Guardian reporting 15 million workers (34 million work force) are not saving enough into pensions.
Auto enrolment has largely replaced final salary pensions for private sector. Only 4% of an estimated 4.2 million self employed are saving for retirement.
Home ownership has reduced over last 25 years; that will see more retiring renters with little / no pension and a deferred state pension.
Cost of living crisis not going away, a generation with student debt, half of social housing sold off leaving 4.5 million households in expensive private sector rentals with little disposable income to save.
How will this retirement situation be addressed by the current and future government(s) ? |
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Depends who the government is.
Labour. Announce a 10-year plan to kick the can down the road, fund it with a tax on pensioners, and quickly u turn.
Tories. Double down on the triple lock for those who already own 3 houses, then tell 25-year-olds already £50k debt to cancel Netflix
Reform UK Limited. Deport all the foreign care staff and replace them with knuckle-dragging Wetherspoons customers and call it a skills revolution.
LibDems Pledge to review the review of the pension crisis
Greens. Work 3 jobs until you die and git buried in a recycled cardboard coffin |
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"Depends who the government is.
Labour. Announce a 10-year plan to kick the can down the road, fund it with a tax on pensioners, and quickly u turn.
Tories. Double down on the triple lock for those who already own 3 houses, then tell 25-year-olds already £50k debt to cancel Netflix
Reform UK Limited. Deport all the foreign care staff and replace them with knuckle-dragging Wetherspoons customers and call it a skills revolution.
LibDems Pledge to review the review of the pension crisis
Greens. Work 3 jobs until you die and git buried in a recycled cardboard coffin "
This  |
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"Auto enrolment has largely replaced final salary pensions for private sector. Only 4% of an estimated 4.2 million self employed are saving for retirement."
Everyone should be contributing 8-15% of income towards retirement. No government has been bold enough to do this. Conservatives, because of the "cost to employers" and self-employed autonomy. Labour, because of an ideological block against private pensions and towards state-funded mediocrity for all.
In order to retire in relative comfort, people need 500k to 1.5M. That's easily achievable over a working life, and would mean that the government could slash their pension bill by over 100bn. They should encourage this by removing most tax from pension contributions AND income, to a generous cap. The maths would work out well, and this would encourage much better financial awareness and responsibility generally. The current system is, indeed, a time bomb. |
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Of all the government sponsored schemes, I think the pension is the most Ponziest scheme ever. No one working today should rely on the state pension. The whole thing is unsustainable and it's only a matter of time before it breaks. |
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I think all parties will kick the can down the street as its too much of a hot potato to take on during their term in office.
Maybe a state pension will be means tested.
If you have worked hard all your life and have a decent private pension or savings, you will not get a state pension.
If you have not even considered saving or taking out any form of private pension, you will get a state pension.
God knows where we will be in 25 to 50 years but it can't continue on this road and no political party would even consider trying anything the public may consider too harsh.
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"Of all the government sponsored schemes, I think the pension is the most Ponziest scheme ever. No one working today should rely on the state pension. The whole thing is unsustainable and it's only a matter of time before it breaks."
If it’s left to fend for yourself, should there be an NI cut to free up disposable income.
How will the cost of delay work for 770,000 youth unemployed.
Today reported new job openings at its lowest level since April 2021. |
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"I think all parties will kick the can down the street as its too much of a hot potato to take on during their term in office.
Maybe a state pension will be means tested.
If you have worked hard all your life and have a decent private pension or savings, you will not get a state pension.
If you have not even considered saving or taking out any form of private pension, you will get a state pension.
God knows where we will be in 25 to 50 years but it can't continue on this road and no political party would even consider trying anything the public may consider too harsh.
"
The ons provides the government with a lot of data, to enable the state to plan ahead; schools, hospitals, investment in industries etc to cite a few. Now we seem to be in a place where everything everywhere is full of current and future problems. But the tax receipts are at a record high. |
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The lack of long term saving is the gift that keeps on giving. The future demographic curves are quite clear and it is nigh on impossible to see how the current standard of living for pensioners is sustainable in the future. Those who are relying on the government are going to be in for a very unfortunate shock. This will not end well for a lot of people. |
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Interestingly the one aspect of the UK economy/personal finance position that has improved is the household debt to income ratio which has improved dramatically in recent years.
In 2008 it was 155%. Today it’s around 117%.
Average total debt per household is around £67,000.
Looking at OBR projections fifty years hence it’s obvious that public expenditure is going to have to be drastically cut somewhere, as the current projections are totally unsustainable.
I imagine at some point certain types of state healthcare and pensions are going to have to be phased out, just like Labour is doing with smoking.
The problem as usual is getting the electorate to adopt any kind of long term thinking on anything when it’s much easier to just keep voting for the benefits to keep coming. Probably only going to happen after some kind of massive fiscal collapse. |
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By *coptoCouple 2 days ago
Côte d'Azur & Great Yarmouth |
“… removing most tax from pension contributions”
Is it not already? My understanding (perhaps incorrect) is that no tax is payable on pension contributions, and that even PAYE Income Tax is only calculated and deducted AFTER the deduction of any pension contributions. BUT, of course, if this results in a future “old-age” pension being more than one’s Personal Allowance of £12,570, Blind Person’s Allowance of three grand etc., THEN you pay tax on it.
