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The government should raise the pension age to 70, now! watch

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    (Original post by Howard)
    Living longer for sure, but what about quality of life? Shouldn't retirement bring some enjoyment with it? What's the point of retiring at 75 as a geriatric?

    There's no need to increase the retirement age. The real need to to make the system fairer so we can all retire at 65 rather than having the public sector retire at 50 while the rest of us have to plough on until we're octogenarians.
    I'm not sure I agree. We're living much longer now than when the system was implemented, so the cost is far greater than ever anticipated. I'd question whether it can really be affordable. Germany is already using 67 as its pension age. We're not helped, of course, by the "baby boomer" demographic.
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    (Original post by Collingwood)
    It's not really a choice. The state pension scheme is not funded by accumulated savings, but rather direct transfer payments. This is predicated on there being a large and ever-increasing workforce. In reality the opposite is the case: the proportion of the population that is elderly is increasing, and the number of years they live after retirement is also increasing. The liability is rising much faster than the ability to pay for it.

    The state pension will bankrupt the country and be abolished. It is not a question of if, but when, and I wouldn't bet on anyone here ever seeing a penny from their National Insurance contributions.
    I agree. I've paid NI in the UK and I now pay Social Security contributions in the US. I've paid in all my working life - never skipped a beat - but I doubt if I'll see a penny or a dime from either government.

    My other alternative is to "invest" (ROFLOL!!!) in the stock market but tbh I'd probably do as well (and have more fun) playing roullette in Las Vegas.

    So, I don't have a retirement plan - I am actually planning on working until I drop dead. That sort of suits me anyway - I'm a workaholic and I like earning money. I also think it'd be a far nobler way to spend my twilight years (managing a construction site) than walking round garden centers in beige shoes.
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    (Original post by Max Hinks)
    Because that's the kind of small thing a government would overlook.... :facepalm:
    It's exactly the kind of thing a government overlooks - they have a five year horizon
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    (Original post by Apagg)
    I'm not sure I agree. We're living much longer now than when the system was implemented, so the cost is far greater than ever anticipated. I'd question whether it can really be affordable. Germany is already using 67 as its pension age. We're not helped, of course, by the "baby boomer" demographic.
    But the average age of the public sector retiree is 58 and that's the average - Council workers in Glasgow and Falkirk retire at 56 and many police officers have been able to claim their pension shortly after their 50th birthday. What's more, most civil servants receive employer pension contributions worth 19.4% of their salary paid into their final salary pension scheme each year. This is more than three times the average of 6% paid by private sector firms into their employees.

    All I am saying is that if the public sector took their snouts out of the trough maybe we could all look forward to retiring at a reasonable age.
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    (Original post by Howard)
    I agree. I've paid NI in the UK and I now pay Social Security contributions in the US. I've paid in all my working life - never skipped a beat - but I doubt if I'll see a penny or a dime from either government.

    My other alternative is to "invest" in the stock market but tbh I'd probably do as well (and have more fun) playing roullette in Las Vegas.

    So, I don't have a retirement plan - I am actually planning on working until I drop dead. That sort of suits me anyway - I'm a workaholic and I like earning money. I also think it'd be a far nobler way to spend my twilight years (managing a construction site) than walking round garden centers in beige shoes.
    It would be nice to at least be able to invest the NI contributions ourselves. But to be honest NI and US social security are barely-disguised taxes, and diverting them to save for one's own retirement would bankrupt the present scheme even faster. They all must know that it can't last, but there are too many votes in not doing anything about it. I view it as naked vote buying with other peoples' money.
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    (Original post by Quady)
    They already can, forced retirement on the grounds of age at 65 isn't legal anymore.
    I know from experience though that in practise an employer can choose to discontinue a worker's contract, they don't have to cite age as a reason. Forced retirement is still fairly common.
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    Well I'm not counting on getting a state pension. I suspect the closest thing will be incapacity benefits. So basically you'll only be able to "retire" when you are physically incapable of working.
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    We really need to figure this out. I don't want to hear stories of people having to work until they die. It seems fair to raise the pensionable age to 70, but we need to ensure that people have enough money to save for their own pensions, without losing out to means-testing. We should ensure a prosperous life throughout life, and not cast aside the old and decrepit when they become burdens on society. However, at the same time life-extension has no worth if healthy working life is not extended too.
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    Pushing state pension age up to 70 is short sighted.

