We have received a couple of reports this week discussing the age at which people should be entitled to a State pension based on their NI contributions.
Current policy is to raise the age from 65 to 66 in 2020, and to 67 in 2028. As people live longer, so the cost of their pensions rises without a proportionate increase in their contributions over their working lives. Whilst the state retirement scheme is a pay as you go one, where each generation pays for its parents generation out of current NI payments, individual pension entitlement is still based on your past contribution record.
The Cridland report suggests raising the age to 69 between 2037 and 2039 and going higher thereafter. The Government Actuary suggests 69 by 2053-5, with another variant bringing in 69 as early as 2040.
The Report also raises the issue of whether after the end of this Parliament there should be some change to the triple lock. Currently the government is pledged to increase pensions each year by the highest of earnings, prices (CPI) or 2.5%. Dropping one or two of these requirements could make progressive savings to the total cost. In recent years the 2.5% minimum has meant pensioner incomes rising faster than incomes in work.
I would be interested in your thoughts on all this. There does seem to be a good case to say that as longevity rises there should be a proportionate rise in the pension age to keep some balance between an individual’s contributions when working and their pension receipts. Allowing the triple lock has helped narrow the gap between pensioner incomes and working incomes. There is an issue in how much further people think that should go.
March 24, 2017
The State pension scheme is a Ponzi scheme and always has been. It was ill conceived and no-one has had the political courage to change it.
By far the best idea is a low tax state in order that people can actually save to support themselves in later life. The state not stealing wealth intended to be inherited would also help….
Naturally, these ideas have been far too radical for recent “Conservative” governments.
March 24, 2017
mickc
Spot on
If the government didn’t take our money in the first place, if the government didn’t illegally manipulate interest rates and if the outrageous IHT, Probate and every other tax they can think of didn’t apply we would all be better off
We now have NI, ENI, Workplace pensions and private pensions. Why ?
March 24, 2017
Libertarian: “Why ?”
Everything the government touches turns to …..
March 24, 2017
The problem with low tax and save for a pension is that there are far too many workers who can hardly exist on the pay they have leave alone save. These workers sell their work too cheaply which they have to so they can stay in work. The fact is that they subsidise those on much higher wages. Percentage wage increases widened the gap between rich and poor so much. If you earn £10 a week and get a 10% increase your weeks pay goes up by £1. If £100, £10 that is an unfair advantage. The result is that through the years people cannot now afford a house or the rates or rent. They would not be able to exist without what some call scrounging. We need geared wage increases to close the gap. Basic wage is unfair. I worked until I was 70 from the age of 15. I can hardly take 1 year out for unemployment or sickness. When work finished I went self employed. for 23 years I never had a holiday. My full pension now including private is £800 a month. I retired in 2008 and lost most on the collapse of the financial system. I need that triple lock. I lived through abject poverty as a child many young men were killed in the war but our old were looked after. I see so much wealth around me and I see the selfishness of the present generation that they must have all without sacrifice. We looked after my in laws they never went to a home and took my mother in for the last 3 years of her life. We had that spirit years ago but its almost gone now.
March 24, 2017
Increasing retirement age as people live longer seems very sensible.
But will this be fair for manual labourers when compared to office workers ?
March 24, 2017
The state pension retirement age was 70 when it was introduced in 1908. Since mass immunisation started and men stopped breathing coal dust and asbestos, Boomers, Generation X and Millennials, will be required to spend no more than 24% of their life expectancy in receipt of state pension.
This means, you should try not to live past your current life expectancy of (average) 90. Hence, your retirement age will be 69. This should, to be fair, skewed +/- 3 to 4 years, due to males in the north, living several years less than females in the south of the UK.
March 24, 2017
Fair? Or even not possible.
March 24, 2017
Those who are already in the workforce, have already contributed tax and NI, your government should pay what it is contracted to pay. Unless of course you are intending to Welch on yet another undertaking.
For those who are yet to join the workforce or who have not yet contributed tax and NI, you can set the threshold where ever you wish.
March 24, 2017
Low interest rates have done more to decimate the value of people’s pensions than anything else but they don’t really affect public sector pensions, so they barely warrant a mention here.
So low interest rates will cause private sector workers to NEED to work longer and longer just to have a decent level of income after retirement. The same pressure is not felt by MPs, EU bureaucrats (sorry for putting you in the same category there!), probably train drivers, teachers and so forth.
Until MPs’ and EU bureaucrats’ retirement income is meaningfully linked to interest rates, this unfairness will persist.
March 24, 2017
As with the NHS and welfare benefits, the funding of pensions and the age of access to them cannot be examined while ignoring the medical advances that mean that far more people will live for far longer.
Society and individuals must start facing up to the philosophical and ethical consideration of quantity of life versus quality of life.
I write as a pensioner, and with personal experience of bereavement.
March 24, 2017
To illustrate.In the news recently.Just one invention…it enables 10-15% extra paint in every paint can worldwide to be fully used. It allows ALL the paint to flow out. That equals billions of dollars saved btw ongoing
Even more massive volumes of all commodities have been achieved across the board in the last couple of decades. Obviously, economists and business people do not have the knowledge or political means to apply this revolution. Otherwise, they would not think people living a bit longer was any problem at all. Greater resources should be provided for the study of economic science.We all know experts” and “economists” are getting it wrong too many times. Perhaps it needs a Bill Gates of Economics to suddenly change all these cute economic models and point to a presently unseen flaw.Our production pipelines have major leaks somewhere.
Lower the pension age by years. It will concentrate minds.
March 24, 2017
Absolutely Prigger. Delaying pension age is quite frankly stupid. Just because people are being kept alive longer does not mean they are able to work longer.
March 24, 2017
Good morning.
Slightly off-topic.
Would it be better to:
a) abolish employers NIC and put it on employee NIC.
b) use some, or all, the NIC received and create a Sovereign Wealth Fund.
If (b) is not possible, please explain why Norway and many other countries seem able to do it ? Yes, government will have less to spend but, we will have an investment that will not rely on endless immigration (a Ponzi Scheme by another name) to keep the cash rolling in.
Some sensible long policies please.
March 24, 2017
The problem with a sovereign wealth would be that we are effectively borrowing money to put in it which would make no sense at all – they are generally used by small countries like Norway and Kuwait who have a massive surplus due to oil revenues.
