Thanks to Jonathan Guthrie for lighting up a wet and windy January morning when the thought of a self-assessment hangs over me and I suspect many other older folk. Here is a ray of light!
I am not retired but I can manage on less in my sixties for reasons rehearsed by Jonathan
The Oldies Expeditionary Force is an important but little-remarked aspect of London mass transit. We set out after 9am from the suburbs “to go up to Town” for fun or occupation. Many of us swipe our free passes apologetically as we mingle with paying travellers. Our embarrassment is misplaced.
Senior railcards and 60+ Oyster cards need to be carefully used, their times useable are different but they will be in use this morning as I travel up to Aberdeen for a meeting (I mean the asset manager though I have booked a trip to Edinburgh by train this week (£58 return to get to the Pensions UK conference in March – being elderly helped when booking yesterday).
Jonathan’s essential point is that the equivalent standard of life maintained after packing work in , is easier the more you used to earn. That’s because things that were expensive and affordable when fully at work , become less expensive when work is no longer a necessity.
Part of it is that rich people don’t generally rent and generally get their kids off their hands (education wise).
It is surprising how savings can mount up. The biggie is liable to be contributions to the pension funds you are now drawing on. Statisticians also assume most better-off retirees have paid off mortgages and covered the cost of raising any children.
And as the big liabilities decrease so the multifarious small ones aren’t a feature of the bank statement at the end of the month
Lower income means lower income tax. Travel may be discounted or free. Eye tests and prescriptions are also gratis. The latter is just as well — the older you get, the more minor ailments you find yourself citing during grumbling contests with peers.
I went through the various prescriptions I get free with my doctor yesterday, I realise how well the elderly are treated. I don’t want to say that, I want to say that with gratitude!
These are numbers from Pensions UK, that people who read this column know all about but those who read Jonathan in the FT may be unaware. The Pensions UK have done a great thing by getting into bed with Loughborough University to work out what we need in retirement and their estimates are of importance to everyone from pension consultants to those in Government and those working for the Government in the Pension Commission.
The real cost of retirement living is very different in real terms than the cost of being fully at work and bringing up a family and that is as it should be.
And from 66, or 67 or 68 (depending how old you are ) you will get a state pension which should be over £12,000 pa whatever income you were on. That means that you will only be “missing by a mile” if you had expectations of what Pensions UK call a “comfortable life” and then only if you have little private pension and savings. For most of us – an equivalent retirement income, as Jonathan has explained to us, is all we really want or feel fair. And here about half of us are in the right place.
Of course there are many people who will be comfortable from pensions and they will have Government pensioned careers , but they are not the usual Brit, most of us have a bit of everything and many of us have very little pension indeed.
I will finish with Jonathan’s comment , he asks for a little tolerance of us old folk
For the moment, “Baby, we’ve earned it!” is the best I can do.
Face it, haters. A triple lock and a free bus pass are very little for older Brits to ask for in a world where one septuagenarian American is demanding he should be given Greenland.
A free bus pass is very little, because for most of us the free travel is something we only use occasionally. But the triple lock is a huge burden on the younger generation who are having to pay for it. The difference is that the triple lock is a ratchet which increases not only this year‘s pension but all future years. It builds up over time in such a way that we will have unsustainable amounts of pension paid in the future unless it is brought to an end at some stage. All sensible economists are pointing this out and the politicians have to understand that the consequences of this in the long-term are not something that can be sustained.
Perhaps a rather London-centric view from a clock tower about the frequency of use of bus passes?
Free bus passes (National Entitlement Cards) in Scotland are used very frequently, accounting for nearly one-third of all bus journeys in the country, with over 145 million trips annually by older and disabled pass holders alone, plus significant use by young people and asylum seekers, making it a core part of Scotland’s public transport system for sustainable travel.
Hello Henry,
‘Why life is really cheaper after you retire’
Please may I be a little picky regarding a couple of points in the above view.
Income: I worked until nearly 70 in order to improve my National Pension. Was it worth it? Technically, yes. Except that the amount above the threshold £12.5k (unchanged) is taxed; as is my Annuity and two other small employers pensions. I, in effect, lose more than my Annuity income to the HMRC.
Who was it who boasted that he paid less tax than his chauffer? Possibly someone like Deloitte’s were working their ‘magic’ for him. The old adage that it’s usually the poor who get the Government out of a financial crises would appear to be true.
Freedom passes: agreed that, particularly in London, they are ideal. Remember it was Boris Johnson who stopped them from being 24/7 allegedly for the comfort of ‘front line workers’ during CoVid. Round here, I suggest, it would have been cheaper for the hospitals to have collected staff in taxis since the buses were invariably empty before 0900.
If I’m right there are, in the City of London (your home), only two private schools plus the Cathedral’s Residential Choir School. I suggest we are talking about 2000 pupils using the many bus services there. Compare that with the one bus route that goes past me that has 3 schools (within one mile) of roughly 1000 pupils each, to deal with, all travelling for ‘free’. Many pupils seem unable to walk two stops. Few bother to place their pass card on the reader even if they have one. Sadiq Khan is reportedly seeking to extend the pupils age up to 24 for free travelling on buses. Presumably there will be others who will also say that they are pupils but have mislaid their pass.
Yet is it all ‘free’…No! I suggest that if you look into your Council Tax expenditure you will see a reasonable precept given to the GLA to fund the public travel arrangements. Obviously the shortfalls in public transport revenue are paid for by general taxation. Not something the Conservatives are ever in favour of e.g. HS2. If Khan does promote free bus travel for the pupils at the next election, I think he should first extend it back to 24/7 for the elderly, in order for them to meet the early morning GP/hospital appointments etc. Otherwise few ‘old codgers’ will vote for him because, like me, they are probably helping to pay for the facility.
Kind regards,
Tim Simpson