Inform the debate on the effect of the equalisation of the state pension age on women

bmm78

colsten wrote: »

John Ralfe's proposal would cost £8.5bn - very significantly less than the WASPI ask.

However, £8.5bn isn't small change either. I may have overlooked it but I have not seen anything from JR on how he would raise this money. What would you suggest should be the funding source?

John's suggestion as I understand it is that in the overall context of state pension spending, a chancellor can "find" £8.5bn, particularly if doing so helps him move next door.

saver861

colsten wrote: »

There is no spare £8.5bn sloshing around in government coffers. So there are three funding options

Actually, I was under the impression to roll back the 2011 policy would cost £30bn. So you need to find another £21.9bn sloshing around!!

colsten wrote: »

1. raise more money from taxation
2. cancel planned expenditure and re-direct the funds to pension payments
3. a combination of the above

Which option would you suggest, and how would it work?

If they have failed to balance the books correctly, i.e. if they failed to cater for the accounts such that a group of 2011'ers are out of pocket, then they have not done their sums right. Maybe they need to check with some of the Maths teachers on or other experts on here. Why should the 2011'ers pay for it?

colsten wrote: »

The difference would be that the government has planned their income and expenditure.

As above, they can plan and plan and plan, but if the plans are done on incorrect data then the results will be equally incorrect.

As part of their planning, there should be an amount aside for eventualities! Most households have. Poverty will not be an excuse not to pay your bills.

saver861

bmm78 wrote: »

John's suggestion as I understand it is that in the overall context of state pension spending, a chancellor can "find" £8.5bn, particularly if doing so helps him move next door.

lol ... indeed. No doubt he has plenty of plans afoot for a potential house move!!!

bowlhead99

saver861 wrote: »

It's clear there would have to be boundaries. However, these boundaries have not been smoothed appropriately. That is the problem. Its not just unfortunate - it has not been done systematically. See link from John Ralfe and his proposals. He is effectively saying all those that did not have 10 years notice should do so. If you look at his figures - someone born in June 1953 would have their pension two years before someone born in June 1954.

But so what?

There has to be a boundary of some sort because at one end of the scale you retire at 60 and another at 66. The people retiring at 66 can look at the person retiring at 65 and think "ooh, the lucky devil, if only I'd been born earlier!". Likewise the people in the 65 group can look at the 64s and wish they were in that. The people in the 64 can look at 63s or 62s and wish they were in that. The people in 62s probably wished the rules still said 60. It's human nature for Mrs A to look at the other group and think "the grass is greener I wish I was in it". But tough, Mrs A isn't in it. Whether she could have got into it by being a week younger or a month younger or a year younger is not relevant. She's missed it.

Yes it could be smoother but if Ralfe is right it means finding the £8billion or £30bn plus, whatever the exact number is. We would rather not find the £8billion plus, thanks. The government has other things to spend £8 billion on, and if it doesn't, it should knock the tax rates down.

In effect, the two situations are identical, just different amounts of money involved.

So, if the government cannot manage the finances to cater for this shortfall, how can it legitimately say to those 2011'ers that you need to manage your finances to make up the shortfall yourselves?

Well, the government does not really have a shortfall and does not need to manage the finances to cater for it. It *had* a problem whereby people were dropping out of work and into the pension system and staying there too long before dying. It solved it by telling those people that were getting paid earlier than others, that they would have to work longer like everyone else. This didn't quite fix it so they told everyone that they would all have to work longer. Now there is no problem. At least until we go somewhere further into the future and they have to push people back again.

So the government doesn't feel it has a problem, and just wants everyone to get on with it. But some of the people who had their dates put later, want to bring them earlier because they thought it unfair, and so create a shortfall. And the government does not want to create a shortfall, and go and find £8bn from somewhere, because it is satisfied with the now-current status quo. And knows that those people who are complaining will get to cash their pensions at an earlier age than every person born after them.

So really it is not the government that has the problem and a hole to plug, it is the complaining women. One of the ways they could 'make up the shortfall' between wanting to retire at say 64 but only getting pension at 65, is simply to carry on working, like all the other people getting pension at 65 or 66 or 67 will have to if they don't have a £150k pool of investments from which to draw £100 or so every week in investment returns to allow them to retire earlier than the date the government has given them.

colsten

saver861 wrote: »

Actually, I was under the impression to roll back the 2011 policy would cost £30bn.

Undoing the entire 2011 changes for 1950s women would cost £30bn. JR's proposal is very different (and has already been rubbished by the WASPI as it doesn't support their ideas of getting pension payments from age 60))

rpc

Goldiegirl wrote: »

And it's a rite of passage to believe that the generation before you had it, somehow, 'better' and 'easier' than you have it.

