State pension to run out of money in 2035. Current under 50s will have to pay much more tax soon if they want it when they retire.

[azal777]

Only my observations and experiences but we are all naturally assuming we will make it to pension age, medicine may indeed be advancing but so are the needs of ever increasing numbers in duebetes, bowel and Cancer wards at hospitals.

one national newspaper front headline today was regarding a hospital in oxford who can no longer service the needs of cancer patients and are having to eek out both the treatments and schedules so as to cope. 

Knowing plenty of friends at my local hospital they have seen numbers increasing by 25% in these wards over last 5 years and amongst cancer patients the scary thing has been the ages, it’s no,longer an illness confined to the OAPS, it’s hitting 30and 40 yo too.

i have my doubts whether a significant portion of future OAPS will ever actually have to worry about this issue, it would be foolish not to plan for retirement of course but with resources disappearing and nursing posts going unfilled at a time when demand is getting ever greater, from what I’m hearing, I’m beginning to wonder.

[spyguy]

1 hour ago, azal777 said:

Only my observations and experiences but we are all naturally assuming we will make it to pension age, medicine may indeed be advancing but so are the needs of ever increasing numbers in duebetes, bowel and Cancer wards at hospitals.

one national newspaper front headline today was regarding a hospital in oxford who can no longer service the needs of cancer patients and are having to eek out both the treatments and schedules so as to cope. 

Knowing plenty of friends at my local hospital they have seen numbers increasing by 25% in these wards over last 5 years and amongst cancer patients the scary thing has been the ages, it’s no,longer an illness confined to the OAPS, it’s hitting 30and 40 yo too.

i have my doubts whether a significant portion of future OAPS will ever actually have to worry about this issue, it would be foolish not to plan for retirement of course but with resources disappearing and nursing posts going unfilled at a time when demand is getting ever greater, from what I’m hearing, I’m beginning to wonder.

No.

If you live past 2 then your expected life span is pretty long - bar car crashes.

[PopGun]

11 hours ago, nightowl said:

Whenever I hear stuff about state pensions being unaffordable etc my BS radar twitches.

Essentially the retired group receive money from the efforts of the currently economic productive group. If the ratio of retired to productive changes that either creates pressure on state pensions or relieves it depending on which way the ratio changes.

Demographic dips and troughs will change this ratio one way then back and thus its not entirely about the narrative of living longer.

When boomers retire the ratio will be a problem but when GenX retires the ratio will swing the otherway et etc...if anthing the over 55s should work to 67/68 and the 35 to 55's work to 63 (or something like that).

So who is making all this noise about state pensions while ignoring the above?  Surely it cant be the financial sector wanting more people to pay into their industry can it ? ummm.

 

Very good points. 

Another level of alarmism completely ignoring demographics. When the boomers die off, pensions, nhs etc suddenly becomes affordable again...

Its mainly why everyone else is in the same boat. Too many people got squeezed out st the same time. Gen xer’s Ys and millennials have another mini baby boom behind then to fund their dotage. Unless the game changes of course..

Edited January 10, 2018 by PopGun

[Errol]

4 hours ago, Noallegiance said:

I don't think anyone needs any more John Wick Errol.

I was aghast that number 2 was made. And I use 'number 2' intentionally.

It was a really good film. The first was excellent and the 2nd good as well. I'm looking forward to the third one. Great films and better than most stuff made these days.

[Errol]

3 hours ago, azal777 said:

Only my observations and experiences but we are all naturally assuming we will make it to pension age, medicine may indeed be advancing but so are the needs of ever increasing numbers in duebetes, bowel and Cancer wards at hospitals.

one national newspaper front headline today was regarding a hospital in oxford who can no longer service the needs of cancer patients and are having to eek out both the treatments and schedules so as to cope. 

Knowing plenty of friends at my local hospital they have seen numbers increasing by 25% in these wards over last 5 years and amongst cancer patients the scary thing has been the ages, it’s no,longer an illness confined to the OAPS, it’s hitting 30and 40 yo too.

i have my doubts whether a significant portion of future OAPS will ever actually have to worry about this issue, it would be foolish not to plan for retirement of course but with resources disappearing and nursing posts going unfilled at a time when demand is getting ever greater, from what I’m hearing, I’m beginning to wonder.

