The next step for pensions

chris as usual

It is interesting that the TV comment this evening on the Osborne speech shows that the changes announced will save about £6 - 8 billion over the course of the next parliament (if I understand it properly), yet the the deficit this year alone is heading for £200 billion, to be followed by similar deficits in each of the next 3 -4 years. It is only scratching the surface, but people are already whingeing. More of this might bring it home to everyone just what a horrible mess the state finances are in.

Goodness knows how all this is going to turn out.

Seriously concerned.

James J

Eventually pension entitlement will cease to be age related and be subject to some “Fitness” test.

Emil

You're supposed to be concerned - nobody has even started to grasp the mess of debt Brown has saddled us with. Nobody likes a pay freeze but I'd suggest a darn sight better option than losing your job, or being clobbered more and more by the increase in NI contributions so favoured by our last chancellor, that will hurt people of 19K a darn sight more than a pay rise that was already going to be capped at 1%.

Simon Cawkwell

Is it not rather comical that the general retirement age should be proposed to be increased by just one year where medical advances have increased life expectancy by a decade or so in recent years and people still protest? The gap between a truth known to all and the general posing is nationally embarrassing.

I am getting sick of the attack line from Labour and the Liberals that because Cam & Osb went to a posh school and come from wealthy families they are not fit to run the country.

It is truly pathetic....

subrosa

Simon, I take it you're nowhere near retirement age.

I have worked since the age of 16 and I was grateful to finish at 60 and have a life after full-time work and bringing up a family for 44 years.

Surely I need a little time just for me before I die?

Nick

It's a default. Pure and simple.

The government is reneging on its debts.

People handed the money over, and in return the deal was a state pension at 60/65. Each year that its delayed, costs people 5,000 pounds.

That's the extent of the rip off.

It is even more terrible, because if the median worker had put their NI into the FTSE, they would be on 20,000 pounds a year from 65, inflation linked, post the crash.

That shows just what a rip off has happened.

The Tories need to produce a Doomsday book of government debt, including the pensions, all of them.

Then they need to hypothecate part of tax to pay the debt off. Every receipt and payslip to show this tax.

It needs a snappy name. I suggest the labour tax (small l) so people don't confuse it with the Labour party (capital l)

Nick

Hysteria

subrosa - I know what you mean - for me , with 10 years to go I can see the prospect of a long and happy retirement dwindling before me eyes!

But here's the rub - all the cries for "sharing the pain" can be agreed with in the abstract, but at an individual level it all gets more difficult.

The tories need to hammer home the message that Brown has totally screwed us up - belt tighteneing at every level is required...

Simon Cawkwell

Dear Subrosa,

I hope you enjoy a long retirement. But it is not argued (by you) as to why others should pay for it.

Yours sincerely,
Simon Cawkwell

PS: I am 63 next Saturday and intend to continue to be dispassionate.

strapworld

I do hope David Cameron gives Gordon Brown both barrels in his speech.

I hope he just tells the British people how bad things are. That Brown is not telling the truth and is incapable of doing so.

I do hope he reminds those unions that are already threatening strike action, that he wants to work with them BUT if elected he will have the mandate and there are thousands of young people desperate for jobs. He wants to ensure they do get to work.

George said We are all in this together. If some do not wish to stand shoulder to shoulder and prove that together we can and will get out of this giant mess, created by both the banks and the Labour Government, then I hope society will show what they think of them!

Subrosa, you appear to have so much time writing your excellent blog! I cannot understand your whinge! Just think how bad it would be in Dundee if you did not have the English taxpeyer assisting you up there!

michael

Phillip Hammond had the right idea the other day. Every other sentence began "Gordon Brown"; as in "the Gordon Brown credit crunch", the Gordon Brown debt crisis and so on. Pin the blame where it should be all the time.

simon too

Subrosa - You must have been saving extremely hard to be able to pay for 25 or more years of, I trust comfortable, retirement from only 44 years of work.

Nick - are you unfamilliar with the saying "put not your trust in princes"?

Chris lancashire

Simon Cawkwell: I'm 61 and looking forward to at least another 2 or 3 years minimum of working. That, of course, is my choice and others choose to retire as soon as they can. That is up to them to organise, not the state. The state provides what it (we) can afford in the way of pension.

Another point, can we stop pretending that NI is something to do with pensions or health. It stopped being that sometime ago, and is now general taxation. If it was rolled up with Income Tax we could do away with a whole raft of civil servants up in Newcastle.

