Move the State Pension age back to 60 for both men & women

hyubh

nigelbb said:

Why do you think that the NI increase should disproportionately fall on the employee? If the overall take must increase by 25% then the employee rates need to change from 12% & 2% to 15% & 2.5%. Returning to my example of someone on £100K their NI payment would increase by under £30/week which I would certainly have been happy to pay for the promise of my state pension at 60.

A further tax on employment meaning nothing for the employee... £100K salary examples... hmm, the voice of the well-remunerated public sector speaks ;-)

jamesd

nigelbb said:

Why do you need to increase the employee rate by 60% from 12% to 19%? To fund the earlier pension requires taking an extra 25% in NI contributions so just increase current rates by 25% i.e. 12% & 2% to 15% & 2.5%. For someone earning £100K per year that's under £30/week. Who wouldn't be happy to pay that for the promise of a state pension at age 60?

You can split the increase however you like as long as the increase in NI take is roughly in proportion to the increase in the number of people getting the state pension. If you make employers pay you should expect reduced pay increases to compensate or fewer jobs or a combination of both, unless you also deliver a matching increase in employee productivity,

I make it crudely around £47 a week combining the standard and higher rate levels with your split to get around £2,450 a year from the employees.

Of course the burden preferentially affects those paying the 12% rate now because that's where most people's earnings are. Median annual pay for full-time employees was £31,461 for the tax year ending 5 April 2020.

The people paying won't be happy with it, overall. This goes back to the work of the Turner Pensions Commission which looked at state pension affordability and found that increasing the state pension age was one of the essential tools to avoid socially unacceptable increases in costs for workers. The report was widely approved by all major parties and major unions and at least the big three have actively moved to implement its recommendations. If you haven't done it yet and are interested in state pension policy I highly recommend reading all three, first, second and final reports since they cover different material at times. The first report has most of the underlying research, the second looks at various solution approaches and the final has the ultimate recommendations.

Anyone interested in the employment effect of Covid-19 might want to look at the high and low pay part of that ONS survey. Low pay (less than two thirds of median) fell from around 22% to around 15% of the workforce while median and high pay (1.5 times median or more) showed little effect. More than half of those on £8.72 or less were furloughed.

jamesd

zagfles said:

Also I don't think jamesd accounted for the loss of NI revenue from those aged 60+ (currently no employee NI above state pension age, and no NI on pensions)

I covered two big omissions in my original post: fewer workers paying NI and the diversion of part of the NI take to the NHS. There are many more, including the extras you mentioned, but it's good enough to show how expensive the idea is.

Anyone who wants to is very welcome to look up more refined numbers and maybe the government will do that in its response.

jamesd

Thrugelmir said:

Anonymous101 said:

Logically those in the lowest paid jobs are more likely to be able to retire if you pulled the state pension forward.

I'd say it's it's the reverse. 

Unlikely, since the lowest paid tend to rely on the state pension and tend not to retire until it gets paid, or a year or so earlier. The Turner Commission did some analysis of this and found that state pension age was key at lower levels, if my recollection of a set of analysis and reports from fifteen years ago is correct.

Malthusian

Ibrahim5 said:

I had never really thought about delay in the start of work. If you left school at 18 and retired at 67 that would be 49 years. I delayed my start and retired early after 28 years full time work. My wife did 7 years full time work and then married me. She has full state pension because we had children over a number of years. Doesn't seem much work over a lifetime. A footballer may only have to do say 5 years and that would be it if they were careful 

Some people do seem to struggle with the fact that a working lifetime is now shorter than it used to be, at least for men.

The taxpayer will maintain you in education if you wish until around age 21. (Longer is possible but postgraduate study has barriers to entry.) State Pension Age is currently 68. Compulsory working life = 47 years.

A male baby boomer would typically start work no later than 16 unless they were academically gifted and collect their State Pension at 65. Working life = 49 years.

Thrugelmir

jamesd said:

Thrugelmir said:

Anonymous101 said:

Logically those in the lowest paid jobs are more likely to be able to retire if you pulled the state pension forward.

I'd say it's it's the reverse. 

Unlikely, since the lowest paid tend to rely on the state pension and tend not to retire until it gets paid, or a year or so earlier. The Turner Commission did some analysis of this and found that state pension age was key at lower levels, if my recollection of a set of analysis and reports from fifteen years ago is correct.

