Can the UK afford the state pension?

greenglide

The UK went down the conflict route

Which was exactly what I meant. The whole approach to the "dying" industries was one of conflict and was never going to succeed.

Arshad_00

lisyloo wrote: »

I started work in 1991 and was told not to expect a state pension.
Perhaps not everyone had good advisors but that was 26 years ago, so I'm surprised that others are only just coming round to realise this.

Anyone listening is being encouraged to make their own provision.

Those not making their own provision will not starve, will not go without healthcare, will not be on the street. Just like now.

Someone retiring today will get a SRP of around £6k pa.

Someone retiring today having made no provision(at all) will get SRP, pension credit, housing benefit, etc etc etc around £15k pa.

I expect that to continue to be the case. The more provision people make, (that the state knows about) the less the state will provide. Much like now.

jerrysimon

I know that NI is for more than the state pension but I recently checked my NI contributions and last year, I paid 4K!

Where is all this money going ?

I guess that almost pays one persons pension and their are quite a few drawing state pension. NHS costs ?

I have certainly got my moneys worth from the NHS.

"Recent developments of the system have meant that National Insurance provides a significant part of the government's revenue (21.5% of the total collected by HMRC"

hmmm

Anonymous101

Arshad_00 wrote: »

Anyone listening is being encouraged to make their own provision.

Those not making their own provision will not starve, will not go without healthcare, will not be on the street. Just like now.

Someone retiring today will get a SRP of around £6k pa.

Someone retiring today having made no provision(at all) will get SRP, pension credit, housing benefit, etc etc etc around £15k pa.

I expect that to continue to be the case. The more provision people make, (that the state knows about) the less the state will provide. Much like now.

The trouble with the current route (speaking from my father's recent experience) is that if you fall in the middle i.e. make some provision but not a huge amount, its not likely to be worth your while. I'm referring to those falling between the £6k pa and £15k pa here.

I don't know what the solution is here but there's currently a logic to those that are unable to save sufficient amounts to make a real difference to their retirement incomes not saving at all!

I feel that's what the government is aiming for with the current levels of auto enrollment. They are far too low to provide anything meaningful in retirement but they might be enough that the bills for pension credit, housing benefit, etc etc etc are reduced.

OldBeanz

Anonymous101 wrote: »

The trouble with the current route (speaking from my father's recent experience) is that if you fall in the middle i.e. make some provision but not a huge amount, its not likely to be worth your while. I'm referring to those falling between the £6k pa and £15k pa here.

I don't know what the solution is here but there's currently a logic to those that are unable to save sufficient amounts to make a real difference to their retirement incomes not saving at all!

I feel that's what the government is aiming for with the current levels of auto enrollment. They are far too low to provide anything meaningful in retirement but they might be enough that the bills for pension credit, housing benefit, etc etc etc are reduced.

No the Government are doing the opposite of that. It was Gordon Brown who screwed the system up by giving pension credits. I cannot remember the figures exactly but if you were a female with children earning the average wage then it was not worth your while saving into a pension because you would lose benefits £ for £ (this was not a Waspi issue males with less than 30 years pension as well). This is why there are so many who come on here and say that it is not worthwhile investing in a pension as many in the past were caught in that trap. Where we are is far better than 5 years ago. The state pension should be enough to survive on but anything saved should not penalise the saver. As long as pensioners go out and vote there will be a universal pension.

Anonymous101

OldBeanz wrote: »

No the Government are doing the opposite of that. It was Gordon Brown who screwed the system up by giving pension credits. I cannot remember the figures exactly but if you were a female with children earning the average wage then it was not worth your while saving into a pension because you would lose benefits £ for £ (this was not a Waspi issue males with less than 30 years pension as well). This is why there are so many who come on here and say that it is not worthwhile investing in a pension as many in the past were caught in that trap. Where we are is far better than 5 years ago. The state pension should be enough to survive on but anything saved should not penalise the saver. As long as pensioners go out and vote there will be a universal pension.

I knew that this was the case. I wasn't sure where the current situation put those savers in the middle. Hopefully I'm doing enough to put me well clear of that.

I'm not sure that they'll be a universal pension. I think that eventually, certainly before I retire, that the state pension will be means tested.

OldBeanz

No it is far too politically difficult and costly to means test the pension. Far easier to increase the age you can draw it from - some time in the future. Give everyone just enough but encourage everyone to save. The issue we have at the moment is that a couple on £82k each with kids and salary sacrifice are highly incentivised to save (tax at 40% eliminated, decreased national insurance, child benefits restored) while those paying no tax may not be getting any incentive to pay more into their works pension.

Seabee42

It is not just the pension cost though is it large though it is (with civil service pension liabilities included its 3 times GDP). When you add the NHS cost and CARE costs and the fact that less pensioners will own their own homes it looks anything but affordable.


Seems though when politicians try and make cuts people complain.

Arshad_00

Anonymous101 wrote: »

The trouble with the current route (speaking from my father's recent experience) is that if you fall in the middle i.e. make some provision but not a huge amount, its not likely to be worth your while. I'm referring to those falling between the £6k pa and £15k pa here.

I don't know what the solution is here but there's currently a logic to those that are unable to save sufficient amounts to make a real difference to their retirement incomes not saving at all!

I feel that's what the government is aiming for with the current levels of auto enrolment. They are far too low to provide anything meaningful in retirement but they might be enough that the bills for pension credit, housing benefit, etc etc etc are reduced.

If you cannot guarantee beating the minimum paid by the state....why bother? Similarly if you find that minimum adequate.....why bother?
Anyone who pays their own housing costs knows buying is better than renting, anyone not paying all of their housing costs doesnt care.
If you think a one bed council flat is OK for your retirement and a couple of hundred a week disposable is fine, then you need make no effort, none at all.