Wifi and mobile signals causing cancer.

[scb]

9 hours ago, happyguy said:

The state pension is nothing i is £8,200 a year.  No one can live on that.  Anyone who is not saving at least 10% of their salary from the time they start work will have a poor old age.

Its £683 a month. Which is more than someone on minimum wage gets by the time they have paid rent, council tax, tv license and the bus to work. So if you're living on minimum wage now, the state pension is going to seem like you've won the lottery.

[Fletcher]

16 hours ago, spyguy said:

Better off getting a time machine and going back to 1997 and shooting Brown.

It really is all down to him.

Until Brown got going in 2002ish, the UK's private sector pensions were OK, the banking system needed somework and the pensions and benefits needed vast reform.

From 2000-2009ish Brown spent about 20 years money.

He took ~50% of families with kids out of work and put them on very expensive beneits.

He took pensioners and stuffed them with gold - dont beleive the ****** on lowest pension. There are so many supplementary benefits that UK pensioners do very well.

And then he blew up the UK ifnaincial sector, which he allowed to get to about 5 x the size of the economy.

And he did that all on your everyone under 50s future benefits. Jus to get himself elected in 2010 ...

This.

Except he should be done the old-fashioned way, hanged, drawn and quartered with his head on a spike. 

And Blair, for putting the f*cker into nr 11 in the first place. 

[Tapori]

Meanwhile:

http://www.dailymail.co.uk/news/article-5256733/Over-55s-released-3bn-equity-homes-year.html

Over-55s released record £3bn of equity from their homes last year in sign baby boomers are using their properties to pay for retirement

• The amount that over-55s borrowed against their properties rose by 40 per cent
• Nearly two-thirds of 'equity releases' were used to pay for home improvements
• More than a fifth were retirees struggling to pay off interest-only mortgages 

[Noallegiance]

2 hours ago, Tapori said:

Meanwhile:

http://www.dailymail.co.uk/news/article-5256733/Over-55s-released-3bn-equity-homes-year.html

Over-55s released record £3bn of equity from their homes last year in sign baby boomers are using their properties to pay for retirement

• The amount that over-55s borrowed against their properties rose by 40 per cent
• Nearly two-thirds of 'equity releases' were used to pay for home improvements
• More than a fifth were retirees struggling to pay off interest-only mortgages 

And/or:

https://www.nationwide.co.uk/products/mortgages/family-deposit-mortgage

[Tapori]

2 hours ago, Noallegiance said:

And/or:

https://www.nationwide.co.uk/products/mortgages/family-deposit-mortgage

No end to this madness. The absolute state of it all.

[winkie]

11 hours ago, azal777 said:

Only my observations and experiences but we are all naturally assuming we will make it to pension age, medicine may indeed be advancing but so are the needs of ever increasing numbers in duebetes, bowel and Cancer wards at hospitals.

one national newspaper front headline today was regarding a hospital in oxford who can no longer service the needs of cancer patients and are having to eek out both the treatments and schedules so as to cope. 

Knowing plenty of friends at my local hospital they have seen numbers increasing by 25% in these wards over last 5 years and amongst cancer patients the scary thing has been the ages, it’s no,longer an illness confined to the OAPS, it’s hitting 30and 40 yo too.

i have my doubts whether a significant portion of future OAPS will ever actually have to worry about this issue, it would be foolish not to plan for retirement of course but with resources disappearing and nursing posts going unfilled at a time when demand is getting ever greater, from what I’m hearing, I’m beginning to wonder.

Is it logical to think there is a link between on-going stress and cancer?

https://www.nhs.uk/news/cancer/anxiety-and-depression-linked-to-increased-cancer-death-risk/

[Bsmf]

Many young people would love 8k a year after housing costs, free bus travel and all those other perks.

And that's if you never saved a penny for retirement.

I earn similar as I'm not paying into the current retire for 30 years and work 16 hours a week system that disadvantages me.

[scottbeard]

12 hours ago, azal777 said:

Only my observations and experiences but we are all naturally assuming we will make it to pension age, medicine may indeed be advancing but so are the needs of ever increasing numbers in duebetes, bowel and Cancer wards at hospitals
...
i have my doubts whether a significant portion of future OAPS will ever actually have to worry about this issue, it would be foolish not to plan for retirement of course but with resources disappearing and nursing posts going unfilled at a time when demand is getting ever greater, from what I’m hearing, I’m beginning to wonder.