March 24, 2017
Mark B: “b) use some, or all, the NIC received and create a Sovereign Wealth Fund.”
Excellent idea.
Who else has done that? Oh yea, Norway, they used a fraction of their Oil revenue to build up a sovereign wealth fund.
Unlike the British government that just squandered it
March 24, 2017
Russia and the Arab states likewise.In this respect,we’re in the same boat as Venezuela and Nigeria!
March 24, 2017
The government already has a 1% or so advantage using RPI geometric mean for charging against the CPI arithmetic average for pension plus the increases in council tax which aren’t included in CPI.
Wokingham have increased CT by close to 5% this year which means a band D property pays £1650 pa or £137 pm, this will account for more than 1 week’s full, basic state pension of £119. This represents more than 1% of the state pension, so with the RPI-CPI differenece you’d need a minimum increase of more than 2% just to cover actual increases.
So 25%+ of the pension goes on CT but then 20% goes on most VAT, 10 – 20% premium tax on insurance, so what’s left and what was the point of deferring the income in the first place.
March 24, 2017
This bloated government wastes so much money everywhere it should perhaps look at reducing its size and its endless waste before reducing pensions and further attacking private pensions (which is yet another back door tax increase). Start with HS2, Hinkley C, biofuels, the absurd Climate Change Act, the damaging sugar tax, subsidies for “renewables”, the attack on the self employed and remove all the other endless damaging red tape.
This would grow the tax base and mean fewer people would even need a state pension or social payments.
I would favour a Milton Friedman type of solution myself to pensions and social security myself rather than the government ponzi scheme. We need to maintain some moral hazard in the system.
March 24, 2017
Also if the government encouraged private education, private provision and private medicine – using tax reliefs, vouchers, no IPT tax, encouraging saving with sound money then far few people would be dependent on the suffocating teat of the state. They would become more self reliant.
Taxing people into the ground while forcing most to be dependent on the state and the usually dire (or at least second rate) public services is no the way to go. But this is clearly not how the current socialist government sees it. They have just increased IPT yet further and are still planning to attack the self employed, private pensions and the productive in general with more tax and more red tape.
Still pissing money down the drain on vanity projects and bloated government too for good measure.
March 24, 2017
Lifelogic, I note that ex-UKIP sponsor Aaron Banks has launched a new political movement, The Patriotic Alliance which will, I am sure, espouse most or all of the ideas you voice here.
March 24, 2017
The age should be no more than 65 at the most. Its not a case of how long people are willing to work, but who is going to employ them. A few years ago, it could be difficult to get a job if you were over 50!
March 24, 2017
I have always offered work to over 60’s, in the main they are most productive and very committed employees in quite demanding jobs. The problem now (since 2011) is that when people become very unproductive, start to lose their memories causing errors and problems, start to have accidents etc. you have to dismiss rather than give them notice to retire over 65. This is costly, disruptive, you have to go through warning procedures causing bad feelings, once warning procedures commence employees can go off sick for 28 weeks causing massive costs in SSP and SSP holiday pay and means you can’t just replace their position having to keep it open for them to return to. If they have many years service there is a big notice period to pay too.
March 24, 2017
Having become a ‘pensioner’ this month, I hardly consider £126/wk to be a drain on the country’s resources. It’s probably less than one MP’s taxi bills for one day.
Reply MPs do not get taxi fares refunded – they have to use public transport with lowest fare for reimbursement
March 24, 2017
What at 2AM ? Or if you wish to rush back from Blackpool as did K.Livingstone one time (I know he wasn’t an MP, but he was a politician with an expenses account)
March 24, 2017
Reply to reply.
Very poor nit picking reply. The point is made. The pension is about the lowest in the first world. When ( never will) it gets to say 60 percent of average earnings, dropping the link may be justified. The old are gradually being demonised for everything from sitting in too large houses to having too much money. How is the bonfire of the Quangos going?
March 26, 2017
Graham:
I agree. Often there seems to be a deliberate campaign to demonise the old, and turn the younger generation against them. It seems a crime to get old these days.
If some of the old have a comfortable lifestyle now, with a decent sized house and some disposable income, it is often because they worked hard for years (I left school myself at 15, no Uni for me, and many others) on what would be considered long hours and low pay now. If they couldnt afford something, they didnt have it, as it was considered a bit dodgy to buy it through ‘hire purchase’ , as it was called then. When/if they could afford it, they put a little money into savings for the future, so as not to rely on the State. It was a matter of pride.
Many older people are now helping their children and grandchildren, Its not as if they are counting their money, and not caring for others. The Charity sector would collapse without their unpaid help. Most of them have more than paid their dues!
March 24, 2017
Pension age should be falling or at least staying the same, funded by massive increases in productivity.
Only problem is we’ve had austerity for so long now, and therefore insufficient demand to allow output per hour (productivity) to rise. After all, if output growth is restricted, how on earth is output per hour going to improve.
But don’t be mistaken, we have the technology and real resources to be unimaginably more prosperous than we are today, we just need the government to run much larger budget deficits to satisfy everyone’s savings desires as well as providing enough spending (demand) in the economy.
March 24, 2017
Well, Jack, I can remember the fifties when ‘mechanisation was going to do all the drudge work and we’d all have so much leisure time and be so wealthy to be able to pay everyone enough money to enjoy. Now it is robots for the thirties. Somehow, it never quite seems to materialise.
March 26, 2017
Graham1946
Well Graham in 1970 there were 21 million people in employment in the UK, in 2017 there are 32 million and most of the drudge work has been automated and we now have a predominantly service economy as far as employment goes with higher wages, better working conditions and less hours. Working out pretty well I’d have thought
March 26, 2017
It depends what “service economy” you talk about. I would agree with you for financial and assimilated services.
Are you so sure of your comment where teaching assistant, people in the food industry and services, retail services, care services are concerned?
What about taking off your blinkers, dear man?
March 24, 2017
The workplace pension scheme tax does not seem to have been factored into these reports. At some point in the future government is going to reduce or remove the state pension based on the tax rebates received by all inmates of this mandated scheme.
Why has NI not been reduced to make allowance to mitigate the (up to 8%) additional tax levied by this scheme?
March 24, 2017
Tax is a “drug” to which ever colour of Government we have, don’t expect NI to disappear any time soon…
March 24, 2017
My view is that there should not be a fixed pension age; some people are well capable of working into their 70s while others are worn out at 60. Rather, one should be allowed to retire with a minimal state pension from , say, 55 but with steeply rising income the longer you stay working.