    Very few people can afford to retire just on state pension, but may need it as a top up to an occupational pension.

    Denying payment of state pension until 70, whilst allowing occupational pension at 50 (55 after April), may force people to remain in work longer than they might have done. This will result in a slow down by firms of recruitment of younger employees as those that might have left at 60-65 hang on until they can afford to retire and block the career progression ladder for those that follow.

    The obvious solution is to create a formula for reducing state pension if taken earlier, say between 60-70, via some form of sliding scale. This will allow those who could afford, with some form of state pension top up of their other pensions, to retire at say 60, releasing a workplace position for someone younger.

    E.g. Simplistically if at 70 my state pension would be £6,000 p.a, and I am expected to live 15 years until 85, the cost to the treasury would be £90,000. (Ignore time value of money) If you let me take pension at 60, treasury might need to pay for 25 years. Therefore reduce starting figure to £3,600 say, cost by time I am 85 still £90,000.

    More flexibility re retirement not less is required. My wife and I will not get our state pensions (now fully paid > 30 years contributions) until 66 (We are 49 and 50 now) and I expect, if we could take circa 75% of state pension at 60 we could probably, with other pension savings we have, afford to retire at that age. However without the circa £9,000 (75% of 2x £6000 pensions) I expect we cannot.

    The result is we will each keep someone younger out of employment for six years.

    This is not sensible.

    DJKL
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    (Original post by DJKL)
    Pushing state pension age up to 70 is short sighted.

    Very few people can afford to retire just on state pension, but may need it as a top up to an occupational pension.

    Denying payment of state pension until 70, whilst allowing occupational pension at 50 (55 after April), may force people to remain in work longer than they might have done. This will result in a slow down by firms of recruitment of younger employees as those that might have left at 60-65 hang on until they can afford to retire and block the career progression ladder for those that follow.

    The obvious solution is to create a formula for reducing state pension if taken earlier, say between 60-70, via some form of sliding scale. This will allow those who could afford, with some form of state pension top up of their other pensions, to retire at say 60 to so do, releasing a workplace position for someone younger.

    E.g. Simplistically if at 70 my state pension would be £6,000 p.a, and I am expected to live 15 years until 85, the cost to the treasury would be £90,000. (Ignore time value of money) If you let me take pension at 60, treasury might need to pay for 25 years. Therefore reduce starting figure to £3,600 say, cost by time I am 85 still £90,000.

    More flexibility re retirement not less is required. My wife and I will not get our state pensions (now fully paid > 30 years contributions) until 66 (We are 49 and 50 now) and I expect, if we could take circa 75% of state pension at 60 we could probably, with other pension savings we have, afford to retire at that age. However without the circa £9,000 (75% of 2x £6000 pensions) I expect we cannot.

    The result is we will each keep someone younger out of employment for six years.

    This is not sensible.

    DJKL

    If you want to retire early, set money aside in a private pension. That's what I plan to do.
    Retaining older staff won't prevent taking on younger staff in the professions (where the hierarcy you describe exists), nor in blue collar occupations, where the work performed by the older members of staff differs because of physical differences.
    You also overlook the economic growth effects of a larger workforce. You seem to think that the number of jobs in the economy will remain static.

    Finally, I don't see how a sliding scale helps - if you can't afford to retire at 70 how could you afford to retire earlier and receive less from the state? And if you receive the same amount in the long run it doesn't reduce the burden on the state. It only fixes the problem that you've conjured up which simply does not exist.

    I'm angry that the generation who had their university education and healthcare completely free at our expense (via debt) will also get to retire earlier than we do, and again we will bear the cost, having already paid more than they did for housing, health and education.
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    (Original post by DJKL)
    The result is we will each keep someone younger out of employment for six years.

    This is not sensible.

    DJKL
    Only if the workforce remains static, one in one out.

    The reason the retirement age has to go up as there isn't a high enough proportion of workers to retirees.
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    (Original post by Apagg)
    I'm angry that the generation who had their university education and healthcare completely free at our expense (via debt) will also get to retire earlier than we do, and again we will bear the cost, having already paid more than they did for housing, health and education.
    tbh it isn't their fault, they didn't set the rules.

    Their healthcare may not be free for the most expensive part of their lives since the younger gen will have control to take it away from them.
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    (Original post by Apagg)
    If you want to retire early, set money aside in a private pension. That's what I plan to do.
    Retaining older staff won't prevent taking on younger staff in the professions (where the hierarcy you describe exists), nor in blue collar occupations, where the work performed by the older members of staff differs because of physical differences.
    You also overlook the economic growth effects of a larger workforce. You seem to think that the number of jobs in the economy will remain static.

