Gov launching pension age review

westv

I am due my SP in 2030 so, if anybody here knows Jack, then tell him I'm alright. 

Albermarle

Considering the huge fuss and unpopularity when the Govt removed a £200 Winter Fuel payment, then I think some of the ideas mentioned in other posts, or speculated about in the media, will never see the light of day.
Even if they make sense, it would just be political suicide to remove the triple lock, increase the age to 70, extra tax on pensions etc so it just will not happen, not for a long, long time anyway.

Aretnap

wrf12345 said:

I think a rise to 70 is imminent, perhaps in April.

I will bet any amount of money you like that the state pension age will not rise to 70 in April.

Really, some of the comments on this thread are completely detached from political or economic reality.

JoeCrystal

Frankly, I am extremely disappointed that they are kicking the can down the road regarding Auto-enrollment levels. Especially, any changes proposed by the revived Pension Commission (the final report in 2027) will only be considered and acted on after the latest end of the current parliament aka August 2029.

Even though it is widely known that the median contribution rate has remained at 8% of total pay since 2019 (for private sector DC savers) and a large majority of the private sector DC savers do not change their contributions for the last three years.

So they are aware that auto-enrollment contribution level is now de facto control mechanism. I honestly thought and hoped this week that they might announce a multiple-year increase from 8% to 12% overall over four years, but I guess that won't happen, if at all, until the 2030s.

And this is increasingly more difficult as and I quote according to the press release: "AE was never intended to be used to fill all of the ‘retirement savings gap’, with the first Commission envisaging that additional voluntary saving would form as significant a chunk of saving" And it also mentioned: "Relying on individuals to choose to save more has proven risky. The result is that people are on course to be more reliant on the State Pension with it contributing a greater proportion of people’s retirement income."

Well, yes, the large majority only contribute as much as they want to, which is the bare minimum. Some research I've seen suggests that savers generally believe the automatic enrollment percentage is sufficient to provide a comfortable retirement, although this is not the case in reality.

So yes, I am fuming here that any potential changes to AE levels will only take effect in the 2030s while there are clear levers to use which can have real benefits to the employees on the whole. Especially they announced that there will be no change to minimum auto-enrolment contribution rates during this Parliament.

Especially Pensions Commission Terms of Reference is much wider ranging as follows:

The Pensions Commission will therefore consider the long-term future of our pensions system, including:

• outcomes and risks for future cohorts of pensioners on current trajectories through to 2050 and beyond
• how to improve retirement outcomes, especially for those on the lowest incomes and at the greatest risk of poverty or undersaving
• the role of private pension provision and wider savings, building on the foundation of the State Pension, in delivering financial security in retirement and supporting those approaching retirement
• the long-term challenges of supporting an ageing population
• proposals for change beyond the current Parliament, that build on the measures in the Pension Schemes Bill and ensure Britain in the mid-21st Century delivers financial security in retirement through a pensions framework that is strong, fair and sustainable

I can answer the second point and third point, increase the contribution level! Problems solved!

eskbanker

Aretnap said:

wrf12345 said:

I think a rise to 70 is imminent, perhaps in April.

I will bet any amount of money you like that the state pension age will not rise to 70 in April.

Really, some of the comments on this thread are completely detached from political or economic reality.

I think it'll happen in April, the question is which April

Agree about some of the contentious comments, which will probably see yet another thread deleted....

Albermarle

Lowtrawler said:

Brenster said:

I am 45, and think it will be at least 70 before my age can access state pension.

Its definately a political grenade, especially with all the government F-ups which we all have to foot the bill for, and the ever increasing population increase. 

You would think with higher population, this would lead to higher tax income, and therefore help to pay for the state pension, unless of course the population increase isnt contributing to the system.

It's a Ponzi scheme ever since they decided not to actually create a pension fund from the National Insurance contributions. So long as more people are joining and contributing than those taking pensions, the scheme is financially viable. With baby boomers now retiring and people living longer, like any Ponzi scheme, it is starting to collapse.

Long-term, the only way for a Ponzi scheme to carry on is for an ever increasing number of people contributing and for at least a portion of their contributions to be put into a pension fund i.e. we need an increasing population of workers paying a higher contribution rate. That points to a need for more immigration and higher National Insurance rates.

It is not a Ponzi scheme, as at any time the Govt can if necessary, top up the scheme to make sure it can meet its commitments.
The National Insurance Fund is largely an accounting exercise. The Govt could just put all NI contributions into the general pot with all the other taxation, and then pay pensions from that. They just choose not do it this way.
Whether pensions are affordable for the state, due to ageing population etc is a fair enough question, but the way they are funded currently via the NIF is not the issue, as it is just the way the bookkeeping is done.

squirrelpie

I think the IFS proposals are quite sensible - https://ifs.org.uk/publications/pensions-review-final-recommendations - (I am a pensioner and I think the triple lock should be scrapped/modified as soon as possible). It was a good idea when it was brought in to increase the state pension, but apart from stopping arbitrary increase, the inflation and/or wages mechanism has been demonstrated to be an obviously silly idea.

LightFlare

Too many old people and too expensive to keep them alive.

Sounds harsh - but true. We are getting almost too good at keeping old people alive and it’s at a huge financial cost.

The country has never faced having to deal with so many over 70s 

Something has to give 

BlackKnightMonty

LightFlare said:

Too many old people and too expensive to keep them alive.

Sounds harsh - but true. We are getting almost too good at keeping old people alive and it’s at a huge financial cost.

The country has never faced having to deal with so many over 70s 

Something has to give 

If you have a lot of accumulated wealth, using it to pay for your own care seems fairer, than to expect tax payers to cover the cost. This is the generational debate we as a country need to have urgently.

QrizB

LightFlare said:
Something has to give 

Logan's Run time?
It's not *that* much less likely than some of the comments on this thread so far 😂