It also seems to be some sort of rite of passage to believe that the generation after you somehow has it easier and better than you did...

saver861

bowlhead99 wrote: »

So the government doesn't feel it has a problem, and just wants everyone to get on with it.

Oh there is no doubt about that. They would like this pesky little problem to disappear - no question.

The problem for the government is that this pesky little problem is finding its way onto various media, newspapers, TV programs etc. So, that then does become a problem, the equivalent to a slight monotonous pain or an itch at place you can't easily reach!

On its own its of no account to the Government and ideally they would like to swat it like a fly. However, Governments don't like dirty laundry airing in public and they can't afford their clothes line to be too full with such pesky little problems!!

bowlhead99 wrote: »

But some of the people who had their dates put later, want to bring them earlier because they thought it unfair, and so create a shortfall. And the government does not want to create a shortfall, and go and find £8bn from somewhere, because it is satisfied with the now-current status quo.

Of course not. However, if the Government has made a dogs dinner of the pension thing and it turns out that pressure to bear means they have to fund £8bn, £30bn or £100bn, then its because their policy was unsound in the first place.

Had they not created that policy then that money would have been sourced in any event. If you make a dogs dinner of your home budget and find that Mrs B has stamped her feet down on something and she gets her way, then you will have to rejig your budget or endure the wrath of Mrs B. Only you can decide which would be the least painful in the long run!!

Daniel54

saver861 wrote: »

On its own its of no account to the Government and ideally they would like to swat it like a fly. However, Governments don't like dirty laundry airing in public and they can't afford their clothes line to be too full with such pesky little problems!!

Governments with a working majority and over 4 years until the next GE tend to be rather less sensitive than those further into their term

If the Government does feel the need to "do something" then my own conclusion is that it will have to be means tested.

This was rejected by WASPI in their oral submission to the Work and Pensions committee.

bowlhead99

saver861 wrote: »

Of course not. However, if the Government has made a dogs dinner of the pension thing and it turns out that pressure to bear means they have to fund £8bn, £30bn or £100bn, then its because their policy was unsound in the first place.

Had they not created that policy then that money would have been sourced in any event.

True, if they hadn't created the policies that women should no longer be able to retire at 60 or that people generally should retire at 66, 67 or 68+ instead of 65, then the money would have to be sourced. So, they created the policies, to make sure that now it doesn't.

The £8bn+ is if they do something to 'fix' the sliding scale which doesn't slide smoothly. They don't want to do that. And WASPI didn't want them to focus on trying to do that, because it was a distraction from WASPI getting its £100bn.

The £30bn is if they do something to 'fix' the 2011 changes for all the '50s women. They don't want to do that. And WASPI didn't want them to focus on that do that because it is a distraction from WASPI getting its £100bn.

Now of course WASPI would like to negotiate, because the £100bn they demanded is not going to happen (and never was) but they still want something that they can claim was the victory they were fighting for all along (just not the basis on which people signed up).

The WASPs incessant buzzing (see what i did there?) in trying to make someone bring 'pressure to bear' risks the government being pushovers and going OK, we're the bad guys, have it your way. A general rollback to age 60 should not and will not happen. Targeted measures to 'fix' particular groups by arbitrarily moving dates en-masse again, as distinct from looking at specific needs of people who actually need help (whether born in 50s or 60s or 70s or 80s) stands to be very expensive for us taxpayers, so most of us hope that won't happen either. If there was a referendum on it, I don't believe it would pass - it is just the self-interested ones who think it could and should come to pass.

If you make a dogs dinner of your home budget and find that Mrs B has stamped her feet down on something and she gets her way, then you will have to rejig your budget or endure the wrath of Mrs B. Only you can decide which would be the least painful in the long run!!

True. Divorce from the unreasonable stamping Mrs B is a solution but that might be financially painful too. And until new nookie provision can be obtained, best not to kick the current one out.

But WASPI does not have the government to ransom with threats of divorce settlements or withholding of nookie. "Doing their worst if they don't get their way" amounts to making a loud and annoying buzz and stirring up ill feeling which is not good for the country's morale - so it would be good to just swat them. Unfortunately 'take off and nuke the place from orbit', while a fun idea in concept is not very practical.

bmm78

Alan Higham suggested a number of areas where Osborne could make savings:

http://www.pensionschamp.com/views/2015/11/4/pension-tax-relief-consultation

While this was in the context of the tax relief consultation, if the shoe fits and all that...


Interestingly enough, Ros' 2011 proposal suggested delaying equalisation and then raising state pension age quicker for the next cohort. This was knocked back, and any similar proposal now would create inter-generational conflict which the government would surely want to avoid.