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The Independent
22-07-2025
- Business
- The Independent
‘Work until we die?' Independent readers outraged over retirement age review
Liz Kendall's announcement of a new review into the state pension age has drawn a strong response from readers, especially older workers and pensioners who feel increasingly squeezed by reforms they see as both unfair and unrealistic. Many took issue with the idea of raising the retirement age again, warning that it fails to account for physical decline, especially among manual workers. 'My knees have packed in,' said one 73-year-old, who retired at 65 after a lifetime of physical labour. 'There's no way I could keep doing the work I used to.' Several readers questioned Ms Kendall's assertion that future pensioners should take heed and save more, with many pointing out that saving is only an option for the wealthy or those with disposable incomes. A recurring theme was frustration at a system seen to punish those who had 'done everything right' – saving into private pensions and paying contributions, only to be left with little support. 'He told me to retire penniless,' another reader said of her father's bitter advice, 'because then you get everything.' A few commenters looked to the future, suggesting that instead of clinging to outdated models, the government should explore policies like basic income to address the long-term impacts of AI and inequality. Here's what you had to say: Pensioners don't drain the system Pensioners are nearly always referred to as if they're draining the system of something they're not entitled to. Forgotten is the fact that most of them worked until 65 and paid what was due until they did. As we now know, it doesn't protect them from poverty in old age. Only those with private pensions, which are also subject to taxation that wasn't foreseen when many set these plans up, have enough to cover basic costs. Saving? How does the average worker do that? They can hardly afford to put food on the table and get by. Take more money out of people's pockets, which cuts spending, and even more high streets will become derelict and industries will fail. Increasing retirement age? A friend died at 69 recently, and another at 72 (neither were manual workers). Increasing retirement age for manual workers would be cruel as well as disastrous, or are people supposed to work until they drop? Too many pensioners are having to desperately look for jobs to boost pensions that don't enable them to eat and heat. Maybe it's time the government took a look at some of the systems that work in other countries! Quick-fix ideas aren't the solution. A system fit for purpose, where everyone pays their fair share and people can retain their dignity and are able to live without having to calculate how and if they're entitled to benefits or charity to get by, is the only sensible way forward. Will it happen? I would lie if I said I was optimistic! Ambigirls Do you think the state pension age should rise — or is it already too high? Share your thoughts in the comments below. Reform, not tinkering There are issues with the triple lock, but the savings narrative is a fiction. As people (particularly working-class people) approach 70, they are more likely to find themselves unable to find suitable employment or be underemployed. So they will require working-age benefits. It is not difficult to imagine that there would also be increased costs on the health system as ageing bodies are required to work more and more. Further, it is likely that around one-third of millennials will end their working lives in the private rental sector, so housing support will be required at greater levels. We cannot keep tinkering with these systems just to balance the books on paper. We must reform the tax code and the social security net to make both fit for the modern age. lostboy88 Punished for saving My dad saved, paid into private pensions and paid his contributions. He was never unemployed and did everything the government asked him to do. When he retired, he found to his disgust that he was entitled to very little from the state – effectively punished for having saved, etc, whilst others who contributed nothing were given everything by the state. That's socialism. He told me to never make his mistake and ensure I retired penniless to get the maximum back from all I had paid in. saghia Work until we die? OK, so here we have the result of all those people who wanted to avoid benefits cuts. The alternative is for working people to work longer. Some benefit cuts were needed, in my opinion. And before anyone suggests a 0.2 per cent tax on billionaires – whether we like it or not – they can leave the UK, fly in from time to time if they really want to, and then we'd lose the huge amount they do pay in tax. What then? Work until we die? Ordinary people are paying for a few too many freeloaders, in my opinion. Where is the sympathy for non-unionised people who work and pay tax? Hi5 Saving is not the answer Saving? Saving is NOT the answer. If we try to save more, we spend less. If we spend less, businesses sell and make less, so they invest less... just the opposite of what we need to increase the output needed to pay pensions. It is a good example of the confused thinking that affects so many people. An individual who saves more will have more to spend in retirement than they would otherwise have. If we all try to do that, we are all worse off. What is right for an individual is often not right collectively (wet wipes, panic buying, burning smoky fuel, saving for