State Pension, Age 40, worked since age 16, do I only need to pay in for 10 more years?

Cobbler_tone

You’ll know it if you get there.

silvercar

I'm concerned that the number of years of contributions could increase. After all they were set when the pension age was lower, now people have longer working in theory to make those years up.

SouthCoastBoy

silvercar said:

I'm concerned that the number of years of contributions could increase. After all they were set when the pension age was lower, now people have longer working in theory to make those years up.

I am surprised they have not been increased, especially as the govt want to keep people in work

Hoenir

silvercar said:

I'm concerned that the number of years of contributions could increase. After all they were set when the pension age was lower, now people have longer working in theory to make those years up.

Majority of working people contribute for far more years than they actually need to in any event. One only stops paying EE's NIC at state retirement age. 

af1963

Exodi said:

You don't need to be a mathematician to realise that a system that always increases more than inflation and average earnings is unsustainable. 

The objective of triple lock was *always* to gradually raise the base income of future pensioners. The biggest winners are not current pensioners but younger workers who will receive the higher pension in future.

Sure, if you assume triple lock goes on forever and extrapolate the increases for 100 or 200 years, you get silly numbers.  But the standard new-style pension is still under £12k , less than half of full time min wage earnings, and it would take *many* years of above-wages increases to change this significantly.

In a reasonably healthy economy, general wages would rise with GDP and would match or beat inflation, and probably also rise by more than 2%. So the triple lock would almost always deliver an increase that matched wage growth, and pensions would stay at the same percentage of  wages.  The few years where wages go up by less than inflation are the only ones where the pension would rise compared to GDP and wages.

JoeCrystal

silvercar said:

I'm concerned that the number of years of contributions could increase. After all they were set when the pension age was lower, now people have longer working in theory to make those years up.

You did know that it was 44 years for males back then? I am fully expecting, and it should go up anyway. Fifty Years would be a good start if the SPA is 68.

SnowMan

silvercar said:

I'm concerned that the number of years of contributions could increase. After all they were set when the pension age was lower, now people have longer working in theory to make those years up.

It was 90% of working lifetime before 2010. This worked out as 44 qualifying years required for a full basic state pension for males and 39 for females when SPA was 65 and 60 for males and females. 

They reduced it to 30 qualifying years to get a full basic state pension for those reaching SPA after 2010. This was in part to reduce inequalities due to women typically having fewer qualifying years than men typically, meaning that a much greater proportion of women didn't get a full basic state pension. And it also meant carers were less likely to lose out if they didn't get carer credits.

When they brought in the new state pension in 2016 they increased the qualifying years needed for a full new state pension to 35 (leaving aside the technical adjustments for contracting-out for those whose national insurance record is both pre and post 2016). The reason for that was that the new state pension replaced the basic state pension and the additional state pension. The basic state pension required 30 qualifying years to get a full basic state pension, but the additional state pension was earned over the full working life time, which for example was 49 years for a state pension age of 65. And so 35 was deemed as a broad brush average taking into account a typical mix of basic (30 years) and additional state pension (around 49 years). And so the increase to 35 wasn't actually a decision to increase the effective number of qualifying years.

So there are good reasons to expect that the number of qualifying years to get a full new state pension won't increase, as it would affect women more than men because it is still the case that women reaching SPA on average have less qualifying years than men.

Exodi

af1963 said:

Exodi said:
You don't need to be a mathematician to realise that a system that always increases more than inflation and average earnings is unsustainable. 

The objective of triple lock was *always* to gradually raise the base income of future pensioners. The biggest winners are not current pensioners but younger workers who will receive the higher pension in future.

I'll be honest, I get frustrated every time I hear this disingenuous excuse argument used to silence younger people into continuing to subsidise the triple lock.

No, younger people will not be the biggest winners because it's almost inevitable they will need to work until they're decrepit and/or the state pension will be gutted by the time they reach SPA.

As I mentioned earlier, even if you ignore the totally unsustainable triple lock, like many nations we have an aging demographic - there is estimated to be 25% more pensioners in 2050 than today. Aside from the obvious increase in spending on the state pension, there will also be significantly increased pressures on health and social care.

I understand why current pensioners might want to try convince young people to shut up and get behind the triple lock with promises of riches in decades to come, but don't think it's just me who's pessimistic on this promised land - about a third of people do not think the state pension will exist at all in 30 years’ time. 

af1963 said:
Sure, if you assume triple lock goes on forever and extrapolate the increases for 100 or 200 years, you get silly numbers.

How convenient, so 100 years would be 'silly numbers' but 50 years (when todays young people would expect to retire) I presume is OK? At what point does it get silly out of interest? I assume just after the current working generation dies?

One (politically easier) way to mitigate the impact of the triple lock has been to continue raising the SPA, but surely you can appreciate you can't do this forever. At what point will you accept that it's just not fair to tell youngsters, "you have to work until you're [70/75/80]", especially to those that die earlier.

af1963 said:
But the standard new-style pension is still under £12k , less than half of full time min wage earnings, and it would take *many* years of above-wages increases to change this significantly.

This one also puzzles me since it comes up so often. What does minimum wage have to do with the state pension? There is always this common message that people believe the SP should be the same as NMW or is related to it? Also that the state pension should be exempt from tax? I understand we all love free stuff, but we can't ignore the fact it has to come from somewhere - and younger people are hardly having a great time as it is at the moment.