The Truth About The State Pension

bumpoowee

marklv wrote: »

What you say is absurd. Get rid of the state pension and millions will fall into dire poverty - if you want that you deserve to be locked in prison for the rest of your life. The state pension can easily be sustained, by ensuring that NI contributions keep up with financial demands.

Haven't got the figures but based on my own payslip I severely doubt that NI contributions, if used only for pensions, would come anywhere near covering the future pension bill, without dramatically raising NI contributions.

What I have said is not absurd - it is reality. The lovely party of the last however many years of perpetual economic growth, increasing government debt, expanding population and increasing life expectancy is coming to an end. If serious changes are not introduced in a controlled way then they will be forced on future generations in a chaotic way.

People need to provide for their own futures - look around the world; many countries do not have a state pension or 'safety net' that we have and prepare for old age in other ways, and as the balance of economic power moves away from the west we will increasingly be unable to afford to spend vast amounts on state handouts.

The baby boomer/property owning generation can easily provide for themselves due to preferential company pensions and huge house price increases etc. Future generations will not see the same favorable economic situation but at least have chance to prepare themselves for retirement in 40+ years.

marklv

The UK is not a poor country. Billions are spent each year on various forms of welfare - much of which should not be spent. All these payments to single mothers should be removed, as should child benefit - what's the point of subsidising chavs? They breed quickly enough as it is. If you can't afford children, then don't have them! Otherwise they should have the children taken from them and given to those who can properly look after them. With the billions saved you could easily look after vulnerable old age pensioners.

Pobby

Hang on, it was Thatcher who cut the links to earnings and now the Tories are saying they are going to restore it? How much will the cost be?

marklv

Pobby wrote: »

Hang on, it was Thatcher who cut the links to earnings and now the Tories are saying they are going to restore it? How much will the cost be?

Overall cost neutral I would think, as the retirement age is going up to 66, then 67, then 68. In the short term the additional costs will be minimal; in the very long term it could be quite costly, but in that case they will just move the state retirement age up until it becomes little more than cost neutral.

jamesd

You'd think very wrong, then. I suggest that you read the report of the Pensions Commission.

marklv

jamesd wrote: »

You'd think very wrong, then. I suggest that you read the report of the Pensions Commission.

Elaborate. I have read the executive summary and it comes up with various proposals. Certainly, some increase in taxation will be required, but nothing dramatic, as you seem to imply.

Errata

The link to earnings can easily be reinstated. Pensions will increase by the same percentage as the average wage. Which could easily be less than the inflation percentage increase as is the case at the moment.

marklv

Errata wrote: »

The link to earnings can easily be reinstated. Pensions will increase by the same percentage as the average wage. Which could easily be less than the inflation percentage increase as is the case at the moment.

Not necessarily. Most of the time average wages increase by around 1-2% above RPI, but then RPI is not a true measure of inflation, as it includes mortgage interest payments, which distort the picture considerably and are of no relevance to pensioners. As an alternative to wage indexation, the government could simply increase the state pension by 50% immediately and then link pensions to the highest of CPI or RPI each year. This would guarantee that the value of pension is properly preserved.

jamesd

Try the first report. You'll find, for example, that an increase from 65 to 66 is required just to keep the same proportion of working to retired years as there was in 2005, per figure 2.21 on page 47. Reports of the Pensions Commission.

marklv

jamesd wrote: »

Try the first report. You'll find, for example, that an increase from 65 to 66 is required just to keep the same proportion of working to retired years as there was in 2005, per figure 2.21 on page 47. Reports of the Pensions Commission.

Maybe, but so what? It's time we all faced the truth and accepted that NI contributions need to rise considerably.