Work till you're 71! Millennials face longer wait for state pension, experts warn

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The younger generation face working until they reach 71, official forecasters warn.

The state pension age will need to rise by about a year every decade, a report by the Government Actuary’s Department said.

It means those millennials who are aged around 20 will have to work to 71 before being getting the state pension. Those in their 30s must wait till 69.

To cope with an ageing population, the Actuary’s Department also said National Insurance (NI) rates may have to soar to keep the pension pot sustainable. It said the fund would not remain in balance unless NI rates rose by 5 percentage points, adding £1,000 to the average worker’s annual tax bill.

Ministers announced last summer that the state pension age would rise to 68 from 2037 – a decade earlier than originally planned. This change affects people currently around the age of 50.

Ministers have not said what will happen after 2037, and any changes will need to be approved by Parliament.

But raising the age again would be controversial as it would force the young to work longer to fund the pensions of those who are already retired.

Former pensions minister Baroness Altmann said: ‘Difficult decisions will need to be taken to deal with the future increases in state pension costs that are forecast for coming decades.’

The Actuary’s Department said that between 2047 and 2049, the pension age would have to rise to 69, which would affect people aged around 39.

Between 2057 and 2059 the age will have to hit 70, affecting those around 29 and younger. And in the two years from 2068 it will have to increase to 71, affecting those aged around 20. On top of this, taxes would have to rise to ensure the NI Fund is topped up.

The department warned that the 5 percentage point rise on NI which may be required to balance the fund would see payments go up to 17 per cent – equivalent to almost £1,000 a year for the average worker on £28,000.

A spokesman for the Treasury said: ‘We expect the fund to have a surplus for the foreseeable future.’



http://www.dailymail.co.uk/news/article-5318707/Millennials-wait-71-state-pension.html

HoratioTarr wrote:

Raggamuffin wrote:

Is anyone going to remember when they were contracted out though? I doubt it - they probably didn't take much notice.

I contracted out in the late 80s.  I had no clue of the real implications and I remember feeling very pressured to sign.    But...I only stayed with that company for a relatively short time.   I'm lucky because I have a private pension that pays well and is not connected to SERPS.  But God help those who don't have that back up.   The pension that I opted out of SERPS for all those years ago pays fuck all.   So I can only imagine what it must be like for those with no proper pension safety net and/or pensions that haven't performed well.

Future Pension Centre on 0845 3000 168 and it'll send you a statement of NI contributions.

I know I was contracted out, then in again, and out again, and in again. The problem is that on the website it doesn't tell you which years, so you can't work out for yourself how many qualifying years you have - you just have to take their word for it. I presume that "full" years includes the years I was contracted out as I was paying NI, but they're not qualifying years.

22 years in the army, came out as CSM, pension £753.00 a month + old age pension. Earned every Penny of it. But income tax really hurts me !

nicko wrote:22 years in the army,   came out as CSM,    pension £753.00 a month + old age pension.   Earned every Penny of it.    But income tax really hurts me !

Your personal allowance is £11,500. So you're only getting taxed on around £5K?