There is nothing to say about yesterday’s Pension PlayPen coffee morning which isn’t better said by its protagonists and interlocutors at the time
Many people have asked for the comments, for completeness – here they are – thanks to Nichola Whitaker for curating all but those which were protected by Teams
Comments
[11:09] Brian Gannon
unfairness is not just for pensioners, throughout life there is a massive disparity and inequality in wealth, opportunities and income between those in the top decile and those in the other nine
[11:09] Jim Woodlingfield
Also slightly off topic, but always worth plugging if anyone has gaps in their NI record and won’t get the full qualifying years for state pension it could be very worthile buying back missing years – How to buy voluntary national insurance contributions (moneysavingexpert.com)
Aged 40 to 73? Urgently consider buying national insurance years
If you’re aged between 45 and 73(ish), buying extra national insurance years could massively boost your state pension. If it works for you, the returns can be huge. Learn more about who should do it,
[11:10] Derek Scott
Peter Cameron Brown (Unverified)
I wonder what proportion of those eligible actual do defer?
A recent survey suggests only 7% of those over 55 said they had used state pension deferral themselves.
[11:11] Stephen Wright (Staff)
But progressivity is seriously compromised by life expectancy. Someone on the lowest quintile is much less likely to survive long enough to benefit from the redistribution at age 65+
[11:11] Gareth Morgan
55 year olds saying that they’ve deferred?
[11:11] Alan Chaplin
Peter Cameron Brown (Unverified)
I wonder what proportion of those eligible actual do defer?
Not many – expect figures are in ONS data somewhere but an article by my firm a couple of years back reports 7.7%.
[11:11] John Mather
Surely a high % of living wage is the objective and with the right productivity per capita it could rise to 100% of the living wage
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[11:13] Martin (Guest)
Watch out for potential pitfalls with VNICs though…
Voluntary National Insurance contributions and the State Pension | MoneyHelper
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[11:15] Stephen Wright (Staff)
But it is not universal. The richer you are the longer your life expectancy, so the more you benefit from a universal benefit that conditions on age.
[11:16] Brian Gannon
would it be unmanageable to introduce the concept of actuarial reduction to the state pension? so with db if you retire before the NRA of the scheme you can do so if the rules allow it but with a %reduction for each year you take it early. Could this early retirement reduction not be introduced to the state pension
[11:17] Brian Gannon
after all its the opposite to the late retirement factor of 5.8% for deferring the state pension
[11:17] Derek Scott
The much-maligned Scottish Government has committed to providing a minimum income guarantee (rather than a universal basic income) by 2030.
[11:19] Peter Cameron Brown
Alan Chaplin (Unverified)
Not many – expect figures are in ONS data somewhere but an article by my firm a couple of years back reports 7.7%.
Is that perhaps an indication of the importance of universality?
[11:20] Michelle Ravenor (She/Her)
Brian Gannon (External)
would it be unmanageable to introduce the concept of actuarial reduction to the state pension? so with db if you retire before the NRA of the scheme you can do so if the rules allow it but with a %reduction for each year you take it early. Could this early retirement reduction not be introduced to …
I would imagine the risk of this is that again this would have a negative impact on the poorest/those in the poorest health who feel forced to take a reduced state pension early – and then their income is ‘spread too thin’ and causes a higher risk of poverty.
[11:20] John Mather
Means testing can be gamed so more wasted paperwork Link the success of the pension to the income (productivity) of the country otherwise, you continue to rob Peter to pay Paul
[11:20] Alan Chaplin
Brian Gannon (External)
after all its the opposite to the late retirement factor of 5.8% for deferring the state pension
yes but … if state pension is a “reasonable minimum” then paying a reduced amount early only practical if person has other income to top it up in which case just use that other income without introducing more complexity?
[11:20] Pádraig Floyd (Guest)
Brian Gannon (Unverified) (External)
in order to have a “fairer society” we need to Iook at the disparity of wealth and the distribution of wealth, pension inequality is one part of this
And the expectations of individuals to become more rational and for them to be prepared to cut their cloth according to their means.
[11:20] Brian Gannon
Michelle Ravenor (She/Her) (External)
I would imagine the risk of this is that again this would have a negative impact on the poorest/those in the poorest health who feel forced to take a reduced state pension early – and then their income is ‘spread too thin’ and causes a higher risk of poverty.
hence pension is but a part of the overall problem of poorer people having inadequate income before retirement age as well as after state pension age
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[11:21] Brian Gannon
Alan Chaplin (Unverified)
yes but … if state pension is a “reasonable minimum” then paying a reduced amount early only practical if person has other income to top it up in which case just use that other income without introducing more complexity?
one of the problems is that a lot of benefits reduce on a means tested basis once you have more than £6,000, and most poor people dont have other income and are living in abject poverty before state retirement age
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[11:24] Gareth Morgan
£10,000 for Pension Credit but least that doesn’t have a cut-off point. That capital cut off makes it very difficult for under 66s to take money from DC pots.
[11:27] Nichola Whitaker
interestingly no one has raised the fact that lots of younger generations do opt out of DC pension schemes so will rely on state pension when older – but its not enough to live on given the inflation in all areas bills/food/rents etc so we have a much bigger issue coming up in years to follow if its not reviewed in line with societal changes and economical factors
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[11:28] Brian Gannon
Nichola Whitaker (External)
interestingly no one has raised the fact that lots of younger generations do opt out of DC pension schemes so will rely on state pension when older – but its not enough to live on given the inflation in all areas bills/food/rents etc so we have a much bigger issue coming up in years to follow if it…
i dont think the state pension can do this job, this is about fairness of opportunity to live somewhere you can afford to live in
[11:29] Brian Gannon
thank you to the panel and everyone for a brilliant debate, its great to hear and learn from your opinions and expertise, thanks again
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[11:29] Nichola Whitaker
its a toughy Brian – theres also what rob just raised which is education of the general public on pensions as a whole which came up in the panel i was on last year on young people and pensions – education on savings now and for the retirement will reduce the problems of people ending up reliant on the state pension
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[11:30] Nichola Whitaker
so many factors
[11:31] Brian Gannon
i think theres a general lack of financial education across the board, and i hope that there will be an increase in the focus placed on educating people of all ages, not just children, to understand more about the basics of money management, budgeting, saving and investing
[11:32] Brian Gannon
they then might come to realise just how unfair society is, and get more interested in politics so that the status quo is not maintained, and we can move towards a society where there is greater equality of opportunity and more support for those unable to support themselves at a decent standard of living
[11:32] Nichola Whitaker
Brian Gannon (External)
i think theres a general lack of financial education across the board, and i hope that there will be an increase in the focus placed on educating people of all ages, not just children, to understand more about the basics of money management, budgeting, saving and investing
agree – myself and a few others were looking at ways the education sector could implement this in classes in schools to educate on savings, pensions, mortgages, costs of living etc
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[11:32] Alan Chaplin
Saw this suggestion on a general polictics post which I’ve not considered previously:
have the state pension rise at 80/85 and 90 to help people avoid the need for excess prudence.
[11:33] Robert Cochran (Guest)
Had a go at explaining state pension here but agree with speakers moreneeds to be done and it is the key element of income for most people https://www.youtube.com/watch?v=AqzB-EHYgig
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