UK Politics General Discussion

[Dave]

I predict that the state pension will become a benefit claim and if you have worked and paid into a private pension you'll be told you don't need the state one you've paid into for 50 years. Might aswel not work basically kids, we'll all be equal.

Our politics is grossly in favour of pensioners because older people vote in greater numbers so almost certain to never happen.

Pensions have increased at a greater rate than wages (which is fine) and continues to do so.

 

[Osaka12]

Our politics is grossly in favour of pensioners because older people vote in greater numbers so almost certain to never happen.

Pensions have increased at a greater rate than wages (which is fine) and continues to do so.

I'm 39, I'll let you know in 30 years.

 

[Dave]

I'm 39, I'll let you know in 30 years.

I could wait for that, or we can just look at the entire history of western politics.

 

[Osaka12]

Don't get me wrong, I'm not waiting for state handouts, I realised a long time ago I needed to invest in my future. But I will campaign for my fair share of what I've paid into.

 

[GooseOnTheLoose]

I predict that the state pension will become a benefit claim and if you have worked and paid into a private pension you'll be told you don't need the state one you've paid into for 50 years. Might aswel not work basically kids, we'll all be equal.

I hate to be the one to burst this particular bubble, but the State Pension is already a benefit. It is the single largest benefit expenditure on the DWP's books, costing significantly more than Universal Credit, Housing Benefit, and Disability benefits combined.

We need to dispel the myth that you have "paid into" a pension for 50 years. You haven't. There is no pot with your name on it sitting in the Bank of England, accruing interest.

The UK State Pension is an unfunded pay as you go scheme. The National Insurance contributions you paid 30 years ago didn't go into a savings account for you; they went immediately out of the door to pay for the pensions of the people who were retired 30 years ago (your parents and grandparents).

Your pension, when you get it, will be paid for by the taxes of the people working today (your children and grandchildren). It is an intergenerational contract, not a personal savings plan.

As for means-testing it against private pensions: political suicide. The grey vote is the most powerful demographic in British politics. Any party whio proposes effectively confiscating the State Pesion from those who have been prudent enough to save privately would be obliterated at the ballot box.

The incentive to work and save privately remains the same. The full new State Pension is currently £221.20 per week. If you want to live on more than £11.5k a year in your retirement, e.g, if you want to do more than just exist, you definitely still need to work and save into a private pot.

 

[Osaka12]

I hate to be the one to burst this particular bubble, but the State Pension is already a benefit. It is the single largest benefit expenditure on the DWP's books, costing significantly more than Universal Credit, Housing Benefit, and Disability benefits combined.

We need to dispel the myth that you have "paid into" a pension for 50 years. You haven't. There is no pot with your name on it sitting in the Bank of England, accruing interest.

The UK State Pension is an unfunded pay as you go scheme. The National Insurance contributions you paid 30 years ago didn't go into a savings account for you; they went immediately out of the door to pay for the pensions of the people who were retired 30 years ago (your parents and grandparents).

Your pension, when you get it, will be paid for by the taxes of the people working today (your children and grandchildren). It is an intergenerational contract, not a personal savings plan.

As for means-testing it against private pensions: political suicide. The grey vote is the most powerful demographic in British politics. Any party whio proposes effectively confiscating the State Pesion from those who have been prudent enough to save privately would be obliterated at the ballot box.

The incentive to work and save privately remains the same. The full new State Pension is currently £221.20 per week. If you want to live on more than £11.5k a year in your retirement, e.g, if you want to do more than just exist, you definitely still need to work and save into a private pothen

So why does everyone born before 1980 get final salary and state pensions and I don't?

 

[rob666]

So why does everyone born before 1980 get final salary and state pensions and I don't?

They don't.
A simple fact.
A large number of retired people born before 1980 have no salary tied pension at all.
Three million of them at the last count.
The figures are easy to research...just google it.

I know many people born before 1980 who have no final salary pension.
Many working for the state in long term employment have had no final salary pension since 2014.

Where exactly did you come across this misinformation?

 

[GooseOnTheLoose]

So why does everyone born before 1980 get final salary and state pensions and I don't?

Not "everyone born before 1980" has a final salary pension. These were workplace benefits offered by private companies and the public sector, not handouts from the government.

They essentially disappeared from the private sector not because of a specific date, but because they became financially unsustainable. Companies realised they were effectively writing blank cheques for employees who were living decades longer than actuaries had predicted. When you combine increased life expectancy with changes to accounting standards, businesses closed these schemes to new members to stop themselves going bankrupt.

It wasn't a generational conspiracy. It was a correction of a financial model that was too generous to be sustainable. Private pensions have moved from Defined Benefit (guaranteed outcome) to Defined Contribution (you get out what you put in plus investment growth), shifting the risk from the employer to the employee.

You will get a State Pension, provided you have 35 qualifying years on your National Insurance record. It hasn't been abolished for those born after 1980.

The difference is not if you get it, but when. We are all living longer, so the state cannot afford to pay people to be retired for 30 years on the taxes of a shrinking workforce. Therefore, the age at which you can access it is being pushed back.

It is not that you won't get it, it is just that the goalposts are moving because the demographic maths of the country has changed.

 

[rob666]

To pick nits off a gooses' back...
You get a pension after ten qualifying years, a full one after thirty five.

Many older women (traditional housewives) only get a "full pension" through pension credit, and those with good savings get a pittance.

Then there are the people with zero additional provision, who cash in assets (houses, stocks and shares, gold) in their retirement.
Paying due tax on it all of course.

 

[Poisson]

As with most things financially, and in life in general, it is wise not to put all your eggs in one basket. A balanced approach combining assets, pensions, ISAs and shares in some quantity will be the wisest approach, subject to your financial situation.