Should We Abolish the State Pension?

[Old Stephania]

You didn't truly clarify why you didn't hate old people. You just talked about how it would work.

So the question still stands.

Touché. I can state for the record that I don't have a problem with old people.

Why should the old, many of who fought in WW2 on the Allied side, have their pensions taken away? All of us are likely to get old in the future.

They... Shouldn't. I did address that question in my OP.

I haven't had enough tea to respond to other people, bear with.

[AiliailiA]

isn't it better to have the guaranteed payment for pensioners than to have to pay out all that welfare later one? people today have a hard enough time paying their bills from month to month, I cant see them suddenly getting the discipline and stability to save for a secure retirement.

My issue is that currently the State Pension pays out to every citizen who has paid into the system for 10 years or more, even the very richest in society who probably have a massive private pension of their own and clearly do not need it. The current budget for the State Pension is almost half of the government's welfare budget (over £74 billion) and while I don't have hard figures on hand I can only assume it would be cheaper if we only covered low income retired people who require benefits to get by.

How much it would save is actually rather important. If it's 25% of the pension recipients or more, who don't need it, that's significant. If it's like 5% it probably isn't worth the complication and ill-will of denying them pensions.

[Old Stephania]

Realistically, you'd have at minimum sixty years of pension payments going out if you decided "nope, no more state pension". Then everyone below the cut-off, no longer gaining a pension, would be astoundingly pissed off and the change would surely be reversed in the next parliament, five years into the policy.

I was thinking of a system where the pension payout and National Insurance are both reduced in a staggered manner over a certain number of years, as opposed to simply specifying a maximum age where it cuts off and nobody under that age will get it. The thought about the next parliament is a good one though, "we'll reverse the pension cuts" is going to be very popular with voters.

My issue is that currently the State Pension pays out to every citizen who has paid into the system for 10 years or more, even the very richest in society who probably have a massive private pension of their own and clearly do not need it. The current budget for the State Pension is almost half of the government's welfare budget (over £74 billion) and while I don't have hard figures on hand I can only assume it would be cheaper if we only covered low income retired people who require benefits to get by.

How much it would save is actually rather important. If it's 25% of the pension recipients or more, who don't need it, that's significant. If it's like 5% it probably isn't worth the complication and ill-will of denying them pensions.

That's a very fair point though it's not really the one I was pre-empting. I was anticipating the moral argument people would probably make, that on principle they have paid in and should get a payout.

[Imperializt Russia]

My issue is that currently the State Pension pays out to every citizen who has paid into the system for 10 years or more, even the very richest in society who probably have a massive private pension of their own and clearly do not need it. The current budget for the State Pension is almost half of the government's welfare budget (over £74 billion) and while I don't have hard figures on hand I can only assume it would be cheaper if we only covered low income retired people who require benefits to get by.

How much it would save is actually rather important. If it's 25% of the pension recipients or more, who don't need it, that's significant. If it's like 5% it probably isn't worth the complication and ill-will of denying them pensions.

Is the state pension a completely flat payment for all recipients, or does it actually change?

[The Imperium Empires]

Not a chance

[Old Stephania]

Not a chance

Can I bribe you into elaborating on that? I have tea.

[The Imperium Empires]

Why should we abolish this exactly. Give me one decent reason.

[Imperializt Russia]

Why should we abolish this exactly. Give me one decent reason.

http://www.ukpublicspending.co.uk/gover ... iture.html
It's the single largest expenditure of the government, at 20% of the budget, and it really doesn't need to be.

[The Imperium Empires]

So you want to let the retired end up on the street? The pension keeps them up and they worked there butt of they deserve it.

[Imperializt Russia]

So you want to let the retired end up on the street? The pension keeps them up and they worked there butt of they deserve it.

I don't agree with it being abolished, I would rather it be radically reformed.

[Old Stephania]

Why should we abolish this exactly. Give me one decent reason.

It's not a policy idea I'm committed to as I said in my OP, but I gave a few reasons there I think it's worth considering. Allow me to sum it up:

• The State Pension makes up almost half of all welfare spending, we could save up to £74 billion or more.
• Unlike many other benefits the State Pension is not means tested, cutting it would not be targeting the poor or disabled.
• With such a large cut to welfare spending we could afford to cut National Insurance and increase wages.

So you want to let the retired end up on the street? The pension keeps them up and they worked there butt of they deserve it.

Actually read the OP for crying out loud.

[The Imperium Empires]

Hmm I see your point.