    Finally, I don't see how a sliding scale helps - if you can't afford to retire at 70 how could you afford to retire earlier and receive less from the state? And if you receive the same amount in the long run it doesn't reduce the burden on the state. It only fixes the problem that you've conjured up which simply does not exist.

    I'm angry that the generation who had their university education and healthcare completely free at our expense (via debt) will also get to retire earlier than we do, and again we will bear the cost, having already paid more than they did for housing, health and education.
    As I posted, I have set funds aside, I have been making pension contributions since I was 25 my wife since she was 22. However I have no employer scheme (never have) and my wife is now in a low paid job with an employer's scheme. At 60 we might have £400k in funds (in todays terms). That will produce an income of maybe £20,000 p.a @ 5%. That is maybe a little tight to retire on (even though we won't have a mortgage) However if we cannot touch our state pension until 66 we will have to work on until 66. If state retirement age is flexible that is not the case, the extra £9,000 making all the difference.

    Retaining older staff means one position in the business is taken, often at a high salary (seniority and experience tend to lead to higher pay)
    Once I go someone needs to do my job, someone is recruited (even from within promoted) and at the foot of the chain maybe some graduate fills a vacany that previously did not exist whilst I was incumbent. My leaving gives someone else a job, I am not sure why you do not see this.

    Re static employment numbers, no, probably will not be static, however may not be higher could well be lower. As the last few years have been a splurge of consumer spending riding on the false optimism of ever increasing house prices, now credit is tight, (and trust me it is, try talking to banks about funding for a business at present ) and may remain so for years, where is the growth in demand that is going to require employers to take on more staff? And what do you think is going to happen to public sector employee numbers post the election?(The elephant in the room)

    I am glad you think school leaver/ graduate unemployment is not an issue, however from where I am sitting it is. (deja vue pour moi)
    I graduated in 1983, height of graduate unemployment, and did not really get my career going until 1985.We had circa 12% graduate unemployment one year post graduation and that was when there was probably about a 1/4 of the number of graduates every year there are now. Now everyone and their dog seems to go to University.

    Forcing people to work on longer ,solely on the basis of your anger at an older generation you perceive as having had an easier ride ,is not dealing with what is going to be a major issue (A possible lost generation)

    I can also point out that the late 1980s were no picnic if you had a mortgage and my generation is not immune to the current cost of education, as undernoted, and has to pay for private dental care as you cannot find an NHS dentist.

    My son, who is living away from home at University, gets a student loan of £915 and has a bank overdraft facility of £1,750. This is supposed to cover his hall fees (not including meals) of £4,700, food/ books/ transport etc .Given the foregoing where do you think the £5,000 shortfall comes from? My income that has been taxed and suffered NI at a marginal rate of 41%, therefore just over £9,000 of my gross income covers one child. My daughter no doubt will be doing similar in a couple of years so another £9,000 gross gone.

    From a policy point of view enabling those who can afford to retire at 60 to so do is sensible, letting them take a lower state pension to go earlier is sensible, it does mean that younger employees will have an easier time gaining employment and then being promoted faster than might otherwise be the case. (Dead mens' shoes)

    And despite thinking the older generation does not pay its way, the tax and NI I pay brings tears to my eyes every year when I complete my Income Tax Return.

    DJKL
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    (Original post by DJKL)
    And despite thinking the older generation does not pay its way, the tax and NI I pay brings tears to my eyes every year when I complete my Income Tax Return.

    DJKL
    ...and will get worse the longer life expectancy increases with no subsequent increase in the retirement age.

    Where is the money to come from? Lower the state pension further (which has been the trick since the 80s)?
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    But there is an increase, women are moving up from 60 and men's age is also increasing. However with this comes the cost of work opportunities for the younger generation. My suggestion addresses that point, allows state pension early but scales back amount. (I presume you do know that currently you can do the opposite, delay state pension but get an increased pension when you do start taking it).

    Why is my suggestion badly received, consider the following?

    In my earlier example I suggested say £6000 p.a at 70(expected payment 15 years total cost £90,000) if retire 60 £3,600 p.a (expected payment 25 years total cost £90,000) However if I live to > than 85 treasury wins, to 85 on either scenario costs £90,000, thereafter cost if retire at 70 is £6,000 p.a. if retire at 60 £3,600, saving for treasury of £2,400 p.a (All of course indexed)

    If increasing life expectancy is expected, as you suggest it is, my solution helps.

