Pension Commission (interim) Report out today

daveyjp

Sole traders and self employed may be investing in a different way, rather than through a SIPP.

kermchem

https://forums.moneysavingexpert.com/discussion/comment/82005830#Comment_82005830

Pension credit tops up your weekly income to a guaranteed minimum of £238.00 if you are single, and £363.25 if you are a couple. If you retire now on a full new state pension then the pension is £241.30 per week. The role of pension credit is to provide extra money for those with less than a full state pension, or the lower old state pension. Either way, pension credit should (ha ha!) in future become less important as a support.

State Pension is already means tested. If you have other income over about £12K per year then you only get 80% of state pension, if your other income is over about £50K then you only get 60%. Given the political mess over winter fuel payment there is going to be little chance of overt means testing. Fiscal drag of personal allowance is politically easier.

hugheskevi

The report shows the Pension Credit forecast caseload:

So a drop from around 1.4m currently down to about 0.8m in about 10 years time. But that is more than offset by the steep rise in means-tested Housing Benefit, so the same saving disincentive applies. This is also a well-known issue from when the new State Pension was introduced, ie, that whilst Pension Credit numbers would go down, the proportion of pensioners affected by means-testing was not really declining.

A higher Pension Credit entitlement exists for carers and the disabled, as well as older pensioners still entitled to the Savings Credit component.

Looking at DWP stat-explore, there are 183,000 Pension Credit claimants aged 66-69. Of these, 75% receive at least £60 per week, so it will take some time for entitlement to full new State Pension to put a big dent in Pension Credit claimant figures.

ComicGeek

https://forums.moneysavingexpert.com/discussion/comment/82005886#Comment_82005886

That's the same as not understanding why people buy cheap cars that need regular repairs to keep them going instead of a more expensive reliable car. Or not understanding why people put a replacement fridge on their expensive credit card instead of using their savings. Or not understanding why people throw away money on rent instead of buying their own house…

I work in the construction industry and see a lot of people working hand to mouth. Also see a lot of small businesses (mine included!) that struggle to break even each year, let alone put aside money for pensions. A lot of people are barely surviving at the moment, and have been for many years.

QrizB

That's the same as not understanding why people buy cheap cars that need regular repairs to keep them going instead of a more expensive reliable car.

Vimes' Boots Theory.

https://en.wikipedia.org/wiki/Boots_theory

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82005967#Comment_82005967

Yes I guess a lot of self employed tradespeople are more inclined to invest in property one way or another, as they understand bricks & mortar better than pensions.

BikingBud

https://forums.moneysavingexpert.com/discussion/comment/82006006#Comment_82006006

People have been over paying for housing and not setting aside for the future, the number of people that are renting and do not have secure housing is scary.

Tell me again why house price inflation was good?

monkey-fingers

https://forums.moneysavingexpert.com/discussion/comment/82006112#Comment_82006112

I have never understood why people who work for themselves and barely break even, living hand to mouth, don't go and work for someone else.

I did it some years ago, because I was hacked off with always being skint.

EdSwippet

190 pages, and yet I didn't notice even one single sentence about how repeated government meddling with pension rules over multiple parliamentary terms - virtually every year for two decades, both actual and considered but as yet unimplemented - has completely eroded any confidence there might have been in the entire edifice. Impressive.

ClashCityRocker1

https://forums.moneysavingexpert.com/discussion/comment/82007627#Comment_82007627

State pension age increases, new flat rate pension, annual allowance and limit to tax free lump sum. CPI/RPI. There was Osborne's new "freedoms"(drawdown and cashing out) - what else?