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MSE News: Calls for 'graduated' state pension

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  • BobQ
    BobQ Posts: 11,181 Forumite
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    The idea has some merit. But the notion of encouraging people to work longer is fine if they want to do it. A more useful approach would be to incentivise those that can afford to retire to do so earlier. While age discrimination is wrong, I cannot see how it helps the younger generation to encourage anyone to work longer than they need to taking jobs that could be filled by younger people.
    Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.
  • Paul_Herring
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    BobQ wrote: »
    I cannot see how it helps the younger generation to encourage anyone to work longer than they need to taking jobs that could be filled by younger people.

    While this may be the popular opinion of what goes on, I wonder if this is really the case.

    e.g. does a senior project manager keeping their job really prevent an 18 yr old having that job?

    Or more realistically, if they were to retire 'early,' would everyone shuffling up the organisational chart (presuming the position would be filled) really result in the employment of that 18 yr old at the lower ranks?

    I'm not too sure.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    would everyone shuffling up the organisational chart (presuming the position would be filled) really result in the employment of that 18 yr old at the lower ranks?

    Yes. that happens, though some people sprint up the org chart while others seem reluctant to even shuffle. And you definitely get cases of "dead mens boots" where advancement is impossible unless the incumbent retires or dies.

    What's annoying is that it's still very difficult to recruit in the UK for many roles, and we're increasingly reliant on cross-EU recruitment and even non-EU nationals if we can get the visas.

    I wonder if UK youngsters are applying for overseas roles to quite this extent?
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • property.advert
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    At higher income levels it matters less and less but if we take the average income of circa £25k per annum then it does make a large difference.

    Even after a full working life up to age 55, many (on a £25k salary) will not have a pension able to pay anything like 50% of that. Just to highlight the argument let's say their pension is £5k at age 55.

    Unless they could live on £5k a year, they would have to use savings (of how much on £25k a year ?) to bridge the gap until the age of 65 when they will get their pension of £5k a year, making an income of £10k per year.

    This is a huge spike, being a 100% increase in their income before taxes.

    But what if they were able to draw on a reduced pension of say £2.5k per year, making a total income of £7.5k ? That may be enough to live on but would cost the state no more money.

    With 3/4/5 or however many million unemployed, surely the idea is to get old people out of work, creating jobs for the younger generation, rather than have them pushing on for another decade or so.
  • Paul_Herring
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    Just to highlight the argument let's say their pension is £5k at age 55.
    Ah, Mr Advert, you spoil us with your estimates :)

    Spot quotes on (to pick a site from google at random) http://www.sharingpensions.co.uk/pension_annuity8.htm indicates that for a £5,000 (gross) pension a 55yr old man needs a pot of £96,600, a woman £101,400.

    To pick (again at 'random') some headlines in the papers recently:

    Average woman aged 56 has just £9,100 pension pot (Telegraph, Feb '11)

    The average pension pot [at retirement] is £25,000 (Fool/LoveMoney, March '11)
    But what if they were able to draw on a reduced pension of say £2.5k per year, making a total income of £7.5k ? That may be enough to live on but would cost the state no more money.

    I somewhat doubt that at age 55, the state would pay as much as 50% of the full state pension.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • FATBALLZ
    FATBALLZ Posts: 5,146 Forumite
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    Terrible idea. Far too many stupid people who will just think 'I can get extra money aged 60, gimme now'. 10 years down the line daily mail headlines "poor pensioners living in poverty, please increase tax 15%".
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    FATBALLZ wrote: »
    Terrible idea. Far too many stupid people who will just think 'I can get extra money aged 60, gimme now'. 10 years down the line daily mail headlines "poor pensioners living in poverty, please increase tax 15%".

    I guess that stupid is as stupid does, and always will be. Should those of use less stupid let the stupid be a shackle around out ankles?

    And yes, everyone at the DM goes into the stupid category, as does everyone who reads said paper, other than those who do it ironically.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • FATBALLZ
    FATBALLZ Posts: 5,146 Forumite
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    gadgetmind wrote: »
    I guess that stupid is as stupid does, and always will be. Should those of use less stupid let the stupid be a shackle around out ankles?

    We shouldn't, but inevitably we are forced to bear the brunt of the stupid decisions made by idiots. Just look at the financial crisis and the state of the Eurozone.
  • Paul_Herring
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    gadgetmind wrote: »
    Should those of use less stupid let the stupid be a shackle around out ankles?

    We already do, in case you hadn't noticed.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
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    We already do, in case you hadn't noticed.

    Crikey, what a typo cluster, how embarrassing! That'll teach me not to post after drinking wine without thorough proofreading!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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