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State Pension Age
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In 1975 the pension age was 60 for woman and 65 for men with average life expectancy around 72 years.
50 years later the pension age is 66 (rising to 67 in 2036) but average life expectancy is around 80ish (slightly higher for women, slightly lower for men)
In 1975 most people started work at 16, now it’s around half at 18 and most of the other half at 21. Although some of those going to uni will have part time work as well.
So in simple terms people are paying into the pot for fewer years but withdrawing from the pot for longer. In fact the average lifespan after retirement is around double what it was in 1975.
I personally think the pension age needs to be reflective these numbers. If the period people receive pension for was shorter, payments could be increased.
Your thoughts? |
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"In 1975 the pension age was 60 for woman and 65 for men with average life expectancy around 72 years.
50 years later the pension age is 66 (rising to 67 in 2036) but average life expectancy is around 80ish (slightly higher for women, slightly lower for men)
In 1975 most people started work at 16, now it’s around half at 18 and most of the other half at 21. Although some of those going to uni will have part time work as well.
So in simple terms people are paying into the pot for fewer years but withdrawing from the pot for longer. In fact the average lifespan after retirement is around double what it was in 1975.
I personally think the pension age needs to be reflective these numbers. If the period people receive pension for was shorter, payments could be increased.
Your thoughts?"
Scrap the pension age it needs to be years worked to reflect different starting. So once you have worked say 50 years you can claim state pension.
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"In 1975 the pension age was 60 for woman and 65 for men with average life expectancy around 72 years.
50 years later the pension age is 66 (rising to 67 in 2036) but average life expectancy is around 80ish (slightly higher for women, slightly lower for men)
In 1975 most people started work at 16, now it’s around half at 18 and most of the other half at 21. Although some of those going to uni will have part time work as well.
So in simple terms people are paying into the pot for fewer years but withdrawing from the pot for longer. In fact the average lifespan after retirement is around double what it was in 1975.
I personally think the pension age needs to be reflective these numbers. If the period people receive pension for was shorter, payments could be increased.
Your thoughts?"
Pension is a benefit essentially paid by the current generation of workers to the previous one.
If we want decent pensions then we need a strong economy with secure work and low unemployment. In the absence of a solid birth rate we need those numbers to come from immigration. We also need those workers to have access to homes, health services etc.
Also as we are expected to work longer, we have ‘oldies’ taking up jobs that would once have been filled by school leavers.
I’m glad I have a good final-salary pension scheme in work, because I fear there won’t be a state pension by the time I retire |
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In 1975 the unemployment rate was 4.5%
In 2025, 9.5 million people are claiming state benefits (exc state pension), which they weren’t in 1975
In 1975, there weren’t half a million new university enrolments annually racking up so far £260bn student loan debt (+£20bn annually), a large proportion of which won’t get repaid.
In 1975, house prices were 3 times income now they are 9 times income, with the average mortgage term of 32 years, and first time buyers buying later, on average at 31 years of age.
In 1975, 32% of people lived in council houses, now half of those houses have been sold off at one time discounts, we have a housing problem, the gap currently plugged by expensive rents in private sector accommodation
In 1975 most employed people had a final salary pension scheme, now more people have money purchase schemes with average fund value of £31,000 which will pay out didly squat.
Add equity release, the largest growth sector in the mortgage industry, demonstrates people don’t have enough money in retirement to maintain their chosen living standards.
Back to your question we are living beyond our means. |
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By *9alMan 4 days ago
Bridgend |
I have just semi retired at 66 , growing up in the 70s there was an expectation that the retirement age would come down as more work was mechanized & the country got richer. Not everyone lives longer a lot depends on genetics & luck. I am not happy with having to work an extra year & understand why the WASPI women are hopping mad about having to work 6 more years! |
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"
In 2025, 9.5 million people are claiming state benefits (exc state pension), which they weren’t in 1975
"
How much of that is top-ups to people already in work? A key factor when considering benefits |
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"I have just semi retired at 66 , growing up in the 70s there was an expectation that the retirement age would come down as more work was mechanized & the country got richer. Not everyone lives longer a lot depends on genetics & luck. I am not happy with having to work an extra year & understand why the WASPI women are hopping mad about having to work 6 more years! "
The figures are averages so yes some die before pension age and some live to be 100
WASPI? Be careful what you wish for. You either want equality or you don’t. You can’t pick and choose where you want it to apply. Men have always had work for more years, was that fair? They work 6 years more but claim for 16 years instead of the 12 it would have been in 1975.
