Retired people could work for pensions..

CLAPTON

Angry_Bear wrote: »

This is one way they could fund it - or reduce wages, reduce profit margins (*gasp*) etc. That's part of why I said you were oversimplifying my point.
I didn't say "raising the prices of goods ... is better than increasing tax". I said that taking an option that may increase the cost of good is preferable in this instance to increasing tax. this (imo) is because of the end result, not the medium of obtaining the money. In many cases, I think increasing taxes to provide better services is a Good Thing (TM).
No there isn't, and I'm not really sure of the point you're making - care to elaborate?*

ETA: I just read this back and it sounds kind of aggressive, it's not meant to ... honest

Economics and the economics of pensions is a difficult subject. There is a general sort of feeling that pensions paid directly from tax are somehow bad whilst pensions paid from funded schemes are some how good.
For any given pension level the true costs are basically the same. The confusion is basically round the issue that everyone understands the idea of more tax but the inevitable reduction in earning and /or increases in prices caused by funded schemes is much much harder to grasp.
Basically if pensioners have a good standard of living whether funded by the workers by taxation or funded by the worker via reduced wages (i.e. to allow profits for the pension funded) the true cost to the workers is the similar.

seven-day-weekend

paulmapp8306 wrote: »

For houses - Ive just bought my first home at 45. No help from anyone, though Im hardly young.

I must say that until very recently (in historical terms) the vast majority of people rented. Very few ever owned their own homes. thats a very modern way of thinking. Its almost a FAD (if you think about it) thats been popular for a while but will soom go back to the traditional way of renting.

not saying I want this to happen - but it does seem rather likely.

I agree with that, when I was born in 1950 (older boomer!) most people rented,, either private or council. I think it is going back that way already.

ruggedtoast

BobQ wrote: »

Did she seek independent advice?
Did Babs suggest she did?
What was Babs plan for retirement when her father died?
Did the bank not think of refusing the equity release when she was approaching negagtive equity?

Beats me.

..

BobQ

paulmapp8306 wrote: »

So - make state pensions means tested, make access to state benefit payments tougher, and only give what is needed to live on at a reasonable level. We need to cut spending in health, education, and every other service. This needs to be done by cutting waste if possible (and it is in most cases, its just easier to cut jobs/services than finding where the waste is). If high cost medication and treatments arnt affordable, then their not. The NHS was set up to give everyone access to BASIC medical care - NOT cutting edge medical care.

I can sympathise with this view to an extent and would not be surprised if the state pension is means tested at some point in the future.

What I have difficulty with is that many people (me included) have paid mandatory NI contributions for four decades in the expectation that I would receive the state pension. You seem to advocate an instant change under which previous contributions are ignored and an unspecified level of means testing applied. I ask is it fair? If you say "yes", I ask if you apply the same criteria to the NHS (ie that its only free for some (Medicare)? I suspect you may say this is fair too.

The difficulty I have with your argument is that I believe that there should be a universal basic pension and that those who have paid contributions to it should should recieve it whatever their means. I also think it will be less bureaucratic to do this. Equally I agree that those who receive it that have other income should pay tax on it which is a form of means testing.

seven-day-weekend

BobQ wrote: »

I can sympathise with this view to an extent and would not be surprised if the state pension is means tested at some point in the future.

What I have difficulty with is that many people (me included) have paid mandatory NI contributions for four decades in the expectation that I would receive the state pension. You seem to advocate an instant change under which previous contributions are ignored and an unspecified level of means testing applied. I ask is it fair? If you say "yes", I ask if you apply the same criteria to the NHS (ie that its only free for some (Medicare)? I suspect you may say this is fair too.

The difficulty I have with your argument is that I believe that there should be a universal basic pension and that those who have paid contributions to it should should recieve it whatever their means. I also think it will be less bureaucratic to do this. Equally I agree that those who receive it that have other income should pay tax on it which is a form of means testing.

This happens anyway, once your income from all sources exceeds your personal tax-free allowance. Many Pensioners pay tax. I don't at the moment, but will when I receive my Local Authority Pension in 2014.

paulmapp8306

Im not advocating anything in particular - and I understant BobQs point.

I will say than NI is not just for pension provision. Its where the NHS is (or is supposed to be) funded from as well. Hence why the NI rate went up 1% to fund extra NHS costs a few years back.

Basically, I say we should get rid og NI all todether, but raise income tax by that amount. Ultimately it all goes into a government pot anyway - just call it one thing and let the government decide how its spent. That way there will be no "ive paid in for my pension" type feeling. You pay Tax on what you earn - and get benefits (including pension) as and when you NEED it - and access to amenaties like medical care, policing, armed forces protection, education, libraries etc etc through you life.

