What do you consider a low income in retirement?

I think most of us are aware that there is no 'pot', Hetty, but it's not unreasonable to expect the scheme to be managed so that those who pay in get out, whether at the time or 4o years later?

People have the idea that they're paying (along with their employers) into a 'fund' - then withdrawing their state pension from that. It doesn't exist, though, in reality, the younger generation/s pay the pensions of the older ones. We come unstuck when there aren't enough working youngsters - or too many people live too long. Contributions have to rise accordingly.

Nobody particularly likes being 'on benefits' either - but take a look at your pension increase letter - yes, it's a benefit!

They may. Probably not though. The odds are much higher that a randomly chosen person will be on minimum wage than in the top 1%

In January 2023 the top one percent of earners in the United Kingdom received an average pay of 14,622 British pounds per month, compared with the bottom 10 percent of earners who earned 719 pounds.

www.statista.com/statistics/1224844/monthly-pay-of-employees-uk/

People aren’t working for others. They are compelled to pay taxes which will benefit them and others. They may be working much longer hours (for no additional pay) and under much greater stress than the person on minimum wage, who is contributing little or nothing in taxes but will be entitled to the same benefits.

Not everyone is paid enough to save though, and they are the people I'm talking about. The better paid will always be ok.

Up to a point, I think that creates incentive, but hard work is not related to salary - not at all. As I said in a PP, someone just has to turn up to the HoL to be paid hundreds of pounds, which would take a worker on minimum wage days to earn by working, and then there is the subsidised bar, the restaurant and the expenses.

Also, aren't people who are working and paying tax doing so for others? Without a system of contributions, we would have no civic society at all, no health service, no roads, libraries or education. Yes, there are those who can pay to access those things, but it would be different if there were no state trained doctors, teachers and engineers - even relatively well-off people would struggle.

I suppose we could have gated societies with the privileged within and the service workers outside, in the manner of The Time Machine, but look how that ended up.

Doodledog

I agree, and they both pay into occupational pensions as well as pay NI, which they would have done whether they expected state pensions or not. It's a shame that young people don't think they will get pensions, IMO, as it shows how far the country has sunk in my lifetime alone, but it is probably realistic if the Tories stay in power.

The question of what to do about those who don't buy their own pensions remains though, and will be more acute in the absence of a state scheme. And about whether workers should continue to pay NI if they are getting less and less back and will be in the same boat as if they hadn't contributed.

Well, people aren't equal, those better paid will be able to save in a private pension. If everyone ended up with the exact same income, no savings, incentive would disappear overnight. People don't work their socks off for others, rather for their own family, do they?

I agree, and they both pay into occupational pensions as well as pay NI, which they would have done whether they expected state pensions or not. It's a shame that young people don't think they will get pensions, IMO, as it shows how far the country has sunk in my lifetime alone, but it is probably realistic if the Tories stay in power.

The question of what to do about those who don't buy their own pensions remains though, and will be more acute in the absence of a state scheme. And about whether workers should continue to pay NI if they are getting less and less back and will be in the same boat as if they hadn't contributed.

Doodledog I have heard several people say that there won't be a pension when they get older. Neither of my children (29 and 31) expect to get one.

Count on that, imo. Our younger 2 daughters and our working GC (40s-20s) totally agree, are saving as much as possible for the eventuality.

Doodledog

Norah

Doodledog There is house insurance that pays in the event of loss, but also life insurance which pays out on maturity - that's how I see the pension scheme (the latter), and how many others see it, I think.

It's not a stopgap payment to get you back on your feet, like other benefits - it is an income for when you are older and no longer able to work, or when you have worked for a pre-defined number of years.

Agreed. Good way to define. It's decidedly a benefit.

My point, as I thought was quite clear, is that I don't agree that it's a benefit . The two things are distinct, as are the insurance policy against fire and theft and the endowment-style life policy in my example.

The disadvantage of pensions being thought of as benefits are as outlined above. They may be defined as benefits by the government, but persuading people to see pensioners as benefit claimants rather than policy beneficiaries is clearly intended as a nail in their coffin. People are already being softened up to accept the demise of the state pension, I think. I have heard several people say that there won't be a pension when they get older. Neither of my children (29 and 31) expect to get one, although they both expect to work until they are a lot older than their parents were when we retired, and they have both worked since they left school to become students - possibly before in my daughter's case. She worked in a newsagents after school and at weekends from the age of 16 - do you pay NI at that age? If so, she will have done. Their political views mean that they will fight for a fair deal but prepare for not getting one, in case the Tories stay in power.

At their age, I was expecting to retire with a full a state pension aged 60 - a year before their father, who thought he'd go at 65. We'd have had 94 years of NI contributions between us, and both paid extra into occupational schemes so that we'd have a good standard of living.

Things have been allowed to slide a long way since then. Realising that our time together in retirement would be shortened if we waited until I was 66, I left at 57, a couple of years after Mr D left at 60. He has his state pension now, and fortunately has decent private ones, as I lost three years of mine, on top of the ones when I wasn't allowed to contribute and the six years of state pension lost by so many. We are comfortable, and I realise that many are a lot worse off, but our plans took a nosedive for reasons entirely beyond our control, which after a lifetime of 'doing the right thing' is galling. I really hope the trajectory doesn't continue downwards for the upcoming generations, but it will unless they wake up to what's happening.