The bottom line is if the government don’t balance the books there won’t be any pension money. The average life expectancy has increased by 12 months every 5 years or so, although there are signs of a plateau. But in 25 years time people could be claiming a pension for over 20 years when the system was designed when that figure was around 5 years |
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There’s also changing work styles to take into account. You can’t be productive in some industries when you’re in your late 60’s. Throw in increasing automation and it muddies the situation further.
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"
In 2025, 9.5 million people are claiming state benefits (exc state pension), which they weren’t in 1975
How much of that is top-ups to people already in work? A key factor when considering benefits "
Exactly my point. We have created a society we’re in work benefits are needed |
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"There’s also changing work styles to take into account. You can’t be productive in some industries when you’re in your late 60’s. Throw in increasing automation and it muddies the situation further.
"
There’s not many jobs that require hard physical labour to the extent that a 65yo can manage but a 67yo can’t.
Valid point about automation tho. In 10 years time the job of taxi driver probably won’t exist. Maybe bus drivers, train drivers, lorry drivers, pilots etc. AI is creating a brave new world.
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In 2025, 9.5 million people are claiming state benefits (exc state pension), which they weren’t in 1975
How much of that is top-ups to people already in work? A key factor when considering benefits
Exactly my point. We have created a society we’re in work benefits are needed "
If only companies paid proper wages. |
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"There’s also changing work styles to take into account. You can’t be productive in some industries when you’re in your late 60’s. Throw in increasing automation and it muddies the situation further.
There’s not many jobs that require hard physical labour to the extent that a 65yo can manage but a 67yo can’t.
Valid point about automation tho. In 10 years time the job of taxi driver probably won’t exist. Maybe bus drivers, train drivers, lorry drivers, pilots etc. AI is creating a brave new world.
"
A 65 year old is not going to be as productive in a manual job as a 50 year old or a 40 year old.
We should be using technology to better our living standards and striving for lower retirement ages across the board, not discussing later retirement
I’m planning on knocking it on the head at 62 which will be 40 years paid in to my scheme. A luxury that everyone should have . |
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The bottom line is if the government don’t balance the books there won’t be any pension money. "
The books do not balance. Country is £2.8trn in debt plus PFI; over £3trn
£42,000 sovereign debt per capita in 2025
£7,000 per capita in 1997 |
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A first world, western nation’s debt is essentially irrelevant - Modern Monetary Theory.
I don’t know enough about economics to justify that statement, but I do know that most countries run a deficit and always have. The U.K. is not unique, nor are we in a worse situation than many others
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By *abioMan 4 days ago
Newcastle and Gateshead |
"In 1975 the pension age was 60 for woman and 65 for men with average life expectancy around 72 years.
50 years later the pension age is 66 (rising to 67 in 2036) but average life expectancy is around 80ish (slightly higher for women, slightly lower for men)
In 1975 most people started work at 16, now it’s around half at 18 and most of the other half at 21. Although some of those going to uni will have part time work as well.
So in simple terms people are paying into the pot for fewer years but withdrawing from the pot for longer. In fact the average lifespan after retirement is around double what it was in 1975.
I personally think the pension age needs to be reflective these numbers. If the period people receive pension for was shorter, payments could be increased.
Your thoughts?"
Basically the government (and its one of those few subjects where there is consensus on all sides) look at it every 10 years…
There is already age 67 and age 68 legislation in place…
So those born after April 61 will retire at 67, and those born after April 78 will retire at 68
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I was going to retire or at least cut back from November which I still can but daughter now lives with me so trying to help here get a house I did it for others so I'm now planning stopping at 60 65 at the very latest I don't care what government says or does I'm not working just to pay taxes when I don't need to plenty of my friends have retired early and loving it. |
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"A first world, western nation’s debt is essentially irrelevant - Modern Monetary Theory.
I don’t know enough about economics to justify that statement, but I do know that most countries run a deficit and always have. The U.K. is not unique, nor are we in a worse situation than many others"
Servicing the debt, rather than the debt itself is the issue.
Rich people the world over basically buy government bonds. The interest rate of these fluctuates, not because of the base rate but based on the stability of the countries economy. The markets basically decide how risky the bond is. A UK bond has historically been a safe bet. I understand some countries have declared bankrupt and left people with worthless bonds.