[The Alexanderians]

While I am wildly unfamiliar with current British government (something I am attempting to fix lately). I rather do not like the idea of removing pensions anywhere. If they cause issues then a change or alteration is in order but removal I'm hesitant to even consider it.

[Moctina]

State pensions are the largest part of the welfare bill, but they are also surely the most deserving.
As a Conservative, I support the scaling-down of all spending, in particular in fields where the state is interfering with the lives of others through far too generous payments in terms of welfare, education & health. However, I do maintain the belief that, when somebody has paid into the tax system, has worked all their life, has contributed to society as a hard-working member of the community, they deserve something back. The entire system needs a total shake-up however, and the Treasury must look up into the encouragement of private pensions, as my grandparents have; people must look after themselves if they can. Otherwise, we will have to deal with crippling bills we may not always be able to afford.

[Old Stephania]

State pensions are the largest part of the welfare bill, but they are also surely the most deserving.
As a Conservative, I support the scaling-down of all spending, in particular in fields where the state is interfering with the lives of others through far too generous payments in terms of welfare, education & health. However, I do maintain the belief that, when somebody has paid into the tax system, has worked all their life, has contributed to society as a hard-working member of the community, they deserve something back. The entire system needs a total shake-up however, and the Treasury must look up into the encouragement of private pensions, as my grandparents have; people must look after themselves if they can. Otherwise, we will have to deal with crippling bills we may not always be able to afford.

How do you feel about a gradual phasing out as opposed to simply abolishing it cold turkey, and also reducing National Insurance so that people do get something back? This way people are still getting out what they pay in throughout the phasing out process, and an increase in wages might help encourage people to invest it for their retirement.

[The Imperium Empires]

State pensions are the largest part of the welfare bill, but they are also surely the most deserving.
As a Conservative, I support the scaling-down of all spending, in particular in fields where the state is interfering with the lives of others through far too generous payments in terms of welfare, education & health. However, I do maintain the belief that, when somebody has paid into the tax system, has worked all their life, has contributed to society as a hard-working member of the community, they deserve something back. The entire system needs a total shake-up however, and the Treasury must look up into the encouragement of private pensions, as my grandparents have; people must look after themselves if they can. Otherwise, we will have to deal with crippling bills we may not always be able to afford.

I agree with this^

[Moctina]

State pensions are the largest part of the welfare bill, but they are also surely the most deserving.
As a Conservative, I support the scaling-down of all spending, in particular in fields where the state is interfering with the lives of others through far too generous payments in terms of welfare, education & health. However, I do maintain the belief that, when somebody has paid into the tax system, has worked all their life, has contributed to society as a hard-working member of the community, they deserve something back. The entire system needs a total shake-up however, and the Treasury must look up into the encouragement of private pensions, as my grandparents have; people must look after themselves if they can. Otherwise, we will have to deal with crippling bills we may not always be able to afford.

How do you feel about a gradual phasing out as opposed to simply abolishing it cold turkey, and also reducing National Insurance so that people do get something back? This way people are still getting out what they pay in throughout the phasing out process, and an increase in wages might help encourage people to invest it for their retirement.

As I said, the bill is too big to be maintained, so phasing out will have to be considered, certainly.
Needless to say, no Prime Minister could just shut down the system, leaving millions in poverty & putting a huge strain on healthcare. Private pensions can be far much lucrative; I am sure my grandparents won't mind if I share that they put a lot of money during their lives into capable investments, into trusts, which can then be lived-off as a private pension. People must be encouraged to do that, certainly in coming years.

[Old Stephania]

How do you feel about a gradual phasing out as opposed to simply abolishing it cold turkey, and also reducing National Insurance so that people do get something back? This way people are still getting out what they pay in throughout the phasing out process, and an increase in wages might help encourage people to invest it for their retirement.

As I said, the bill is too big to be maintained, so phasing out will have to be considered, certainly.
Needless to say, no Prime Minister could just shut down the system, leaving millions in poverty & putting a huge strain on healthcare. Private pensions can be far much lucrative; I am sure my grandparents won't mind if I share that they put a lot of money during their lives into capable investments, into trusts, which can then be lived-off as a private pension. People must be encouraged to do that, certainly in coming years.

I agree completely, I would never support even the remotest possibility of something like that. A gradual, fair phasing out with a cut to NI I could be convinced of though.

[AiliailiA]

How much it would save is actually rather important. If it's 25% of the pension recipients or more, who don't need it, that's significant. If it's like 5% it probably isn't worth the complication and ill-will of denying them pensions.

