State pension age rise needed to balance books

marklv

bendix wrote: »

Good. Make it 75 at least, or even 80, and force people to make private provision.

It might - just might - help us create a generation of people fiscally responsible, and mature enough to develop and sense of personal responsibility.

You are really a bonehead aren't you? For many people a private pension is impossible. It's not a question of being fiscally responsible, it's a question of simply not having money. Not everyone earns £100k+ and can afford to save thousands every year. People on £20-30k simply cannot afford to save more than small amounts that will never be enough to generate a sufficient pension.
The Tory objective is to remove the state pension altogether but to do it in a hidden, silent way, by constantly increasing the age at which you can claim it.

For someone with a supposedly high-flying job you are very immature and repeatedly state obvious idiocies as if they were obvious truth.

marklv

Rainmaker_uk wrote: »

I agree - there should be measures to force people to put away for their retirement. What would really annoy me is if they made it means tested. They would then be rewarding all the people who have let others cloth and feed them their entire lives at the expense of those who have sacrificed to plan for their retirement and need the state pension to top it up.

Nonsense. Even if you forced everyone to put 10% of their salary into a pension plan this wouldn't be enough to generate a pension with enough to live on. Only the wealthiest would benefit because they earn so much more. The state pension is offered in every industrialised country as an essential safety net, moreover the UK state pension is one of the lowest, so there is no need to push the pension age higher and higher. All this talk of the need to increase retirement age is part of a political agenda designed to lower state spending, the result of which will be that low earners will be forced into destitution in old age.

marklv

IveSeenTheLight wrote: »

To be honest, as the life expectancy increased, surely it's natural that the working life should also increase proportionally.
Otherwise the percentage of working life shrinks thus your provision has to go further.

I hope that it pushes more to provide for themselves such that they have the choice if they want to retire early regardless of the state retirement age.

This is a fallacy. There were peple who lived to 100 in 1950 just as there are now. Obviously the number who do has increased since then, but this is only because of fewer people smoking, better healthcare and more awareness of illnesses etc. There is no reason to make hypothetical extrapolations on the basis of the way life expectancy has risen in the last few decades - the ageing process is not being slowed down - people age at the same rate as they did 1,000 years ago. There is no reason to assume life expectancy will rise more and more - there will come a point at which it will plateau.

Sapphire

marklv wrote: »

Nonsense. Even if you forced everyone to put 10% of their salary into a pension plan this wouldn't be enough to generate a pension with enough to live on. Only the wealthiest would benefit because they earn so much more. The state pension is offered in every industrialised country as an essential safety net, moreover the UK state pension is one of the lowest, so there is no need to push the pension age higher and higher.

One thing that has been conveniently overlooked in this discussion is the question of jobs. Those over 50 – sometimes even over 40 – find it almost impossible to find any job. Who do you think is going to employ someone in their sixties and seventies?

Before any measure to increase the retirement age is introduced, there needs to be a radical change of attitude towards older people/work, as well as (given the fact that many much younger people profess to being unable to find work) the creation of jobs that they could actually do. After forty years or so of work, I don't see many people of over 60 being able to do strenuous work or very long hours, which is a requirement of many jobs these days.

Generali

marklv wrote: »

This is a fallacy. There were peple who lived to 100 in 1950 just as there are now. Obviously the number who do has increased since then, but this is only because of fewer people smoking, better healthcare and more awareness of illnesses etc. There is no reason to make hypothetical extrapolations on the basis of the way life expectancy has risen in the last few decades - the ageing process is not being slowed down - people age at the same rate as they did 1,000 years ago. There is no reason to assume life expectancy will rise more and more - there will come a point at which it will plateau.

Life expectancy at birth has increased from 65-75 in Europe over the last 60 years:

http://en.wikipedia.org/wiki/File:Life_expectancy_1950-2005.svg

Why would you assume that life expectancy won't continue to increase at a similar rate? For my money there is less reason to think life expectancy won't continue to rise than that it will. Why should a 100 year trend suddenly turn around despite all the advances that are being made in genetics?

This bloke reckons that my generation (I'm 39) will routinely live to be 100 and my kids will most likely live for centuries.

Sapphire

Generali wrote: »

This bloke reckons that my generation (I'm 39) will routinely live to be 100 and my kids will most likely live for centuries.

Where will they live? The world is over-populated now. What will happen if people live for centuries?

Do we migrate to the stars? Or practise genocide?

Generali

Sapphire wrote: »

Where will they live? The world is over-populated now. What will happen if people live for centuries?

Do we migrate to the stars? Or practise genocide?

Ask him not me, he's on Radio 5 once a week and invites questions.

Life expectancy has risen consistently and we can expect it to continue rising. We can ignore that or embrace it. The former is foolhardy IMO.

