State Pension vs Private Pension

jamesd

hezmack wrote: »

I have been wondering if when I retire in 40 years if I would even get a state pension as my parents always said that I wouldn't and that I should get a private one as soon as I started work and I immediately started paying in to a pension when I started to work.

The announced plan is to introduce a flat rate cut to state pension benefits for employees. This reduces the earnings-related portion and makes all employees in the new system long term worse off than they would have been under the old system, capping benefit at £144 (adjusted for inflation) instead of the usually substantially higher combination of basic state pension and additional state pension.

Transitional protection means that those close to retirement today with an entitlement over £144 get some protection from this drop but those of your age will fully suffer from it, along with just about all employees who are middle aged or younger who will no longer be able to accrue more than £144 in state pension income.

hezmack wrote: »

Would it be worth looking at stopping my private pension and using those payments I am making and pay additional to the state pension?

It's not possible to do this so the answer is no.

Because of the cuts to the state pension and the near certainty of later state pension age you should give significant priority to higher personal pension contributions because the state will not be providing as much to you as in the past and present.

Jack_Griffin

I think the government & those in the future will seek to fix the state pension at some percentage of GDP... currently around 1.9% & projected to decline to ~1.5%.



They are moving to force the workforce (& their employers) to make pension provisions for themselves, hence the new workplace pension arrangements that are being rolled out.

http://www.moneysavingexpert.com/news/family/2012/09/automatic-pension-enrolment-what-it-means-for-you