| Non-motoring > State pension at 70? | Miscellaneous |
| Thread Author: Manatee | Replies: 5 |
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New Sun 13 Jan 13 19:03
State pension at 70? - Manatee
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www.thisismoney.co.uk/money/pensions/article-1679780/New-state-pension-age-retire.html This is not new news, but I wonder if it comes under the heading of "not fully thought through". The prognostication for now is that my children, born 1981 and 1985, will qualify for a state pension at 70 or 71. I am 59 and as expected I did not make it to my defined benefit pension scheme (closed in 2010) retirement age of 65. Not a surprise because I can't remember the last person who went at 65, and I have been working on a cunning plan (i.e. not spending all my money for the last dozen years or so) but I am shocked at the number of people I have come across who essentially have no provision other than the state pension plus whatever benefits come on top. It's all very well saying that people will have to wait longer, but they will either (i) have to be supported by the state anyway, from the time they stop working until pension age; or (ii) have a job to go go; or (iii) have to make adequate provision for themselves to complement or anticipate whatever state pension is expected. No I know this is a long time in the future, and much will change. But it's no use waiting to see what happens if pensions aren't to be replaced by welfare, and there might not be enough jobs. A phased automatic enrolment of employees into some sort of pension scheme is now mandated and is being phased in. However, employees can still opt out, and the minimum contribution levels from which benefits will be funded are pathetically low, rising to only 8% by 2018. Any low paid individual in their right mind will opt out unless they can make the significantly higher contributions they will need to get above the welfare level when they can no longer work (assuming that there are no plans to bring back the workhouse). Once again the problem hasn't been confronted. For the low paid, any pension savings they make are likely only to benefit the taxpayer, so there's no point making them on a purely mercenary basis. Either there needs to be a rationale for people to make some provision for themselves, or some compulsion to save. I think I have just invented National Insurance. Shame the original version was hijacked as another form of income tax. All of this is predicated of course on life expectancy increasing rapidly. Maybe, as the overweight Playstation cohort gradually replaces the baby boom/welfare orange juice one it will stall or even come down again. |
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New Sun 13 Jan 13 19:12
State pension at 70? - Robin O'Reliant
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The trouble with private pension schemes - certainly for the self employed - is that years of contributions can be effectively wiped out overnight during an economic hoo-haa. Mine was, to the point where it was better to cash it in a few years back and take the lump sum and the annuity while it still had any value. For a self-employed person to fund an adequate pension they'd have to be earnig a fair bit more than the average wage. I'm lucky in that my mortgage was paid off years ago and we're debt free (at the moment!) so all I'll have to worry about are day to day running costs. |
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New Sun 13 Jan 13 19:29
State pension at 70? - Stuu
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I must say, im extremely relaxed about it all, perhaps because I know Im very much a passenger to whatever a government of the day does and on low wages, big sacrifices on my part will be of little consequence. I could live on the basic state pension at todays prices so as long as it keeps up with inflation Im not going to loose sleep over it. I will inherit my parents wealth and that would last me 30 years if spent moderately on top of the state pension. I suspect many of my generation will do the same. My dad ended up with a terrible income from his sizeable pension pot despite doing all the right things and he said he regrets having a private pension at all. He reckoned he could have bought 6 modest houses and rented them out for a pension income and done far better from the same contribution - may do just that with whatever I inherit. |
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New Sun 13 Jan 13 21:15
State pension at 70? - -
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I feel like FoR, much as its terribly important for all of us its almost impossible to make the right judgement when you're an expert let alone a numbskull like me, even knowledgeable people have been ripped off, by govt as much as by snake salesmen. How can you possibly plan when few a years down the line those in charge (harrumph) shift the goal posts and effectively steal the very pension pot you've been paying into. Our house was paid for a few years ago, its large so we can easily downscale in due course, or as is more likely make the move to somewhere far from the madding crowd and possibly warmer, when the need to be within distance of my work is no longer an issue, we don't do debts or loans and live fairly frugally. My company will along with others have to come up with some sort of scheme this or next year, they stopped the previous excellent final salary scheme some years ago, i'll judge it on its merits when the time comes, but cynical me knows full well that any predictions made for the scheme might as well have come from Mystic Meg and if it should show results will likely be pilfered by whoever is the chancellor of the next few corrupt governments. I have no illusions that i'll be working longer than the recent letter i received from pensions service, those goal posts will shift nearer to 70 for me than presently ordered comrade i have no doubt, 66 at present according to my appointed apparatchik i expect it to be 67 or 8 before i get there, i trust our govt and advisory services as far as i could throw them, and i fully expect the age 70 pension prediction to realise around age 75 before 2050. By that time the chip in the head may well be enforced so those useless worn out productive workers can be turned off in order not to be a drain on the drone's livelihoods. Unfortunately the increasingly high pension age will have to happen, the country is effectively bankrupt, our debts cannot be repaid in an imaginable time frame and eventually interest rates will rise which will hasten the carp hitting the fan and the welfare state system will start to shut down. Aside, did i mishear the other day something on the state broadcaster wireless that 75% of our economy is service industries?, is that people offering services to each other with taxes being taken from each transaction to keep the British Titanic on its full speed present heading? If you shrunk the country to a house with 10 people living in it, 2 of them would be on the dole, 2 would be pensionable age, 2 would be house employees overseeing the tax takes from the rest whilst ordering them about and sending protection money to the big mafia house in Belgium for er nothing, 3 would be working inside the house and charging all others for services, i reckon that leaves 1 going out to proper work making something to sell to bring some real money in to start the ball rolling....is that so far removed from the current country as a whole. |
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New Sun 13 Jan 13 21:40
State pension at 70? - Manatee
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You're not wrong GB. I can't think of a cure other than a few years of inflation to wipe the debt out and devalue the currency. That might be unavoidable when our trading partners are doing the same thing themselves. The unfortunate side effect of that for us will be to transfer wealth from those with savings to those with debts. On a broad brush scale there is a sort of fairness to that, as it is the younger generation whose future has been mortgaged, but as RR says those who have tried to make provision for themselves have a lot to lose. One way to deal with it might be to get some debt, quick, and finance property with it - but timing is everything! |
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New Mon 14 Jan 13 13:13
State pension at 70? - Cliff Pope
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It seems to me that all the arguments and recriminations arise because the way pension schemes have always used the reference point of retirement age. It has been known for decades if not centuries that people were living longer, so wouldn't it be more sensible to refer to a working/contributing life as a fixed % of life expectancy? So if say 20% is allocated to education/training, 50% to working, 5% to needing end of life care, that leaves 25% for retirement. If someone is expecting to retire for a period equal to half his working life, then leaving aside investment growth for a moment, he needs to put aside half his income if he wants to retire at the same standard of living. If he is content to retire at a lower standard, then he can save less. Obviously there ought to be a final cut-off assessment, after which the deal is done regardless of changing life expectancy, but that concept is already familiar in annuity calculations. There should be no more talk of ages, simply of fixed percentages. |
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