Most of us will be right.  Around 95% of 21-year-olds currently survive to age 65. 

Even if it dropped back to 1990s levels of 90% the vast, vast majority of people will need a pension.

The best way to visualise it I always think is to imagine your class of 30 at school.  If it followed average mortality you'd probably see maybe one of those people die young (most probably a car accident), two or three dying in their 40s/50s (cancer probably the most common) and the other 26-27 living into their late 60s and beyond.

[VeryMeanReversion]

A couple of my favourite graphs below.

You can see that as the the headline income tax rates fell over the years,  NI just went up to compensate.  Of course, BTL'rs and pensioners don't pay NI so their marginal rate stays in the 0-20% range. (Section 24 will move some BTL'rs up to 40% income tax but still no NI costs)

Workers get the 32-60% range, particularly painful if then paying a large proportion of net income as rent to someone in the 0-20% marginal range.

This EMTR graph actually understates marginal rate since it doesn't include employer NI which is effectively another worker tax avoidable via salary sacrifice.

Personally, I salary sacrifice as much as I possibly can with the aim of living off the income (NI-free) asap.  The tax system is simply encouraging me to become a pensioner as soon as possible.

[kzb]

15 hours ago, ebull said:

One of the things that surprises me on this forum is that no-one much notices that BTL income is also NI-exempt.

Employee on 40k, roughly 10k tax/NI free and 30% on 30K = 9K tax.

BTLer with 40k profit, roughly 10k tax free and 20% on 30K = 6K tax.  No work clothes or commute costs, no 8 or even 7am start etc etc.

When BTLer is broke at 70 he.ll get just as much pension credit top up whatever it's called and HB as the employee.

Merge tax+NI is a no brainer and probably goes a long way to fixing the deficit and putting all the nations finances including pensions back in order.

Not gonna happen without riots though [IMO].

That is an argument for tackling the thorny issue of NICs and the self-employed -not necessarily merging tax and NI.

I DO agree that a self-employed landlord should be paying NI.

[kzb]

10 hours ago, scb said:

Its £683 a month. Which is more than someone on minimum wage gets by the time they have paid rent, council tax, tv license and the bus to work. So if you're living on minimum wage now, the state pension is going to seem like you've won the lottery.

Where does it say you are exempt from Council Tax as a pensioner?  Also no rent?  The only valid points are TV licence (over 75s only) and bus fares.

Also you are leaving out that someone on minimum wage will almost certainly qualify for housing benefit and working tax credit.

[RentingForever]

8 hours ago, Tapori said:

Meanwhile:

http://www.dailymail.co.uk/news/article-5256733/Over-55s-released-3bn-equity-homes-year.html

Over-55s released record £3bn of equity from their homes last year in sign baby boomers are using their properties to pay for retirement

• The amount that over-55s borrowed against their properties rose by 40 per cent
• Nearly two-thirds of 'equity releases' were used to pay for home improvements
• More than a fifth were retirees struggling to pay off interest-only mortgages 

"More than a fifth were retirees struggling to pay off interest-only mortgages" is the really scary bit there. 

[kzb]

15 hours ago, azal777 said:

Only my observations and experiences but we are all naturally assuming we will make it to pension age,

An advantage of DC schemes versus DB schemes I have to point out in all fairness. 

A teacher relative died a few years ago.  No kids and not married.  Various relations started getting all excited as to who would get his pension.  Absolutely offended by my arguing they would get nothing -because they are not classed as dependants.  All they could see is the amount he had paid in during his career.

Of course no-one got a bean.  If you die young with no dependants in a DB scheme no-one gets anything.  With a DC scheme they are supposed to look round hard for someone to pay it to.

[Freki]

2 hours ago, VeryMeanReversion said:

Personally, I salary sacrifice as much as I possibly can with the aim of living off the income (NI-free) asap.  The tax system is simply encouraging me to become a pensioner as soon as possible.

The rest of your post was very insightful, but being able to salary sacrifice that much is luxury that a renter can hardly afford.

I have to build a deposit (for when the time is right) and can't push 1k a month into my retirement plan.

