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PANIC!!! State pension age 'should rise'

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State pension age 'should rise'

 

A rise in the basic state pension and an increase in the age at which it can be claimed is to be recommended by the Pensions Commission later this month. The commission's report will call for a more generous state pension but a rise in the claimant age to 67, according to the Financial Times newspaper. A new national savings plan, in which individuals will automatically have to enrol, will also be recommended.

 

The commission has been tasked with finding a blueprint for pension reform. A Pensions Commission spokeswoman said the newspaper article was speculative and that it would not be commenting ahead of the report's publication on 30 November.

 

Higher state pension

 

According to details of the report obtained by the FT, the commission will call for a generous rise in the state pension. This should rise from the current £80 a week to closer to the £109 a week paid out through the means-tested minimum income guarantee. To pay for this increase, the report will recommend that the age at which people can claim the state pension should rise from 65 to 67.

 

 

I certainly think that this kind of headline is not going to go down very well

Dr Ros Altmann, pensions expert

 

Q&A: Raising the pension age

 

The proposals, to come into force after 2020, would affect everyone currently under the age of 50. There is also s suggestion that the Turner Commission has been discussing scrapping the State Second Pension scheme to help pay the cost of their proposals.

 

National savings plan

 

The report will also call for the creation of a new national savings plan, modelled on a scheme currently being set up in New Zealand. People would join when they started a new job, with contributions, possibly from both workers and employers, being collected by the Revenue & Customs through the PAYE scheme.

 

 

The Prime Minister and the government are going to find it very difficult.

Malcolm Rifkind, Shadow Work and Pensions Secretary

 

Laura Cronin, an adviser to the New Zealand minister of finance, told BBC Radio 4: "The scheme makes it easy for people to save because lots of us find it difficult to sign up to pension schemes even when we do want to save. A scheme like this works to encourage people to save by making it simple for them to do so. We need to find a way to supplement people's incomes in retirement."

 

KiwiSaver is being introduced because New Zealand has some of the same problem as the UK - low levels of savings combined with an ageing population. Their new scheme will channel the extra contributions into investment funds, just like occupational pension schemes.

 

Ms Cronin pointed out that although individuals would be enrolled automatically, they would still retain the right to opt out: "It does give people the opportunity to opt out if they've got a mortgage or other commitments or debts, or if they've already got other kinds of savings."

 

Mixed Reaction

 

One pension expert said any proposal to raise the state pension age would be unpopular. "I certainly think that this kind of headline is not going to go down very well, especially after the recent deal we have seen for public sector pensions," Dr Ros Altmann, pensions expert at the London School of Economics, told the BBC.

 

The government recently backed down on plans to raise the retirement age for current members of public sector pension schemes for civil servants, NHS staff and teachers. Instead it agreed to bring in a later retirement age for new joiners only.

 

Shadow Work and Pensions Secretary Malcolm Rifkind said that having just given in to the unions on public pensions, "the Prime Minister and the government are going to find it very difficult" to sell this plan to the public. However Alan Pickering, who wrote a previous government report on pensions, welcomed the pensions commission's reported recommendation to raise the state retirement age to 67: "It's an essential pre-requisite of modernising the pension system," he said. "It's a good thing to put the nation on notice that by the 2020 decade we will be getting a bigger state pension but will have to wait a bit longer to get it."

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To misquote

 

"the system of Govt should be above having some bint in a coach distributing telegrams to the oppressed elderly"

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I don't think that you can argue that with people living longer lives, the system needs to be overhauled.

 

Here in the US, retirement age is 65, but when that figure was decided upon, the life expectancy was a lot lower.

 

If you adjusted it for today's life expectancy, it would be over 70.

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To be fair when intereviewed early this year the guy did say

 

"we have to fix pensions - we can do that by putting up the retirement age, cutting pensions, putting up the $$$ everyone pays, putting up the $$$ the employers pay, putting up taxes.... now everyone will look at only one aspect and panic at the size of thr adjustment - I think that a number of small changes to all of them is the obvious way to go..........."

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It's hardly surprising news now is it? We've been expecting it for quite some time...

 

By the time I come to retire, I fully expect that a state pension will long have been a thing of the past!

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link

 

Gordon Brown believes pensions proposals to be published next week are unaffordable, the BBC has learned.

BBC political editor Nick Robinson says the chancellor plans to "shelve" a key part of the Turner report.

 

Mr Brown is believed to oppose its suggestion the state pension age be raised to 67 to pay for restoration of a link between pensions and earnings.

 

But Pensions Secretary John Hutton said the report would be treated seriously, and promised a "grown-up debate".

 

Targeting

 

The Turner commission, headed by former Confederation of British Industry boss Lord Turner, was meant to provide a long-term solution to Britain's looming pensions crisis.

 

But Mr Brown, who received an advance copy of its report a few days ago, is understood to disagree with its plan to restore the link between the basic state pension and rises in earnings - rather than prices as now.

 

He has consistently opposed restoring the earnings link when it has been proposed by Labour's left or, more recently, the Conservatives and the Liberal Democrats.

 

He has favoured instead targeting resources on the means-tested pension credit.

 

Mr Brown has also written to Lord Turner to correct one of the financial assumptions made in his calculations, saying he "should not assume" the link between the pension credit and earnings "will continue beyond 2008".

 

'Discipline'

 

The implication is that Lord Turner has got his figures wrong and that his proposals will be much more expensive than his report suggests.

 

Ed Balls, the chancellor's close ally and former chief economic adviser, told BBC Radio 4's Today programme "our approach has always been based on fiscal discipline...the key issue is - is it affordable and do the sums add up".

 

Mr Hutton has also stressed any long-term settlement on pensions must be "affordable".

 

Five tests

 

Mr Hutton told Today the "long term pensions settlement" had to "strike the right balance between "promoting personal responsibility" and "the job of the state to provide a decent floor below which nobody should be allowed to fall".

 

Later, in his first major speech since taking the work and pensions job, Mr Hutton said any changes must meet five tests - to promote "personal responsibility" and be fair, affordable, simple and sustainable.

 

He also insisted that "the government will approach this debate with a genuinely open mind".

 

'Huge tragedy'

 

Liberal Democrat work and pensions spokesman David Laws said Mr Brown should not be allowed to "veto what sounds like a very sensible report".

 

"This is a scandalous intervention by the chancellor of the exchequer, an attempt to strangle the independent Turner Commission report before it's even been born.

 

"After all the Turner Commission has been reporting for three years, it's been trying to build a consensus right across the country to reform our pensions system.

 

"And on the week before it comes out, and on the very day that the new secretary of state for work and pensions is making his first speech on the issue of pensions, the chancellor of the exchequer chooses this day to leak his views that this report is not sustainable and affordable and tries to kill this whole thing off."

 

He said it would be a "huge tragedy" if Mr Brown was "allowed to undermine and destroy" the Turner proposals.

 

"There is a massive division in the government and in the country between one man, Gordon Brown, who wants to keep the system he has designed since 1997, and everybody else," he told BBC News 24.

 

the shit.

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