The Lifespan Fund plan - a state pension idea from the Tony Blair Institute for Global Change

QrizB

@GunJack wrote:

However, the perceived poverty is only when compared to earnings, not actually being badly off, surely?

Definitions of poverty are often contentious.

The "dollar a day" absolute poverty line from 1985 (more like $3 a day now) is pretty much unknown in the UK.

The UK poverty line is drawn at "60% of median household income" which might seem rather high to some readers.

Meanwhile the Joseph Rowntree Foundation would suggest that my retired parents, who take two month-long European motorhome holidays a year, fall short of the Minimum Income Standard.

QQQQQQQQ_Y

https://forums.moneysavingexpert.com/discussion/comment/81986232#Comment_81986232

I very much agree with this.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81987614#Comment_81987614

As the previous poster said, there is an official definition of poverty. Of course in reality everybody would perceive it differently.

However if the state pension had remained linked to inflation since 1980 it would probable be worth significantly less than £10K, which is not a lot.

phlebas192

https://forums.moneysavingexpert.com/discussion/comment/81987584#Comment_81987584

That sort of scenario is one of the examples in the report:

Manual worker with lower life expectancy: A person leaves school at 16 and works in construction for 40 years. By age 56 they have a full Lifespan Fund but are in poor health and have a more limited life expectancy than the general population. As a result, the Lifespan App tells them that they are able to retire immediately and convert their Lifespan Fund to a guaranteed pension of £12,500 a year – retiring a decade earlier than is possible under the current system, but on the same terms.

The whole point is that it uses an individual's actual health to determine their life expectancy so it will pick up on issues caused by employment or where they live. Lifestyle comes into it by claiming that it would be possible to exclude health issues caused from eg smoking from the calculation. Seems utterly impractical to me but the underlying idea has merit.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81987622#Comment_81987622

The issues are interlinked. The lower the areas income, employment prospects, housing quality etc, then the unhealthier the lifestyles tend to be.

To digress a bit - I am always surprised by that statistic about Blackpool, somewhere I am very familiar with. Blackpool is one of the largest towns ( as opposed to cities) in the UK. Although the areas directly behind the Golden Mile are 'problematic' ( and a few other areas)., there are large swathes of pleasant suburbs, large parks, golf courses etc. Quite middle class in fact.

So I can understand that life expectancy in parts of Blackpool is poor, I would have thought the average would be higher than many other post industrial towns in the North, where beer, chips and fags are also still popular. Maybe it is a drug problem causing deaths at a young age amongst certain groups that drags down the average.

GunJack

Yeah, don't forget the massive drug problems in Blackpool, it really does drag the place down..

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81987728#Comment_81987728

That seems excessively confusing to me. How does the process work to differentiate between health and lifestyle (possibly not considered a bad choice such as working in Construction) and lifestyle (possibly considered a bad choice such as a diet of cigarettes in Blackpool)? [Nothing against Blackpool but the location seems to have been tarnished in this thread and I don't see the reason to tarnish somewhere else as well.]

Then, the system seems unfair as it would be penalising (or rewarding) people for their choices made 30 years ago in how they can access the SP from age 56, or whatever age is set.

Then, if the rules allow a person in ill-health to access their SP at age 56, why would the SP not be paid to a young mother diagnosed with breast cancer in her early 30's?

Not to mention the other big question that obviously arises in light of personal allowances and what seems to be pledges not to tax the SP (subject to all the many and undefined caveats such pledges are wrapped in)? [Please don't discuss that query here as there are other threads where that topic about tax the SP is mentioned - I was merely referencing it as this is a further complication of early access to SP.

Then, how does the early access to SP affect the already existing benefits that might be available to an individual in poor health and below SP age? Or, indeed, non-health related benefits?

michaels

https://forums.moneysavingexpert.com/discussion/comment/81987728#Comment_81987728

Might do wonders for Blackpool property prices if everyone wanted to live there for 12 months before retiring to qualify for early state pension….

My understanding is that since the introduction of the triple lock, the increase in the state pension has been almost identical to what it would have been had the RPI lock been used instead for the same period?

If I trusted the govt, my pension solution would be that employees (and the self employed) should have the option for their mandatory auto-enrolment pensions contributions (plus any added contributions) to be paid into a funded scheme with the same costs and defined benefits as the LGPS scheme for additonal contributions - this would be a choice not compulsory, they could stay with DC if wanted. The govt would stand behind the pay out (as the council taxpayer stands behind the LGPS) but would benefit from a 'wealth fund' of contributions.

Davesquire

https://forums.moneysavingexpert.com/discussion/comment/81987817#Comment_81987817

A very interesting response. I wonder how much of that drug problem may be due to quality of life and opportunities to move up to social scale (not at all excusing druga taking, but I do understand that it is one of the underlying reasons).

I am originally from the other side of the country - Hartlepool - where most of the industry was shut down by a certain Prime Minister, with very little left to replace it and an unrealistic expectation of re-skilling - which was further damaged by closure of the polytechnic system (the very institutions which could have made a difference).

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81988887#Comment_81988887

Blackpool has a different history to Hartlepool/similar post industrial towns.

The most obvious one is that it was never very industrial ( although there were a lot of good jobs in commuting distance like at ICI & BAE) and the tourist trade has always been the main economic driver.

The tourist trade declined from the 1960's onward, with the increased popularity of going on foreign holidays. In fact the number of visitors stayed very high,( and still is - 20 Million a year ) but their stays got shorter. This led to a glut of tens of thousands of empty beds in all the B&Bs and small hotels, which towns/councils from all over the North utilised as cheap accommodation to house their own homeless /vulnerable citizens. So the Central/behind the Prom part of Blackpool where the biggest concentration of B&B's were, became an area of severe deprivation and very poor quality of accommodation and very few employment prospects beyond some seasonal work. So leading to drug abuse/poor health outcomes and various other ills.

As said before away from these areas, a bit more inland or to the North and South it is has some nice areas. Almost like two separate worlds.