Procrastinator333

marklv wrote: »

You are really a bonehead aren't you? For many people a private pension is impossible. It's not a question of being fiscally responsible, it's a question of simply not having money. Not everyone earns £100k+ and can afford to save thousands every year. People on £20-30k simply cannot afford to save more than small amounts that will never be enough to generate a sufficient pension.
The Tory objective is to remove the state pension altogether but to do it in a hidden, silent way, by constantly increasing the age at which you can claim it.

For someone with a supposedly high-flying job you are very immature and repeatedly state obvious idiocies as if they were obvious truth.

Not all can save for a pension. But a lot more than currently do, could if they wanted to. I also don't think you understand how defined contribution schemes are often structured. So, to educate you a bit (probably not possible) on defined contribution schemes.

There is an old rule of thumb. If from the day you start work you put half your age (as a %) in to your pension you will get about 2/3 final salary.

So a 22 year old needs 11%. The vast majority of employers offer matching, or better than matching offers. Which often increase with length of service too. Even if it is just a matching scheme, the company will often put in 3,4,5% if the employee does too. There is also the fact that you get tax relief. So if an employee has a scheme where they put in 5%, the company puts in 5% they only lose 4% of net pay and get 10% in their pension. If it is a salary sacrifice that adds another 0.5% in to the pot.

Yes this is not available to all and the terms will be different. But almost all employers offer company contributions of some level or another. Even though this is such an obvious bargain. The numbers that don't do it are ridiculous. My employer gives 6% if you put in 4% and it is salary sacrifice. So that would cost an employee 3.2% of net pay and they would get 10.4% of their salary in to their pension.

I see the payroll / pension for 300 of our employees. Only about 130 pay in to the pension! For every £3.20 of net pay, they can have £10.40 in their pension. But so few do it!!!!! Or. A person on £20k only needs to give up £640 of their salary to get £2,080 in to their pension each year.

Sure there may be a few who really can't spare a penny, but that is not the majority. The majority chose to blow money on many other things. Then when they get to about 40 they suddenly think oh carp, I might need a pension one day. Too late sunshine.

marklv

Sapphire wrote: »

One thing that has been conveniently overlooked in this discussion is the question of jobs. Those over 50 – sometimes even over 40 – find it almost impossible to find any job. Who do you think is going to employ someone in their sixties and seventies?

Before any measure to increase the retirement age is introduced, there needs to be a radical change of attitude towards older people/work, as well as (given the fact that many much younger people profess to being unable to find work) the creation of jobs that they could actually do. After forty years or so of work, I don't see many people of over 60 being able to do strenuous work or very long hours, which is a requirement of many jobs these days.

You are absolutely right. How many people over 50 who are not in very senior management roles work for the likes of Accenture or one of the investment banks like JP Morgan or Goldman's? Not many. These organisations want young people who are happy to be pushed around and forced to work 12-15 hours a day, even weekends.

The only jobs suitable for the older workers are part-time ones in places like B&Q or Tesco. Is this what the government has in mind?

marklv

Procrastinator333 wrote: »

Not all can save for a pension. But a lot more than currently do, could if they wanted to. I also don't think you understand how defined contribution schemes are often structured. So, to educate you a bit (probably not possible) on defined contribution schemes.

There is an old rule of thumb. If from the day you start work you put half your age (as a %) in to your pension you will get about 2/3 final salary.

So a 22 year old needs 11%. The vast majority of employers offer matching, or better than matching offers. Which often increase with length of service too. Even if it is just a matching scheme, the company will often put in 3,4,5% if the employee does too. There is also the fact that you get tax relief. So if an employee has a scheme where they put in 5%, the company puts in 5% they only lose 4% of net pay and get 10% in their pension. If it is a salary sacrifice that adds another 0.5% in to the pot.

Yes this is not available to all and the terms will be different. But almost all employers offer company contributions of some level or another. Even though this is such an obvious bargain. The numbers that don't do it are ridiculous. My employer gives 6% if you put in 4% and it is salary sacrifice. So that would cost an employee 3.2% of net pay and they would get 10.4% of their salary in to their pension.

I see the payroll / pension for 300 of our employees. Only about 130 pay in to the pension! For every £3.20 of net pay, they can have £10.40 in their pension. But so few do it!!!!! Or. A person on £20k only needs to give up £640 of their salary to get £2,080 in to their pension each year.

Sure there may be a few who really can't spare a penny, but that is not the majority. The majority chose to blow money on many other things. Then when they get to about 40 they suddenly think oh carp, I might need a pension one day. Too late sunshine.

A lot of what you say is fanciful rubbish, and trust me I don't need 'educating'. I know all about personal pensions. A lot of what pension providers and financial consultants promise is pure lies and utter rubbish as it's based on totally groundless projections of the stock market indices growing over several years. The fact is that the stock market index can stay static for decades, or even drop, as has been happening since 2000. Then you end up with less money than you contributed!! And, as I said before and repeat for your deaf ears, many people already have high levels of financial commitment and simply cannot afford to contribute anything to the pension schemes.

And you forget that even £2k a year into a pension scheme is only £80k after 40 years. What does that give? £4k a year. Big deal. Can you live on that?