Huge row over pensions report

EdInvestor

Hmm, it seems this guy Turner is about to produce a report on pensions suggesting something akin to Tory policy at the last election.

Thus Gordon Brown plans to throw it in the bin.

This doesn't seem very surprising, unless I'm missing something A rather startling amount of spin around in the press, though, and it's really confusing having that new pensions guy named Hutton....now which big issue are we talking about again....?:D.

margaretclare

It's complicated. But from what I understand, there was a proposal that people should work longer before claiming state retirement pension, but that to balance that there would be better pensions and an end to the means-tested 'top-up' of pension credit.

The Chancellor (from what I've read) favours keeping the means-tested element as a way of helping the poorest. All very laudable so far. But if he does that then he can't afford a better un-means-tested pension. And the idea of working longer is proving extremely unpopular.

What I don't understand, however, if the idea is to 'help the poorest', then what is the point of the extra payments - winter fuel, help with council tax and an age-related free TV licence? These are all NOT means-tested. Don't they cost a lot?

From my personal perspective, both I and my husband worked until we were 67, and it didn't bother us. We didn't do the same kind of physical active work we'd done in our main careers. Also, we were't allowed to continue paying NI contributions, but really, working to 67 was no problem.

In addition, we both received £200 (£400 total between us) yesterday morning into our bank accounts - this is the winter fuel and help with council tax payments. Both these things are budgeted for already.

I've also read somewhere, there is no way of checking up on what we spend this extra money on! If we don't spend it on heating/council tax, then what is the point?

Hutton has had to replace David Blunkett following Blunkett's recent resignation.

Aunty Margaret

djohn2002uk

margaretclare wrote:

I've also read somewhere, there is no way of checking up on what we spend this extra money on! If we don't spend it on heating/council tax, then what is the point?
Aunty Margaret

The point is that it doesn't matter one iota if you go out Monday and blow it all on a new television.
Most people of our age aren't likely to go wasting money on such things and only buy them from neccessity.
So, if you needed the television you would have bought it anyway and struggled with the heating and council tax bills but these things will be made easier because your overall financial situation is still healthier to the tune of £400.

If you think maybe some people should have their heating and council tax bills reduced by £400 instead of paying them the money, then we are getting into another argument where nanny state comes to mind.

margaretclare

The point is that it doesn't matter one iota if you go out Monday and blow it all on a new television.

Yes, I understand that. And a little extra money - £200 to each of us - is always welcome and never to be sneezed at. That wasn't what I was saying.....

If you think maybe some people should have their heating and council tax bills reduced by £400 instead of paying them the money

What I think doesn't matter at all - I'm not one of the decision-makers in this area. But logically, if the Chancellor really wants to 'help the poorest' rather than give it in a 'scattergun' fashion to those who don't need it as well as those who do, then that would have been a way to go.

....then we are getting into another argument where nanny state comes to mind.

Ah, I couldn't possibly comment on that one.

Aunty Margaret

Dora_the_Explorer_5

I think harsh words will be exchanged on the Turner report by all and sundry when it's published.
Couple of interesting points. The retirement age of 65 for men was set by Bismarck when he unified the small german states into Greater Germany and sorted out welfare provision for it, I expect he asked how long men lived for and when told 66 and three quarters set the state pension age at 65. So what fitted then does not fit now. Naturally everyone is alarmed at the suggestion of putting up the retirement age to 67 but life expectancy is increasing all the time and people experience poor health only during the last couple of years of their long lives.
All this is a bit academic anyhow because the problem is that Brown started off 20 billion in credit and is now 30 billion in debt, and I guess doesn't want that to worsen by any state pension increase - remember, he was the guy who felt a 75p a week increase was acceptable!
A while ago I listened to a financial advisor to the government explaining that if all the means testing was scrapped and the state pension increased to a proper level the decrease in bureaucracy costs would fund the increase. However all the means testing, credits, formulaes have been developed by Ed Balls who had to come up with something that looked smart and complicated to justify his place at his master's table.
It will be interesting to see which way Blair jumps on this and who jumps with him - Hutton will do as he's damn well told as he did when he replaced Blunkett.
I guess the thing that infuriates me most about this is the lack of respect shown by the government towards retired people, but I'm afraid it was ever thus and even though we have at the moment a so called socialist government I have no expectation of it behaving in anything like a socialist way.
I'd be interested to know what other people think? Is increasing the retirement age by 2 years fair in the light of 60 is the new 40?
Should all retired people get a state pension which gives them financial independence from state handouts and let them live their lives with some dignity and security?
Can anyone explain why the state pension isn't taxed so that those with loadsamoney don't get any of it and those who rely on it solely get all of it? Or is that solution too simple?

