How old will you be when you can retire?

N1AK

CLAPTON wrote: »

looking 20-30 years ahead, it's doubtful that one could predict what a private pension will provide any better than the state system.

I don't really understand what you mean about the state fundamentally mismanaging the state pension: it provides broadly what is claims to provide.

No it doesn't, unless you take such a ridiculously wide definition as "some money to some people who are old" because part of the problem is it isn't defined. Should entitlement be based on contribution, should it be income assessed, should it pay a bare minimum or for a little comfort, how long should one work to get the full amount and how long on average should one be able to claim it for (and dozens of other questions) can't be answered.

The pension has been mismanaged, in my opinion, because it took decades to start doing something about the fact it wasn't sustainable. It's mismanaged because what it provides has changed hugely due to inaction rather than long term planning. It's mismanaged because governments constantly promise (and sometimes even give) more to current pensioners while making it worse for future pensioners.

If the state pension could be set in stone as providing x% of the median income from y% of the average life expectancy where the values of x and y made it affordable for the long term then I might have a small amount of faith in the system. This won't ever happen though because you apparently can't change the pension for current pensioners (except to make it better) or for people retiring in the next 10-15 years without being murdered in elections.

Besides which what is the benefit of a larger state pension over a basic provision with forced private pensions other than that it allows the government to mess around with it or spend on buying the votes of desired demographics?

N1AK

CLAPTON wrote: »

looking 20-30 years ahead, it's doubtful that one could predict what a private pension will provide any better than the state system.

I don't accept that premise. Take a look at the history of private pensions and the comparative lack of government intervention compared to the state pension. Private pensions are comparatively safe because taking money from people holding them is less popular politically than fudging the state pension rules in a way that gives the less.

Probably the biggest risk to private pensions is that the government doesn't effectively reform public pensions and then decides to income assess the state pension (or a chunk of it) thus effectively taking part of every private pension. The things that make a private pension less safe are things that would make a larger state pension even more risky.

CLAPTON

N1AK wrote: »

No it doesn't, unless you take such a ridiculously wide definition as "some money to some people who are old" because part of the problem is it isn't defined. Should entitlement be based on contribution, should it be income assessed, should it pay a bare minimum or for a little comfort, how long should one work to get the full amount and how long on average should one be able to claim it for (and dozens of other questions) can't be answered.

The pension has been mismanaged, in my opinion, because it took decades to start doing something about the fact it wasn't sustainable. It's mismanaged because what it provides has changed hugely due to inaction rather than long term planning. It's mismanaged because governments constantly promise (and sometimes even give) more to current pensioners while making it worse for future pensioners.

If the state pension could be set in stone as providing x% of the median income from y% of the average life expectancy where the values of x and y made it affordable for the long term then I might have a small amount of faith in the system. This won't ever happen though because you apparently can't change the pension for current pensioners (except to make it better) or for people retiring in the next 10-15 years without being murdered in elections.

Besides which what is the benefit of a larger state pension over a basic provision with forced private pensions other than that it allows the government to mess around with it or spend on buying the votes of desired demographics?

the state pension is totally affordable

it will undoubtedly change in the future as things evolve

we have no real idea what the population will be in 10 years let alone 20 or 30

we have no real idea what GDP or per capita GDP will be in 20/30 years either

we have no idea about what advances in science or medicine will be either

how can we set in stone what the state pension will be?

Forced private pensions are just tax by another name like green levies on utility bills

CLAPTON

N1AK wrote: »

I don't accept that premise. Take a look at the history of private pensions and the comparative lack of government intervention compared to the state pension. Private pensions are comparatively safe because taking money from people holding them is less popular politically than fudging the state pension rules in a way that gives the less.

Probably the biggest risk to private pensions is that the government doesn't effectively reform public pensions and then decides to income assess the state pension (or a chunk of it) thus effectively taking part of every private pension. The things that make a private pension less safe are things that would make a larger state pension even more risky.