Your statement is kinda true, but with the economy at close to zero growth, the debt becomes more expensive. Kinda like the interest on your credit card |
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"A first world, western nation’s debt is essentially irrelevant - Modern Monetary Theory.
I don’t know enough about economics to justify that statement, but I do know that most countries run a deficit and always have. The U.K. is not unique, nor are we in a worse situation than many others
Servicing the debt, rather than the debt itself is the issue.
Rich people the world over basically buy government bonds. The interest rate of these fluctuates, not because of the base rate but based on the stability of the countries economy. The markets basically decide how risky the bond is. A UK bond has historically been a safe bet. I understand some countries have declared bankrupt and left people with worthless bonds.
Your statement is kinda true, but with the economy at close to zero growth, the debt becomes more expensive. Kinda like the interest on your credit card "
I disagree and think it does matter.
Currently the interest payments are £319m a day / £9bn a month. While we are continually lectured how hard up the country is. Debt servicing costs are nearly two thirds the annual nhs budget. And one months interest is more than taken off the disabled, farmers and pensioners in a year |
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"A first world, western nation’s debt is essentially irrelevant - Modern Monetary Theory.
I don’t know enough about economics to justify that statement, but I do know that most countries run a deficit and always have. The U.K. is not unique, nor are we in a worse situation than many others
Servicing the debt, rather than the debt itself is the issue.
Rich people the world over basically buy government bonds. The interest rate of these fluctuates, not because of the base rate but based on the stability of the countries economy. The markets basically decide how risky the bond is. A UK bond has historically been a safe bet. I understand some countries have declared bankrupt and left people with worthless bonds.
Your statement is kinda true, but with the economy at close to zero growth, the debt becomes more expensive. Kinda like the interest on your credit card
I disagree and think it does matter.
Currently the interest payments are £319m a day / £9bn a month. While we are continually lectured how hard up the country is. Debt servicing costs are nearly two thirds the annual nhs budget. And one months interest is more than taken off the disabled, farmers and pensioners in a year "
And we are far from the most indebted nation in the world.
If things continue (and they will) it’ll be intriguing to see the outcome because the eastern world won’t accept austerity long-term (especially as the rich get richer and are immune to it) so there will have to be some kind of economic reset button waiting to pushed somewhere down the line
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"If things continue (and they will) it’ll be intriguing to see the outcome because the eastern world won’t accept austerity long-term (especially as the rich get richer and are immune to it) so there will have to be some kind of economic reset button waiting to pushed somewhere down the line
"
Is it realistic to opine that such resets are often presaged by cataclysmic world events ? Eg, World War, World Viral Outbreak ?
.
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"A first world, western nation’s debt is essentially irrelevant - Modern Monetary Theory.
I don’t know enough about economics to justify that statement, but I do know that most countries run a deficit and always have. The U.K. is not unique, nor are we in a worse situation than many others
"
There are about a dozen countries in the world with a worse debt to GDP ratio than the UK. And 170 with a better one.
It’s correct that the countries with a worse ratio are not necessarily basket cases (Japan, Singapore, the US) but the UK is definitely at the worse end of the spectrum in terms of our debt.
The difficulty is that once the state has started to provide benefits on the scale that the UK and EU do (17% of world economy, 50% of world benefits), it’s very hard to cut back on them due to the sense of societal entitlement. |
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I imagine sooner or later there is going to have to be a major curtailment of state benefits like pensions and healthcare.
The figures don’t add up now but looking forward fifty years they will be totally impossible.
And remember what happened in the Greek financial crisis due to their government debt: state pensions cut overnight, money taken from people’s savings accounts etc etc.
I guess at some point new entrants to the system will have to be told that they are on their own in terms of future pension and healthcare provision.
That shouldn’t be any great loss as far as healthcare is concerned, given how dismal state provided healthcare is in the UK. Most people would be much better off sorting out their own provision. |
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The UK was too timid and too late with enforced personal/employer pension plans. Australia introduced it decades ago, with 11.5% (increasing to 12% in July) of income being automatically saved by an employer towards retirement (in a defined contribution scheme).
https://en.m.wikipedia.org/wiki/Superannuation_in_Australia
"...making Australia as a nation the 5th largest holder of pension fund assets in the world."
