MSE News: Pension age rise 'a bitter blow' 30 November 2011 at 11:44AM in Pensions, annuities & retirement planning 37 replies 4.2K views

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Government plans to bring forward an increase in the state pension age have been met with dismay by elderly groups ..."

Read the full story:
Pension age rise 'a bitter blow'

MacMickster

Another way of looking at this is that the government has decided to take a £5000+ windfall from every man, woman and child in the country currently aged under 52. This tax wil be collected between the ages of 66 and 67.

They could put a penny on the rate of national insurance and collect this throughout people's working lives without the need to raise the retirement age, but this government dogmatically does not believe in raising taxes.

jamesd

Makes sense, though still too slow because of the number of early and mid baby boomers who will retire with longer life expectancy and still at the earlier age. At least some of the later boomers will be affected so the whole big generation isn't missed.

The assertion by Michelle Mitchell that there's no published detailed analysis seems somewhat misleading. She might benefit from re-reading the Turner Reports and considering what they say about funding life expectancy with later state pension ages in light of subsequent changes in life expectancy projections. Nobody in her position should be surprised at this move in light of those reports and the changing data. It's not a great service to those of us who will be retired after this period to try to make pensions unacceptably expensive for those whose income taxes and NI will be picking up the bills.

Michelle did make one excellent point: the disproportionate effect on those people who will die earlier than the population average because of their background. More analysis and discussion of how to handle the great difference in life expectancy between various groups of people would be a really good thing. It's a tough problem that might be partly solved by varying NI a little based on location and type of work, just as the government is considering regional pay for public sector workers that may see more pay for some and less for others based on local living costs and perhaps life expectancies affecting the anticipated costs of funding their pensions.

MacMickster, what's the source for your assertion that a 1% increase in NI would be sufficient? Why do you want to add yet another transfer of wealth to baby boomers from their children and grandchildren's generation? That's not a fair thing to do to those two following generations.

The amount isn't so close to £5,000. It's at least the basic state pension (if someone is getting all of that) plus any income tax and NI paid during the extra year of work, if they choose to do that work instead of saving money up so they can retire at the time they choose.

While I'm affected by this it'll have no significant effect on my retirement plans. Just a little more money to put away, with plenty of time to get it done. That's perhaps two years added to my own state pension age in less than three years.

sheffield_lad

Yes it effects me and as with everything else thats happened ie end of final salary, increase in contributions, increase in age to 66

I wil accept this as I can see why I need to we are all living longer, I just can't see why 'some' PS workers don't understand this

Gracchus_Babeuf

Absolutely disgraceful from this awful government, but not unexpected. This country devotes less of its GDP to state pensions than any other civilised country on the planet, and we are still asked to retire later. In a normal country there would be violent revolt, but we are a brain dead bunch.

jamesd

That lower proportion of money going to state pensions is part of why this is less significant than it might be. People should have their own additional retirement income plans that they can adjust to deal with this and still retire at the same age as they always wanted.

molerat

A minor irritation maybe but a never a "bitter blow".

roddydogs

Arnt you forgetting that the Basic OAP will rise to £155 by 2015?

Lokolo

Gracchus_Babeuf wrote: »

Absolutely disgraceful from this awful government, but not unexpected. This country devotes less of its GDP to state pensions than any other civilised country on the planet, and we are still asked to retire later. In a normal country there would be violent revolt, but we are a brain dead bunch.

Ireland, Japan and Mexico (maybe not so much the latter being civilised though!) pay less than the UK.

Yes, it's pretty bad, but we're not the worst as you seem to think.

If you feel so strongly about it and think you could do a better job, run for PM

jno

eeek, I will be 52 in 2026, which means I won't be retiring until 2041 now - doh! Then again, I live abroad, so maybe my adopted country will look after me better than David Macaroon does.

Some formulas for Excel lovers out there:

To find out how old you will be on 01/04/2026, use quotes around birthdate in dd/mm/yy:

=DATEDIF("birthdate in dd/mm/yy", 01/04/2026 , "y" )

To find out your approximate retirement date, 67 years after you were born (no quotes required around italicised values):

=EDATE(DATE(your birth year,your birth month,your birth day no),12*67)

amjustagirl

Am 30 now and no doubt it will rise a number of times by the time i come to retire. Will be working till we are dead no doubt!