Proposed U.K. retirement fix to screw high income earners

Of course it's from the 'liberal' party, the party of fairness right?

Found via Drudge Report, originally from TimesOnline.Co.Uk, headline is linked.

May 22, 2005

Higher earners ‘to retire at 70’

Robert Winnett, Whitehall Correspondent

UNIVERSITY graduates may be barred from receiving a state pension until they are 70 under proposals from Tony Blair’s pensions supremo to solve the looming crisis.
Adair Turner, head of the government’s Pensions Commission, says lower-paid workers could, however, still retire on a full pension at 65 to reflect their lower life expectancy.
The move would break the century-old system of a common state pension retirement age across all social groups and shows how the scale of the problem is forcing Whitehall to consider drastic measures.
It would mean the professional middle classes would bear the brunt of what Turner describes as the “tricky choices” forced onto the government by the ageing population.
But he argues that such a radical change might be necessary because professionals survive on average five years longer than lower social groups after retirement. Turner says this should be reflected in the state retirement age. “One of the sad facts is that although life expectancy is going up, it is going up least in lower socio-economic groups,” Turner said.
“So we have to be sensitive to that when we put up the state pension age. For example, the person who starts work at 16 would be able to get something at 65. The person who went to university and started serious work at 23 is not going to get it until 70.”
In the interview, Turner said that all workers might have to be forced to save for a pension with the money invested on their behalf by the government. It would ensure that everybody would have an annual income of about £12,000 a year, including the basic state pension.
The unpopular changes are being considered by Turner because of the multi-billion-pound shortfall in the amount that people have saved for their retirement. Estimates have put the shortfall at between £30 billion and £60 billion.
During the election campaign, Labour said that it would decide how to reform pensions after receiving Turner’s final recommendations in the autumn.

So, in the name of fairness (on one hand) professional workers, typically higher paid workers, would have to work longer because they have a longer life expectancy, but (on the other hand) there would be different age requirements for drawing a pension.

I see something like this proposal as opening a whole can of worms. What if a University Graduate was nothing more than a day laborer all of his/her life? Do they get to retire early, or would they still have to work until age 70? Is this a way for the government to further separate the classes, forcing those that are fortunate enough to obtain a university education to permanently stay away from labor positions?

Interesting that with all of the fuss that has been made here in the U.S., we've heard little about the U.K.'s problems in their retirement system. I thought that socialized countries weren't supposed to have problems like this. They tax and tax and problems like this don't exist. These problems -- at least according to the liberal diatribe we get exposed to here, you know, the one that says we should do it all like the Euros do -- are supposed to be problems for U.S. only, and not for the Euros.

Personally, all of these retirement problems again clearly demonstrate the fallacy of having the government be responsible for one's retirement. Even the Brit's seem to be getting that concept now. Note the comments in the article that said:

In the interview, Turner said that all workers might have to be forced to save for a pension with the money invested on their behalf by the government. It would ensure that everybody would have an annual income of about £12,000 a year, including the basic state pension.

Ah, so in the U.K., workers might be forced to participate in some sort of TSP style account. Isn't this JUST WHAT PRESIDENT BUSH HAS PROPOSED?? Except, hmmmm, the President has touted the idea that the participants in the plan would be able to choose from several plans for investing their money in, each with different blends of investments and risks, but all carefully selected to provide the best return on investment with tolerable and reasonable levels of risk.

Anyway folks, you can see that problems with a burgeoning aging population don't just affect the U.S.A., they affect the entire world.

politics

Locked Post

Advanced Search

Watch this post

Do not email me updates for this post Email me updates for this post