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I was under the impression that we paid for our pensions by deductions from our earnings whilst we were working.
Although that is a common assumption, the fact of the matter is that when we worked, our contributions went towards paying the pensions of those retired. Now that we are retired, we depend on the contributions of those who are currently working.
This also explains why people are being steered towards taking on private pensions.
I was under the impression that we paid for our pensions by deductions from our earnings whilst we were working.
A lot of people are under the same illusion. The SARB (State Age Related Benefit) is paid out of the tax take each fiscal year and the NI contribution simply buys 1/35 of the full SARB a person can claim on reaching qualifying age.