Younger people and their thoughts about working

One thing I like about not relying on any government pensions or assistance whatsoever is that I don’t have to hang around those dingy offices with supercilious creeps deciding my future. Worth the unfairness.

Doodledog Pensions in the future are going to be worse not better. 75% of the countries in the world now have birthrates at replacement level or below and the number of countries with below replacement rate birth rates increases every year. At the same time longevity is increasing. By the end of the century workd population will be on a downward slope.

Our children, grandchildren and beyond will have to pay more and more taxes to support the burgeoning number of pensioners from a smaller amd smaller base of workig age people.

If we want bette pensions we must first provide cheaper homes and provide free childcare, so that those of child bearing age will be encouraged to have more children.

Only if the system of paying for the generation before stays in place. There are other ways of doing things, which should have been investigated long before now, as population trends are well known. It's almost as though the government wanted people to continue working into their dotage.🤔

I am sorry Doodlebug I can see no alternative. Even if you build up an enrmous invested fund, the income anf investments of that fund will be dependent on the smaller pool of younger people genrating the growth in funds and necessary income to pay out.

Even though people would be paying in through their lives? I'm not going to argue, as I am no economist, and I know that you are , but there would surely be growth in savings that people accrued during a lifetime of work, particularly if governments added to it?

Apologies for all the typos in the above post. Even worse than usual.

May I just mention Equitable Life there? In return for contracting out, the government made payments to investors’ pension pots.

nanna8

One thing I like about not relying on any government pensions or assistance whatsoever is that I don’t have to hang around those dingy offices with supercilious creeps deciding my future. Worth the unfairness.

Be thankful that you don’t have to. Millions do 😥

Doodledog Money placed under the mattress does not grow To grow, the money must be invested in various forms in assets that will grow and that means interest bearing bonds, like government bonds with interest paid out of government funds that all come from taxing assets people have - insurance, VAT, Income tax, or investment in companies making and selling things - and the people making and selling to sustain these investments, will, when you retire, mean younger people, of whom there will be far fewer.

It could be that if we have a smaller population that the economy is also smaller and the burden of providing a full income for older people will be too much. As well as having to wait longer for pensions, it could also be necessary to reduce them.

We do not want pogroms where bands of young people go round killing old people because providing their pensions is such a millstone round their necks.

I would predict that if the pension age increases, average life expectancy won’t - there has to be a relationship between the two.

Casdon, We cannot tell what medical advances may come out in future years that enable people to live longer and healthier, even though they work to an older age.

I envisage a system where people in work with jobs, like physical labour, that become impossible with age or ill health will have a flexible retirement age, plus retraining for jobs within their capabilities.

I hope for the sake of all our children that you’re right Monica, but I don’t think that’s how it will be. There will be medical advances, hopefully there will be cures for illnesses like cancer, but our bodies are programmed to wear out, and that isn’t going to change.
I also can’t envisage jobs for people who are no longer able to do physical work, because many routine jobs will be automated, done by robots. I even saw a very efficient robot waitress in a cafe the other day. Realistically the retirement age is unlikely to rise above 70.

Maybe governments will have to come up with more creative way to generate income than taxing prople to the point where it takes away any incentive to work. Nowadays we have many highly skilled people like consultants gold part time or using salary sacrifice and various other mechanisms because they begrudge working for the tax man.

I think they will, biglouis. The days when people will be able to opt out of contributing to society as a whole will have to end, if we want to have things like education, roads, police and so on to continue. There will always be some with more than others, and personally, I think that's ok, or there will be corruption and stagnation, but of we (as a society) want to support the sick, old, young and disabled, we can't continue to have large groups of people who opt out of contributing.

How that will happen will depend on what kind of governments people vote for, but I can't see an alternative. If people only contribute to the support of their own families we will go back to workhouses and widespread hunger and lawlessness.

Without trying to be funny, I think my state retirement age is... 70? 71?

Due to a long career break for children, and a lot of time on "temporary" (but neverending) contracts that didn't allow me into pension schemes, I think I have... six or seven years' worth of pension contributions. And I've passed forty. It's an awful long climb from here.

I also have a couple manageable but long term health conditions. In all honesty, I don't know that I will live long enough to draw any pension I save up.

I understand life expectancy for my generation and the one below us is falling quite significantly compared to our parents' generation. I definitely know my peers (and younger) are very pessimistic about reaching retirement and also are struggling very badly to save up for retirement at all, let alone save up enough (which is a great deal more saving than the vast majority of people realise).

muffinthemoo time spent at home looking after children counts towards a State pension. Honestly so it should.

ronib

muffinthemoo time spent at home looking after children counts towards a State pension. Honestly so it should.

The changes to how child benefit can be claimed if one earner (usually the Father) earns above a certain amount means lots of Mothers who have had to stay at home to look after children (some who will be ill or disabled/sen) means their contributions haven’t been automatically paid and iirc the government have also removed the option to top up NI contributions too (correct mr if I’m wrong but I am sure this was covered on the Martin Lewis money show)

JaneJudgeNic can be protected even if not paid child benefits. I believe it requires a tick on a form to not claim child benefits but to remain eligible for the state covering nics. Any other option would be an outrage.

biglouis Nowadays we have many highly skilled people like consultants gold part time or using salary sacrifice and various other mechanisms because they begrudge working for the tax man.