This strategy should be the norm and the UK should pursue this target more aggressively. |
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Best for the individual and state would be a structured work taper-off, with, say, a part pension kicking-in around 64 to full pension at 70. The longer people keep their brains active, the better. |
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Involuntary euthanasia, there’s way too many old fogies kicking around, the savings would be enormous, reduction in pension payments, massive reduction in NHS spending, freeing up badly needed housing stock, the benefits are endless |
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"The UK was too timid and too late with enforced personal/employer pension plans. Australia introduced it decades ago, with 11.5% (increasing to 12% in July) of income being automatically saved by an employer towards retirement (in a defined contribution scheme).
https://en.m.wikipedia.org/wiki/Superannuation_in_Australia
"...making Australia as a nation the 5th largest holder of pension fund assets in the world."
This strategy should be the norm and the UK should pursue this target more aggressively."
Too many Labour governments wanting to create a nanny state. Once in place people’s mentality is “these are free services” so saying you want to take them away and replace them with a service you pay for at the point of contact is political suicide.
The NHS in principle is a fantastic thing. But the cost of managing it makes it very expensive.
The initial concept of state benefits is also fantastic in principle, but it’s abused so much by so many. Unfortunately the socialists see everything through rose tinted specs and think there’s maybe half a dozen people in the benefits system who shouldn’t be there, when in reality it’s probably well over a million.
I said before, everyone is great at thinking up things we should spend more money on, but not so great at thinking up cuts or taxes to pay for them. Many seem to have this weird notion that the government have trillions of pounds just sat there, waiting for someone to suggest what we spend it on. We need to reduce spending, not increase it. |
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"The UK was too timid and too late with enforced personal/employer pension plans. Australia introduced it decades ago, with 11.5% (increasing to 12% in July) of income being automatically saved by an employer towards retirement (in a defined contribution scheme).
https://en.m.wikipedia.org/wiki/Superannuation_in_Australia
"...making Australia as a nation the 5th largest holder of pension fund assets in the world."
This strategy should be the norm and the UK should pursue this target more aggressively.
Too many Labour governments wanting to create a nanny state. Once in place people’s mentality is “these are free services” so saying you want to take them away and replace them with a service you pay for at the point of contact is political suicide.
The NHS in principle is a fantastic thing. But the cost of managing it makes it very expensive.
The initial concept of state benefits is also fantastic in principle, but it’s abused so much by so many. Unfortunately the socialists see everything through rose tinted specs and think there’s maybe half a dozen people in the benefits system who shouldn’t be there, when in reality it’s probably well over a million.
I said before, everyone is great at thinking up things we should spend more money on, but not so great at thinking up cuts or taxes to pay for them. Many seem to have this weird notion that the government have trillions of pounds just sat there, waiting for someone to suggest what we spend it on. We need to reduce spending, not increase it. "
Exactly. The Australia takes the government bill for pensions down significantly. |
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That shouldn’t be any great loss as far as healthcare is concerned, given how dismal state provided healthcare is in the UK. Most people would be much better off sorting out their own provision."
Be careful what you wish for |
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"In 1975 the pension age was 60 for woman and 65 for men with average life expectancy around 72 years.
50 years later the pension age is 66 (rising to 67 in 2036) but average life expectancy is around 80ish (slightly higher for women, slightly lower for men)
In 1975 most people started work at 16, now it’s around half at 18 and most of the other half at 21. Although some of those going to uni will have part time work as well.
So in simple terms people are paying into the pot for fewer years but withdrawing from the pot for longer. In fact the average lifespan after retirement is around double what it was in 1975.
I personally think the pension age needs to be reflective these numbers. If the period people receive pension for was shorter, payments could be increased.
Your thoughts?"
It’s already risen to 67 for many of us and no doubt will get higher |
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"Involuntary euthanasia, there’s way too many old fogies kicking around, the savings would be enormous, reduction in pension payments, massive reduction in NHS spending, freeing up badly needed housing stock, the benefits are endless "
Hopefully they’ll be doing you as soon as you come of age. The biggest factor is carrying those that although perfectly able have chosen to retire before they even started to work and contribute to the system. An increased pension age is irrelevant to them as they are always well looked after. Many older people are still paying huge wads of tax into the system despite being retired. |
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It's the biggest problem in developed countries today. You add reduction in birth rates, the problem gets lots worse. You end up having a small working population supporting a huge ageing population.
