Is the state pension doomed?

A new report claims thousands of people believe the State Pension will no longer be around by the time they’re old enough to draw it.

Research by investment service Hargreaves Lansdown shows how pessimistic people are about the future of the old age pension.

Pension

Just 28% of under 35s and 35% of those aged between 35 and 54 believe the pension has a long term future.

A survey of more than 2,000 people concluded that the state pension is included in the general turmoil over what will happen to our pension savings in the future.

Trust issues

Senior analyst Nathan Long said: “Trust issues are running rampant within pensions, even the state pension – the bedrock of everyone’s retirement – is being eyed with suspicion.

“Less than a third of people under 55 expect they’ll get a pay-out from the government. It’s telling that women are less trusting than men, given they’ve seen most change to their state pension in recent years.”

Annuity

The new state pension pays £168.60 per week and if it were to be withdrawn it would cost more than £300,000 to replace it with an annuity.

Annuities were seen as a way of ensuring an income for life before pension freedoms began in April 2015, but since then sales have dropped dramatically.

Concern

Some experts have expressed concern that savers are taking too much too early from their pension savings and not leaving themselves with enough money to fund a comfortable retirement.

Losing the state pension would make things even worse for those who find themselves over-extended with no way of bailing themselves out of their shortfall.

Nathan Long commented: “The chances of getting nothing at all from the state are slim, but increasingly building up private pension savings provides flexibility over when you finish work and prevents your retirement plans being side swiped by a future government intent on making ends meet.”

‘Waspi’ women

Thousands of women born in the 1950s have just suffered another major pensions setback after the High Court refused their claim for millions of pounds in pension payments they feel they were ‘done out of’ when the government raised their qualifying age from 60 to 65.

Women Against State Pension Intervention (WASPI) had claimed the rise in age was unfair as they were not given enough time to make alternative arrangements.

They had claimed it constituted an ‘unjustified direct discrimination’ on grounds of age and sex, but the judges disagreed.