The extras and perks surrounding the state pension should certainly be tidied up and simplified; abolish the ‘free’ TV license and bus pass, scrap the winter fuel cheque and get rid of the 2.5% minimum. In exchange make a one-off increase in pensions to the value of those items and save the cost of administration.
Full disclosure; I am a state pensioner.
March 24, 2017
Abolish the TV license entirely.
March 24, 2017
Raise the age to 69 – fine – also raise the age at which MPs get paid their gold-plated pension to 69 too.
It is not the fault of the pensioners that the government has already spent the NI contributions they have made over their lifetime so why do they get punished ?
Stop ALL final salary pension schemes in the public sector NOW. Then we can think about the state pension.
March 24, 2017
Rather than setting an age it should be based upon number of years’ contributions. Once the taxpayer has reached a set number of years they should be eligible for the state pension from 65.
The former pensions minister made a point yesterday that the retirement age should be different for different industries (heavy labour attracting a lower start point for instance). I tend to agree but having identified such roles that could require early retirement then those industries should then pay a higher rate of NI to pay for their early retirement. A set number of years’ contributions at the agreed rate would then be required to qualify.
March 24, 2017
If we’re going industry-based looking at whether the workers can stay productive then good luck telling the teachers they can’t retire till 70.
March 24, 2017
Nevertheless Roy, this should be the case.
March 24, 2017
I agree NS. These ideas about lengthening the working life come from pen pushers in comfy well remunerated positions. I doubt roofers whose knees go at about 50 or dockers whose backs go about the same time are consulted (yes, even in these days of containerisation).
I can never understand why they cut the minimum qualifying requirement from 44 years to 35 years, then raised the retirement age and cheated the women.
March 24, 2017
Stop the nonsense whereby claimants in receipt of Tax Credits and Child Benefit receive NI credits which entitles them to a state pension when they don’t even live in this country. Maybe if the Government didn’t waste our taxes then there would be enough to pay those who have paid into the system a decent return. For too long UK workers have been an easy target for cuts. This new system is so unfair. I’ve worked for 35 years so far yet I will get less state pension than someone who has not worked a day in their life and just been in receipt of benefits. Where is the justice in that?
March 24, 2017
I agree that longevity has been rising for some decades now, but will that continue ?
In what physical condition are those people who live longer.
Perhaps if you have not punished your body with a lifetime of physical work, and have looked after your body with a healthy diet with some regular common sense exercise then perhaps you can be reasonably fit and well into your seventies.
But if you have been doing a lifetime of heavy physical work, then your skeleton and joints are knackered by the time you are 60.
All well and good for politicians to say to those knackered people, then get a desk job, but in the real world that is not always possible, because say what you like ageism exists, few employers want to employ the millions of grandma’s or grandad’s to work with people who are very much younger, and who perhaps do not have the office and computer skills required to work in a high tech modern office.
65 on average is the right age for retirement.
March 24, 2017
Agreed.
March 24, 2017
Off topic : Why are E-blueys ( a fast postal system for soldiers sent to hell holes abroad) being stopped under a Tory government ? (To save a million quid a year it seems.)
This and the treatment of Sergeant Blackman shows the true contempt our soldiers are held in by the establishment. Foreign Aid (to countries with nuclear rocket programmes) will not be stopped.
March 24, 2017
Agreed
March 24, 2017
Agreed
March 24, 2017
Governments and particularly the MOD have always acted poorly to service personnel, whilst the likes of the Great Ditherer stand up in parliament and mouth empty words about how grateful they are for their service. Yesterday was the latest, with all the ‘hear hears’ from the equally vacuous members.
March 24, 2017
Never understood why the government lowered the number of years contributions needed for a full State retirement pension some years ago.
Seemed a daft calculation at the time, when they wanted and needed to save money.
Why not simply pay out a percentage of the state pension depending upon the percentage of yearly contributions made.
Set the number of contribution years needed for a full pension, and if you pay in for more years than that, you get more, pay in for less years, you get less.
Seems so simple, but no, we had to have additional contributions of all types and all names to complicate the system because the State pension was never large enough in the first place.
My Council tax alone costs me 35% of my basic state pension, its gone up by 4.5% this year.
My fuel and power is going up 9% this year (already on the lowest tariff)
Enough said ?
March 24, 2017
There should be a pot of pension money that I have being paying NI for for 35 years. Theoretically I should be allowed to take that pot at the age 65 (the age I agreed that I would be retiring when I started to pay NI) and invest it as I wish.
My unemployed (never worked) neighbour will actually get more pension entitlement than me and will be moved from the unemployment figures at 65. (He will doubtless seek a share of my house equity when we share a room in a carehome in later life.)
A huge lie is that the long term (never worked) unemployed can become ‘retired’. How can you be retired if you’ve never worked ? And so Lefties can coo “Ooh. But the biggest drain on welfare is retired oldies.”
The state pension is not a *benefit* when one has contributed a lot of money into it.
Anyone who calls the state pension a ‘benefit’ needs to be pulled up sharpish on it.
March 24, 2017
There is no assurance that I will be living beyond 70. In my present shift pattern it seems unlikely.
March 24, 2017
If you don’t collect your pension (I hope you do and manage a great old age), the government will snaffle it even though you have paid for it. It won’t go to your heirs. More cheating.
March 24, 2017
Current entitlements are unsustainable. In the immediate future the triple lock should certainly be reviewed. This does not seem fair and reasonable to those who must pay for it. At the same time more needs to be done to encourage savings for retirement through reform of the tax system. In this respect one the worst decision in recent decades was Mr Brown’s pensions tax which effectively destroyed the basis of final salary scheme pensions.
March 24, 2017
So working people pay into a scheme for decades on the understanding they would receive a pension at 65 (already unfair because longer lived women get it earlier) then the terms are changed on a yearly basis to their disadvantage? This is absolutely typical of government. They make a great fuss about their tax slaves obligation to pay them vast amounts of money yet renege on their obligations whenever they choose.
What we see in NI contributions is a ponzi scheme. Early investors do really well at the expense of late comers. We also see insiders (politicians, civil servants etc) being exempt from these reductions.
The only surprise is that millions of people actually trust anything they are told by a bankrupt and corrupt establishment.