[kzb]

16 hours ago, Pitchfork said:

 

Were do you source your figures? From the ONS, for 2017 pensions are the biggest by a large margin:

42% Pensions £111bn

18% Family benefits, tax credits etc £46bn

https://visual.ons.gov.uk/welfare-spending/

Or is there something misleading or missing from those figures?

£44 bn Incapacity Benefit

+ £2 bn Unemployment benefit

+ £25 bn Housing Benefit

+ £46 bn Family benefits

=  £117 bn total

The social services budget of £35 bn is apparently split £10 bn for pensioners and the remainder to non-pensioners.

So that makes the totals £111 bn + £10 bn = £121 bn for pensioners and 117 + 25 = £142 bn for non-pensioners.

 

[PopGun]

9 hours ago, fru-gal said:

But how many of them will be paying enough tax/NI to fund the pensions of their elders? If the younger generation can't even afford housing and employment without huge subsidies, then surely it will be the opposite (the older generations paying taxes to subsidise the  younger generations who cannot afford to live without subsidies)? It all comes down to the stupid cost of housing.

Plenty of supply when the die off happens. If you believe it’s supply that’s simply the problem..

[Greg Bowman]

On 10/01/2018 at 1:53 PM, Funn3r said:

I'll say what I always say - the problem does not really exist and there is plenty for everyone. The elite/1%ers/TPTB have grabbed nearly all of the pie leaving us plebs to fight over the scraps.

The more we blame each other "it's the filthy immigrants" , "it's the lazy boomers", "it's the idiotic Brexiters/Remainers" then the more amused they get and recline further into their armchairs with another glass of port.

Every Millenial basher, every boomer basher, every the immigrants are taking my jobs pleader - please cut and paste and make your screen saver - top post 

[Greg Bowman]

On 10/01/2018 at 7:01 PM, Pitchfork said:

 

Were do you source your figures? From the ONS, for 2017 pensions are the biggest by a large margin:

42% Pensions £111bn

18% Family benefits, tax credits etc £46bn

https://visual.ons.gov.uk/welfare-spending/

Or is there something misleading or missing from those figures?

Got a slightly different take recently on state pensions ( although in some cases over generous ) its like being on PAYE as a pensioner a lot of tax is recouped from this pot - the true cost is what’s paid out - minus the tax which I suspect is quite a lot 

contrast that with some reasonable tax planning for a 40% tax payer who will be looking at all the available wrappers ISA’s Sipps and maybe shovelling something into their partners pot to make the use of tax breaks 

I am certainly planning to live a virtually non tax paying life when I retire 

 

[Thorn]

4 minutes ago, Greg Bowman said:

Got a slightly different take recently on state pensions ( although in some cases over generous ) its like being on PAYE as a pensioner a lot of tax is recouped from this pot - the true cost is what’s paid out - minus the tax which I suspect is quite a lot 

contrast that with some reasonable tax planning for a 40% tax payer who will be looking at all the available wrappers ISA’s Sipps and maybe shovelling something into their partners pot to make the use of tax breaks 

I am certainly planning to live a virtually non tax paying life when I retire 

 

Regardless of who blames who for the hopelessness and who’s right or wrong, I don’t think many of the current under 50s will ever use those words “when I retire.”

[Greg Bowman]

13 minutes ago, Thorn said:

Regardless of who blames who for the hopelessness and who’s right or wrong, I don’t think many of the current under 50s will ever use those words “when I retire.”

Buy the book by wish I could afford one and get cracking. There are plenty of opportunities to earn money and as Ling used to say one of our great posters why aren’t our hospitals full of young UK born youngsters just going hell for leather to work and occasionally needing treatment to get back out there - she thought it was paradise on earth ( entrepreneur from China who created a lease car business)

Careers that can generate good level 5 figure  income and have real shortages now 

B2B sales - great sales people always a shortage 

animators

skilled construction workers ( crane driver £100k a year )

Any blue collar trade but especially electrician currently 

I am sure other posters could add more, I think just as many will retire they just will have made better consistently life choices:

earnt more/ saved more/ married well (stable)/ were prepared to retrain as required

Finally my favourite industry IT my primary business - still the Wild West and not a graduate play ground and skill shortages every where but long hours, high pressure and you have to keep reskilling 

Edited January 11, 2018 by Greg Bowman