State Pension Costs

Generali

50,000,000 people can expect to get a state pension in the UK that do not currently get one.

At present, life expectancy for someone aged 65 is 17 further years for a man and 20 for a woman.

@ £90 per person per week and assuming an average life expectancy of 18.5 years on retirement the UK has an eventual liabiity of:

£90 x 50,000,000 x 52 x 18.5
= £4,329,000,000,000

Total liability in the UK national accounts? £0.00.

On top of that there is the second state pension, pension top ups, NHS promises, Civil Service pensions, any net local authority pension shortfall and other Government promises to people when they get old like no TV license fee. None of those things have had liabilities accrued for them.

You're kids will still be paying the bill. Unless they decide they don't want to of course. That would be an interesting standoff: baby boomers want their pensions paying and their kids don't want to pay the taxes.

Baby boomers' Governments put aside £0.00 towards their state pension liability. What is the moral, legal and pragmatic case for people to pay their parents' pension?

PasturesNew

When pensioners were brought up, there wasn't the spending on them in family allowances, tax credits, education, social services, youth clubs, baby bonds, parks, schems giveaways ....

Today's kids have had money thrown at them hand over fist in 100s of ways. Baby bonds, family allowance, child tax credits, a teacher and an assistant in a classroom holding half the kids, social services, prizes and giveaways for being naughty.

Thrugelmir

Generali wrote: »

50,000,000 people can expect to get a state pension in the UK that do not currently get one.

At present, life expectancy for someone aged 65 is 17 further years for a man and 20 for a woman.

@ £90 per person per week and assuming an average life expectancy of 18.5 years on retirement the UK has an eventual liabiity of:

£90 x 50,000,000 x 52 x 18.5
= £4,329,000,000,000

Total liability in the UK national accounts? £0.00.

On top of that there is the second state pension, pension top ups, NHS promises, Civil Service pensions, any net local authority pension shortfall and other Government promises to people when they get old like no TV license fee. None of those things have had liabilities accrued for them.

You're kids will still be paying the bill. Unless they decide they don't want to of course. That would be an interesting standoff: baby boomers want their pensions paying and their kids don't want to pay the taxes.

Baby boomers' Governments put aside £0.00 towards their state pension liability. What is the moral, legal and pragmatic case for people to pay their parents' pension?

Slowly being addressed .....

The state pension age is set to increase to 68 by 2050 with anyone aged less than 47 facing a longer working life, the work and pensions secretary, John Hutton.
Only those born before 1959 will be unaffected by plans to phase in a higher retirement age over three decades, outlined in the government's white paper on pension reforms.
Starting in 2024, the age at which the state pension is paid will be increased in line with life expectancy, so that individuals continue to receive the state pension for the same proportion of their life.
The state retirement age, which is set to be 65 for men and women by 2020, will rise to 66 between 2024 and 2026, to 67 between 2034 and 2036 and to 68 between 2044 and 2046.
Mr Hutton said the increase would meet some of the cost of restoring the link between pensions and earnings, a move which will close the gap between pensioners' incomes and those of the rest of society

and more

The number of qualifying years will be reduced, so more women are entitled to a full state pension and the tax credit system modified to help them build up contributions for a full pension.
Under the reforms, Mr Hutton said that by 2050 pensioners would retire on a state pension worth £135 a week in today's terms, rather than £114 as today and the £90 to £100 they would receive if no reforms were introduced.
The government said the costs of the reforms would see spending on pensions in cash terms at today's prices increase tenfold to £728 billion by 2050, although as a proportion of the UK's GDP spending will rise by just 1.5% to 6.7%.
Although they will receive a better state pension, Mr Hutton said individuals will have to take more responsibility for their retirement planning.
Mr Hutton said between 10 million people who were not saving enough for retirement would be helped with the introduction in 2012 of low-cost personal accounts.
Workers earning more than £5,000 a year would be automatically enrolled into an account if they did not have access to a better company scheme. Individuals would contribute 4% of their pay and companies would pay in 3%.

Less money for property investment.......:rolleyes:

StevieJ

Generali wrote: »

50,000,000 people can expect to get a state pension in the UK that do not currently get one.

Good job we have inferior state pension to the Europeans, wonder how the Germans are going to cope

kennyboy66_2

Thrugelmir wrote: »

Slowly being addressed .....

I firmly think we need to move faster to a retirement age of 70.

In fact something like 1 month a year for men and 2 months a year for women would do the trick.

ie from 2010 men work until 65 and 1 month, women 60 and 2 months.
from 2011 men work until 65 and 2 months, women 60 and 4 months.

This spreads the pain fairly.

The problem is not pensions itself, it is the ratio of workers / pensionsers that is the key thing. The government transition plans was a typical government "postpone the problem" approach.

Mr_Matey

Generali, where are these numbers coming from? My quick google says the UK's population is 61m. You think 5/6 people will receive on average £90 a week?

Also surely these people are a range of ages, some won't be 65 for 60 years.

The numbers look strange, but the point is still valid. I think the best move would be to only give benefits based on need (eg disability, unable to work, unemployed but looking etc.) not age.

kennyboy66_2

Generali wrote: »

What is the moral, legal and pragmatic case for people to pay their parents' pension?

What is the moral, legal and pragmatic case for people to pay for childrens education & healthcare ?

StevieJ

Generali wrote: »

Baby boomers' Governments put aside £0.00 towards their state pension liability. What is the moral, legal and pragmatic case for people to pay their parents' pension?

Same case can be made for making welfare payments to the young unemployed.

Mr_Matey

kennyboy66 wrote: »

What is the moral, legal and pragmatic case for people to pay for childrens education & healthcare ?

The pragmatic case is that the children will be future tax-payers and therefore it's a good investment.

Also it's probably a lot more cost-efficient for society to immunise a child than replace it.

So what's the pragmatic case for people to pay their parents' generation's pension?

ad9898_3

Another pyramid scheme that's going to end up toppling when the funding at the bottom is outstripped by the needs of the pyramid.

Oh, well I guess I could buy a house instead.......... oh hang on...

kennyboy66_2

Mr_Matey wrote: »

The pragmatic case is that the children will be future tax-payers and therefore it's a good investment.

Also it's probably a lot more cost-efficient for society to immunise a child than replace it.

So what's the pragmatic case for people to pay their parents' generation's pension?

Don't you sort of answer you own question ?
Whats the point of "an investment" in children, if they are not going to at some stage support their elders.

Why do you think that people in 3rd world countries have lots of (preferably) male children ?