Work until 70 idea as money for pensions runs dry
Friday 14th November 2008, 2:30PM GMT.
CONSULTATION begins today on whether to raise the retirement age to 70.
Social Security’s funds will run out by 2040 unless action is taken and the department has released a Green Paper outlining potential ways the problem could be solved.
It is stressing that at this stage no decisions have been made. It said it was ‘in listening mode’.
The options include higher contributions for individuals or employers, an increase in the upper earnings limits or an increase in the pension age, but that would not be before 2020.
‘There is a problem which can definitely be solved,’ said minister Mark Dorey (pictured). ‘But it can be solved in several ways and we need to find the best solution overall. I think that the answer will involve changing two or three things rather than just one.’
Disagreement over how the pension pot is funded is also up for debate.
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What about an investigation by the Public Accounts Committee about how this shortfall came about and who is responsible.
Tony Webber
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Stop handing out benefits to anyone that wants them.
Simple as.
I am not condeming all those on benefits as i know some really do need them.
But Single parents, whose child is at school most of the day. Therefore there is no reason they cannot work part time during the day.
People claiming unemployment, when they are not actually wanting to work as have become used to the frre hand outs from the states.
Please re think the benefits scheme. it is being abused by so many who do not need it, and it is selfish on those who actually cannot work, an those who have worked an now face not receiving their pension.
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Maybe we will see pensioners hobbling into work with walking frames next? It is a fact that the older generation tend to be looked at last in the employment market. How is this stigma going to be tackled?
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Great idea.
We are living longer and in better health than previous generations so we should also expect to have a longer working life too. Most people like the idea of continuing to work at least part-time anyway, keeps the mind active, good for socialising and the extra income doesnt hurt.
I agree with part of Gsygals statement that there is no reason why parents of school children cant work part-time during the day – that is quite a reasonable comment. Perhaps if pre-school/childcare was tax-deductable then many people would be encouraged to work prior to the children going to school, lets face it most childcare places are very expensive with the average being around 5pounds per hour. The “part-time” reception situation and the “going home at lunch” should also be looked at as barriers to the participation of primary carers in the workplace.
Another idea -how about letting shops open on Sundays? the extra tax received would top up that pension pot nicely.
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Good point Tony…
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Civil Servants retire at 60 I believe (please correct me if i’m wrong) so surely their retirement age should be raised to 65 before thinking any further. After all, our pension fund is under their trust / custodianship and just lost £100,000,000 . I wonder if the rest is still invested 72% equities? FTSE 100 will drop below 3000 before easter. I shifted into safe investments 12 months ago.
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Steven, you’re behind the curve on this one. The retirement age for all new civil servants joining since 1st January 2008 has already been raised to 65.
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So there is a God!
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It’s not our fault that the States bought in this ridiculous zero-ten regime which nobody wanted in the first place. The States should scrap zero-ten NOW and then this nonsense of raising retirement age can be forgotten about. I do a physical job outdoors and at the age of 40 I can’t do as much as ten years ago, so I will be too worn out by 65 anyway. The States seem to be intent on bankrupting this Island.
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“The States seem to be intent on bankrupting this Island.”
Too right.
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Soon the school leaving age for our children will be twenty,and possibly thirty for uni students, maybe they wont have to work all if they ever come up with a plan to resurrect us after we have been worked to death.
Many of us left schooling at the age of fourteen,college eighteen,they would never refer to us as children, so therefor we grew up
and accepted our responsibilities.
There are so many single parents claiming houses funds etc ,why is
it not possible for some of these to be trained as child minders,this could be run by a states department,enabling them to earn,pay tax and insurance like the rest of us, and would free the others up for earning their living instead of scrounging off society.
This is not a hit at single parents alone, there are many others abusing our system.
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How much is a packet of cigarets? they can afford those,or is it need those.
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I’ve probably misinterpreted this situation about civil servants pensions, but I, like a lot of people pay into my own private pension scheme, (which is under achieving). Am I to assume that through possible future taxation I will be contributing to civil servants pensions as well? If this is so, it seems unjust…..in return would the States subsidise my under achieving private pension?
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Well said Gsy Gal i totally agree, there are to
many people getting handouts, benefits being paid to people who are working the system some for years on end, look after the old they have made their full share of contributions in their working life, action needed now on benefit cheats….
