One answer is of course to raise the retirement age although that is a tad unfair...

It's unfair on everybody, not just manual workers. And it's not the answer either. It's the easiest answer as far as government is concerned because governments love to take the easiest possible option.

People are living longer, we can't afford to pay these pensions any more, make people work longer for them, hope more people drop dead before they get them and of those who don't let's hope they die soon after getting them. We're quids in, problem solved.

Only it's extremely unfair on those people who have been paying in and contributing for their state pension ever since they were able to work, many of whom I might add have already paid in a sufficient number of years to qualify for one.

It used to be (and still is for private and occupational schemes) that you pay in for a maximum of 40 years to qualify for a pension. If you pay in for less than 40 years you get x/40ths of however many years you did pay in for.

That used to be the case for the state pension too, although I can't remember whether it was 40 or 45 years. However, recently the government reduced the number of years to 30. So now you only have to pay in for 30 years to qualify for a full state pension. So theoretically someone who started work and paying NI at 16, will have paid a sufficient number of years to qualify for a full state pension at age 46. Only they can't actually take their state pension until what was 65, then 66, then 67 and now 68.

Contrast that to a recent EU migrant who arrives ages 35, pays NI for 30 years and walks away with same state pension as the person born here who has worked and paid NI since age 16. Hardly fair is it?

The bottom line here is this: the government is paying out so much in welfare and benefits, a lot of that to people who've never paid a penny into the system—it can't afford pensions any more. So it has to reduce down it's pension bill and making people work longer for it is one way of reducing it.

It's got ****** all to do with people living longer and everything to do with the fact that this government and the one before this one have financially mismanaged the economy and continues to mismanage the economy and will continue to mismanage the economy.

The sad fact is the government is incompetent.

A private individual planning his/her retirement income, works out how much he/she needs to pay in to his/her pension pot to receive an annuity of a certain amount at the age he/she plans to retire at. Over his working life he/she will monitor that pension pot and pay more or less to ensure the final annuity meets his/her requirements.

It's not really rocket science is it? The government has access to statistical figures of the current UK population by age demographic. Yet it seems totally incapable of planning ahead for that population when they start to retire and starts bleating about people living longer? What the f*** do they pay all these highly paid economists and actuaries for exactly if they can't work out these simple figures? And how much extra they might need people to pay over the course of their working lives to enable them to take a state pension at age 65?

Unless of course statistical figures they're using are totally wrong.

There are no excuses whatsoever for asking people to work longer before they can receive a state pension beyond total and utter financial incompetence from the government.

 

It does seem unfair that the EU migrant with fewer qualifying NI payments gets the same as someone who has paid in for forty years plus. The same presumably applies to other benefits such as those associated with health, education, maternity/ paternity benefits.
I hadn't thought of it like that before.
But the largest percentage of the welfare budget goes to the working poor as well as pensions so the issue of low pay needs tackling, doesn't it?

 

But the largest percentage of the welfare budget goes to the working poor as well as pensions so the issue of low pay needs tackling, doesn't it?

It does. Workers should be paid a minimum living wage by employers without having to resort to the government subsidising it. How much longer can the government go on subsidising businesses in this way?

I laugh when I hear people talk about the economy recovering and GDP increasing. Much of that recovery is based on government subsidies and spending and everyone else eating into their savings.

That's not sustainable either.

The UK economy is bankrupt.

 

When the UK state pension age was set at 65 , the average life expectancy for a man was 66 & a woman 72.
I never understood the reasoning behind the reduction to 30 years ? Now 35. I thought it was EU but it wasn't.
What compounds the problem, not so much now but is a ticking bomb for the future , is the EU pension rules allowing anyone who has worked in more than one country to get increased payements from all.
That is going to come back & haunt all countries.
I honestly believe that no Uk government has any interest in anything except in the 4 /5 years that they are in power & are solely concerned in gaining re-election. Nothing else.

 

I honestly believe that no Uk government has any interest in anything except in the 4 /5 years that they are in power & are solely concerned in gaining re-election. Nothing else.

Yes. Nail on the head.

There is NO long term planning. It's all short-termism, no long termism and with an eye on winning another term. This is one of the very real and worst aspects of our current electoral system.

I've offered up my own solution to this being PR where you can then start planning longer term by concensus.

People don't like PR either and from what I can tell we're stuck with our current system for the foreseeable future.

Another big dollop of the same please.

 

It is no different here. Talking to the neighbour's son last night, lovely bloke , always normally looks on the bright side & even he gave me the impression that he has given up hope ! Said exactly the same as Zenkarma did about 2 parties, all crooks, all corrupt, only in it for themselves & relations. ;the banksters, etc; etc. Made me quite depressed coming from someone who normally see's opportunities & ways forward.

