The pension prevention

[Naselus]

Time, I think, to look into Blair's pension plans...

Well, it seems Blair's final realised that, as a Labour PM, he should listen to the unions. Unfortunately, the union he's listening to is the Director's Institute, set up to protect the interests of rich bastards everywhere.

Now the members of the Director's Institute disagree with almost all other unions on the subject of retirement and state pensions. They want the age at which we all retire raised to 70 - not for members of the institute, obviously; they take early retirement at 50 and live off the cash that comes in from shares - while most people prefer to keep it at 65.

On the other hand, we're faced with the problem that people are living too long for us to keep it at 65. Now, I think we're all well aware of the excellent job the current pension does of keeping the elderly's numbers down, particularly over winter, but the average lifespan of a man is currently 71.

71. That's one (1) year older than the age the IOD want people to work until. Although, in some professions, such as builders, labourers, or indeed anything physical, I can imagine they'll probably be dead before they get there.

So here's the long and the short of it. There's too many pensioners for us to support them all retiring at 65 (or, most unfairly and sexistly, 60 for women. Who, incidently, live to 78 now. So they get 18 years worth of pension to men's average of 7. But pointing this out probably makes me some form of misogynist.), but raising the age will mean most men work until they die. I'm not into that idea, myself. I pay tax, and I want to claim a little of it back before the end of my life.

So, what's the right course? The government wants to raise the age to 67. The IOD wants 70. And the unions of working people want it to remain the same. Which should it be, gentlemen?

[TheCritique]

The unions don't have a great economic record, particularly when considering their support for anything that will retain their members' jobs and protect their short-term interests, regardless of how economically impractical it is. I refer in particular to the NUM (I know this is a particularly radical example), unions at British Leyland, and so on.

In this particular case, keeping the retirement age at 65 is impractical, when considering that people at that age can still work. Furthermore, the money saved will be diverted to remaining pensioners, including those who are simply too old to work, those at the age of 80, for instance, thereby increasing their standard of living.

I therefore support an increase in the retirement age to 67.

[HStorm]

Much as I'd love it to be kept the same, we do have to be realistic and accept that it's just not feasible. I agree with Will that it should be advanced to 67; and that's for both men and women.

[Naselus]

Well, it depends on your job, too. A bricklayer is not going to be able to keep working at 65. A train driver probably shouldn't either, given that his eyesight will start to fail.

Now, I agree with raising the women's retirement age to 65, as there is no means of justifying a different age for the sexes. But most manual-labour jobs should have a lower retirement age than 65, in my opinion, as the human body is at it's physical peak around 40 years earlier.

I can see how the majority of office jobs might stand to go a little higher, as they mainly involve sitting down. But frankly, a one-size-fits-all retirement age is impractical. Especially when you consider the class-longeviety divide, where by the average working class man can expect to die at 67, precisely when he retires.

The middle-class man can expect to live to 73. He can stand to lose a couple more years on his retirement, but for the fact he'll probably use savings and a private pension to retire early at 65 anyway. Raising the retirement age will probably only effect the working class, who can't really afford it anyway. Such is the way.

[Thanatos]

I think the life expectancy you cite may be misleading: remove premature deaths (which can hardly be relevant to retirement) and the number is probably much higher.

As for retirement, I say abolish the retirement age altogether: that most people can be sacked for being 65 (or 70) is ridiculous (if their age is actually causing their work to deteriorate then that's another matter, but the reason must be the poor work rather than something which may but often doesn't cause it). Raise the minimum age for the state pension to somewhere from 67 to 70 (and increase the pension a lot, particularly for the poor - yes, I support means-testing, based in this instance on private income and savings).

[Naselus]

thanatos said:

I think the life expectancy you cite may be misleading: remove premature deaths (which can hardly be relevant to retirement) and the number is probably much higher.

You mean if I remove all the people who die before they reach the averageage , then the average gets higher? Good lord.

If you mean discount people who don't die of old age, well I'm afraid I can't do that. Very few people indeed die of old age. Most die of problem associated with it, regardless of if they've retired or not. And a lifetime of manual labour makes you far more susceptable to such problems, as does a low-income lifestyle.

And those who do die before retiring still put money in the pot for the survivors. Just because they don't claim it doesn't make them irrelevant in a discussion of pensions.

I can't disagree enough with your idea of raising the minimum pension age, but I do agree with means testing in all ways. I've read accounts of house-owner pensioners complaining that they only recieve £110 a week from the state, in addition to their private pensions. They're getting a pension roughly equal to my weekly wage, and then complaining about only recieving three times the amount of jobseeker's allowance.

On the other hand, there are other quirks to the current system that simply shouldn't be possible. The wife of the Chairman of the Pensions Coaliition only recieves £1 a week for her state pension, since she's spent most of her life as a housewife, and doesn't have many NI contributions.