I agree about people taking salary sacrifice, but I am not sure about the reason you give. DD sacrificed salary for extra holiday entitlement. Tax did not figure in her calculation, but the opportunity to have extra leave to follow her own interests did. It seems many people she worked with did the same - and for the same reasons.

These days people are making work/life balance decisions and, of course, are earning enough money to be able to afford to do so.

Something to remember, when on GN so many people assume that everyone is on below average salaries and living below the breadline.

I do not deny the poverty in this country, there are many people living on unacceptably low incomes, but there are actually far more people on comfortable salaries and in good jobs, so much so that they can afford to sacrifice income for more time off.

I definitely know my peers (and younger) are very pessimistic about reaching retirement and also are struggling very badly to save up for retirement at all, let alone save up enough (which is a great deal more saving than the vast majority of people realise).
muffinthemoo

I don't remember having any savings when we were your age and had young children. I worked evenings and didn't get a stamp paid but did get HRP. In addition, we had two endowment mortgages, both of which failed to pay off but at least by that time two of the DC had left home and we were both working full-time.
You can check to see if your NI contribution is being paid and how many years you have (The Government Gateway website).

Perhaps you will be able to return to work before too long and pay a full stamp and join a works pension scheme too.

ronib

*JaneJudge*Nic can be protected even if not paid child benefits. I believe it requires a tick on a form to not claim child benefits but to remain eligible for the state covering nics. Any other option would be an outrage.

I just looked it up ronib, and JaneJudge is correct, so it’s an outrage. The government is apparently planning legislation to close the loophole.
stca.co.uk/news/national-insurance-credit-scheme-will-be-introduced-to-tackle-child-benefit-gaps/

Casdon

ronib

JaneJudgeNic can be protected even if not paid child benefits. I believe it requires a tick on a form to not claim child benefits but to remain eligible for the state covering nics. Any other option would be an outrage.

I just looked it up ronib, and JaneJudge is correct, so it’s an outrage. The government is apparently planning legislation to close the loophole.
stca.co.uk/news/national-insurance-credit-scheme-will-be-introduced-to-tackle-child-benefit-gaps/

This is confusing.

Does it mean that, if one partner earns over £50,000, Child Benefit will not be paid to the partner who is staying at home to look after a family? That would usually be the mother (I realise not always).

It does not necessarily follow, either, that those two parents will still be together at retirement age so the stay-at-home parent will have a gap in their own NI contributions which will affect the State Pension.

Women will be at a disadvantage again.

Child benefit is still paid but is clawed back through a tax adjustment called the High Income Child Benefit Charge. HICBC.

Before 6 April 2024, child benefit was effectively withdrawn at a rate of 1% for each £100 earned by the higher-income partner over £50,000 a year. Therefore, the benefit is fully withdrawn where income of the higher-income partner reaches £60,000 a year.

From 6 April 2024 that was changed. The charged is now 1% of your Child Benefit for every £200 of income that exceeds £60,000. Therefore, the benefit is fully withdrawn where income of the higher-income partner reaches £80,000 a year.

That change happened as a result of campaigning by Martin Lewis. There will be a review of the situation which currently disadvantages single parents who are high earners e.g if two parents work and each earn up to £60,000 they are not subject to HICBC.

However …

Where the charge applies to a partner, it has consequences for the whole household. The charge reduces the income available to the household, but it can have more subtle and indirect consequences. The most common of these is where, as a household, you decide not to claim child benefit where the charge would apply because there would appear to be no point in doing so. This is especially likely to be the case where your partner has net adjusted income of more than £60,000 (meaning the whole amount of child benefit is clawed back) and would be required to file a self assessment tax return as a direct result of the charge. Many people decide it is not worth this additional administration burden for no financial return.

Not claiming child benefit in this scenario means that you will miss out on National Insurance (NI) credits which are given to child benefit claimants until the child is 12 years old. These can be critical to build entitlement towards a state pension and other benefits, if you do not work or you are not entitled to NI credits on some other basis. It is only possible to backdate child benefit for three months – thus, if you do not claim child benefit and miss out on NI credits as a result, there is no way to claim NI credits retrospectively beyond the three-month period.

www.litrg.org.uk/tax-nic/income-tax/high-income-child-benefit-charge

She's right. Life is too short to work more than you have to. If she has enough to live on then it's fine. Too many people work, plan and save for the future then the future never arrives because they die

My dad died just before retirement age leaving man with plenty of money but he wasn't there with her. They'd saved and planned all their lives for their retirement.

A similar thing happened to a friend. Her husband was diagnosed with lung cancer a month after he'd retired and died within the year. Again she's got the money but not the man she'd loved for over 40 years.

Do what you want to do now. Don't put it off as no one knows what the future holds.

Germanshepherdsmum

What does she do with the rest of her time? I’m amazed that she can afford to live alone on a part time wage, and can’t imagine how she can enjoy any sort of life with what’s left over after the bills are paid.

Yes, I agree with you.
I suppose that if you don't have close family to support you could afford to do this, but I don't imagine that she would feel the same if she had a job she enjoyed.