State Pension Costs

EdInvestor

Generali wrote: »

@ £90 per person per week and assuming an
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.

Unlike in Australia where the basic state pension is means tested and there are virtually no freebies at all.

michaels

All our local elderly people buy food in M&S - they seem to be the only ones who can afford to...

michaels

I still think this entire argument about saving or payg for pensions is some sort of 'money illusion'.

Lets look at real resources and who has call on them. As the balance between workers and pensioners shifts the amount of output that pensioners can get must fall whether they pay for it from savings or taxation - same number of people, fewer working = less resources per person. How those resources are shared out will depend on political decisions at the time as much as any attempt to 'prefund' now - obviously the pensioners lobby will be relatively more powerful electorally compared to the workers but try and confiscate (tax) too much of the workers output and they will try to vote with their feet (or by sitting on their behinds). With limited natural resources I can not even see 'the fruits of growth' providing any sort of rescue so we had better pin our hopes on technology - look at Japan to see what I am talking about.

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?

bluey890

chewmylegoff wrote: »

it's not supposed to be much, it's a basic pension.

Relatively speaking, the figure is lower than many other european countries (with similar GDPs)

My post was in reference to it being a lot of money to PN.

vivatifosi

Like you Pastures, when I get to retirement age I'll have worked the best part of 50 years. I did claim dole for a couple of weeks when I was 17 and living and home after being made redundant (can't remember numbers but would have been no more than £100 in total), that's all I've ever taken.

I've got a number of little pensions dotted around. If I get to retiring and get nothing because of these I'll be very unhappy, especially if those who've done sod all to invest and not worked much get supported by the state. I may have to revolt. Viva la Revolucion!

Generali

EdInvestor wrote: »

Unlike in Australia where the basic state pension is means tested and there are virtually no freebies at all.

My point isn't what level of support is or is not available, it's more about the huge sums that the Government have apparently commited themselves to spending without accounting for it in any way.

vivatifosi

Generali wrote: »

My point isn't what level of support is or is not available, it's more about the huge sums that the Government have apparently commited themselves to spending without accounting for it in any way.

A good friend of mine in America likened Bush's financial incompetence as "Paying for the War in Iraq on a credit card". I don't even want to contemplate what the UK has paid for on its credit card, but I'm pretty sure it's priceless.

bluey890

Generali wrote: »

My point isn't what level of support is or is not available, it's more about the huge sums that the Government have apparently commited themselves to spending without accounting for it in any way.

Governments only think a maximum of 5 years in advance.
It could be argued that labours spending extravaganza kept them in power.

Anyone have ideas on how to ensure governments take a long term view?

Generali

bluey890 wrote: »

Governments only think a maximum of 5 years in advance.
It could be argued that labours spending extravaganza kept them in power.

Anyone have ideas on how to ensure governments take a long term view?

A start would be to change National Accounting so that long-term liabilities have to be accounted for.

For example, the Government can say, 'We're spending an extra £xx,xxx,xxx,xxx on the NHS'. It should then be clear that by doing so, we're also on the hook for £xxx,xxx,xxx in liabilities for pensions for NHS workers, also PFI perhaps (depending on what the spending was on).

StevieJ

Generali wrote: »

My point isn't what level of support is or is not available, it's more about the huge sums that the Government have apparently commited themselves to spending without accounting for it in any way.

Surely if they accounted for it in the national accounts they would offset it by the estimate of future income re N.I.