Increasing pension age is an option. But a question has to be asked if the increase in our lifespan also comes with an ability to work until late age. Are our cognitive functions retained for longer than it used to be? |
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The way I see it we have a 50 50 chance of surviving each day.
Death doesn't obey a certain age.
However as a norm if you have paid into a scheme all your working life you should be expect to get something back no matter how long you live. If the governments and analysts were doing their job properly there shouldn't be any problem.
There are huge lumps of gold bars held by the BoE they can cover any shortfall due to falling birth and increased death rates so there is no excuse.
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Over a working lifetime, an average household is projected to pay around £173,235 in employee National Insurance contributions and £40,350 in employer contributions; £213,535. (TaxPayers' Alliance analysis)
The state pension age, currently 66 for both men and women, average life expectancy is 85 years for men and 88 years for women. On average, men can expect to live another 19 years after retirement, women 22.
Current weekly state pension pay out is £230.25, ignoring increases:
Men 19 years total state pension, £227,487
Women 22 years, £263,406
We know it’s a pay in pay out system with no pot. I’d assume GAD know that the investment growth on contributions to the state cover annual pension/triple lock increases in retirement. |
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"It's the biggest problem in developed countries today. You add reduction in birth rates, the problem gets lots worse. You end up having a small working population supporting a huge ageing population.
Increasing pension age is an option. But a question has to be asked if the increase in our lifespan also comes with an ability to work until late age. Are our cognitive functions retained for longer than it used to be?"
In part there is an element of education here, as well as people at an individual level having the impetus and discipline to act.
There is always an element of luck with health, and we all die eventually.
But you can of course on average increase your mental and physical longevity by eating the right things, doing the right kinds of exercise, maintaining your mental and physical engagement.
Whether people generally are aware of this or have the discipline to do it over many decades is another issue. |
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"The way I see it we have a 50 50 chance of surviving each day.
Death doesn't obey a certain age.
However as a norm if you have paid into a scheme all your working life you should be expect to get something back no matter how long you live. If the governments and analysts were doing their job properly there shouldn't be any problem.
There are huge lumps of gold bars held by the BoE they can cover any shortfall due to falling birth and increased death rates so there is no excuse."
That gold has zero value until you come to sell it. And there’s probably not as much as you might think. Most was spent financing WW2. In theory it acts and a security deposit but one that could only be used in small chunks.
To state the birthrate is slowing is misleading. It is true to some extent in different demographics of the population but in others it’s rising. But it’s the red herring of economic growth that’s never talked about….
Growth in the economy can only happen in two ways, there is a third but the 3rd one never happens…
1. We export more than we import. This naturally grows the economy and as a nation we become richer. This was the promise of North Sea oil and gas in the 70s. But what nobody saw coming was the unemployment of the 80s
2. Population increase. More people means more money spent. Tony Blair knew this only too well and used it to make it look like they were doing wonders with the economy when all they were really doing was destroying the effectiveness of our infrastructure.
For those who are interested the third is to reduce the national debt significantly, which in turn reduces the deficit which means the government has more money left over. But this never happens.
2 of those things are very hard to do, one is very easy. Why do you think Labour are so keen to bring as many migrants over as possible? They saw Blair succeed with this notion and want to emulate him.
But to come back on topic…
There is no doubt that physical and mental abilities decrease with age and so there is ultimately a theoretical maximum working age past which we can’t go. Different for different jobs of course. But there’s no reason why someone who has worked as a roofer for 40 years that is now not exactly safe to be doing that job, can’t switch careers and get a desk job for example.
I’ve seen two memes on fb this morning, one calling for the retirement age to be reduced to 50 and one calling for pensioners to be able to live tax free. Of course no explanation of where the money was coming from. 50% basic rate of income tax anyone?
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Of course no explanation of where the money was coming from.
50% basic rate of income tax anyone?
"
Treasury income £1.06trn a year
£2.8trn national debt; the sum of all the deficits and poor spending
Decades in poor planning and lack of investment
Social housing sold off at a discount
9.5 million on benefits ( exc state pension)
Half our food imported while farming reduced to 0.6% gdp
Manufacturing jobs globalised
Overrun with stay at home migrants
A large proportion of unhealthy population.
Etc
Reap what we sow, now a race to the bottom
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"In 1975 the pension age was 60 for woman and 65 for men with average life expectancy around 72 years.
