Gov launching pension age review

Brenster

I think a rise to 70 is imminent, perhaps in April. I also think they will grab some pensioner income to pay for social care. say 5-10 percent on income over 20k as NI is not paid after 66/67.

I cant see a rise of 3 years from 67-70 at once, they might set out a staggered age increase over the coming 20 years which although not popular will be more palletable.

BlackKnightMonty

wrf12345 said:

I think a rise to 70 is imminent, perhaps in April. I also think they will grab some pensioner income to pay for social care. say 5-10 percent on income over 20k as NI is not paid after 66/67.

Replacing the SP with universal basic income is another option - it would have to be limited to British nationals and EU Brexit cohort - but that would mean the whole of welfare and income tax allowances gone, paying 18-70 year olds 4-5k and pensioners 12k and kids 2k, and then all income taxed at a flat rate with no NI. Tax rate would be around 30 percent, perhaps less, to give a budget surplus over current spending/tax. There would have to be a direct link between UBI and the income tax rate to fend off corrupt politicians. There would be nothing for foreigners and nothing extra for the welfare crowd, they would have to work to some extent.

Some interesting ideas.

Silvertabby

Don't forget that the original (1919) version of the State pension had a retirement age of 70, for both men and women.  In addition, not only was it means tested but it was only paid to 'those of good character'.   

Back then, anyone poor enough to pass the means test was unlikely to be healthy enough to live to much over 70, assuming they even got there in the first place, so the costings for the new State pension scheme were minimal.

Meanwhile, 106 years later........

 

hugheskevi

Perhaps also worth remembering that an increase to the State Pension age is a reduction in the pension entitlement of public sector workers who have their post 2015 scheme Normal Pension age linked to State Pension age (other than uniformed services, who are age 60). 

Trades Unions have a lot of influence on this government, and many of their members are in the public sector.

BlackKnightMonty

hugheskevi said:

Perhaps also worth remembering that an increase to the State Pension age is a reduction in the pension entitlement of public sector workers who have their post 2015 scheme Normal Pension age linked to State Pension age (other than uniformed services, who are age 60). 

Trades Unions have a lot of influence on this government, and many of their members are in the public sector.

Ouch! Good point.

Workerdrone

Silvertabby said:

Don't forget that the original (1919) version of the State pension had a retirement age of 70, for both men and women.  In addition, not only was it means tested but it was only paid to 'those of good character'.   

Back then, anyone poor enough to pass the means test was unlikely to be healthy enough to live to much over 70, assuming they even got there in the first place, so the costings for the new State pension scheme were minimal.

Meanwhile, 106 years later........

 

Well I think you might have just found the solution, we go back to the 1919 rules

• Crucially, the act excluded those deemed “undeserving”, which included:

  • People who had been habitual drunkards

  • Those convicted of criminal offences

  • People who had avoided work or had been deemed “idle and dissolute”

  • Those who had been in workhouses frequently

mebu60

BlackKnightMonty said:

mebu60 said:

BlackKnightMonty said:

HappyHarry said:

BlackKnightMonty said:

Lowtrawler said:

BlackKnightMonty said:

Personally I don’t think I will ever see a state pension. So I am planning for that outcome. Does make me quite bitter though. Over 30 years of National Insurance Contributions…

If you have over 30 years NIC's, you will be within 20 years of state pension age. I think it unlikely you will not receive any state pension given that timeline. Many things could happen that will reduce the value of the state pension you receive.

Fully replacing the state pension with an equivalent private pension would require individuals to save an additional £0.25m through to retirement. That may not be unreasonable for those planning with 40 years to go but it would be completely unreasonable for those closer to retirement. The government would also face an issue encouraging people to make personal provision for retirement if, by doing so, the £0.25m state pension was taken from them. This is what makes it unlikely any government will completely remove the state pension.

I think it will become means tested.

It already is.

Non-taxpayers get all the state pension, basic rate tax payers get 80% of it and so on.

Not really. The state pension and personal allowance are roughly equal. So it’s pretty much tax free.

But then it pushes any other income / pension fully into the next tax band and maybe into the one(s) after that.

If people are going to be further penalised for having made their own provision on top then many simply won't bother. 

Gosh how awful to have so much pension income you must pay tax on it!

Did I say it was awful? I am however making the point that the SP is already effectively means tested by being included in taxable income and that you have to be careful not to disincentivise people from making additional provision, often achieved by going without or being very careful. 

TIALTNGO

My understanding is the current review is due to conclude by 2029 per Sky News. So if they stick to the giving 10 years notice of any changes I would expect any rise in the age would occur from 2039 onwards

fuzzzzy

Get rid of all the pension credit freebies. Just make pension credit a top up to the new state pension amount, nothing more so that no -one is put off saving by thinking it could make them effectively worse off.

BlackKnightMonty

TIALTNGO said:

My understanding is the current review is due to conclude by 2029 per Sky News. So if they stick to the giving 10 years notice of any changes I would expect any rise in the age would occur from 2039 onwards

Plenty of time to raise it, or remove it, for me.

At least they won’t fiddle with triple lock for now.