retirement, etc). The Fallacy of Composition. much0ado People aren't saving because they can't People aren't saving because they can't – it's that simple. There is no money left at the end of the month to save anything because of the cost of living. A large majority of people are having to live pay cheque to pay cheque with no slack. Unless something is done about that, then there is a huge problem being stored up for the future, let alone Reeves saying she was going after people's savings!! deadduck Gross inequality is the root of our problems The government can't simply keep increasing the state pension age for one reason: some people become physically incapable of working when they get a little bit older. Asking a manual worker to keep digging holes when he's nearly 70 is absurd. The government needs to deal with tax evasion and avoidance, including offshore. I'd also introduce a land value tax, which forces the wealthy to pay their share. Gross inequality is the root cause of many of our societal problems, and it's time it was addressed. You don't deal with it by taxing working people more – you tax the ultra wealthy who pay basically nothing. flying scot It makes sense to raise the pension age People are largely living longer because of better living conditions, nutrition and healthcare. For example, I'm now much older than all my grandparents were when they died. Although the most vulnerable must still be cared for, it makes sense to raise the pension age to reflect this change in society – it is the 21st century rather than the 1900s... hayneman Onsalught on working-class people I'm 73, retired at 65 and did manual work most of my life. My knees have packed in, and the rest of my body is slowly packing in now – there is no way I am able to do the sort of work I did when I was younger, and haven't been able for well over 10 years now. This is the case for many manual workers. How can Kendall, Reeves, Streeting, Starmer etc. call themselves a Labour government with this continual onslaught on working-class people? The trade unions should withdraw support and funding immediately and advise their members to place their votes elsewhere, preferably not in Farage's direction, though. manwithnoname The future looks unpredictable We must bear in mind that the relentless march of AI and other systems is considerably reducing the number of jobs in many sectors dependent on 'exchanges of data', from simple insurance to DVLA or HMRC, for instance... The list is endless. How can these workers be 'recycled' in the short term? How do we ensure that those mythical 16-year-old voters HAVE some employment to look forward to after finishing their studies, at whatever level? Importing 'low-grade' labour is eating into the job supply at the bottom end, while all those 'surgeons and engineers' cream off the top end... The future looks unpredictable for too many youngsters. Problems must be addressed now! Failure to do that will make the triple lock – an invaluable resource to many pensioners still – look like change from the back of the sofa... YvesFerrer These reviews are so detached from people's realities Financial literacy is not taught in schools. I suspect a large proportion of people who are not planning for retirement don't understand money very well. Also, a huge number of people don't have enough disposable income to save at a level that would give a comfortable retirement. You need, in current terms, around £300,000 to £500,000 in private funds. That is for someone who owns their own home. If you retire but have to still pay for rented accommodation, you've got no chance. These reviews are so detached from people's realities. After paying tax and National Insurance for 50 years, I get my State Pension next year – and I will be paying income tax on it :) Lithiumiron Some of the comments have been edited for this article for brevity and clarity.
The Independent
21-07-2025
- Business
- The Independent
Labour minister Liz Kendall announces review of state pension age
Work and pensions secretary Liz Kendall has announced a review of the state pension age. It comes in a major speech where the senior cabinet minister warned that the cost of the triple lock guarantee on the state pension is £31bn a year. The triple lock, which was introduced by David Cameron's government in 2010, means that the state pension either rises by 2.5 per cent or the highest rate of inflation whichever is higher to keep up with the cost of living. Speaking in central London this morning where she was relaunching the Pensions Commission, Ms Kendall warned of a growing threat of pensioner poverty unless there was major reform to the system.
The Independent
15-07-2025
- Business
- The Independent
Business news live: Rachel Reeves to address taxes and pensions in Mansion House speech
Tuesday brings Rachel Reeves ' Mansion House speech, with the chancellor expected to delve into pension reform and plenty more besides. There has been a push in some quarters for the chancellor to rip up fiscal rules limiting spending, which has been rejected by the government, and to bring in a wealth tax, which has not. It's not expected that ISAs will be a key focus now, with reform expected to wait until further discussions have taken place, but tax changes for businesses may still be on the agenda along with other initiatives as the government chases economic growth. Elsewhere, bitcoin has hit new highs of late and the FTSE 100 performed well on Monday - in contrast to other places in the stock market as tariff threats continue and a deal between the US and the EU appears no closer.