50 years later the pension age is 66 (rising to 67 in 2036) but average life expectancy is around 80ish (slightly higher for women, slightly lower for men)
In 1975 most people started work at 16, now it’s around half at 18 and most of the other half at 21. Although some of those going to uni will have part time work as well.
So in simple terms people are paying into the pot for fewer years but withdrawing from the pot for longer. In fact the average lifespan after retirement is around double what it was in 1975.
I personally think the pension age needs to be reflective these numbers. If the period people receive pension for was shorter, payments could be increased.
Your thoughts?"
The masters need to hold onto your money for a bit longer and wring ever last bit of economic worth out of the plebs, anyway it makes the pensioner numbers in the uk look a bit better if you can hold off creating pensioners by not pensioning them off, middle aged is 40-45 for some and 60-65 for the plebs.  |
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"The way I see it we have a 50 50 chance of surviving each day.
Death doesn't obey a certain age.
However as a norm if you have paid into a scheme all your working life you should be expect to get something back no matter how long you live. If the governments and analysts were doing their job properly there shouldn't be any problem.
There are huge lumps of gold bars held by the BoE they can cover any shortfall due to falling birth and increased death rates so there is no excuse.
That gold has zero value until you come to sell it. And there’s probably not as much as you might think. Most was spent financing WW2. In theory it acts and a security deposit but one that could only be used in small chunks.
To state the birthrate is slowing is misleading. It is true to some extent in different demographics of the population but in others it’s rising. But it’s the red herring of economic growth that’s never talked about….
Growth in the economy can only happen in two ways, there is a third but the 3rd one never happens…
1. We export more than we import. This naturally grows the economy and as a nation we become richer. This was the promise of North Sea oil and gas in the 70s. But what nobody saw coming was the unemployment of the 80s
2. Population increase. More people means more money spent. Tony Blair knew this only too well and used it to make it look like they were doing wonders with the economy when all they were really doing was destroying the effectiveness of our infrastructure.
For those who are interested the third is to reduce the national debt significantly, which in turn reduces the deficit which means the government has more money left over. But this never happens.
2 of those things are very hard to do, one is very easy. Why do you think Labour are so keen to bring as many migrants over as possible? They saw Blair succeed with this notion and want to emulate him.
But to come back on topic…
There is no doubt that physical and mental abilities decrease with age and so there is ultimately a theoretical maximum working age past which we can’t go. Different for different jobs of course. But there’s no reason why someone who has worked as a roofer for 40 years that is now not exactly safe to be doing that job, can’t switch careers and get a desk job for example.
I’ve seen two memes on fb this morning, one calling for the retirement age to be reduced to 50 and one calling for pensioners to be able to live tax free. Of course no explanation of where the money was coming from. 50% basic rate of income tax anyone?
"
There's alot more gold than people think.
Because they keep using the excuse it's for security it's a phallic, wwII debt is gone. We don't owe the Americans.
The perpetual argument to protect the future has helped accumulate wealth here and overseas. The government pleading poverty every few years is a farce to squeeze more money out of people rich and poor.
How many beers do they think we have on our legs. I don't buy it especially when it come from a socialist government.
The |
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The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
The problem is that the pension system is riddled with madness. People aren’t saving enough which means we have to have an unfunded pension system. That makes no economic sense. Final salary pensions make no economic sense. Allowing women to retire earlier despite having much higher life expectancy makes no economic sense.
I understand why politically all these things happen but that doesn’t mean they are right. None of this will change but until it does the current pension model is broken. |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
"
It’s never worked like that. Literally never.
Pensions are paid by the current generation of workers via taxation. When you retire, your pension is paid by those still in work. |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
The problem is that the pension system is riddled with madness. People aren’t saving enough which means we have to have an unfunded pension system. That makes no economic sense. Final salary pensions make no economic sense. Allowing women to retire earlier despite having much higher life expectancy makes no economic sense.
I understand why politically all these things happen but that doesn’t mean they are right. None of this will change but until it does the current pension model is broken."
I read the average Briton saves 4.2% income, the German 13%, the Chinese 33%.
The average British household also has more debt (£65k) than the other two examples (€34k and $11,498usd respectively) |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
It’s never worked like that. Literally never.
Pensions are paid by the current generation of workers via taxation. When you retire, your pension is paid by those still in work."