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Being self-employed I don’t have the luxury of an employer provided pension scheme whether that is from a private or public sector employer.
Being close to 40 perhaps I should consider but putting my money into a market which will probably have another crash in around 20 years just when I want to retire. Just don’t seem that clever.
Hopefully my other assets will provide the income I need.
One thing for sure, I am not looking to my States Pension to provide for me. If I am fit and able I will work for as long as I need to.
In fact for me Social Security contributions are merely another form of tax for which I may or may not receive a benefit from.
If we are looking to balance the social books perhaps we should be charging people for the lifestyle choices they make that cost others money.
For example smokers who will be a burden on the hospitals at some point, excessive drinkers who will also be the same later on or a cost at weekends, drivers who cause accidents thru negligence….the list goes on.
I am sure if people where charged for their lack of responsibility you would see a change in behaviour. Before anyone shouts human rights…it’s not a restriction on anyone human right just acceptance to pay for your choices.
Choose not to work when you are fit and able, choose to have more kids than you can reasonably support then accept that society should not be paying for your choices.
It’s one of the biggest issues facing the UK and it will become one for the island. My social taxes should be used on those in need, not those that expect without taking responsibility.
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Dont the rich politicians have any empathy?
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Rob – re smokers, they tend to die before pension age and therefore are not a problem. Indeed the tax take from tobacco (in the UK at least) is 9 times per annum more than the cost of treatment to the NHS – which is why tobacco is not banned!
Back the main debate – I work in IT and, frankly, I doubt I’d be capable of keeping up with the technology at 55 let alone 70. Retirement age was set at 65ish for a good reason – most people are way past their best at that age and need to retire from their chosen career – its not a capability or ageist issue – most people at 70 simply could not do the job that a 45 year old could.
However many of us will simply not be able to “retire” at whatever age because we will not have the pension pots to cover our old age. Many people in the 30 to 50+ age group are too busy paying their mortgages off to have anywhere near enough cash to provide a pension fund for their future. The days of a final salary pension for most of us are long gone.
So we’ll all have to do some work if we can to top up our States pension and anything privately we may have.
In 25 years time you’ll find me selling fags in a corner shop doing my bit to fill the still black hole!
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Gilthead is right.Last salary pensions, I believe can’t work. How can you pay a last salary pension to one person and employ another person to fill their job without it being unaffordable. Why can’t the States see that?
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I would suggest that the money running out at 2040 is highly optimistic.
Given the way the economy has gone the last month, and the way it will go the next two years, plus the States overspends in every single area, I anticipate you will be lucky if it lasts until 2025.
Maybe the States need a new logo or strap line?
‘States of Guernsey, Committed to maximising our losses for minimal effort’ ?
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A lot of wealthy people and also those in certain professions i.e. firemen, police, teachers etc can retire at 50. That needs to be addressed first before they start making people work until they are 70. It is one thing to choose to continue working say part-time whilst collecting a pension and another to force workers to continue until they are 70.
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few or no employers would give a job to someone over 60 ( especially if they have been out of work for a few years.) This idea is unworkable as illness and lack of physical or mental health would be too much of a barrier. eg. A male aged 68 pressured into job-hunting and even if he gets a menial job he would be unlikely to be of much good compared to a much younger man. OF COURSE there will always be exceptions – but there is enough scope at present to accommodate these people.
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I totally agree with GsyGal.
The money needs to be given to people that REALLY need it and not people that cannot be bothered to get off their backsides and work… I understand that not all people are able to work, through genuine health/sickness problems, but for those who stand on the corner of the Edward T Wheadon house everyweek, waiting to collect their benefit, most of them, got a cigarette in their hand, have a child/children with them, covered in tattoos, (fair enough if thats what they want) But WE hard workers pay for all of that !! and the weekends whilst half of them go out and get drunk !?? People like myself, and my partner that have a mortage, work all the hours under the sun, can’t afford to go out and get obilterated every weekend !! (and we don’t have children yet either) Everything we have, we have had to pay for !! Nothing gets handed to us on a plate, (i.e a new kitchen, new carpet, as and when we ask for it !)
And then there are pensioners like my nan, and dad…. 68, and 95 years of age, and they are really struggling with Guernsey’s lifestyle and costs…. and this is fair?? They have worked all their lives, for what? Just to not be able to have much of a life now because they can’t afford it, and their pension benefit is discusting !!!! And again, they both have to pay for everything…. Don’t get help at all !
