Pension affordability solved - back to the future

property.advert

When pensions were introduced, they were expected to take care of the pensioner for just a few years before the pensioner died. So why not go back to that logic ?

If we agree that pensions will be payable for 10 years then they will be payable for the last 10 years of your expected life. This will be estimated when you are 50 (or thereabouts) so if your life expectancy was 80, you would have to work until 70 whilst someone a few years later whose life expectancy was 90 would have to work until they were 80.

Of course, if you happen to live longer then your pension will carry on, offset by those who pay in but collect less than the average. In this way, a pension of a decent amount could be given, paid through investment rather than current tax income.

Of course, another option would be the Logans Run approach at an age or level of infirmity or poverty yet to be determined.

bilbo51

Have you considered standing for election? :cool:

lvader

Another option might to be to make some small sacrifices during your working life and actually save for your pension.

Linton

PA's proposal sounds good. Just a slight addition - we could make the 10year limit a bit less prescriptive and outsource the whole system to insurance companies.

hugheskevi

You mean something like a longevity adjustment factor?

As used in schemes such as British Aerospace?

Linton

I was thinking we could call them "Annuities".

JayBrun

property.advert wrote: »

When pensions were introduced, they were expected to take care of the pensioner for just a few years before the pensioner died.

When the State Pension was introduced, and for many years thereafter, most men didn't live long enough to pick one up.

bilbo51 wrote: »

Have you considered standing for election? :cool:

No-one would get elected with that in the Manifesto so it isn't going to happen any time soon.

Interesting idea though and one day we're going to have to 'bite the bullet'.

Edit: On further thought, those who overindulge in whatever way would on average have a lower life expectancy and retire early with their pensions paid for by their neighbours who lived more moderately and longer.

Many wouldn't take kindly to contributing towards an early guaranteed retirement pension for someone who they feel didn't deserve it by virtue of lifestyle choice.

In general principle similar to certain aspects of life now so it would have its opponents.

There are lots of permutations but no easy answers.

Loughton_Monkey

lvader wrote: »

Another option might to be to make some small sacrifices during your working life and actually save for your pension.

A novel and radical idea. But I don't think it will ever catch on.

...Oooops!

Spoke too soon. What did I hear the Government whinging about? Apparently there are such things already, that you can't touch until age 55. This is apparently discouraging people so there are plans to let you take out all the money at age 30.....

property.advert

lvader wrote: »

Another option might to be to make some small sacrifices during your working life and actually save for your pension.

I agree but millions don't. The proof is out there all to easy to see.

People can't or more accurately won't pay enough in. The whole history of financial advice is riddled with spivs, conmen and theft which results in that sector being seen as totally untrustworthy by the masses. People won't be able to work long enough to pay in sufficient as there won't be enough jobs. There are too many more pressing needs on people's incomes during their working life, as they see them. The list is endless.

My guess is that shares in Dignitas will be soaring when people get over their irrational morality with euthanasia.

From my chair, what annoys me the most is that people who do save, who do put something away for a rainy day etc. are constantly bombarded with the news that their next door neighbour, who frittered away everything they ever had, is getting benefits to bring their income up near or equal that of those who scrimped and saved throughout life.

Then the issue of nursing home care needs to be sorted out as the current situation is just not fair, then taking your house for instance.

If things don't improve, it will still make no sense to pay in a full share when the system treats you like a mug.