1. Keyword in my statement was : _should_
2. Historically unfunded pensions only really became a thing when they were used by the government to pay for things like the military and civil service. The creation of the welfare state and the New Deal in the US was what made the model ubiquitous because pensions could then be paid quickly without having to build a pot.
Before that became prevalent then funded pensions were the norm for most private individuals.
Unfunded pension schemes are politically valuable. I get that. They make no economic sense when you have an aging and increasing older population. Hence the word _should_. |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
The problem is that the pension system is riddled with madness. People aren’t saving enough which means we have to have an unfunded pension system. That makes no economic sense. Final salary pensions make no economic sense. Allowing women to retire earlier despite having much higher life expectancy makes no economic sense.
I understand why politically all these things happen but that doesn’t mean they are right. None of this will change but until it does the current pension model is broken."
The current State Pension liabilities in the UK are estimated reaching almost £5 trillion, including £1.2 trillion for public service pensions and £3.84 trillion for the State Pension.
To run such a scheme on paying in - invest - withdraw later basis you’d need tens of trillions invested. Country is currently £3trn in debt.
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
It’s never worked like that. Literally never.
Pensions are paid by the current generation of workers via taxation. When you retire, your pension is paid by those still in work."
In the UK, today. Other places and other times were different.
See above on the system that Australia brought in over the past thirty years or so, weaning the population of unfunded state pensions. A Labour government put the onus on all employers to pay (now, 12% of salary) into a pension pot. Everyone on the political spectrum sees the value in that. The UK followed with too little, too late. Yes, there will always be state support for those who feel between the cracks, but the vast majority should have their own pot. |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
The problem is that the pension system is riddled with madness. People aren’t saving enough which means we have to have an unfunded pension system. That makes no economic sense. Final salary pensions make no economic sense. Allowing women to retire earlier despite having much higher life expectancy makes no economic sense.
I understand why politically all these things happen but that doesn’t mean they are right. None of this will change but until it does the current pension model is broken.
The current State Pension liabilities in the UK are estimated reaching almost £5 trillion, including £1.2 trillion for public service pensions and £3.84 trillion for the State Pension.
To run such a scheme on paying in - invest - withdraw later basis you’d need tens of trillions invested. Country is currently £3trn in debt.
"
I get that. The fact that it requires squillions in investment explains why the thing is economically broken - that is exactly the liability that needs to be funded and shying away from it doesn’t make it go away.
What happens when your aging population who are living longer and expecting increases in their “pension” - which isn’t actually a pension but an unfunded social security benefit - find that the younger working tax base can’t’/wont’t fund it? If you don’t have those squillions backing it up then things can go very wrong very quickly.
Economic liabilities have a horrible tendency to show themselves at the worse moment. There is no reason to believe this is an exception. |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
It’s never worked like that. Literally never.
Pensions are paid by the current generation of workers via taxation. When you retire, your pension is paid by those still in work.
In the UK, today. Other places and other times were different.
See above on the system that Australia brought in over the past thirty years or so, weaning the population of unfunded state pensions. A Labour government put the onus on all employers to pay (now, 12% of salary) into a pension pot. Everyone on the political spectrum sees the value in that. The UK followed with too little, too late. Yes, there will always be state support for those who feel between the cracks, but the vast majority should have their own pot."
The net value of the uk is £13.3trn according to ons. Of that property is £9trn (less £1.7trn o/s mortgages)
The value of chimney pots exceeds the combined values of all pension funds, all savings, and all the stock market indices.
This is why the equity release market is the fastest growing sector in the mortgage industry, I read 10% year on year growth. |
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"The economics of pensions should be quite simple - you save during your life into a pot of money so that when you retire you can live off that money. The more you save, the longer you save for and the less time you take money out of the pot then the more you can have every month.
The problem is that the pension system is riddled with madness. People aren’t saving enough which means we have to have an unfunded pension system. That makes no economic sense. Final salary pensions make no economic sense. Allowing women to retire earlier despite having much higher life expectancy makes no economic sense.
I understand why politically all these things happen but that doesn’t mean they are right. None of this will change but until it does the current pension model is broken.
The current State Pension liabilities in the UK are estimated reaching almost £5 trillion, including £1.2 trillion for public service pensions and £3.84 trillion for the State Pension.
To run such a scheme on paying in - invest - withdraw later basis you’d need tens of trillions invested. Country is currently £3trn in debt.
I get that. The fact that it requires squillions in investment explains why the thing is economically broken - that is exactly the liability that needs to be funded and shying away from it doesn’t make it go away.