Reply No, the terms are not changed for those close to retirement.
March 24, 2017
Reply to Reply :
Unfortunately this reply is not correct :
My wife recently started to receive her state pension at the age of 63. It was a shock for her to lose three years pension – £16,000 with little notice. It was a disgraceful amount for the state to take from one person !
She was one of the worst affected under Brown and Osbourne’s changes.
reply This was agreed and debated in Parliament many years earlier.
March 24, 2017
ChrisS, I banged on about this many years ago it was first discussed in 1995 20+ years ago, there were reports on the BBC but not enough, this is our state-funded broadcaster and should have made people more aware at the time. A link from 2005 http://news.bbc.co.uk/1/hi/business/4445488.stm
Following pressure from the EU (we were told) the UK had to equalise state pension age for men and women, just as they instructed insurers to equalise insurance premiums more recently. 1997 Labour took over, in 2006 they put up the pension age from 65 to 68.
March 24, 2017
Reply to reply
So politicians agreed it all. That’s alright then. Silly of us to feel hard done by.
March 24, 2017
Debated or not John, it’s still theft.
March 25, 2017
I agree that what happened to your wife was disgraceful.
However unfortunately three years was not the worst. Some women have had their age changed twice, my pension age was first altered by 4 years 2 months and then when the pension age increased by one year (from 65 to 67) somehow it was thought appropriate to alter it again adding on another 18 months, making the change 5 years and 7 months in total.
I of course understand all the arguments re equality and support them. Had the new age been notified in a reasonable time, I would have been able to make changes to my plans. It is the second change only a couple of years before my retirement date that to me seems most unfair and which upsets me most, both changes were introduced by Conservative governments.
These changes as you will know also affect spouses, partners and even the children of women unable to work both financially and otherwise. Their votes added to the 2.6m women affected add up to a considerable amount of votes which could easily alter the outcome of an election.
March 25, 2017
The one year change, which altered my retirement by an additional 18months, should read 65 to 66.
March 24, 2017
This question needs to bring in public sector pensions as well. When those who are retiring now started their public sector career, they weren’t supposed to look forward to decades of pension, just a few years.
When the government introduces reductions in public sector pensions, the unions may protest, but there’s no sympathy from the private sector.
March 24, 2017
From the private sector that funds public sector pensions.
March 24, 2017
You should get the pension corresponding to the deal when you paid the contributions.
So why is the state raising the age?
Ah yes, it goes back to the promise you made John to publish the state pension liabilities. It’s the growth in the liabilities.
The Tories error was not publishing that number as soon as you got into power. Then you could have blamed Labour, but you hide it.
Now for the numbers. Currently the state owes 10 trillion pounds for pensions. If you look at the recent changes for damage compenstation, where the assume returns have gone negative, payouts have rocketed. Same for the pensions liabilities.
The biggy however, is what people could have got if it wasn’t a ponzi. The money redistributed. Mr Median, just retiring, would have had £905,000 in a fund. The state pension is only worth 108K. Mr Median’s contributions in today’s value, 235K.
He doesn’t even get back what he’s paid in, and politicians are now blaming the victims of the fraud for living too long,
Reply We did publish them!
March 24, 2017
The pension age should be 65.
The govt should move away from the “pay as you go” model towards a funded model, investing some of the money to setup such things as corporations operating monopolistic utilities which could provide very healthy returns to the fund to mitigate the effect of increased longevity and stock market and interest rate fluctuations.
The bottom line is that when someone has paid in for a pension for 40 years or more, the terms should not be arbitrarily changed by a pension raiding pipsqueak chancer from Eton.
March 24, 2017
I don’t want a State pension this is communist nonsense John, think out the box.
March 24, 2017
JR: “Whilst the state retirement scheme is a pay as you go one, where each generation pays for its parents generation out of current NI payments, ”
That’s not a ‘pay as you go’ that’s a pay as someone else goes. In fact it’s a Ponzi scheme.
If you wish to make a meaningful change now, just start an actual National insurance fund now for people entering the workforce.
And cancel that NEST lie. It’s just another tax and the contributions won’t ever pay the drawdown when people start collecting their pensions.
Reply If you started funding a scheme it would mean the current generation pays twice!
March 24, 2017
JR: “If you started funding a scheme it would mean the current generation pays twice!”
Well bite the bullet! Make the honest case for doing the honest thing for once.
We are already being crucified by the inflation tax, another impost won’t make that much difference.
But as Ian Wragg said, stop borrowing money to give to foreigners, cut foreign aid and reduce government borrowing at the same time.
March 24, 2017
I want the State to go away, horrible corrupt and dishonest entity it is.
That is unless the good men prevail, but currently they are not. Satan himself is running the show.
March 24, 2017
If we didn’t keep wasting billions on foreign aid we could pay our pensioners, look after our sick and fund security and the military.
Giving away so much money whilst cutting back at home will lose you the next election.
March 24, 2017
Hear hear.
March 24, 2017
Aaron Banks has launched a new movement, The Patriotic Alliance, which I am sure will get a grip on state pensions and other things that our current liberal-socialist government is unable to manage.
March 24, 2017
You need to get a handle on defined benefit pensions first before you start digging into the pittance you pay out to people that have been working in the private sector contributing in many circumstances for 50 years as many of them started work at 15! Gordon Brown happily stole funds out of their private pensions so many of them are now trying to find part-time work to supplement their pensions whilst he protected his union funders pensions retiring at 60.
The NEST pension is going to cause lots of upset when people realise their pension pot won’t even cover their council tax bills for their 3% contribution plus their employers 3% and that’s on top of the NI that was supposed to guarantee them a pension at 60/65 when it was sold to our generation as how wonderful cradle to grave con trick.
March 24, 2017
As a pensioner who willingly paid NIC for some 40 years (please stop calling me lucky), I feel that the reduction in qualfying years for a full pension to 30 was a grave mstake. The government needs to swallow its pride and accept it was an error and reinstate the previous qualifying periods.
March 24, 2017
They have raised it to 35.
March 24, 2017
JR, I would urge you to widen your survey to encompass young(er) people, e.g., in the schools of your constituency. I am afraid people on your blog might only offer a rather skewed sample, age-wise.
March 24, 2017
Hefner
Nothing to stop young people from writing on this blog to air their views to my knowledge.
When you get to 65 then you are fully aware of your physical and metal capabilities and limitations.
