The future of the state pension | IFS Zooms In
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- Опубліковано 26 вер 2024
- With an ageing population, the UK faces a series of significant challenges with regard to its state pension. The OBR estimates that spending on the state pension, pension credit and winter fuel payment is expected to rise by 1.2% of national income (£32 billion per year in today’s terms) by 2050.
How does the state pension work? What are the problems with it? And how can we reform it to work more effectively?
In our final episode of the year, Paul is joined by Jonathan Cribb, Associate Director at IFS and Head of the Retirement, Savings, and Ageing sector, and Baroness Ros Altmann, a life peer, pensions expert and former Pensions Minister.
Find out more: ifs.org.uk/art...
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@imohimoh3441 That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@@FernandoBowen-78 My advisor is Victoria Carmen Santaella;
You can look her up online
@@imohimoh3441 The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
I grew up through the 50s and 60s and started working in 1974. At that time NI was exactly that. An insurance policy that some people claimed a lot from and many didn't. Some used the NHS a lot and many didn't. Some people had a lot of State Pension (they lived a long time) and some people didn't. The SP wasn't a huge amount, so, some people would put a little away to save for their retirement. But a major unfairness came about that those without savings or extra pension got additional state benefits whereas those that did save got very little additional benefits. So, in 1978, the government put up NI by 2% to cover SERPS. This way everyone would get more than the basic SP. Companies could set up their own works pension schemes, and you could choose to divert (contract out) of the 2% going to SERPS but going into a better company pension scheme. This would put paid to having to give out additional benefits. What the heck has happened to this? Everybody since 1978 should have either SERPS or an additional works pension cos they were forced to pay an extra 2% of their salary in NI. This sounds like an insurance policy where the people taking the premiums have welched on the deal. As an aside, I do get a SERPS payment, so, I'm not whingeing about my own situation.
Will be interested to hear what they have to say about the estimated 500,000 pensioners with private pensions pre 1997 that are not receiving the promised increases from companies such as Hewlett-Packard, AMEX, 3M and Foster Wheeler. Some pensioners pensions are now worth only 60% of their expected value. Scandalous. I hope that this will be included in future podcasts.
What about the serps Scandal. People told they were contracting out of serps & would be better off . How many people would of contracted out if they were told they would lose both serps & the state pension . ? Nobody .
Exactly, we had no choice as far as I knew, certainly we were told to take the local govt pension as it was, then as approaching retirement age, the rules changed!!! Shocking! State theft
Not sure what you mean! Those that contracted outnof SERPS had that money invested in their occupational or private pension, which may have done even better!
@@johnporcella2375 only after 2016 did this become a thing! it was never ever something that impacted a state pension before in fact it was used to justify lower wages in the public sector
I can retire in my 50s because I worked flipping hard for decades, saved, invested, saved, invested for a long long time. I didn’t blow it on smoking, booze and holidays. Why should I be penalized and lose my state pension while someone who was lazy or blew their income gets more
Shut the hell up
We live in a society which encourages state dependancy rather than saving and investing for the future. We can't continue to entrust our future economic well-being with the government who care not a damn about us.
Except auto enrollment....
@@CupOfSweetTea Auto Enrollment is just a trojan horse in order to steal your state pension. Its obvious , the people that work the most & pay most into their pension will be told they dont need a state pension. So you work alot & get no state pension or you live on benefits or save nothing you get a pension. What do you think people will choose ?
We live in a society that for many has prevented them from saving and investing, living from hand to mouth instead, because of ever increasing costs of housing, now food and energy too.
If you have a private pension or life savings you cant claim benefits so you get less than people who dont have these who do claim benefits like no council tax and free dental treatment and cost of living payments
Exactly . The Responsible are punished . That's why you dont have a private pension.
Optician payments, t.v. licence, and now winter fuel.
@@jeanjones1211 We still get a free eye test
It would be fairer if for every year the pension age rises over 60 an hour is taken of the working week ,a 30 hour week would allow people to enjoy their lives?
Because that compromises employer contracts. A company can employ the deficit hours needed. Wouldn’t work
Most pensioners only get the maximum of about £8500, which is incredibly low , the new pension has only been received since 2016 . Very few people get the maximum of £11500 as most people have been contracted out during working life reducing their and so many need about 45 years of contributing as contracted out years are reduced in value to 2/3 years.
Also there have been huge savings by increasing women’s retirement age 6 soon to be 7 years and men’s 2 years.
Absolutely correct . People that paid thousands into private pensions are told they dont qualify for pensions credit because of their private pension. Their private pension has made them worse off not better off .
Contracted out was another con….I ended up paying 50 yrs NI to get the full new pension..to cover the shortfall.
The UK spends £13 billion a year on overseas aid and £5.5 billion on hotels for illegal immigrants.
That money could provide an extra £125 for the monthly pension.
Absolute rubbish about the cost of the hotels. It’s high, but that’s only because (undoubtedly Tory funding) hotel chains are charging the highest of inner London rates for grotty little hotels dotted around the 3rd world parts of the U.K. overseas aid is all about buying influence, something we could do with as we are now an irrelevance to most of the rest of the world.
Yes, we could scrap the NHS too, get rid of public transport and close schools and fly tip instead of recycle. That's the kind of shithole you'd like to live in?
@@charliestafford9978 why dont people understand this?