What happens when your aging population who are living longer and expecting increases in their “pension” - which isn’t actually a pension but an unfunded social security benefit - find that the younger working tax base can’t’/wont’t fund it? If you don’t have those squillions backing it up then things can go very wrong very quickly.
Economic liabilities have a horrible tendency to show themselves at the worse moment. There is no reason to believe this is an exception."
People have invested, but not in pensions
£9trn of property values, a bank for retirees drawing tax free, from tax free gains on residential property via equity release. |
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"
People have invested, but not in pensions
£9trn of property values, a bank for retirees drawing tax free, from tax free gains on residential property via equity release. "
So you are suggesting that if you have property and can’t fund yourself in old age then you don’t get a state pension but will be required to take a loan against your property?
Economically I am not against that idea - I do wonder how that will work politically.
It does also make property purchases a tax free investment which is only going to turbo charge prices. Given that housing costs are already a substantial issue for the younger generation then I can’t see that working. |
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People have invested, but not in pensions
£9trn of property values, a bank for retirees drawing tax free, from tax free gains on residential property via equity release.
So you are suggesting that if you have property and can’t fund yourself in old age then you don’t get a state pension but will be required to take a loan against your property?
Economically I am not against that idea - I do wonder how that will work politically.
It does also make property purchases a tax free investment which is only going to turbo charge prices. Given that housing costs are already a substantial issue for the younger generation then I can’t see that working."
Agreed. People in the uk have chosen property over traditional stocks and bond investments through pensions. That is fact.
The problem is the vast majority’s income spent on housing costs ( renters 32% of income, mortgaged owners 19% spent servicing mortgages). 10 million homes, over 50% of uk dwellings owned outright.
Personal savings and pensions second place. The average personal pension fund is £32,000, the annuity a round of drinks at Wetherspoons. |
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People have invested, but not in pensions
£9trn of property values, a bank for retirees drawing tax free, from tax free gains on residential property via equity release.
So you are suggesting that if you have property and can’t fund yourself in old age then you don’t get a state pension but will be required to take a loan against your property?
Economically I am not against that idea - I do wonder how that will work politically.
It does also make property purchases a tax free investment which is only going to turbo charge prices. Given that housing costs are already a substantial issue for the younger generation then I can’t see that working.
Agreed. People in the uk have chosen property over traditional stocks and bond investments through pensions. That is fact.
The problem is the vast majority’s income spent on housing costs ( renters 32% of income, mortgaged owners 19% spent servicing mortgages). 10 million homes, over 50% of uk dwellings owned outright.
Personal savings and pensions second place. The average personal pension fund is £32,000, the annuity a round of drinks at Wetherspoons. "
Property is an awful investment at a societal level. It is unproductive in that it doesn’t create new wealth (ie companies etc) which is what you want from your pension industry.
I understand why it makes sense at an individual level because it is the only way most people will be able to get large amounts of leverage (ie a mortgage) to get an “asset” but it doesn’t really help the economy. |
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Property is an awful investment at a societal level. It is unproductive in that it doesn’t create new wealth (ie companies etc) which is what you want from your pension industry.
I understand why it makes sense at an individual level because it is the only way most people will be able to get large amounts of leverage (ie a mortgage) to get an “asset” but it doesn’t really help the economy."
Incentive and stability. |
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There is no 'pot'. NI payments are treated the same as any other income the government gets. It gets spent on what they think needs to be spent on.
We'll see further cuts to NI rates for us as a softener for when they stop state pension. Well, that's our prediction anyway. |
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Property is an awful investment at a societal level. It is unproductive in that it doesn’t create new wealth (ie companies etc) which is what you want from your pension industry.
I understand why it makes sense at an individual level because it is the only way most people will be able to get large amounts of leverage (ie a mortgage) to get an “asset” but it doesn’t really help the economy.
Incentive and stability."
And a cash cow for the state
5 million private sector rental properties; income tax on rent, 5% stamp duty surcharge, capital gains tax. A better deal for the state than council houses?
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"Property is an awful investment at a societal level. It is unproductive in that it doesn’t create new wealth (ie companies etc) which is what you want from your pension industry."
Disagree. Without landlords investing in housing, there would be no rental housing for those that need it. Landlords renting out commercial property reduce the cost of starting up a business and therefore encourage more people to start a business. |
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