That's a very fair point though it's not really the one I was pre-empting. I was anticipating the moral argument people would probably make, that on principle they have paid in and should get a payout.

Well that's the "ill-will" I'm referring to. Not only did they pay in, they're likely still paying taxes (VAT) on what they spend from their private pension plan.

I think the "paying in" argument can be met by considering those payments premiums on insurance. Government required them to insure themselves against poverty in old age, but if they're not poor they don't a payout from the insurance. Any more than someone who insured against car crashes but isn't in a car crash, would "get their money back".

People over 65 are the second-wealthiest sector of the UK population (after the following generation 45-65 who will be the next to retire), by the standard of household wealth over £500,000. And have the second lowest poverty (again, coming second to the 45-65 group), by the standard of household wealth under £50,000. Source. 31% have wealth over half a million, including 10% of the total who have wealth over a million.

I've always believed that the wealth of the elderly was mainly in their home ownership, that they bought and payed off property decades ago when it was much cheaper even by average earnings terms, but they might still need a pension to pay for recurrent expenses (ie, their wealth isn't liquid as they still need a place to live), and the report bears that out to some extent: "Property Wealth tends to increase with age. The share of individuals in Great Britain who live in households with property wealth greater than £100,000 is 33% for 25-44 year olds, 63% for 45-64 year olds and 67% for those aged 65 or over."

Before deciding that an elderly couple (or even individual) with net wealth over a million pounds doesn't need the pension, we have to consider how much of their wealth is available to them to pay living expenses (eg is a private pension or saleable assets like artworks or stocks), as opposed to how much is tied up in ownership of the house they live in. While I wouldn't take ownership of a home entirely out of the calculation, I'd probably set a exempt value depending on region, and only count the value of their home above that exempt value. It seems a bit harsh to force people to sell the home they've lived in (probably for decades) to fund their own retirement, but I also want to avoid the situation where quite wealthy retirees can invest in a very expensive home knowing it will be exempt from any means test.

[Moctina]

As I said, the bill is too big to be maintained, so phasing out will have to be considered, certainly.
Needless to say, no Prime Minister could just shut down the system, leaving millions in poverty & putting a huge strain on healthcare. Private pensions can be far much lucrative; I am sure my grandparents won't mind if I share that they put a lot of money during their lives into capable investments, into trusts, which can then be lived-off as a private pension. People must be encouraged to do that, certainly in coming years.

I agree completely, I would never support even the remotest possibility of something like that. A gradual, fair phasing out with a cut to NI I could be convinced of though.

It is the only part of the welfare bill which could never be removed.
However, phasing out in gradual stages to save money and make the system more efficient is essential.

[Old Stephania]

Ailiailia I never realised pensioners made up such a large proportion of wealthy people, that's very interesting. As you say most of it is probably tied up in their property, but it's still a surprise to me.

Regarding your last point about their wealth being tied up in their property and the morality of expecting them to sell up, their home was probably valued much lower when they bought it and they might actually do well out of selling up (or even renting it out and living somewhere cheaper), but I do like your idea about lower limit exemptions in cases where someone simply does not want to move as that shouldn't be a decision forced upon a person. Alternatively I think this is one of those cases where simply moving those people from the State Pension to a regular, means tested benefit would be suitable because the savings criteria taken into account when applying for a low income benefit do not take non-liquid assets into account IIRC.

[Imperializt Russia]

Well, they've had all their lives to accrue it.

Even if someone works minimum wage their whole life, they'd earn over a million quid. That number was quoted to me like ten years ago, it's probably nearer 2-3 million now.

[Old Stephania]

Well, they've had all their lives to accrue it.

Even if someone works minimum wage their whole life, they'd earn over a million quid. That number was quoted to me like ten years ago, it's probably nearer 2-3 million now.

Very true, I guess I'm just a victim of the "cold, lonely pensioner sat in their council flat" stereotype always portrayed on television. To be fair I did grow up around pensioners like that too.

[Moctina]

I have to agree that, yes, they have had their whole lives to save up money.
A small, very small, state pension should be offered if they have paid taxes, have worked hard, if they are in a desperate situation. Otherwise, it is up to people to look after themselves.

[Costa Fierro]

One problem with that proposal is that you're going to draw the ire of people who have already paid into the system and expect to make a return, not only that but we're talking about the very class of people who are almost certain to vote for the Conservative Party so they would never make such a decision. A future government might, though.

And? Political affiliations are meaningless if they're in the minority.