 

No, not ALL crooks. Many , yes, all, no.

I have both here and in the UK got to know many decent, honest people from nearly all political parties who do the job because they sincerely wish to work for the wellbeing of their communities.
Tarring everryone with the same brush is silly, lazy thinking that as I've said before will serve only to deter more decent people from coming forward to do a thankless job. After all, why do a job that before you've started work brands you as a cheat and a fraudster?

I feel personally offended to read this kind of nonsense since as anyone reading my posts will know I was a politician myself. Quite apart from making any money out of those years I suffered financially. I claimed very low expenses, claiming only for travel, phone calls and the occasional meal if -and only if - there was good reason for not eating at home. I turned down promotions as I didn't have the time to do two jobs properly. I once wasted a pint of Abbot Ale by pouring it over the head of some pondlife who offered me a bribe to get his daughter a council house.

Enough of this blanket condemnation. Substitute the word 'vicar' 'nurse' or dentist' for politician and you'll see how daft this generalisation is.
Politicians are people like you. They are not born politicians. If you don't like the ones you have, then put up or shut up....step forward yourself and bring some 'honesty' to political life by your example.

 

It's all very well to complain about the 'unfairness' of government or local authority final salary pension schemes and low interest rates on savings...but what is the solution to the fact that life expectancy is now well beyond what it was in the 1940s, 1900s or whenever it was that the current contributory pension scheme was introduced?

The solution is fairly simple. Changing from what in most countries today is a pay as you go system. A system that the money that you put in today is paid out today to current retirees. That sort of system made sense in the days when the average retiree lived literally one or two years post retirement.

Late 80s/early 90s Canada was facing the choice of hiking contribution rates to what was considered an extreme level (10%!!!!!!) or doing something else. The choice was switching to an investment type system.

The first thing that happened is they took the annual surplus and bought government bonds. This is zero risk if you consider the government is already on the hook for this.

The second step was to take a chunk and use it to buy an index of large stocks. Impossible for the politicians to interfere this way.

Third step was to hand a smaller chunk to independent advisers.

Fourth step was to hand a smaller chunk to alternative investments. Real estate for example. The fund made a chunk of money on Skype for example.

Today the fund is one of the worlds largest investors.

Why won't this happen in the EU? Ideology.

Think about your own life. If you're 20 and saving money for retirement you'll obviously invest it some how. Anything else requires you to save way too much money.

 

Think about your own life. If you're 20 and saving money for retirement you'll obviously invest it some how. QUOTE]

Not if you're unemployed or on poverty pay, though. And if you have a family and are unemployed or on poverty pay you'll have even less opportunity to save.

All you have written bypasses my main point which is simply this: given that MOST people do not earn sufficient to be able to save for ten years of retirement let alone twenty or thirty years, how is their retirement to be funded?

Paying people in work a decent wage is surely the starting pint.

 

No you're missing the point. The reason the money in the pocket is so low is because the amount the government needs to take is so high.

The current system requires obscenely high contributions. I don't know what the rate is in Spain but in Italy it's currently 33%. If they could cut that to 15% (It shouldn't be very hard to reduce it even more) then that would be a pay hike of 18%!

 

If you are earning a low wage in the UK you pay no tax and an awwful lot of people fall into that zero tax bracket. Many others receive pay which is so low that they require benefits to give them a living wage. Other workers pay tax to fund that gap.
So...I ask again: how can they be expected to save?

Consider how much you would need in your pension pot to fund a decent life in retirement. At current interest rates £100k wouldn't give much. Even invested in stocks etc. you'd be lucky to get 4.5%. Who could live on that?
The average earner would find it difficult to save £100k over his/her working life.

Retired people need more medical treatment than younger people. Cut taxes..how do you fund this and other social services?

As I said earlier, the government takes too much tax...but only from some, the poorer wage earners. The super rich get away with paying proportionately peanuts.

18% extra on a wage of £26k p.a., which is well above the mode, would give less than £5k. Assuming that all that cash was invested, which is highly unlikely, given the cost of living, you still would require a state top-up.

 

BTW I'm not suggesting cutting the pensions paid or increasing the retirement age.

 

Only one country in the EU has a national debt increasing faster than the UK. The UK debt is increasing by£3000 every second even though Osborne boast he has it all under control. :deadhorse:

The country where the debt is increasing faster than the UK? Why Spain of course.

There won't be any money for pensioners in years to come. Buy land, shotguns and tinned food!

Banks stockpiling money? Don't think so. The amount they need is trillions. The EU initiative is to create a massive 55 billion euros. Just a drop in the ocean when the day of reckoning comes. Buy land, shotguns and tinned food!

Sorry to sound gloomy at this time of cheer but it is all a giant ponzi scheme of epic proportions that will end in tears.