Calling pensions benefits might be a good idea if it helped people to see that many people rely on more than just their basic salary to live on. Why not include expense accounts and tax-deductible allowances, too? They make up the salaries of a significant number of people in the same way as universal credit, so we could start calling people with company cars and subsidised canteens benefit claimants.

Would 'We are all claimants now' pull in as many supporters as 'We are all middle class now' did, I wonder? 😈

I misunderstood. Sorry.

Norah

Doodledog There is house insurance that pays in the event of loss, but also life insurance which pays out on maturity - that's how I see the pension scheme (the latter), and how many others see it, I think.

It's not a stopgap payment to get you back on your feet, like other benefits - it is an income for when you are older and no longer able to work, or when you have worked for a pre-defined number of years.

Agreed. Good way to define. It's decidedly a benefit.

My point, as I thought was quite clear, is that I don't agree that it's a benefit . The two things are distinct, as are the insurance policy against fire and theft and the endowment-style life policy in my example.

The disadvantage of pensions being thought of as benefits are as outlined above. They may be defined as benefits by the government, but persuading people to see pensioners as benefit claimants rather than policy beneficiaries is clearly intended as a nail in their coffin. People are already being softened up to accept the demise of the state pension, I think. I have heard several people say that there won't be a pension when they get older. Neither of my children (29 and 31) expect to get one, although they both expect to work until they are a lot older than their parents were when we retired, and they have both worked since they left school to become students - possibly before in my daughter's case. She worked in a newsagents after school and at weekends from the age of 16 - do you pay NI at that age? If so, she will have done. Their political views mean that they will fight for a fair deal but prepare for not getting one, in case the Tories stay in power.

At their age, I was expecting to retire with a full a state pension aged 60 - a year before their father, who thought he'd go at 65. We'd have had 94 years of NI contributions between us, and both paid extra into occupational schemes so that we'd have a good standard of living.

Things have been allowed to slide a long way since then. Realising that our time together in retirement would be shortened if we waited until I was 66, I left at 57, a couple of years after Mr D left at 60. He has his state pension now, and fortunately has decent private ones, as I lost three years of mine, on top of the ones when I wasn't allowed to contribute and the six years of state pension lost by so many. We are comfortable, and I realise that many are a lot worse off, but our plans took a nosedive for reasons entirely beyond our control, which after a lifetime of 'doing the right thing' is galling. I really hope the trajectory doesn't continue downwards for the upcoming generations, but it will unless they wake up to what's happening.

Calling pensions benefits might be a good idea if it helped people to see that many people rely on more than just their basic salary to live on. Why not include expense accounts and tax-deductible allowances, too? They make up the salaries of a significant number of people in the same way as universal credit, so we could start calling people with company cars and subsidised canteens benefit claimants.

Would 'We are all claimants now' pull in as many supporters as 'We are all middle class now' did, I wonder? 😈

HousePlantQueen

Nobody has suggested a return to 90%, Norah, it was just part of my reply to GSM's suggestion that high taxes (to pay for pensions among other things) would mean some tax payers choosing to leave the country rather than contribute.

Of course not aloud, but some would very much like to raise rates on the "undeserving rich" - or that seems a theme to me.

Nobody has suggested a return to 90%, Norah, it was just part of my reply to GSM's suggestion that high taxes (to pay for pensions among other things) would mean some tax payers choosing to leave the country rather than contribute.

HousePlantQueen

Germanshepherdsmum

Very true Calli. My point was not that I would be a loss to the legal profession here but that as a partner in a big firm, practising in a niche area that requires years of experience, and earning accordingly, my taxes would be lost to the country. If anyone thinks any foreign lawyer can just step into a job in this country they’re much mistaken.

Good point GSM, but there will also be many lawyers, practising in a niche area who are happy to stay in the UK and pay their taxes to the benefit of society, your replacement didn't have to be a migrant.

I don't think any of us, however, want to return to the days of the Wilson administration with some finding taxation being applied at 90% rates; it is better to get 40 or 50% of something, rather than 90% of nothing.

We've no need to return to ridiculous 90% - 45% is a plenty, IMO.

Isn’t it just.

Germanshepherdsmum

Very true Calli. My point was not that I would be a loss to the legal profession here but that as a partner in a big firm, practising in a niche area that requires years of experience, and earning accordingly, my taxes would be lost to the country. If anyone thinks any foreign lawyer can just step into a job in this country they’re much mistaken.

Good point GSM, but there will also be many lawyers, practising in a niche area who are happy to stay in the UK and pay their taxes to the benefit of society, your replacement didn't have to be a migrant.

I don't think any of us, however, want to return to the days of the Wilson administration with some finding taxation being applied at 90% rates; it is better to get 40 or 50% of something, rather than 90% of nothing.

