retirement age

EdInvestor

tanith wrote:

My understanding of the reasons behind this is that there simply will not be enough people working to pay everyone a pension when they reach pensionable age unless they move the goal posts now...

It's a bit more complicated than that: you have to factor in how many people under pension age are not working and thus not paying tax or NI ( children, students,SAHMs, those on benefits, those who have retired early) and also how many pensioners are contributing to the system by paying taxes.

That's set to rise considerably as the generation retiring now will have the best retirement incomes so far (mainly via company pensions and other private savings, including equity from property). The net result of this is that the forecast change in the ratio of those paying in to those receiving payouts in the UK is actually quite small, probably manageable with a bit of immigration - hence the changes to retirement age are not draconian.

The position is very different from most European countires where the vast majority of pensioners' income is from generous unfunded state pensions which do have to be paid for by the young generation.The birthrate in Italy, for instance is one of the lowest in the world, and they allow retirement from (IIRC) aged around 55. AND many countries have problems with immigration already..looks like the potential for big trouble ahead...

margaretclare

Cook_County wrote:

Perhaps we should go back to Attlee & Beveridge (the 1945 government for those not schooled in the history of these things) and try to work out why they thought an unfunded promise based on part of the overall tax each person pays was an appropriate method of funding.

Heaven forbid. The way the Attlee government of 1945 saw it, based on the Beveridge Report of 1942, was that pensions would be paid to the man as breadwinner for the family. A married woman was not assumed to be in the workforce - as Beveridge put it 'she has other duties' by which he meant she was to stay at home bearing and rearing children (Beveridge said 'replenishing the population). Her husband would be out at work and he would earn an income - and later a pension - for both of them. For those women who chose to go to work, which was considered secondary to their main occupation of being a housewife and mother, there was the option of not paying NI contributions, only a small amount being paid to cover industrial injuries.

Since then there has been a huge change in thinking. Since the 'baby boom' years of 1945 to the 1960s women have NOT chosen to stay at home having a lot of children and raising them to be the next generation of wage-earners. Women decided they were tired of being dragged into the work-force every time there was a world war and then shoved back out again and told to go home and raise children! They'd enjoyed earning their own money and the freedom and independence that gives.

Gradually there has been a seismic shift in thinking in that nowadays people expect pension provision in their own right and not as part of a 'couple pension' (although it hasn't completely change - GB the Chancellor still refers to 'pensioner couples'). The Fawcett Society in conjunction with Age Concern is currently running a campaign for women's pensions. I am one of a minority of women of my age-group who gets pension income in my own right - it's somewhere like 15%, a tiny minority - and I can tell you that there's no feeling like it, earning your own money and then getting your own pension income in your own right.

Margaret

dunstonh

Beveridge also built the system based on that stats that the average life expectancy was just 2 years after state retirement age.

So much has changed since then and the whole state pension issue needs bringing up to date.

margaretclare

dunstonh wrote:

Beveridge also built the system based on that stats that the average life expectancy was just 2 years after state retirement age.

Absolutely. Also, wasn't it all based on the figures from Bismarck in Germany in the 1870s, that on average a woman would be 5 years younger than her husband, hence 60 for her and 65 for him, they'd both retire together (when he reached 65) and they'd live only a few years, with just enough income to keep them out of the workhouse (although workhouses had been abolished by the 1940s).

DH and I are in what's been called the 'golden cohort' of people born in the 1930s who - if we survived wars, accidents, industrial diseases and everything else - have good health thanks to our healthy lifestyle in our growing-up years - enough plain nourishing food but not too much, physical exercise from walking and cycling everywhere - and improved living conditions and better health-care since. Those of us who've lived past 65 now are projected to have a much longer life-span than anyone predicted before.

So much has changed since then and the whole state pension issue needs bringing up to date.

Absolutely.

Margaret

exil

Bear in mind that if we sue the govt as pensioners or potential pensioners - it's not Blair, or the ghosts of Attlee and Churchill (and I almost said Thatcher) who will pay - but current and future taxpayers (that is - ourselves). There's the rub as Hamlet said.

Govts rarely act off their own bat but on best advice from experts at the time, especially when long-term planning is needed. Things change over time - life expectancy, working patterns (ie women now earning own pension),
expectations. In the 1940s anything looked better than the old system of sending Granny to the workhouse, which was something my great-grandparents remembered happening to people they knew.