margaretclare

Dora_the_Explorer wrote:

I'd be interested to know what other people think? Is increasing the retirement age by 2 years fair in the light of 60 is the new 40?
Should all retired people get a state pension which gives them financial independence from state handouts and let them live their lives with some dignity and security?
Can anyone explain why the state pension isn't taxed so that those with loadsamoney don't get any of it and those who rely on it solely get all of it? Or is that solution too simple?

Wish I could answer your last question, Dora...we are actually taxed more favourably than younger people under the present system. We (that's B and I) are in the last cohort of people to get the married people's tax allowance which we split between us, and we each get £7090 personal tax allowance because of our age(s).

As I've said, it wouldn't have bothered us in the least to go on working to 67 - in fact, that's what we did do. It might have been different however if we hadn't been able to change careers and do less physically-demanding jobs than we did when younger. And also, someone in their 40s or 50s, looking forward to retiring at a set age, may not be too pleased to find the goalposts have suddenly been shifted further back. Like gearing yourself up to run the marathon and then half-way round, suddenly being told: another few miles have been added on to the course.

And yes, I do think all retired people should get a decent income without state hand-outs - that includes the means-tested ones, pension credit, and also the 'scattergun' ones like winter fuel payments.

You mention Bismarck in Germany, but when the first 'old age pensions' started in this country, it was a century ago and it was for poor people of 70 and over, just a few shillings to keep them out of the workhouse. So they were means-tested in the beginning!

Aunty Margaret

Dora_the_Explorer_5

Well the government managed to change women's retirement age from 60 without much collateral damage, so frankly I can't see why it shouldn't be able to change the age again without too much of a riot. But it's a great shame that having an increasing older population should be seen as a problem and not a cause for celebration. I bet Brown's preferred pension option is to increase the retirment age and decrease the state pension - the Guardian today suggests in a few years time it will be worth 8.8% of average earnings if no significant change happens! Oh dear, I think I'm turning into a grumpy old woman !

Dora_the_Explorer_5

ps - this is Age Concern's latest research -
"Good nutrition is essential to maintain both physical and mental health in later life, however older people often eat food which is poor in terms of both quantity and quality. The cost of a healthy diet for older people carrying out the recommended level of physical activity is £32.30 for a single person and £63.70 for a couple – around 30% more than older people on a low income actually spend. "
State pension is currently £82 - pensioners might protest a bit more if they weren't being starved into submission!

EdInvestor

What about SERPS/S2P?

People don't seem to be taking that into account at all, yet for someone on the full amount,it doubles the basic state pension, so the pensioners is well above the benefit level.

Surely there will be more and more people on the two state pensions in the future, and fewer and fewer on the pension credit?

Dora_the_Explorer_5

That's interesting Ed - and a fat lot of use to women who paid the small stamp and/or stayed at home to look after children or elderly parents which is the position many of today's female pensioners find themselves in.....eg me

al_yrpal

We are told that things have changed and that is why there is a pensions crisis. You bet they have changed, people today want a decent spell of retirement with the means to enjoy it for a long time - why shouldn't they? I think the public should kick up a big stink about the proposal to raise the retirement age. We should be looking to bring it down not put it up.

What do people really want - do we want to be a world policeman with massive spending on arms and the biggest army in Europe that has cost every taxpayer dear? Do we really need to go and fight foreign wars that have no bearing on us - surely that should be shared between all nations that care about a stable world order. Do we want to pay billions for the eurofighter to fight a long dead cold war? Do we want to subsidise loafers who won't get a job, preferring benefits? Do we really need book packs for kids? Or, do we want care for people with dementia, a decent basic state pension for all, and the time and health to enjoy it? Our armed forces are wonderful, but they cost us very dear. As everyone suspects there is an army of loafers and fraudsters out there spending your pension money.