There's a growing number of people with mortgages outstanding heading towards and into their retirement years. With property increasingly only affordable on 30-40 years mortgage terms. There's an increasing wealth gulf developing in this country. As there has been in the US for the past 30 years. 

michaels

Thrugelmir said:

jamesd said:

Thrugelmir said:

Anonymous101 said:

Logically those in the lowest paid jobs are more likely to be able to retire if you pulled the state pension forward.

I'd say it's it's the reverse. 

Unlikely, since the lowest paid tend to rely on the state pension and tend not to retire until it gets paid, or a year or so earlier. The Turner Commission did some analysis of this and found that state pension age was key at lower levels, if my recollection of a set of analysis and reports from fifteen years ago is correct.

There's a growing number of people with mortgages outstanding heading towards and into their retirement years. With property increasingly only affordable on 30-40 years mortgage terms. There's an increasing wealth gulf developing in this country. As there has been in the US for the past 30 years. 

Too true. Excessive house price inflation as a result of housing supply being constrained by nimbyism has led to anime who owns a property, mortgaged or not, seeing a big increase in paper wealth.

6 pages in and we are still feeding the troll/sum op.

AlanP_2

JoeCrystal said:

The More Details got more information from the creator.

"Young people are struggling to find work, & losing their jobs, due to the pandemic. Why not allow older people to retire earlier, thereby freeing up jobs for younger people? There would be a cost, however, surely a far more positive cost than paying Universal Credit? Not to mention the option of restoring the balance back into young people's favour, & helping restore their future."

Lower the state pension age isn't the right way to restore "balance" back into young people's favour! Besides, all this will only result in large tax increases and guess who would be most hard-hit? A single working childless young person likes me, and I certainly don't fancy paying for it, not when I am trying to keep my head above the water at the moment.

Having said that, I am a firm believer that all people need to contribute towards the Treasury coffers, especially the pensioners who draws on the most from the coffers.

From all the "staff wanted" posters on shops, bars, cafes etc. and the difficulties in recruiting I hear about why does anything need to be done to make more jobs available?

Brie

how about having anyone who has been on a very high salary (over £100K?) for a long time (20+ years) be excluded from getting any state pension?  that was there would be some money to pay to those who were never in a position to save for a pension to get a decent cut when they hit their 60s (be it 60 or 68).  

(I'll now put on my tin hat and duck behind the sand bags before the barrage begins)

p00hsticks

There has now been a Government (DWP) response to the petition, as follows;

Parliament has voted to equalise the State Pension age (SPa) and subsequent retirement ages for men and women. Reducing it to 60 is neither affordable nor fair to tax payers and future generations.

The latest Office for National Statistics data shows that the number of people over SPa compared to the number of people of working age is expected to increase. On average, people are living longer, and increasing SPa in line with life expectancy changes has been the approach of successive governments over many years. It helps to maintain the cost and sustainability of the State Pension in the long term.

The State Pension is funded through the tax contributions of the current working-age population. Reducing the SPa to 60 would therefore increase the tax burden of the current working-age population.

The government have previously estimated that had we not put in place any increases in SPa for both men and women, the total additional cost to taxpayers would have been around £215 billion for the period 2010/11 to 2025/26, in 2018/19 prices. This figure takes into account State Pension, other pensioner benefits, and savings made on working age benefits. The 2019 report that details these costs can be found here: https://www.gov.uk/government/publications/analysis-relating-to-state-pension-age-changes-from-the-1995-and-2011-pensions-acts/analysis-relating-to-state-pension-age-changes-from-the-1995-and-2011-pensions-acts

The Government has provided an unprecedented amount of support via our plan for jobs to help those of all ages find work and get the skills they need to return to work.

Our Plan for Jobs has been designed to deliver targeted support to those most in need, and we continue to provide tailored programmes for younger people who are unemployed. Evidence shows that unemployed young people can gain employment more quickly than older age groups and we have built on our existing programmes by providing further support for young people during the pandemic including the DWP Youth Offer, which has provided wrap-around support for 18-24-year-olds in the Intensive Work search regime of Universal Credit, since September 2020, and the £2 billion Kickstart scheme which funds the direct creation of additional jobs for young people at risk of long-term unemployment giving them the chance to build their confidence and skills in the workplace, and to gain experience that will improve their chances of progressing to find long-term, sustainable work.

Since the launch of Kickstart in September, employers have created over 247,000 approved vacancies for young people, including engineering, construction, adult social care and retail and over 44,000 young people have started in their Kickstart job.

Department for Work and Pensions