The economics of pensions - what should the country do?

vivatifosi

At last, something to discuss that has nothing to do with Brexit.

Interesting article on the Guardian website. It suggests that incremental increases in age, with people living longer, stopped in 2010. This was confirmed this week in an analysis by the ONS.

https://amp.theguardian.com/money/2018/jun/23/state-pension-age

If true, what should the government do? Stop raising the ages, raise them still pay pay down the deficit or pay for the NHS, or something else?

tacpot12

As people are no longer living longer, the government should keep the state retirement age where it is, and keep raising the level of the state pension in line with RPI (not CPI); the triple lock was unnecessarily generous to my mind.

The budget deficit is falling and needs to continue to fall, so the government should raise the basic level of income tax to adequately fund the NHS and allow the deficit to continue to be eroded. I feel the UK National Debt is too great and needs to return to being about 40% of GDP, so once the deficit is eliminated, the government should focus on reducing the national debt.

Nullboris

Yes the govt should stop raisng the SPA as long as life spans don't continue to increase.
ANy extra money should go towards those hardest hit by Austerity and less likely to live their average old age (which tend to be the same group, the poor, low paid non house owners).
If extra money is needed to pay off the deficit , National Debt it should come from taxing the TURNOVER of tax dodgers supreme (AMZ, GGL,MSFT,EBAY) so they cant escape.
RPI, increases in SP were never that generous , GB has the worst state pension of any advanced nation (on the level of Monrovia).

https://www.theguardian.com/money/2017/dec/05/oecd-uk-has-lowest-state-pension-of-any-developed-country

Things should get easier for the GOVT as the new Private pensions start to eventually kick in .
Altho that leaves people of say, 50+ caught in between the old regime and the new.

Sapphire

Nullboris wrote: »

If extra money is needed to pay off the deficit , National Debt it should come from taxing the TURNOVER of tax dodgers supreme (AMZ, GGL,MSFT,EBAY) so they cant escape.
RPI, increases in SP were never that generous , GB has the worst state pension of any advanced nation (on the level of Monrovia).

Thoroughly agree with that sentiment.

Thrugelmir

Need to understand why. Is it down to lifestyle? As very easily there could be a sea change in attitude.

kinger101

Of course, the real statistic that should have been used is longevity at 65 rather than longevity per se. The increase in life expectancy for those that reach retirement age has been more modest.

But that makes the Government's job of screwing over the younger generations somewhat harder.

kinger101

Thrugelmir wrote: »

Need to understand why. Is it down to lifestyle? As very easily there could be a sea change in attitude.

It could also change with further improvements in healthcare. I expect we'll be able to catch cancers at much earlier stages with improved diagnostics, and tailor treatments better based on a greater understanding of the ecology of cancers.

sleepymans

Top priority is to settle the WASPI womens valid claims to the pensions they were defrauded at the end of their 40 year working lives, with no time to ameliorate the loss.
Next priority to ensure SPA for everyone is no older than 65 whilst retaining the generous increases to defer SP voluntarily.
Then Put resources into closing loopholes and tax dodges for big global companies, even if some rates of tax for them were to be kept competitive in order to retain jobs in GB & NI.
Then Stop Help to Buy, it merely keeps house prices artificially high and increases profits for the big rip off developers

michaels

I guess the increase in retirement age fell behind the increase in life expectancy so in theory we probably still need some increases to get back to the point where it is actually affordable.


In reality there is also a trade off between the retirement age and the rate of pension increase in terms of keeping things affordable - perhaps we should have a poll asking whether people would prefer inflation busting increases in the state pension and a rising retirement age or less generous increases but a lower retirement age?


Finally NI is income tax in all but name and the two should be merged, with the impact on wealthy pensioners accepted.


(It seems strange that those who decry VAT as a regressive tax on the poor at the first to propose a tax on turnover = VAT by another name :rotfl:)

Thrugelmir

michaels wrote: »

(It seems strange that those who decry VAT as a regressive tax on the poor at the first to propose a tax on turnover = VAT by another name :rotfl:)

VAT isn't charged on turnover. It's charged on the value of goods or services supplied. A tax on turnover would reduce the ability of multi nationals to move profit around their international subsidaries. Thereby impacting the level of corporation tax paid.

LHW99

Although many people retire early, there are also those that continue to work after SPA. Continuing to pay NI if you are employed seems reasonable, and IMO it seems odd to have an upper limit at which NI is charged at a lower rate, so basically I agree with Michaels that NI should be merged with income tax, and paid by all with income over a (perhaps increased) nil rate band