    DJKL
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    (Original post by DJKL)
    But there is an increase, women are moving up from 60 and men's age is also increasing. However with this comes the cost of work opportunities for the younger generation. My suggestion addresses that point, allows state pension early but scales back amount. (I presume you do know that currently you can do the opposite, delay state pension but get an increased pension when you do start taking it).

    Why is my suggestion badly received, consider the following?

    In my earlier example I suggested say £6000 p.a at 70(expected payment 15 years total cost £90,000) if retire 60 £3,600 p.a (expected payment 25 years total cost £90,000) However if I live to > than 85 treasury wins, to 85 on either scenario costs £90,000, thereafter cost if retire at 70 is £6,000 p.a. if retire at 60 £3,600, saving for treasury of £2,400 p.a (All of course indexed)

    If increasing life expectancy is expected, as you suggest it is, my solution helps.

    DJKL
    The Treasury doesn't win as the time you're in retirement you aren't earning. The UK loses 5 years of prime earning power in that scenario.

    Again your argument about youth unemployment only works if there is no job creation, which is an unlikely assumption.
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    I may not be working but I still pay taxes (pensions are taxed)
    My replacement earns more and is taxed. If someone is taken on currently unemployed Treasury saves benefit payments. Remember whilst pension fund I have grows tax free pension drawn from it is taxable. My retiring unlocks new taxable source in economy.
    I do not save my pension, I spend it, the funds circulate around the economy, Treasury/Local Authority still get paid council tax, RFL, fuel duty etc. Companies I buy from still pay tax on their profits.

    And your point re youth unemployment only works if there is full employment, mine works even if there is already job creation as long as there is not full employment. I know which one I think is unlikely.
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    (Original post by DJKL)
    I may not be working but I still pay taxes (pensions are taxed)
    My replacement earns more and is taxed. If someone is taken on currently unemployed Treasury saves benefit payments. Remember whilst pension fund I have grows tax free pension drawn from it is taxable. My retiring unlocks new taxable source in economy.
    I do not save my pension, I spend it, the funds circulate around the economy, Treasury/Local Authority still get paid council tax, RFL, fuel duty etc. Companies I buy from still pay tax on their profits.

    And your point re youth unemployment only works if there is full employment, mine works even if there is already job creation as long as there is not full employment. I know which one I think is unlikely.
    Full employment is impossible in a flexible labour market as we both know.

    I'd be surprised if on retirement you'll be on 100% of your previous pay. That was pretty difficult when final salary schemes were around, now practically everyone is on average salary or worse its neigh on impossible at age 60.

    I won't bother continuing save this;
    By logical extension of your argument there shouldn't be a lower limit to the state retirement age, in fact the earlier people retire the better for the economy.
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    Of course I would not be on 100% of my full pay, but the sum of pays in my workplace, Ceteris paribus, remains the same, someone replaces me, they get my pay.(Or close to it)

    The pension fund I have is only taxed when pension taken, as a SIPP it earns dividends from its investments but no tax paid on this income (beyond notional tax credit on dividends no longer reclaimable by pension funds thanks to G Broon), once I start taking this pension I am taxable in receipt. Until that time HMRC gets nothing on that £20,000 p.a. This is an extra taxable receipt into the economy.

    Providing there is a reduction in state pension for taking it early where is the cost? All I am getting is what I have already paid towards. I get it early but at a lower amount, on average cost to treasury in total same as if waited but gave me higher pension at 66.

    Currently only 30 years NI needed for full basic state pension (used to be 44 years) I am 49 and have more than 30 years paid. (First contribution age 16, worked through University) Even if I never worked again under current rules at 66 I get my basic state pension.

    The point is there is an age when occupational pensions can be taken (50 up to 5/4/10, 55 thereafter) In an occupational scheme if normal retirement age is 65 there would be a scale back for taking early. Even if scheme does not allow it is possible, though often not wise, to arrange cash commutation to a private scheme like a SIPP where rules allow benefits at 50/55 as stated above.

    Surely the correct logic is to marry up the state pension with entitlements under occupational/private schemes, treat the same, retire early if you want but receive less, your choice.

    DJKL
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    I despise the word "pension" - it sounds horrible.
 
 
 
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