Under 25 and you think you and all others are immortal until a family member/friend dies.
March 24, 2017
I retired at 60 years . There is no question in my mind that I was capable of continuing – doing the same job at the same rate of intensity , for at least another 5- 10 years . As it was I remained the non-exec Chairman of an international organisation for a further 5 years and , for a further 25 years tutored part time at Oxford . Frankly without these extra activities I would have been bored out of my mind – and a nuisance to others !.
Good health was , of course , a factor in my life . I re-married at 68 years and became a father in my 79th year . As far as I know I am in pretty good shape . I believe that the role of women is a different one to that of the man and , if motherhood is involved , it does inhibit the choices she has and the time available she has to do a job . There is absolutely no question that the stability of family life and the well being of children depends on the mother in the home ; her values create the whole life of the child and the opportunities for it .
Allowance for the time a woman can spend in an occupation ought to be reflected in any pension she receives . She should not be penalised for the time she spent as a mother in a household . Men , certainly , subject to health , ought to continue to work until they are 70 years – or thereabouts . The amount of pension paid ought not to be regulated by what they have paid for it during their working life ( apart from private pension contributions ) . The State Pension paid should be based on current circumstances including cost of living factors – pensioners live in the present day world and cannot escape from all of its consequences . This is a costly and very important topic – one that I am glad John has raised .
March 24, 2017
The cost of state pensions is only one element that needs to be addressed. Public sector pensions are subsidised by the majority who are not or have not been employed by the state.
The published National Debt currently at about £1.8 trillion, £0.5 trillion in 1997 and £0.8 trillion in 2010 is a reflection of hidden liabilities coming to the surface. Some say our true National Debt is £5trillion. The ending of final salary schemes for the vast majority in the private sector is highlighting the public sector imbalance and unfairness. It also brings home to future private sector pensioners how big a pension pot is needed to pay a modest retirement income, which is unlikely to be inflation proofed.
Why do state employees receive two state pensions?
There needs to be a lot of lateral thinking, simply upping the retirement age is too simplistic. Maybe a hypothecated properly funded pension scheme run by the state for the public sector but also available to private employees and employers on the same basis.
March 24, 2017
The welfare state has become a voracious beast. It started out as social policies motivated by good intentions but there was a failure to calculate all the consequences. All that was seen was the good. The bad was either not understood and/or ignored as it was accepted it was a price worth paying. That price is now such and the system so entrenched in archaic and misguided lefty thinking that we are blundering around attempting to find ways to sustain it. All of which are only predicated on buy now pay later. Creating a financial commitment that we hope the next generation will find a way to solve.
However we are now finding that the next generation has almost arrived and have noticed taxes are not going to increase enough to keep the Ponzi scheme going. And that it is the most wasteful and inefficient way to do it. We are going to have to stop relying solely on the state to be the provider and funder of the welfare state and we are going to have to restructure it to defend it against those who misuse and abuse it. The state must pass more of the responsibility of welfare back to the recipients. To do that the state must reduce the benefits like increasing the retirement age and reduce the value of welfare available which the Conservatives are doing but not rapidly or extensively enough. Coupled with increasingly privatising provision and funding.
March 24, 2017
I hope any further increases are phased in much more gradually than the current ones for which a quite rapid introduction was worsened by the last chancellor ( perhaps he thought we all have 5 jobs). Unlike many of my contemporaries I did realise that I would not get a pension at 60 and was expecting to get it at 64+. But in one fell swoop Mr Osborne changed that to 66 and my husband’s pension age went up by a year as well even though the government announcements suggested that it would remain at 65. Luckily for us we have other pensions but I do know people for whom this was a very serious blow.
Of course, one thing voters hate is to see their neighbours, friends and relatives being treated differently from them. A friend who is 5 years older than me will have had 11 years of state pension by the time I get mine. Another who is less than 3 years older will have had about 7 years of pension.
The irony is that the inevitable clamp down on pensioner benefits will come in just as those who have taken the hit finally qualify.
March 24, 2017
We have a non-stop flow of people that are coming here. Those that are coming to do absolutely nothing, no intention of working and paying taxes, what “pension/benefits” upon “retirement” will they get for having been a financial burden on the taxpayer for decades?
And why are they still allowed to come and do nothing, but be a burden on our taxes while they breed for more reward?
March 24, 2017
I would like the option to take a reduced state pension at an earlier age. Say 70% of entitlement at 60.
Also, given that women live on average 4 years longer than men, some account should be taken of this. I wont make a suggestion for fear of being branded sexist, of course!!
March 24, 2017
Keep the triple lock. Spend less, be more efficient, allocate resources better. Leave pensioners with this measure of security. Keep the triple lock.
March 24, 2017
Yes, definitely keep the triple lock.
If spending cuts are needed, cut HS2. We don’t need it and can’t afford it.
If HS2 were a viable project and if there were sufficient demand for it, private investors would have already jumped in.
March 24, 2017
Bob
If HS2 was a viable project, then it would not need to pay 17 private PR agencies to work on its behalf (at taxpayers expense) to try and convince us it really was needed.
What fool was responsible for employing 17 PR Agencies John ?
March 24, 2017
Further thought; the majority of people retiring today left school and started work at 16. No-one today starts work before they are 18, and half of them don’t start until they are 22. This clearly reduces the number paying in.
March 24, 2017
Just to put a different perspective on things (people here who have worked since 16/18 and are likely to be affected by a rising pension age please bear with me – it’ll affect me too!):
As the press and the liberal politicians go into “outrage”, bear in mind that the pension age was introduced over half a century ago when the average life expectancy in England was 65 and when people generally started working at about 15 years of age. Nowadays most people don’t start working until 18 at the earliest, and 21 as the average I believe.
Military (full) pensionable age has now risen from 55 to 65 to reflect the rise in life expectancy amongst service personnel from 58 to 69.
Maybe if the state made it less easy for folks to live a life on welfare (not only taking but also not contributing) and stopped “lashing up” any waif and stray that washed up on our shores with housing benefits, 4-star hotels, and a wage for doing nothing, the pension pot would be healthier.
Ultimately, make people work if they are able, increase the retirement age by a year or two to reflect increased life expectancy and later start-work ages, and stop giving our taxes away.