At 23 mins you say that you think no one believes people in their early 60 s should get a pension, well how about Poland , just reduced the state pension age to 60 yrs, and Russia, its 60 yrs, in France it is 62 yrs and far more generous.
and definately agree with allowing the taking of the pension early with a reduction but the tricky thing is that some people say they can't work but can and GPs that want an easy life will just sign them off.
As a student in postgraduate studies, I do not accrue years of NI contributions despite contributing to the economy! Granted, I fully expect the rules to change by the time I get to pension age 😂
Most of the trust issued are due to the IFS speculating on changing the rules for pensions every 5 minutes, do you not see that the PAYE employee sees very little incentive to save into a pension for 40+ years if at the time of need, it is stolen by rule changes?
It says your claim what claim we paid an agreed amount it is a social contract changing the dates was not part of that or any other changes
Really: there is more to making a video for public consumption than meets the eye. Can I plead with you in future leave it to the experts - just provide the specialised info they need . Thanks in advance
The State Pension was an entitlement prior to 2016 when the Tory government changed it to a “benefit”
You are “entitled” to confiscate other people’s wealth? That’s what pension is. Money taken from working people to pay for retirees. There isn’t a fund or pot money to support pension. So as with all benefits, how much of someone’s labour is another person entitled to in a modern caring society?
Employers don't really help anymore and even though I was, it's not really enough. My private pension would be OK if I could cash it in for a lump sum but it's not allowed, I can only take 25% tax free and the rest I must take monthly which isn't great and I will have to live for at least another ten years to recover all of it. I don't know how much it would cost for a 20 year old each week working up 70 but it's probably waaay too much for anyone on a minimum wage and that means maybe half the workforce over the last 25 years who will have next to nothing to live on in retirement. Just like the NHS, without more money it can't survive in it's present form; hence the move to private health care also unaffordable for many. I think the government was at least slightly right when it stated that we would all have to get used to the Idea of higher costs of living and lower standards which is now self evident.
Can you not transfer your remaining pension pot to a private scheme and use drawdown?
At 4minutes you said "nearly everyone gets a pension" but I thought if you work part time then you get nothing! Or a stay at home wife gets only the first 11 years contribution out of 35.
Doh and at 10minutes you mention this flaw that people don't understand until they're 70
I am a disabled pensioner and cannot manage the high cost of living.
What about pension for the boat people?
You mean the young people who will work and pay for pensioners state pension? Europe is ageing. That's why, despite the rhetoric, immigration is so high.
We worked from age 15 to age 66 and paid our National Insurance that we were told would pay for our State Pension. My question is this, why was that money not invested to pay for the State Pension?We were never paid enough to purchase a private pension. I do feel sorry for our young they have very little chance of putting money into a private pension. Just like we couldn’t afford it. I can’t understand why nobody in Government understands this? I don’t know any at the bottom who have huge pensions.
Immigration is to high because the Government did nothing to stop them. They paid a fortune to France to help stop this and that’s not working. Give them nothing like people born in Britain get’s. Spending £8million a day on housing Migrants is obscene, considering our veterans and homeless are ignored and forced to live on the street’s. Attacking Pensioners is unfair so is the vilification of the sick and disabled. Look at the state of our roads and infrastructures yet money can always be found for wars and other countries. We need to start taking care of Britain and the British people. This Government is the worst we have ever had to suffer under.
@@user-Tortured-soulcan you imagine if they invested your pension portion of NI in the stock market for fifty years - we would be happy bunnies
Governments will spend it on the military, buying guns and bombs
And weapons that empower themselves
Anything that flies into pieces is rubbish
I foolishly worked an extra year ( because I wanted to! ) as a result I gained an extra £12 on top of my state pension only to find it didn’t increase wit inflation and now it’s taxed. The private pension system got the death nell when the government taxed the dividends on pension funds Employers are now no interested because of cost long after members have left the company
the triple lock needs to go, as you said it's done its job, we need to go based on inflation
What about tax and national insurance payments paid from wages, what happens to that who benefit from that ???the very RICH in their pockets???
Paul Johnson sounds like Alan Partridge.
you could not find anyone better than a baroness to talk abut state pensione.... really. really.
You might find it useful to read a bit of her background. I suspect that you believe she is merely an upper class idiot with a title. In fact there are few better and she is a dedicated and tireless campaigner for pensioners.
OMG! cut cut older people money to pay all gov.people wage
They're right, pensions will get simpler over time, meaning you ain't getting one. The aim of future Governments will gradually reduce who quality over time. In 30-40 years time its your responsibility to make your own provisions for old age. The people who can't make such provisions will be assessed by a means test, meaning if you have property, own a vehicle, savings, investments or inheritance, you'll probably won't qualify or receive a much reduced rate.
Yeah I agree . The Governments want to take as much money in taxes as possible & give you diddly back . Dont have a private pension. You will be screwed out of your state pension .
Yeah I agree This is why Gen Z ain't working. Why work & build wealth for 40 plus years to lose it all retirement if you can do nothing & be guaranteed a state pension ?
The rules when you start work should be the same rules when you retire . How have we let the government get away with this the French wouldnt let this happen
Its already around 45 years NI contributions for so many of us who had opted out pension schemes, something we werent informed about at the time, spent a lifetime paying into this only to be told as approaching retirement after 2016 that 35 years NI wasnt enough by a long way! Such theft
Pay your NI contributions and get a pension, not rocket science. However, successive governments plundered the funds and that is the dealer issue.
😢 im not going to listen to a Al robot yell me anything 😡 about my pension its fake