MSE News: Pension age to rise earlier than planned

exil

joolzred wrote: »

When state pensions were introduced, they were meant to be a small cushion to meet life's necessities for the average 7 years before one met the grim reaper. A man retiring in 1946 at the age of 65 had a general expectancy of living until he was 71-73. State pensions were not meant to pay for cars, holidays and other so-called necessary stuff we have today (so says my ex nan-in-law who remembers them being introduced)

Fast forward 60 years and the same situation isn't occurring. A man of 65 today generally will have 20+ years to look forward to. People are generally healthier at 65 than they used to be thanks to pollution control, cleaner jobs, drop in smoking rates and better medical care and screening.

People chose to have smaller families from the 60's onwards. You can't have it both ways - there are now more over 60's than children in this country. Do people of, or nearing, retirement age want crippling levels of taxes levied on a smaller workforce to pay for their pension at 65, or could they work a year or two more before claiming their state pension? Could they take a lower pension and retire at 65 or take a slightly higher one and claim it later?

The fact is that people have to face the figures, and the demographics and perhaps the baby-boomer generation will have to make a few sacrifices for the sake of their following generations - just as their parents and grandparents did for them!

Nonsense. The current generation of pensioners (recently retired) were born in the 1940s and had the full benefit of the post-war economic era of full employment and the welfare state. The people we are talking about - those who will now have to work 2 to 7 years longer - are only 10 to 20 years younger, born in the 1950s and early 60s, and are much less likely to be members of final salary schemes than those who retired in the last few years.

There is of course an issue with longevity.But why should the young have to work longer due to a phenomenon that actually has benefitted the CURRENT generation of pensioners?

chihuahuabear

I agree with Ivader, the government will not force people to work who are not capable of doing so. At the moment many people continue to work beyond the retirement age, and not solely for financial reasons.

This article from http://quoteboffin.co.uk explains how some work on in order to get out the house and stay active: http://quoteboffin.co.uk/insurance/blog/part-tirement-is-the-new-retirement-says-aviva.

artha

chihuahuabear wrote: »

I agree with Ivader, the government will not force people to work who are not capable of doing so. At the moment many people continue to work beyond the retirement age, and not solely for financial reasons.

There are of course people who "work till they drop" because working is their life. They are the lucky ones whose lives revolve around their jobs and they get satisfaction from them. What I find objectionable is the spin put on raising the retirement age for the vast majority who don't want to/can't physically do it and describing it as an opportunity to do the same. One or two individuals who want to work in their eighties are trotted out to support this argument. Many people in boring jobs, that keep the wheels turning, are longing for their retirement and possibly the first time that they can enjoy life to the full as far as finances allow.

artha

uk1 wrote: »

The current discussion is about men retiring at age 66 from 2016. As yiour father would have retired in September 2015 under both current rules and under the current ideas being floated it is highly unlikely these proposals will effect him.

When the ideas are floated is is also fairly likely that there will be a short term phasing of retirement dates and that it will not simply be an additional year for everyone. Politically any other proposal is unlikely to be supported.

He seems to have little to worry about.

I hope you are correct but with no detail available it's probably wise to prepare for the worst.

I'm hoping someone can tell me I'm talking absolute b***ocks (with a rationale of course!) but I began to wonder why the subject was included in the budget speech when it is going to start in 2016 and could not therefore make any savings during the scope of the budget i.e. the life of the current parliament.

Unless of course the state pension age becomes 66 in April 2016 with a phasing to achieve that started much earlier to achieve a staggered progression possibly starting as early as 2014

jamesd

artha, for changes like that it's good to provide the greatest possible amount of notice. The currently planned changes for men and women were announced in parliaments well before they have any effect. This one has less notice but still enough to be better than doing it within a parliament.

artha

jamesd wrote: »

artha, for changes like that it's good to provide the greatest possible amount of notice. The currently planned changes for men and women were announced in parliaments well before they have any effect. This one has less notice but still enough to be better than doing it within a parliament.

So it could be abandoned in the next parliament when we have a new government;)

jamesd

artha, it could but it's not likely. It's the right thing to be doing in principle.

artha

jamesd wrote: »

artha, it could but it's not likely. It's the right thing to be doing in principle.

I can see that if the current government is retained at the next election then whatever plans are laid now will go through. It was said that the drastic measures planned and now realised by the Conservatives would make them unelectable for a generation. If so could a newly elected labour(?) government in 2015 reverse the Con/LibDem measures if they had been put in place before 2016? My feeling is that these measures will be put in place such that it could not become an electioneering hinge point for change in 2015. That is why I think the move may come much earlier than expected. I hope that I am being pessimistic

jamesd

A replacement government could undo the proposed changes but it seems unlikely. The previous plans didn't catch the early part of the baby boomers before they retired. This one still will miss the very earliest but it'll include a fair chunk. The compensation is the link to wages that's starting earlier and this is one of the ways to pay the cost of that link.

stator

I totally support the decision. I also think they should scrap the state pension and make it means completely tested. The only viable model going forward will be for everyone to save for their own pension throughout their working life. They can make it mandatory for everyone to contribute something to their own pension and for their employer to contribute something too. Those who don't have enough pension when they retire can claim for the means tested pension.

Expecting the next generation to pay for your retirement is not a good idea.