March 24, 2017
We would all like an active and heathy retirement. This depends on health
Health depends on air quality, good food, good medical support, moderate stress etc
Assuming that we can continue to increase the retirement age is not good
You can increase the number if you have a healthy population
This is not the case
March 24, 2017
My wife and I have very recently started to receive our state pensions at the ages of 65 and 63. It was a shock for my wife to lose three years pension – she was one of the worst affected under Brown and Osbourne’s changes.
I can’t see how the state can pay a rapidly growing number like us, more than £1200 a month when that has to be collected from those that are working. The scheme should always have been funded from the start, like any private pension arrangement.
I agree with Roy Grainger : all Public sector Final Salary schemes should be closed, ideally immediately. Of most concern is the increasing cost to Council Tax payers of local authority-funded pensions : they are completely unsustainable.
Small villages will rapidly become two tier places to live : Those residents in receipt of state final salary pensions benefits and others on lower incomes who struggle to pay their council tax, an ever larger proportion of which is going to pay for those pensions.
Our own small area contributed single contributions over the last four years of £1.46m to fund local authority pensions in addition to the regular contributions already taken.
March 24, 2017
Just one thing abour Public Sector pensions. The people of the lower echelons of the Civil Service get very poorly paid. I have a very close relative who works and lives in London. He gets just over £22k a year – hardly a princely sum. They had a pay freeze for three years, and get (if they are lucky) 1 per cent increase a year. (MPs have recently awarded themselves an increase of £2K. ) I think thats an eleven per cent rise, but I could be wrong. I think it was thought in the past that the more generous CS pension would compensate for the very poor pay.
There is much talk of ‘gold plated ‘ pensions, but that only applies to those at the top.
March 24, 2017
As a state pensioner who pays tax, I feel guilty that the state pension has increased faster than both the cost of living and average pay over the last few years. It should be increased by the cost of living only.
Also, the winter fuel allowance and the £10 Christmas bonus (!) should both be counted as pension and taxed accordingly.
March 24, 2017
It is, in my opinion, really sad that all the advances in medical science will mean people will be held in harness for longer and longer rather than being able to enjoy the fruits of their labour.
Growing up in the 1950s and 1960s, we were told that, we would have far more leisure time because robots would be doing the work for us.
I think a bricklayer or roofer would be unable to do their job much beyond sixty years of age and I am not sure I would want a seventy-five year old bus driver taking my grandchildren to school. I am sure a lawyer or accountant could still sit behind their desk well into their eighties if need be.
Perhaps we need to think about when people actually start work with regards to say graduates working a further four years compared to someone who leaves school and goes straight into employment. The former is more likely to have a less physically demanding job compared to the latter.
We should also note that if any other business or organisation, other than the state, operated the Ponzi scheme which our state pension scheme is, it would be illegal.
The state, aided by the media, is intent on starting a generational war and that will lead to greater division in our society but I suspect, in the eyes of the government, a divided population are easier to control compared to a united one.
March 24, 2017
Workers in Britain face a larger financial shock in retirement than European counterparts because the UK state pension is “one of the least generous in Europe”. For example even Hungary, Romania, Bulgaria, Portugal and little Lithuania receive more. Also, I have never fully understood why a pension is taxed?
As usual, I have the distinct feeling the Government is stamping on the ants whilst letting the elephants through!
Government official turkeys have never been keen on voting for Christmas, but I feel the questions regarding Pensioner (ants) payments rather disingenuous. I am personally a great believer in financial check and balance initiatives that shed light on inefficiencies and wastage. Something the EU might like to look at! UK Corporation tax gathering springs to mind.
The Government, being a non-profit organisation, is probably the most profligate in terms of money badly spent. Unlike you, few members of the Government have had real life experience of running budgets. In general they are quite immune to the consequences of decisions made on people less financially fortunately then themselves.
Perhaps suggesting the Government look at its management of tax resources significantly better might help. I am positive that should one of my senior financial advisers have a peak view (audit) of the Government budget expenditure he/she could find ways to reduce wastage, thereby freeing up resources that may be used to provide a decent income for all pensioners. However, turkeys don’t like C&B initiatives
March 24, 2017
1) The age at which a person receives their State pension should be the age promised at the time the Government started taking money from them by force, but being realistic, set a post-retirement income cap above which State pension will not be paid.
2) Abolish State pension entitlement for everyone under age 30 years and allow them to decide their own retirement plan, or not.
3) Abolish NIC and replace it with a transparent, honest income tax rate out of which existing and future pensioners will be funded until those entitled all die off.
4) Denationalise healthcare – both provision and payment – and unemployment benefit, so that State disbursement on these will decrease… and thus the need to tax… as free market competition via private providers and for-profit and not-for-profit insurers takes effect.
Just like our ancestors did prior to 1911 and 1948.
If politicians believe that monopolies do not serve the interests of consumers, hence the Government quango the Competition Commission, are not politicians being schizophrenic to insist on and protect monopolies run by themselves in Government? (None of these things are Public Goods – so markets can and will and do, when allowed, provide.)
At least private monopolies are contestable whereas public monopolies are not… by law!
I think Mr Redwood that should be your start point: refer Government to the Competition Commissions – sauce for the goose, etc. Get Government out of the pensions and health industry, and its sticky fingers out of everyone’s pockets.
March 24, 2017
God willing, I’ll be 65 in 2030. So I shan’t be eligible for a state pension until I’m 67, in 2032.
It seems fair enough to me, and further changes along the lines of those mooted seem equally fair, not to mention inevitable.
March 24, 2017
State pension ages should have been raised years ago. We need a formula, say, average death age less 15 years. That would make a man’s state pension age = 69 and a women’s a bit older. That needs to happen right now.
March 24, 2017
My wife and I are pensioners, we have “enjoyed” the benefits of the triple lock since its introduction a few years ago. But when I see the pie charts showing how our taxes and NI contributions are spend I feel that the pension spend is too high as a proportion if not totally out of control, a Ponzi-style scheme that can only end in tears.
Many young people are already resentful of the way the EURef vote went, are equally resentful of the lives we “Baby-Boomers” have lived (without knowing about post-war rationing and austerity, 20% inflation, booms and busts, ERM, the 3-day week, living without computers or globalisation, and all the rest we’ve had to contend with to get to where we are). The latest resentment is that they’re paying for our retirement and the triple-lock which is beginning to look overly generous . I feel that much more needs to be done (a) to educate them in better financial planning for their own futures, (b) the essential role of private pension provision, and (c) limiting further rises in State pensions in a way that encourages more personal pension planning alongside what the State can afford to provide.
