Before I retired, my day job was as a pensions consultant and I had been involved with pensions planning and pensions administration for the best part of 30 years.
To answer some specific queries raised
The answer to whether state pensions can be paid abroad is “yes” - see
https://www.gov.uk/state-pension-if-you ... w-to-claim
However, as far as increases on state pensions is concerned, it depends where you choose to live. Living in the EU and most of the Commonwealth countries should mean you get inflation linked increases but you need to check e.g. re Australia - see
https://www.gov.uk/state-pension-if-you ... te-pension
With regard to the other points made, the major problem with pensions, both private and State, is that they have been subjected to more and more political interference. At one time, there tended to be only one bit of legislation passed every 5 years. Now it seems to be 5 times a year. The original idea was that contributions to private pension schemes could be offset against income tax and that the investments would grow tax free. At retirement, you could take a certain amount of tax free cash and the balance pension was subject to income tax. This way you only paid tax on what you actually received. However, the concession on contributions has been constantly whittled away in recent years although the effects are probably felt only by high earners. Tax on the investments was introduced in part by the Tories and then wholeheartedly by Gordon Brown.
State pensions have always been funded on a pay-as-you-go basis i.e. simplistically, you pay for your parents’ pensions and your children pay for yours. With ever increasing longevity, this is becoming unsustainable if people retire at age 65. When state pensions first started, the average length of state pensions payment was about 5 years, now it’s more like 15. This is why the State Pension Age is being put up.
Going back to the subject of tax relief on pensions’ contributions, if these have to be paid out of taxed income then, logically, there is an argument to say that pensions’ payments should be tax free as would happen if, for example, you invested in ISAs where the investments grow tax free and you can drew down the payouts tax free in retirement. This argument doesn’t completely hold water because other investments not held in ISAs are taxed and income and capital gains from them in retirement is also taxed, up to a point.
When my children first started work, they asked me if they should invest in a pension scheme straight away. Unless they were going into a government type final salary scheme or one where their employer put in a large contribution for them, e.g. 10%, my answer was always, get yourself on the housing ladder, look after your kids and start worrying about retirement when the kids have started to grow up and allow you more money to spend on yourself. However, if they had a family, to make sure they had adequate life assurance and, if the employer offered it, sickness and injury cover.
