The State Pension needs celebration says Karen Quinn
The old-age pension has its birthday . Karen Quinn endorse this headline from the Economist. Here is her contribution (snipped from Linked in) and one of a triplet of blogs this morning on simple pensions!
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Pensions stopped being means tested charity and became something people believed they had earned. National Insurance mattered… paying in created a powerful sense of entitlement.
I’ve paid my stamps!
A century on, we’ve doubled the population, rewired homes with hot water and broadband and put computers in our pockets! But we’re still relying on pension assumptions designed for 1926.
Even though NI now looks much more like a general tax, does it still feel like pension contributions in people’s minds?
When providers talk to members about their State Pension entitlement in years of work needed – are we quietly reinforcing that century old promise?
How will it ever change? When, as written here, these ‘pensioners are more numerous and far more politically powerful… owing to their habit of voting and living longer…’
You can read the article in the Economist from this link (though you need a subscription). Luckily , Karen has given you an excellent explanation of its argument, so be economic with your subs!
The State Pension needs updating – says Britain’s most energetic state pensioner and expert
Andrew Young – “Unemployed”
The problem with state pension is quite simple. And is the same as occupational pensions.
They were meant to be payable from an age when most people (originally most men, and in pretty onerous work) could no longer work. Even in 1950, most people (well men) chose to work after minimum SPA, and as a result deferred their state pension (a rule later changed).
It has simply become too easy to get your pension and for too long. State and occupational pensions have become literally counterproductive. Of course not everyone are able to work for much longer. And lots don’t want to. And some employers don’t want them to. The better off can as ever choose.
We are on the road to finding this not just unaffordable in the simple sense for many people, so they will have to work longer, but for the country as a whole, and the developed world (unless productivity in the care industries is transformed).
Growth enabled us to be lazy about protecting the pension systems. The reckoning will mean not only the death of DB but a hike in SPA.
Hopefully a return to National INSURANCE as intended. Including proper protection against unemployment and incapacity risks.