March 24, 2017
Raising the retirement age helps the government
March 24, 2017
I hear that people claiming tax relief on their income tax for private and companies pension has gone up from 32 billions in 2010 a year to 38 billions a year, i do not view NIs as a pension i view it as a tax and do not see why people earning over 100,000 a year should have a state pension and people in retirement who have income of more than 450 a week should get the full state benefit and also think that 38 billion given in tax relief should stopped and given to people on a sliding scale as they work, with most on percentage given to the low paid and should be cut off at 100,000 a year to put into their own pension so that a person on 200 pounds a week get 15% of their wages paid to their pension with state pension as well, i not see why people like yourself who good money should have any pensions at all from the state, your just scamming the system like the rest .
Reply Public sector employees who save through an employer pension scheme also pay NI, so like private sector employees in their employer scheme qualify for two pensions.
March 24, 2017
If you had a plan like that, you could cut income tax at the top rate 45 percent and 40 percent and the bottom rate, wasting money on pension where it is not needed is stopping cutting income tax rates and that where you need the cuts but getting something like that through parliament will not work because the PMs want everything they can get off the tax system for themselves and friends because that the sort of people they are crap and that why do not vote because i know i am voting for crap.
March 24, 2017
“the state retirement scheme is a pay as you go one, where each generation pays for its parents generation out of current NI payments”
Politicians need to spell this out, as shown by previous comments. Government old age benefits are only an entitlement to what can be afforded by the ‘generation’ funding the benefits. It is effectively a conscripted chain-letter. Apart from small countries which have sovereign wealth funds (eg Australia), the insurance terminology is misleading and promotes incorrect expectations.
March 24, 2017
The rob Peter to pay Paul is not a sound principal on which to run a pension scheme. Better that contributions are invested away from the clutches of government , but added to by government from the tax income that will arise from fracking. You could learn a lot fro Norway.
Stretching retirement age based on longevity may work for some occupations but it is hardly fair for those who have led a hard physical life such as entailed by many in civil engineering as an example. It is not just a numbers game. You might succeed as an MP till you are 90 , but not digging trenches.
March 24, 2017
I don’t see much sympathy on here for the 500,000 or so Frozen Pensioners in mainly Commonwealth countries. My wife and I live in Canada (we came for good altruistic reasons, are now sick and receiving hospital treatment but cant afford to return and buy a home in UK). My wife’s pension has been frozen for 14 years and mine frozen for 9 years despite our having paid NI contributions as required. We find that we are between £60 and £70 A WEEK down from current rates. I should think that the UK should get it’s house in order and look after it’s own overseas. It will be interesting to see how the British pensioners in EU get treated.
Perhaps you could support current efforts to annul the Social Security Benefits Up-Rating Regulations 2017 due to be considered in Parliament shortly. As you know, this is the Regulation used to prevent British Pensioners abroad, from receiving the annual uprating of our pensions
March 24, 2017
I do not see why public employee are treated different to any other employee and more so the people who work for the government at the top and MPs who now leave parliament nearly all millionaires, why should their pension be gold plated and not like everyone else on a private pension, by doing this you are stopping the country from getting on because you think your entitled to more money than anybody else and i have notice that government employee pension at the bottom are far less than the one at the top who f everything up, you people might think that it great to have one over on everybody else but as you will see as time go on it just going rebound on you, three tier pension system will not work in the long run, it better that everyone is on a private pension with no state over money over 100,000 of income a year going to private pension, you people are to greed by far, making rules around pension for your own benefit and your friends, the purpose of a state pension in the first place was for poor people who have no income in retirement not tax payers gravy train for the wealthy and people in government at the top
March 24, 2017
The problem lies in this one size fits all mentality, many jobs are physically and/or mentally demanding and beyond a certain age it becomes impossible to do the work effectively if at all. I know many people who can’t work because their skeletons are worn out and others who can’t keep up the pace with new technology. It seems unfair that special terms apply to the likes of the police and the fire service who can retire at 50 thanks to generous employer (Taxpayer) contributions over 30 years when others have to carry on working after 40 or 50 years or working because they weren’t earning enough to build up sufficient retirement funds.
March 24, 2017
State pension triple lock – use CPI/RPI it’s an absolute no brainer!
March 24, 2017
I don’t think that giving people who earn a good income in retirement a state pension is good way of spending public money just so they can pay their income tax bill with their state pension.
March 24, 2017
After working for 40 years and having my taxes used to fund other people’s pensions I’d be pretty annoyed not to be extended the same privelige all be it a bit later than i had thought.
Now if the Government want to stop paying state pensions they need to introduce a lower tax regime for new taxpayers and encourage them to use the extra money to fund their own pension schemes.
March 24, 2017
Whether we like it or not, the pension age has to rise. When the state pension was first introduced, most people did not draw it for more than a few years. Now it is drawn for well over a decade. It is not affordable.
Provided that proper notice is given, I see no reason why the age should not be increased to 70. If life expectancy continues to rise, then the state pension age may have to rise to age 75.
The key is that proper notice should be given. Frankly, 10 years is not enough. 20 years is the minimum requirement to enable people to have time properly to provide for themselves.
The Government needs to understand that constant tinkering with the pension system causes confidence to dissolve and people cease making provision for themselves, always assuming that they are able to do so. Good pension policy is stable and any changes are signalled very many years ahead.
March 24, 2017
When I looked at the official population projections by age I found that raising the retirement age to 70 would mean that we never had as high a proportion of retirees compared with those of working age in the population as recently – it peaks at about 26% in 2042, compared with almost 30% for a 65 retirement age currently. I didn’t try finessing any further.
With regard to pensions, we should remember that ZIRP has been particularly unkind to those who have made their own pension savings and do not have a defined benefit pension – and indeed, it has strained private pension schemes generally. The state pension needs to be viewed in this context. Current annuity rates require people to live to over 100 just to see return of their capital, let alone an investment return. We should concentrate on restoring normal investment returns in the economy which would help to resolve many problems with pensions. A productive economy can afford to pay for more benefits.
March 24, 2017
I would have to disagree with you on your reply, most public employee have three pension, state pension, private pension and government pension from work and even buy to let property as a pension on top and some PMs have all four as well as lords payment and eu pension payments as well as a work place pension, some people in government like PMs can have up to seven or eight pension and jobs working into their seventies and eighties, that’s the greed of them.
