Terms & Conditions

[nick dearnley]

There is so much that needs to be looked at with state pensions. I’m 54 (as of last week) and don’t expect to get my pension until I’m 67; not a problem, I’m (so far) fit and healthy and another two years in work shouldn’t be a problem for me. But I’m not everyone; a builder, for example, at 65 will be pretty much worn out by the physical work they’ve done, and making them work longer will not provide a comfortable retirement for them.

But there is also the perception about how the state pension works. How many of us in benefits work have heard the line ‘I paid in, why can’t I have something out’. It’s a misconception that my NI goes to my pension pot – it goes to fund current pensioners. I’ll be relying on a different, currently younger, group to fund my pension.

How was 65 originally arrived at as retirement age? My guess would be that, as with so many things, there was a bit of guesswork going on. When it was set there were not that many people getting to that age at all, let alone living another 10-20-30 years after retirement. As I see it, demographic changes have made that unsustainable, bitter pill though it is.

That’s set against what seems to be a growing public awareness of government mismanagement of finances – £15bn wasted on unusable PPE etc – and a rising sense that the population will be expected to pay for those mistakes. Of course they will, they’re the only source of government money, via taxation.

There are some very difficult conversations ahead, and as John says there are structural economic issues to be tackled that seem to be in many politicians’ blind spots. Personally I don’t believe there is a ‘shortage of money’ as such – there is hoarding of it by a few reducing what is in general circulation, maybe, and there always seems to be money to pay a government contractor when the initial budget for a project goes over because it was incompetently estimated. It’s a question of political (from whatever party) will at least as much as it is of finance.