Paul B

With respect Subrosa, why should you get your pension five years earlier than a man with the same date of birth as you, working the same amount of years and paying the same ni contributions? That sort of discrimination just should not exist nowadays.

We can all recognise there is just simply not enough money around, in even good times for the government to pay a decent retirement pension to everyone from the age 65 on-wards until their death. Especially as we are all living longer, partially due to the NHS being used as weapon of moral blackmail to make us all eat, drink and smoke less (not at all) wear our seat belts & crash helmets and not take risks with our own safety, run along there children.

If the pension to be paid (to those who have contributed) is to be a decent amount then the age its paid out from has to increase, or we are have to be taxed more (many pensioners are tax payers) or HMG borrows more which we all pay for in the long run. Its really as simple as that.

I belive increasing the retirement age to 66 is a reasonable policy,(I`m 50 next week btw) I understand that it will anger those turning 65 in 2016, but on balance I believe its the right thing to do, if we are ever as a country to live within our means.

Dorothy Wilson

One of the real scandals of the current pension scheme is the way in which people on a low income who have contributed to an additional small private pension are penalised.

People who have not done so are entitled to the pension credit. People who have saved for a private pension, which takes them just above the eligibility level for that, are taxed.

Forlornehope

One idea, for what it's worth, let everyone get one pension paid by the taxpayer. Those in receipt of an unfunded public pension don't get the regular state pension as an addition. Given the numbers of public sector workers that should translate into a 20% rise in the state pension and go a long way to eliminate both means testing and poverty in old age. And yes, given the demographics, there isn't much alternative to indexing the pension age against life expectancy. There has to be a showdown sooner or later between the public sector special interests and those who pay for them. Just make this part of the package.

Ian Walker

Nick: I prefer the name "Brown Tax!" A 5% surcharge on all other taxes and duties, specifically targeted at reducing debt, and expiring when the debt is payed off. The economic boost from being a debt-free country whose taxes suddenly drop by 5% across the board would be incredible, although the intervening years would be hard.

Since inception, the pension has always been funded by the working to pay for the retired. It's not like the problem with this couldn't be seen years ago. What we should have done is initiate a program to move from a welfare-based pension system to a savings-based one. But a program like that would take a generation to implement - you can't ask todays kids to save for themselves and pay for you as well. One of the problems with democracy is that lack of long-termism; a benevolent dictator might have achieved this but politicians who have to be re-elected every five years never will.

Paul B

Dorothy is quite right, there is no incentive to save, apart from ones own self pride. Often its positively detrimental to save and provide for yourself and family, especially at the margins, losing out on grants etc. Hopefully IDFs study has looked into and has proposals to address the problem.

One pleasing note, which has been little remarked upon in the msm, was Osbourne's promise to re-introduce the tax breaks pension schemes had prior to Brown continuing raids of them. I`m sure I heard him say as much, unless anyone can correct.

That will be good for savings, pension funds and by extension, the City and those looking to borrow for investment. Brown raids on pensions have been obscene, putting Maxwell's criminality (another damned socialist) into the shade.

Sue Ward

Firstly Osbourne needs to grasp the nettle of public sector pensions. I find it hard to swallow that we will have to work to 66 yet public servants can retire on full pension at 50.

Secondly, I can't understand why people moan about having to work an extra year if the alternative is living on the meagre state pension. Fine if you have a private or company pension but for the rest of we are surely better off working.

Lastly, it is all very well for me working in a nice comfy office to work until I'm 66. As long a I keep senility at bay I will be quite happy to keep on until I drop. It is a different matter, however, for people in physical, manual work.

As manual workers tend to have lower life expectancies, perhaps they should be allowed to retire early than us white collar types?

Paul B

To be fair Sue, I don`t think many public servants can retire at 50 on a full pension.
Police officers can retire after 30 years service and receive a pension, but they pay 16pc of their salary (I believe) into their pension scheme. Most public servants have to have had forty years service to receive a full pension, which when reaching 60,not 50, they can retire and receive. Local authority pension schemes tend to be retire at 65.

Your underlying point though is well made, the pension age should be equalised, and public servants-barring the forces- should receive their pensions at the retirement age and not before.This would also help to assist in reducing HMGs borrowing.

Any Colour but Brown

There is only one epithet that I want Cameron to use on Brown:

LIAR!