All I do know is that I get from the DWP only £505.90 every thirteen weeks. Thank God - and a bit of foresight - that I put quite a lot of money into a private pension pot to supplement that. Anybody who didn’t, doesn’t or will not…….. Fuck ‘Em! |
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"
The problem as usual is getting the electorate to adopt any kind of long term thinking on anything when it’s much easier to just keep voting for the benefits to keep coming. Probably only going to happen after some kind of massive fiscal collapse."
The electorate have not been incentivised.
Anyone who saves is penalised, a 10% increase in savings/investment tax rate for basic rate tax payers. (20% 22%) (labour)
Rumoured ISAs would be tampered with, also rumoured pension tax free cash could be limited, both will come.
Capital gains tax thresholds have been reduced by 75% ( by tories )
Gordon Brown took £300M a year from pension funds removing tax free status of dividend income, and deferring personal pension retirement dates by five years.
Anyone diy investing in property has to pay higher taxes on purchase and income (Tory and Labour) |
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By *abioMan 2 days ago
Newcastle and Gateshead |
"
All I do know is that I get from the DWP only £505.90 every thirteen weeks. Thank God - and a bit of foresight - that I put quite a lot of money into a private pension pot to supplement that. Anybody who didn’t, doesn’t or will not…….. Fuck ‘Em!"
Bless people of a certain age.. I say certain because any working before 2016 will be caught up in this..
….. because it effects the money that would have gone into your state pension pot was given back to your employer to put into your private pension…. You actually have not lost out and probably gained
The way you need to look at your private pension is that it was basically made up from 3 things… your personal contributions, your employers contributions… and the additional pension contributions instead of them going into your state pension pot, have gone into your private pension pot
And they also did something clever ( not that I give governments much credit) .. they kept a track of how well your money would have done if they had kept it!
So if your invested money did better privately.. you kept all the gains, but if you had done better if the state had held onto the money, you kept all the private money… and they also gave you the difference between state and private!
The government made it a win win in that employees never lost out.. and encouraged companies to provide private pensions
And even in 2016 when law changed they compared old law rules with new law rules… if you were doing better under the old law they carried that amount over into new rules… if you were doing better under new rules, they switched you across from the beginning of your entire work life! |
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"“… removing most tax from pension contributions”
Is it not already? My understanding (perhaps incorrect) is that no tax is payable on pension contributions, and that even PAYE Income Tax is only calculated and deducted AFTER the deduction of any pension contributions. BUT, of course, if this results in a future “old-age” pension being more than one’s Personal Allowance of £12,570, Blind Person’s Allowance of three grand etc., THEN you pay tax on it.
All I do know is that I get from the DWP only £505.90 every thirteen weeks. Thank God - and a bit of foresight - that I put quite a lot of money into a private pension pot to supplement that. Anybody who didn’t, doesn’t or will not…….. Fuck ‘Em!"
"They should encourage this by removing most tax from pension contributions AND income, to a generous cap"
There's not typically tax (but there is NI) on contributions, up to a limit. It grows tax free. But then it's taxed as income when you draw it down. Better that NI is waived on contributions and it's taxed very favourably at draw down, but that they then make the state pension means tested. Should be fairly cost neutral to do this, possibly saving money. Obviously full tax kicks in when someone is drawing down six figures, but incentivising people to save aggressively pays off, as pensioners can afford their own homes, care and general maintenance. |
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"“… removing most tax from pension contributions”
Is it not already? My understanding (perhaps incorrect) is that no tax is payable on pension contributions, and that even PAYE Income Tax is only calculated and deducted AFTER the deduction of any pension contributions. BUT, of course, if this results in a future “old-age” pension being more than one’s Personal Allowance of £12,570, Blind Person’s Allowance of three grand etc., THEN you pay tax on it.
All I do know is that I get from the DWP only £505.90 every thirteen weeks. Thank God - and a bit of foresight - that I put quite a lot of money into a private pension pot to supplement that. Anybody who didn’t, doesn’t or will not…….. Fuck ‘Em!
"They should encourage this by removing most tax from pension contributions AND income, to a generous cap"
There's not typically tax (but there is NI) on contributions, up to a limit. It grows tax free. But then it's taxed as income when you draw it down. Better that NI is waived on contributions and it's taxed very favourably at draw down, but that they then make the state pension means tested. Should be fairly cost neutral to do this, possibly saving money. Obviously full tax kicks in when someone is drawing down six figures, but incentivising people to save aggressively pays off, as pensioners can afford their own homes, care and general maintenance."
If the state pension is means tested will this not deincentivis people from saving in a pension. If I save hard I get less later if I spend hard now the state will look after me.
It's like if I work hard I get nothing from the state but if I do f all I get, social housing benefit and reduced bill and support. |
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"
If the state pension is means tested will this not deincentivis people from saving in a pension. If I save hard I get less later if I spend hard now the state will look after me.
It's like if I work hard I get nothing from the state but if I do f all I get, social housing benefit and reduced bill and support."
Exactly why it needs to be very tax advantageous and saving needs to put people into a better position than not saving - i.e. you cannot lose £1 in means tested pension for each £1 of savings. |
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"Of all the government sponsored schemes, I think the pension is the most Ponziest scheme ever. No one working today should rely on the state pension. The whole thing is unsustainable and it's only a matter of time before it breaks."
I wonder how other counties manage.... And with better state pensions than ours 🤔 someone getting ripped off somewhere |
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