Missing The Pension Point

The press and media have been very busy with a report issued by the Institute for Fiscal Studies (IFS).

 

From 2010 to 2016 the State Pension Age was increased from 60 to 63 for women as part of the ‘equalisation’ of the State Pension age for men and women to age 65 and the IFS report has confirmed that this will provide a £5.1 billion annual boost for the Government. Or to put that another way, 1.1 million women have been impacted by receiving their State Pension at an older age and the Government is saving £5.1 billion a year as a consequence.

 

Enter campaigning and rights groups arguing against the morality of it all. I get it……I really do get it. I have family that have been affected. But there are bigger points here.

 

Firstly, there has been no alternative offered and the age that the State Pension is received has been dictated. Surely it would not have been unrealistic to offer the original State Pension age but at an increased cost for an individual? Give us a choice. The Government would not have had to foot the bill, so why not options?

 

Secondly, we live in an age when private pensions aren’t understood or trusted (or both) and 80% of company pensions have a big black hole of underfunding. Is it really too much to ask to have a State Pension that would provide more than £155.00 per week and at an age that can be chosen individually?

 

Yes, it might be complicated to calculate and design a new scheme. Yes, it might not win many votes with the under 30’s if they have to pay more National Insurance Contributions. Yes, it will have teething problems. BUT……we are one of the most economically advanced countries in the world and it is doable.

 

Alternatively, we can let each Government that comes around every 5 years (or is that months?) mess around with the State Pension and come up with no solutions as there is nothing in it for them in the short term. Why not leave a legacy? That’s what leading the country is all about rather than simply balancing the books (together with immense borrowing – it’s a ‘kind of’ balancing) as simply as possible.

 

Oh how I would love a ‘leader’ to be Prime Minister.

 

One day maybe.