Thatcher raided final salary schemes
Brown raided pension fund dividend
Endless mis-selling pension scandals
current annuity scandal
Minimum age changed from 50 to 55
RPI changed to CPI
Max Size of pension pot continually being reduced
Max yearly contribution capped and now reduced

Likely many more changes: higher rate tax relief abolished?

kabayiri

Are we enabling today's pensioner to live efficiently on modest income?

If we did work in this area, we could derive even greater benefit out of the state pension.

Most pensioners I know are fairly modest in expectation

N1AK

CLAPTON wrote: »

the state pension is totally affordable

it will undoubtedly change in the future as things evolve

No it isn't. The OBR in it's own report shows that our 50 year 'plan' ends in a 1.8% deficit with public sector debt reaching 100% of GDP.

Things change, but that isn't an excuse for ignoring the fact your plan won't work even if they don't.

It's no coincidence that over that period state pensions will go from 5.8% to 8.4% of GDP (+2.6% or +45%), with increases in healthcare and long term social care as well.

So take all the austerity we have planned now all the way through to the end of the decade, with no tax cuts and no additional spending that hasn't already been announced and we still can't afford pensions.

Well I guess we could always afford our pensions if we cut our education budget by another 25% instead

N1AK

sabretoothtigger wrote: »

Thats the socialist doctrine but actually capitalism allocates money best and shareholders only gain from profits, they cant really demand a cut if money is needed elsewhere.

I don't think there's any evidence to show that capitalism and private enterprise is always the better option. Competition is certainly good for markets and a charity offering annuities would have to compete in that market.

N1AK

kabayiri wrote: »

Are we enabling today's pensioner to live efficiently on modest income?

If we did work in this area, we could derive even greater benefit out of the state pension.

Most pensioners I know are fairly modest in expectation

We're enabling it, but it's like leading a horse to water. To take a personal example, my own grandparents:

1. Live in a large 4 bedroom property
2. Keep a decent amount of savings in a terrible rate ISA
3. Have a cheap inefficient boiler, aren't interested in insulating and have hoarded incandescent lightbulbs

They can afford this, fortunately, even if very little of it makes financial sense. The elderly just like anyone else could downsize, insulate etc to save money on heating but the government can't say "if you can't afford to heat a family house with just two people living there then move" because it would be seen as callous and uncaring so instead we brought in the winter fuel allowance to support poor decision making.

CLAPTON

N1AK wrote: »

No it isn't. The OBR in it's own report shows that our 50 year 'plan' ends in a 1.8% deficit with public sector debt reaching 100% of GDP.

Things change, but that isn't an excuse for ignoring the fact your plan won't work even if they don't.

It's no coincidence that over that period state pensions will go from 5.8% to 8.4% of GDP (+2.6% or +45%), with increases in healthcare and long term social care as well.

So take all the austerity we have planned now all the way through to the end of the decade, with no tax cuts and no additional spending that hasn't already been announced and we still can't afford pensions.

Well I guess we could always afford our pensions if we cut our education budget by another 25% instead

if the number of retired people are increasing as a percentage of the whole then one would expect the percentage of GDP being spent on retired people to increase too.

If you want the % GDP spent on the old to decrease then you must make them poorer; no other way.

Loughton_Monkey

CLAPTON wrote: »

if the number of retired people are increasing as a percentage of the whole then one would expect the percentage of GDP being spent on retired people to increase too.

If you want the % GDP spent on the old to decrease then you must make them poorer; no other way.

"If the number of retired people are increasing as a percentage of the whole then one would expect the amount of money being spent on retired people to increase too." may be a true statement. Then again, it might not. I don't know what you mean by "spent on", nor do I know how much is "spent on" children, or young adults, or old but not retired adults.

You have an interesting concept of "Spending GDP" which is alien to most peoples' thinkng. GDP tends to generate tax. Tax goes into government coffers. Government borrow more on top. And then they spend that. Maybe there's a loose correlation between GDP and [tax plus borrowing] but I don't know how you would measure it. A lot of Government spending out of tax is, itself, GDP.

The government spent £4 million last month on MP's salaries. Could you enlighten us how much of this related to people of my age (retired), how much to working people, how much to children, and how much to non working, non retired people? And which exact part of our "GDP" did this money come from?