Very true Calli. My point was not that I would be a loss to the legal profession here but that as a partner in a big firm, practising in a niche area that requires years of experience, and earning accordingly, my taxes would be lost to the country. If anyone thinks any foreign lawyer can just step into a job in this country they’re much mistaken.

I understand that Callistemon but it s perfectly possible for an immigrant to do that if they arrive with the means our local hospital has people from 50 different countries who must have all done the extra exams etc

BlueBelle

GMS says
So, Doodledog, if I as a high earning lawyer decided to take myself off to Jersey to escape your punitive taxes, which would have been an entirely feasible move when I was working, you would get an immigrant to take my place? I don’t think so

Why do you think that there are no solicitors, lawyers doctors dentists and other professionals of your standard who are immigrants (legal and illegal) I m sure we could find one to take your place GSM

Not so easy, Bluebelle, as foreign lawyers wishing to work here would need to take a course and, I think, two sets of examinations before they could practise.

Teeth and bodies are much the same the world over but the law isn't - although my niece had to take a Masters and an English examination before she could work as a qualified nurse here in the UK, even though she already had a degree and was a native English speaker.

GMS says
So, Doodledog, if I as a high earning lawyer decided to take myself off to Jersey to escape your punitive taxes, which would have been an entirely feasible move when I was working, you would get an immigrant to take my place? I don’t think so

Why do you think that there are no solicitors, lawyers doctors dentists and other professionals of your standard who are immigrants (legal and illegal) I m sure we could find one to take your place GSM

Well I definitely fit in the minimum band
Think I m very different from most on here but I don’t qualify for anything as I made the mistake of putting a small amount of savings in a pot ‘for my old age’ I should take it out and put it under the mattress but then my conscience would hound me
So lose/ lose eh

Doodledog There is house insurance that pays in the event of loss, but also life insurance which pays out on maturity - that's how I see the pension scheme (the latter), and how many others see it, I think.

It's not a stopgap payment to get you back on your feet, like other benefits - it is an income for when you are older and no longer able to work, or when you have worked for a pre-defined number of years.

Agreed. Good way to define. It's decidedly a benefit.

There is house insurance that pays in the event of loss, but also life insurance which pays out on maturity - that's how I see the pension scheme (the latter), and how many others see it, I think.

It's not a stopgap payment to get you back on your feet, like other benefits - it is an income for when you are older and no longer able to work, or when you have worked for a pre-defined number of years.

It may be that we need to rethink the parameters of who gets a pension and for how long, but IMO it would be most unreasonable to exclude anyone who has been paying in for ten years or more from what they were expecting, which is a non means-tested and index-linked payment for life. If (and it's a big if) that is unaffordable for the future, we need to find ways to pay for it, and give people plenty of time to make other arrangements before cutting them off.

Do we want to go back to old people going to workhouses as they have no money for rent? Do we want to see insurance schemes springing up, as in Victorian times, or do we want to keep a state-run scheme but increase contributions? If we do increase contributions, should they only come from those who work, or should anyone expecting a pension have to pay? If so, how will those who don't want to work find the money? And what happens if someone doesn't pay and then finds themselves old and poor? At what age should we start asking new payees to join a new system?

These are all big questions, but maybe it's time for an adult conversation.

I agree with your definition, DaisyAnne, but that doesn't make it a benefit.

I think 'benefit' is old-fashioned and out of date, but it is applied generally as in "the benefits of our life-insurance policy", Doodledog

I wondered if there was a synonym we might prefer, but I can't see one.

The definition is: A benefit is a pay-out or another form of compensation or reimbursement that an insurance company owes to a policyholder when the policyholder experiences a covered loss. Whether or not a loss is covered is determined by the terms of the specific policy that the policyholder bought from the insurer.

Taking the last sentence, I think we can see the issue. The terms of our National Insurance are not specific, or if they are, we are not involved in changes. Are we just feeling unrepresented by our government? With only around 80 seats deciding our future, I would guess we are and perhaps more people are beginning to object to the fact that we are.

It doesn’t matter what name you give it, it all comes to us via government funding and they make and change the rules.

I agree with your definition, DaisyAnne, but that doesn't make it a benefit. I know that the government is calling it that, and those who want to see it means-tested or reduced are enthusiastic about insisting that it is indeed a benefit. I think that most people see benefits as payments made when life doesn't work out as planned - like house insurance. A pension is something we get when it does work out as planned - like an endowment policy.

I don't care what it's called - what I care about is the way in which for the first time in my life it appears to be under threat. Most of us have spent at least our adult lives with the expectation of a pension (and other things too numerous for this thread), but we are being softened up for having them removed, with no time to make other plans.

A 'benefit' can be part of a shake-up, means-tested, made conditional, phased out or even withdrawn, and if we all start seeing the pension as a benefit like others (and we have already been encouraged to see the others as being given to scroungers and the feckless) we are more likely to accept that when it happens. The young have already been told that older people had life handed to us on a plate, and this will become an extension of that. Of course they won't look ahead to the fact that they will one day be old - the young aren't programmed that way - and it will be relatively easy to erode or reduce the pension until it is a means-tested allowance for those with no other means of support.

First they came for the long-term sick. . .