootersGsy said:
Based on annuity numbers I’ve heard recently, about 340k to buy a 8.5k annuity. Not that many people have pension pots of that size.
I find it terrifying that people have pension pots that small, while being in quite well paid jobs. Talking to a member of the family who owns a dental tech company. We were discussing pensions and I was talking about the reduction in the pot limit to £1M and was surprised it didn't affect him. Gassing Station | Finance | Top of Page | What's New | My Stuff