Reply It is not necessarily greedy to work into their 70s! No-one can have more tax privileged pension savings than the reducing lifetime allowance, so people will not be saving more when they earn more.
March 24, 2017
“the state retirement scheme is a pay as you go one, where each generation pays for its parents generation out of current NI payments”
This wasn’t my understanding when I started work nor anyone else I just questioned at work. A quick wiki check confirms ‘The National Insurance stamp was first started in 1911, one card for health and pension and the other for unemployment benefit.’ so surely that generation paid for themselves.
Reply No, because the scheme was introduced for all from Day one. You did not have to wait thirty years for a pension if you were older.
March 24, 2017
Which group of 65-year-olds got their pension without any contributions (which year are we going back to?)
March 24, 2017
I would to disagree again lord payment are tax free as well as eu payment, then the rule of 2 million in a pension that has not touched can be given tax free in your will and paying pension in to a trust, i know the loop holes brother just as people in the know do to avoid tax.
March 24, 2017
The State pension is run on a Pay as you go basis, currently about 700,000 retire each year and so it simply is not a sustainable structure as it is. The mis-guided thought was that immigration could fill the gap, its nonsense even if most of those stayed in this country.
The Conservatives need to start to move away from the triple lock or it will just become a party for the old and become irrelevant to others. Especially as the young are increasingly thinking that they won’t get a State pension when they come to retire.
I think also that the MPs pension needs to change to a Defined Contribution pension going forward. It is increasingly out of step with the population and fosters bad decisions from those with a tax payer backed pension ‘acting in the best interests’ of those on DC pensions.
I think MPs on a DC pension that is more in line with what the public have will inform and guide their decisions better when the decisions they make will also affect their pensions.
March 24, 2017
I tell you what john, why don’t go away and come back with plan that includes 38 billion for tax relief and the perks and MPs and government workers so everybogy on the same plan and comeback and put the plan on the blog and we can tell you what we think.
March 24, 2017
I mean everybody,
After all it is part your job to think about things and come up with better plans for pension and things which can save money so as to cut income tax or give more services for the people, even if that plan is bad for yourself and friends, is that not your job and then to put it to parliament if you have the support of the people for that plan, is that not the way it works, your fight there like with eu ref to make sure people are not overruled by the executive of parliament or any other parliament or body and fight the executive to make people life better, should that not be what the media should used for, to put MPs plan forward to the public and then get support in parliament of other MPs to make the executive of parliament to take it on board, that why i say party get in the way of democracy, democracy need all MPs in parliament against the parliament executive to bring the best plan to the people with people support sir.
March 24, 2017
“What should be the age to receive your State pension?”
That’ll be the age when your joints pack up. That age will be different for those in the building trade, for example, to those who work in an office.
Simply delaying pension age will not work. For some people, after a certain age, work becomes impossible.
March 24, 2017
I do not believe that the triple lock as it currently operates is sustainable. It places too large a liability on future generations. I would propose an amended triple lock so that the pension would increase by the higher of earnings or prices but always calculated from a base date, say April 2017 when the latest increase takes effect. There would still need to be a minimum annual % increase to avoid the fall out from a possible 75p rise as happened previously. I believe such an alteration would be more affordable and still offer protection to pensioners. The more stringent the changes to the triple lock the more the increases in pension age can be delayed.
March 24, 2017
Government is spending too much, and we have to stop putting yet more financial burden onto future generations. We distribute benefits of various types – including state pensions – as if we had an infinite supply of cash.
The triple lock will have to go, and pensions will need to be frozen for a while.
If people wish to retain the same sort of disposable income as they enjoy in their working days when they retire, then they need to be saving more throughout their working life.
March 26, 2017
“The triple lock will have to go, and pensions will need to be frozen for a while.”
While I agree that the triple lock in its current form is probably not sustainable, a freeze would have an impact that goes further than the state pension.
When the new flat rate state pension was introduced, the government removed its contribution to the inflation uprating of the Guaranteed Minimum Pension portions of private sector defined benefit schemes which had been contracted out.
Prior to April 2016 the state paid for the inflation rises to pre-1988 GMP, and for any inflation rises in excess of 3% (paid for by the company) for post-1988 GMP. This remains in place for pensioners who retired before April 2016, but the removal of these payments leaves pensioners who retire after April 2016 with partially frozen pensions.
The higher new state pension is supposed to offset some of these losses, but workers who are close to state retirement age will lose out. This change has not been well communicated, and future pensioners may believe their final salary schemes are still fully index linked.
When the Government is considering reducing the inflation uprating of the state pension, they need to bear in mind that future retirees will no longer have full inflation linking of their private pensions. These pensioners will be more dependent on state pension increases to keep up with inflation.
The National Audit Office produced a good paper which explains these changes and provides worked examples:
https://www.nao.org.uk/wp-content/uploads/2016/03/The-impact-of-state-pension-reforms-on-people-with-Guaranteed-Minimum-Pension.pdf
March 24, 2017
We should be thinking about a basic income for everyone. One way of introducing a basic income would be by continually lowering the pension age to sixteen.
March 26, 2017
Its probably irrelevant to most who are average private sector workers, with defined contribution pensions. As most will likely rely on top-ups.
Old “Public” sector schemes should closed. First those for senior bureaucrats (lords) then the (serf) ordinary schemes.
A new Public scheme should be set up available all on the same terms. Investing in real long term assets. (Infrastructure, index funds, etc). Charges would then be low.
Ageism,illness & forced unemployment – will not go away so “income” should be granted at earlier age bands dates where statistics indicate where this is a problem. Caps and withdrawal percentages calibrated to incent work and also react to economic shocks. (Instead of QE for banks, which should be 100% reserve)
A simpler overall tax and benefit system which rewards good work ethics & public behavior.
Thought should be given to resolve the massive unfairness of means testing in relation to long-term savings.
Perhaps we should offer to repatriate pensioners trapped abroad on frozen pensions. Or make it a condition that all pensions are payable to UK residents only.Or pay the same to all irrespective of residence?
How about flatter taxes on all income (above personal allowances) and less tax breaks -with a minimum tax percentage.
Personal tax allowance should be transferable if unused or able to be carried forward if no non contributory benefits are claimed.