The difficulty is always - when do you impliment the change. If your going to change it has to happen at some point and there will always be winners and loosers. Change it now, while also raising the state retirement age by a couple of years (planned anyway), and have done with it.

Angry_Bear

CLAPTON wrote: »

Economics and the economics of pensions is a difficult subject. There is a general sort of feeling that pensions paid directly from tax are somehow bad whilst pensions paid from funded schemes are some how good.
For any given pension level the true costs are basically the same. The confusion is basically round the issue that everyone understands the idea of more tax but the inevitable reduction in earning and /or increases in prices caused by funded schemes is much much harder to grasp.
Basically if pensioners have a good standard of living whether funded by the workers by taxation or funded by the worker via reduced wages (i.e. to allow profits for the pension funded) the true cost to the workers is the similar.

I’d agree with all of that. I guess what I’m trying to do is address the feeling that people should get out something proportionate to what they’ve paid in. But in some ways that’s what we already have – with private pensions being a top-up to state pension. Then the question becomes whether the state pension is “too much”, “too little” or “just right” and I don’t really have a feel for that.

I tend towards the opinion that a state funded pension should be survival level, and if you want better you provide it for yourself – but I don’t know how close/far it is from that just now.

The practical problem seems to be that you have a generation approaching retirement who didn’t make private provisions because they were under the impression that their NI contributions were making those provisions for them. This clearly isn’t sustainable long term, but moving the goal posts for people about to retire is unfair to say the least.

However, we need to ensure that this (perception of NI contribution being sufficient for a future pension) is corrected for future generations - including me - so that people know that if they don’t make their own provisions, then they should expect a breadline retirement

I am against raising the pension age because I doubt that a 70 year old in 30 years time will be any more capable of doing a job than a 70 year old today (that is, some 70-year olds will be capable of doing some jobs but many will be ruled out due to physical demands). So the options are back to raising taxes, reducing pension costs, or both.

Out of curiosity, what will you do when you rule the world?

CLAPTON

Angry_Bear wrote: »

I’d agree with all of that. I guess what I’m trying to do is address the feeling that people should get out something proportionate to what they’ve paid in. But in some ways that’s what we already have – with private pensions being a top-up to state pension. Then the question becomes whether the state pension is “too much”, “too little” or “just right” and I don’t really have a feel for that.

I tend towards the opinion that a state funded pension should be survival level, and if you want better you provide it for yourself – but I don’t know how close/far it is from that just now.

The practical problem seems to be that you have a generation approaching retirement who didn’t make private provisions because they were under the impression that their NI contributions were making those provisions for them. This clearly isn’t sustainable long term, but moving the goal posts for people about to retire is unfair to say the least.

However, we need to ensure that this (perception of NI contribution being sufficient for a future pension) is corrected for future generations - including me - so that people know that if they don’t make their own provisions, then they should expect a breadline retirement

I am against raising the pension age because I doubt that a 70 year old in 30 years time will be any more capable of doing a job than a 70 year old today (that is, some 70-year olds will be capable of doing some jobs but many will be ruled out due to physical demands). So the options are back to raising taxes, reducing pension costs, or both.

Out of curiosity, what will you do when you rule the world?

when I rule the world pensionwise,
I would raise the state pension to a higher level so that most people would have liveable income in retirement without means tested benefits...the exact amount and whether it would be graduated etc would be for public debate.

I would scrap the new compulsory work place pensions for a whole variety of reasons and abolish the tax benefits for all pensions (basically destroying the largely corrupt pension industry).

people would then have a very definite idea of how much money they will have in retirement and if they wish to have more then they would make whatever provision they wish (cash savings, S&S, property etc.) but without taxpayer support.

transition arrangements would of course need to be worked out but the whole process would have to be phased in over a number of years.

I would launch an education programme to explain the consequences in the demographic changes likely over the next 40 years or so and how this affects the long term income of pensioners and workers in the future

paulmapp8306

I think raising the retirement age to the proposed 67 or 68 is OK. many people work until then anyway either through desire or necessity.

Those 2 or 3 years relief from liability for the government coffers would in themselves go a long way to reducing the national deficite.

StevieJ

Angry_Bear wrote: »

.

However, we need to ensure that this (perception of NI contribution being sufficient for a future pension) is corrected for future generations - including me - so that people know that if they don’t make their own provisions, then they should expect a breadline retirement

I am not sure that current state pension provision (without personal pension) is any better than a breadline retirement level?