The future of pensions - thoughts!

ukpoker

According to most financial analysts the country can't afford to keep paying out an ever increasing amount of pensions to people that are living longer and require more money every year just to keep up with the basics.

Its therefore an idea for the government to grasp the nettle and start to come up with ideas on how to solve this issue. 

My thoughts are as follows :

- Tell the public that as from 2065 no new pensioners will be created. In other words anyone becoming of retirement age (currently 67) will no longer get a STATE pension.

- Enforce a strict contribution scheme whereby people of a certain age will be deducted a percentage of their salary in order to fund their retirement. 

Aged - 18 thru 25 -> 3% of earnings
            25 thru 30 -> 5% of earnings
            30 thru 35 -> 8% of earnings
            35 thru 40 -> 10% of earnings
            40 thru 50 -> 12.5% of earnings
            50+ -> 15% of earnings

All contributions will be government MATCHED!

By 2100 all monies usually being paid out on state pension will be none existent and can then be used to fund the ever going saga of the NHS...but that's another story

Brie

What about the pensions being funded today by the payments being paid today?

JoeCrystal

Provided the government closed all DB pensions for public sector workers beforehand. Leading by example and so on. 🫤

p00hsticks

This is the sort of posts that in the olden days would have been on (or moved to) the now defunct Discussion part of the forum, so I'm not sure how long it will last here. 

But I'd suggest that your premis that people are living longer is not necessarily true any more - I believe that some forecasts show that current lifestyles are resulting in a slowing down or even reversing of the current increases in life expectancy. And steps to address this issue in relation to state pension costs are already in place with the periodic review and if necessary adjustments to state pension age.

Rich1976

What if people can’t afford 10% to 15% deducted from their wages, how would that be managed?
Lower income people in particular would find that a serious struggle.

Silvertabby

Rich1976 said:

What if people can’t afford 10% to 15% deducted from their wages, how would that be managed?
Lower income people in particular would find that a serious struggle.

Europeans manage - hence their much envied ( by some UK pensioners) higher hybrid/State pensions.

Rich1976

Silvertabby said:

Rich1976 said:

What if people can’t afford 10% to 15% deducted from their wages, how would that be managed?
Lower income people in particular would find that a serious struggle.

Europeans manage - hence their much envied ( by some UK pensioners) higher hybrid/State pensions.

Can’t see someone who is a carer on minimum wage  and zero hours contract being able to afford that. 

SouthCoastBoy

The state pension has already been reformed to make it more affordable. Also the Crickland report is a comprehensive review of the future of the state pension. I'm not sure why so many people focus on its abolition, to date it has never been suggested by a political party, and if it was I think it would be a political disaster for the party in question.

The bigger question should be productivity and the reduction of people receiving benefits.

Andy_L

Rich1976 said:

What if people can’t afford 10% to 15% deducted from their wages, how would that be managed?
Lower income people in particular would find that a serious struggle.

Presumably the bit of NI that currently funds the state pension would stop.
Although see Brie's post for the problems that causes

Universidad

ukpoker said:

Its therefore an idea for the government to grasp the nettle and start to come up with ideas on how to solve this issue.

Are you proposing they do this in time to affect your own pension, or just the pensions for the generation(s) after you?

Silvertabby

Universidad said:

ukpoker said:

Its therefore an idea for the government to grasp the nettle and start to come up with ideas on how to solve this issue.

Are you proposing they do this in time to affect your own pension, or just the pensions for the generation(s) after you?

Shades of WASPI saying that they fully agree with the re-equalisation of State pension ages - just as long as it only applied to their younger sisters, and not them.