[ringmasterrob]

The latest proposal (http://news.bbc.co.uk/1/hi/business/4484226.stm) put forward is suggesting a rise in the state pension age to a whopping 68 years of age! It's not quite the 70 that the IOD wanted, but it's higher than the original suggestion of 67. What are your reactions to this?

[Naselus]

Until the nonsensical idea of a one size fits all state pension, and with it the absurd notion that we live in a classless society, are both banished from thought on this issue, no sensible resolution can be made.

Working until 68 is not an option for some professions (notably not including the civil service, who's working wage should be raised into line with private income and whose pension age should be matched also), whereas others could easily continue until 70. Enforced retirement should be illegal. There should be no state pension for anyone with a private pension equal to or greater than £250 a week. Anyone with a net worth of greater than £500,000 should not recieve a state pension.

[TheCritique]

I would argue that a majority of people who are retired have a great personal value compared to the rest of us – they have worked all their life and paid off the mortgage – their wealth is locked in property, and therefore cannot be quickly and easily recovered. Moving to bungalows does not ease this problem, as they are almost as valuable as two-storey houses. In London, the retired will have a value of over £500k! To suggest that they should not receive the basic state pension is absurd, as this would force them into poverty.

I have to say that the ideas circulated here seem to be ‘disincentiveing’ private pensions! The idea is surely to encourage people to pay into pension schemes so they will have as much money in retirement as possible. Giving the state pension to only those who have saved nothing is encouraging irresponsibility! The basic state pension should be for all without a pension significantly larger then £250 per week.

Personally, I’ll never pay into any pension except a state sector pension (for clarification, those ‘gold-plated’ ones that civil servants pay into - but that is only if I do become a civil servant), which are legally guaranteed, not means tested, and generous. The rationale for this is that any other pensions are not guaranteed. If you pay into a state pension scheme (for those working in the private sector), you can pay in a fortune, and then they make it means tested and you lose everything. Private companies may borrow from their pension funds, and if they become bankrupt, again, you can lose a fortune off your pension, and there are numerous case studies of this happening. I therefore will not pay into a pension scheme, and invest my money in either bricks and mortar or companies, which will generate a return, and hopefully I will retire rich with good returns and investments, rather than a pension which isn’t guaranteed.

Having said this, I do favour pensions in principle which will not discriminate against the poor who have had no opportunity to become rich. I only have no sympathy for those who are irresponsible.

Comments are welcome.

[Naselus]

If you're retired, you should move out of London rather than sitting in a house that's quadrupled in value since you bought it and moaning you can't afford to live. And a bungalow in Eastborne is not worth anything remotely like a two-storey town house in the centre of London, which would be valued at about three quarters of a million quid.

Also, if I had the option of paying into a private pension that would yield me £250 quid a week or more, I would do it even if it cost me my measily £110 state pension. It's not encouraging irresponsiblity. The gap would still be enough to make it clear which option is preferable. It's just that £250 a week is more than enough to live on for a retired person, without any need for a handsome state top-up.

The vast majority of people will look at that, and rather than think "Oh, I can get away with not paying into a pension scheme and live on £100 quid a week less!", will think "Well, I'll pay into my private scheme, but IF things go wrong I'll still survive past my 70th birthday.". The present method of giving people a state pension regardless cannot continue. Take my proposals as a package, rather than individually, as they support each other quite well.

Firstly, no pension for those worth over 500k. This encourages pensioners to sell off properties in city centres, where they would be better used by people who work there, and buy smaller places for a couple of hundred thousand. That leaves a decent sized pot of cash, and when their net wealth fell below that 500k mark, they would become eligible for the state pension. Unless their private one is over the £250 per person, which is obviously more than they're really going to need. If their private one is under £250, they still don't recieve the full state pension, but do get a percentage. End result, you've got people paying into private pensions because those pay out regardless of your other income or the value of your property holdings, but the state pension is there, and sufficient, just in case.

[HStorm]

The Government has introduced a new white paper that will gradually move the state pension age back to 68 years old by the year 2044, via 66 from the year 2024, and 67 from 2034. It will also restore the link between pensions and earnings that had been scrapped by the Tories.

Who's in favour?

[Naselus]

I'm dead set against it, but then I think the whole system needs to be properly reformed rather than simply adjusted, and I'd also be one of the poor bastards working til I'm 68. Unlike some, HStorm.

[modeski]

I like the idea of linking the pensions to earnings, and think people should receive backdated payments. I quite like the idea of most of our pensioners actually being above the bread-line for a change.

I agree with Nas that the entire pension system needs a complete overhaul. I'm just getting to grips with the australian system of superannuation, where everyone's employer pays 9% of your salary into a pension fund, and you have the ability to choose how it's invested. I believe the earliest you can claim it is 60, though it may be 55.

Regardless, something needs to change in the UK in to stop pensioner poverty.