And do you really think people want to work until they are 70???? I doubt it – what kind of life is that – and who knows what age you will live to, once you have retired??
And just one more thing, why do you think, many pensioners are now moving away from the Island to retire? Cost and unfairness comes into mind. Soon there will be no locals left !!!
(I apologise if this sounds a bit harsh) But that is how I feel, and everyone is allowed and opinion.
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What about giving us a choice – retire earlier with a lower pension, or later with a higher pension. That is what it comes down to in the end, so why not reward those who want to, or are able to work for longer and retire later?
It would be nice to have a choice of contribution level as well, but I can see that as being more difficult to organise. (Although we already do have this is a way, as the pension is based on the number of years of contributions)
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How did the shortfall occur in the first place? Why has it not been addressed before now, if the shortfall is apparently very large? Surely it was highlighted in the previous actuarial valuations and the actuaries would have suggested a funding review long ago if necessary.
I would be loath to see decisions made now before the root of the problem is uncovered otherwise there is no evidence to suggest that we won’t find ourselves in the same position again in the future.
Some sort of public investigation is required, urgently, to find out what and who is accountable for the situation in which we find ourselves today.
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I am amused by some of the people above who perceive those over 65 as witless and doddery. Many of the sharpest and most knowledgeable minds I know are in their 70′s and older and a lot are in very good physical shape as well. As an employer I would prefer someone 60+ to a school leaver any day.
However after working for 50 years people deserve to retire and enjoy life while they are still fit and active.
Moreover, the majority of people doing a huge amount of voluntary work on the island are retired. If the States had to provide those services instead, they would do it badly or not at all and at vast expense.
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Sheila – you miss the point of the other posts completely.
I know people in their 60′s and 70′s who are wiser, sharper and more switched on than a 20 year old.
The point is, why on earth should a person who has worked for 45 years of their life, have to work for an extra 5 years?
Most people die in their late 60′s (male) or 70′s (female).
I know a lot of people who retired at 65 only to have died before they reached 70; their pensions and investments that would have led to a lovely pension / retirement plan were null and void as they were 6 feet under.
70 year old is an outrageous retirement age.
Whoever suggested this policy is a complete numpty in my view – maximum productivity comes from active people in their 20′s and 30′s and from academic, or mentally driven people in their 40′s and 50′s.
By the time most people are 60 they just want a rest for crikeys sake.
Just think – would you want your grandmother, grandfather, auntie, uncle, or father and mother to be working in a call centre aged 69 dealing with problematic calls???? No, me neither.
Get a life States of Guernsey, and get someone in who knows about fiscal change, policy and economics.
Whoever suggested the retirement age of 70 is obviously devoid of any intelligence of their own.
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The only answer is to start collecting realistic pension contributions from the start of people’s working life. It must be compulsary and it must be realistic.
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Yet another cracking suggestion from the states again completely missing the point and looking for the easy solution.
The people being targeted here yet again are the workers who are filling the pot, people who work and contribute for their whole lives and now being told that you potentially have to do it for 5 years longer because we’ve mismanaged the islands funds.
Isnt it funny how it always falls on the average worker to pick up the slack?? Workers who could do anything from 40-80 hour weeks living for the weekend and their 25 days leave.
I also note that the people suggesting this are more than likely “current” states employees, ergo can retire at 60 rather than “new” employees that have to retire at 65.
For my generation you spend 25-30 years crippled by a mortgage, trying your best to better yourself and by the time you have finished your mortgage and have (more than likely) worked your fingers to the bone for a large portion of your life (whilst making contributions) why the hell should you then be expected to plod on until 70.
The first step should be to review the mistake that was Zero 10, then a full overhaul of the benefits situation because I begrudge money that I earn being paid for some lazy git to sit on his arse smoking fags and drinking special brew, or the “career choice” that is purposefully having children at 16.
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I agree with you ‘The Man’. No-one wanted zero-ten in the first place but looney Lyndon insisted on it, and sort out those lazy people that can’t be bothered to work, which I think we have all had at our workplaces at one point in our lives (stay for a day and find it too much). And those who purposely try to get a flat/states house by having children early in life.
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