MSE News: Pension age rise 'a bitter blow'

donny_jim

at least they have 17yrs to get used to the idea, my wife is 1 of the unlucky ones born in 1954.
born 4yrs later but having to wait nearly 6yrs before she gets her pension.
the government keeps saying its only an extra 18mnths.
it was bad enough knowing she had to work an exta 4yrs, then they moved the goalposts again.

wozearly

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.

Yes, but in fairness, we are also facing an unusually large increase in the proportion of retirees due to increased life expectancy and the demographic impact of the baby boomer generation retiring whilst leaving a significantly smaller younger generation after it. There has also been a historically fairly static retirement age that hasn't risen in line with life expectancy and the state pension itself tends to (in general) rise to help offset inflation.

That means that the cost burden on current and future workers is set to be unusually high by historic standards. This will also be borne for a number of years, hence the 'unaffordable' comments being thrown around. Its not technically unaffordable, but it does risk being politically unaffordable further down the line as paying towards current pensioners' provision takes up an increasing proportion of tax revenue.

In my view, its better to manage the costs of this over time by making the state pension available for a smaller proportion of someone's life than it would be to, say, reduce state pension payments starting next year (which would be another solution, and one that would be far more equitable to the younger generations...but don't worry, it won't happen as it would be political suicide).

Even if I disagree with some specifics of the government's decisions, I do agree with their general direction.

Ultimately a violent revolt won't change the economics behind the problem...we need 'someone' to permanently pay more if we want to get the same benefits as current retirees.

So I'd echo Lokolo's view. If you have a better solution that you believe is workable then put it to the country at the next election. Pensioners and soon-to-be-pensioners are, after all, a very sizeable political group.

bigfreddiel

but as we all know from other threads - you must not rely only on the state pension for your retirement income as its so low you can't live of it - just regard it as pin money - so bearing that in mind waiting a year or two isn't a problem now is it!

jem16

donny_jim wrote: »

at least they have 17yrs to get used to the idea, my wife is 1 of the unlucky ones born in 1954.
born 4yrs later but having to wait nearly 6yrs before she gets her pension.

The change to equalise women's state pension age with men's happened in 1995 and was brought up about 5 years before that. So women have known about it for 20 years.

the government keeps saying its only an extra 18mnths.

It's the 2nd change of an increase to age 66 that's been brought in too quickly which is why the government pegged it back to 18 months from 2 yrs for those, like your wife born in 1954. Still doesn't help much though in this case.

DPEN

I think they are going the wrong way. I think the retirement age should be comming down and younger people should be given employment. People that want to work past 60 should be allowed to continue working with greater tax insentives but no pension, others that not enjoying there work due to age should be allowed to retire and claim the state pension at 60.

If you opt for retirement at 60 you should be given additional money to work with the community and older people to cut down the cost of looking after older people and doing home visits.

jamesd

wozearly wrote: »

Its not technically unaffordable, but it does risk being politically unaffordable further down the line as paying towards current pensioners' provision takes up an increasing proportion of tax revenue.

Indeed. That's part of why I support this even though it'll affect me: I'll be retired at the time of peak financial stress if I'm fortunate enough to live that long. I don't want those paying the bills then to be excessively unhappy about the cost.

Gracchus_Babeuf

wozearly wrote: »

Yes, but in fairness, we are also facing an unusually large increase in the proportion of retirees due to increased life expectancy and the demographic impact of the baby boomer generation retiring whilst leaving a significantly smaller younger generation after it. There has also been a historically fairly static retirement age that hasn't risen in line with life expectancy and the state pension itself tends to (in general) rise to help offset inflation.

Sorry, but I don't necessarily accept that these increasing life expectancy figures have so dramatic an impact. Life expectancy has been increasing since the invention of antibiotics but the crucial thing is that the actual ageing process has not changed. People might live a few years longer, because of improved medical care, but they still get old at the same rate as they did 500 years ago! So, does that mean the solution is to make elderly people work for longer? Of course not! Employers don't want white haired geriatrics in offices, they want young and energetic employees. Many of these people will be kicked out at 65 and then claim dole money for two years, so the government will still be paying out some money to them anyway! The solution is not to postpone the pension age but to increase NI contribution to ensure there is enough input to match the potentially longer payout.

wozearly wrote: »

That means that the cost burden on current and future workers is set to be unusually high by historic standards. This will also be borne for a number of years, hence the 'unaffordable' comments being thrown around. Its not technically unaffordable, but it does risk being politically unaffordable further down the line as paying towards current pensioners' provision takes up an increasing proportion of tax revenue.

Tough! Pensions are important and have to be paid for. I would rather pay higher NI in return for the certainty of a state pension than have to make greater contributions to my private one which is gambled on the stock market.

wozearly wrote: »

In my view, its better to manage the costs of this over time by making the state pension available for a smaller proportion of someone's life than it would be to, say, reduce state pension payments starting next year (which would be another solution, and one that would be far more equitable to the younger generations...but don't worry, it won't happen as it would be political suicide).

I disagree - it's better to pay more NI and keep the pension at 65.

wozearly wrote: »

Even if I disagree with some specifics of the government's decisions, I do agree with their general direction.

Ultimately a violent revolt won't change the economics behind the problem...we need 'someone' to permanently pay more if we want to get the same benefits as current retirees.

So I'd echo Lokolo's view. If you have a better solution that you believe is workable then put it to the country at the next election. Pensioners and soon-to-be-pensioners are, after all, a very sizeable political group.

My solution is higher NI contributions and also for the government to underwrite all private pensions so that everyone who pays into them is guaranteed a designated minimum pension based on contributions over a period of time - i.e. pay £500 a month over 30 years, get a minimum £XXXX pension at age 65 etc.

Gracchus_Babeuf

bigfreddiel wrote: »

but as we all know from other threads - you must not rely only on the state pension for your retirement income as its so low you can't live of it - just regard it as pin money - so bearing that in mind waiting a year or two isn't a problem now is it!

Unfortunately many people have to rely on the state pension. Lots of people either earn too little to save for a private pension or don't have steady employment for long enough. That's life I'm afraid and please don't start blaming them as you have no idea of what life can throw at you!

Gracchus_Babeuf

DPEN wrote: »

I think they are going the wrong way. I think the retirement age should be comming down and younger people should be given employment. People that want to work past 60 should be allowed to continue working with greater tax insentives but no pension, others that not enjoying there work due to age should be allowed to retire and claim the state pension at 60.

If you opt for retirement at 60 you should be given additional money to work with the community and older people to cut down the cost of looking after older people and doing home visits.

I've always believed 60 was the right age for retirement. Infact, 55 is probably the optimum age if this was possible.

Gracchus_Babeuf

MacMickster wrote: »

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.

My point exactly.