Telegraph
10-07-2025
- Business
- Telegraph
Spiteful calls to rein in triple lock must be ignored
'The triple lock is a political luxury that the Treasury simply cannot afford,' said the Adam Smith Institute this week, in an echo of similar warnings that have been ongoing for the best part of the past decade. As if to confirm the think tank's analysis, the Office for Budget Responsibility (OBR) identified the growing cost of the state pension as a key threat to the public finances in its latest 'Fiscal Risks and Sustainability Report'. Personally, I don't argue with the idea that some kind of reform to the way in which the state pension is upgraded to keep pace with prices and incomes is both necessary and desirable in the long run. But there is a spiteful undertone to much of the current complaints about pension entitlements that paints them as in some way an undeserved indulgence. Wholly objectionable is the growing chorus of voices arguing that the state pension per se has become 'unaffordable', that it should be significantly curtailed in the interests of younger cohorts expected to pay for it through their taxes, and that pensioners are somehow a cost to society which we could easily do without. Both economically and morally, all these arguments are false. Next, they'll be advocating age-related euthanasia; as in Aldous Huxley's dystopian novel Brave New World, once devoid of our usefulness, we'll be shuffled off to some version of the Park Lane Hospital for the Dying and quickly dispatched in a haze of soma-induced oblivion. Looked at objectively, the UK state pension is, as a matter of fact, perfectly affordable. Pensioners are big voters, but sustaining their entitlements is not just a matter of political expediency; it is an essential hallmark of any civilised, high-income society. Of all the items of state spending that might be cut, the state pension is the least justifiable. Already it is one of the meanest there is among the OECD group of higher-income economies – this is despite the fact that the UK is one of its richest in terms of GDP per head. Against the miserly 4.7pc of national income the UK spent in 2019 on the state pension and other pensioner benefits, Greece and Italy spent 13pc, France 12pc, Germany 10pc, and even the United States nearly 7pc. The numbers may have changed a bit since then, but not by much. The idea that the UK cannot afford such spending is ridiculous, and an insult to those who have worked hard most of their lives to make the UK as prosperous as it is today. The concern that the OBR highlights is that, under the current policy setting, spending on the state pension is expected to rise markedly over the decades ahead, both in absolute terms and as a proportion of national income. But what really surprised me, looking at the OBR's analysis, is quite how little it rises given the obvious pressures from an ageing demographic. Under the OBR's central projection, which assumes no change in policy, the cost of the state pension rises by around three percentage points of national income to just shy of 8pc in 45 years' time when the demographic pressures are at their most extreme. This is admittedly a lot, and in the OBR analysis, the second largest increase in non-interest spending after health. In any case, it dwarfs the additional spending the Government plans for defence. But all spending decisions are about priorities, and in that context, the costs remain reasonable and manageable. One of the reasons that the costs of the state pension flattened off throughout much of the 1980s, 1990s and noughties is that the Thatcher government deliberately abandoned the earnings link, so that despite the growing numbers reaching the age of entitlement, the cost of the pension eroded relative to national income. This was good for the Exchequer, but very bad for pensioner poverty. By the time Gordon Brown began to address the issue, Britain had some of the most shameful levels of pensioner poverty in the OECD. The Cameron government went further still by introducing the so-called 'triple lock'. By stipulating that pensions must be upgraded by inflation, earnings growth or 2.5pc a year, whichever is greatest, the triple lock has helped close the gap in living standards between retirees and those in work. If the lock were abandoned, and pensions once again began to lag growth in the economy, relative pensioner poverty would soon rise anew, and the Government would find itself in many cases having to top up state provision with pension credits and other forms of benefit. The net savings might therefore be relatively modest. It's true that the costs of the triple lock thus far have proved markedly higher than originally anticipated. But this is largely because of increased volatility in inflation and earnings growth. Get inflation under control and the problem would not be nearly as severe. Some argue that the solution lies in means-testing of the state pension, but quite aside from this being a politically suicidal policy to adopt, means-testing already, in effect, exists. Better-off pensioners will pay part of their entitlement back to the Exchequer in income tax. In the case of additional rate taxpayers, it will be nearly half. The system is therefore already reasonably progressive. Moreover, some pensioners continue to work, and thus help pay for their own entitlements. But even among those who do not, the state pension cannot in macroeconomic terms be described as a 'cost'. Virtually all these monies are spent, and are therefore recycled into supporting the wider economy. There has long been a fairly obvious solution to the seemingly ever-rising costs of the state pension, and though nothing these days seems to command a political consensus, it ought to be an approach that commands cross-party support. This would be, as the Institute for Fiscal Studies has suggested, to set a target for the state pension as a proportion of average earnings. Once achieved via the triple lock, the state pension would then be indexed to earnings alone, thus maintaining its ongoing spending power relative to those in work. Set at, say, a third of average earnings, it would take some years before the threshold was reached, but once achieved, it would reduce the ongoing rise in expected costs by around half. It's not going to help Rachel Reeves, the Chancellor, meet her fiscal rules, but it would provide certainty and limit the costs to acceptable levels. Fiscally, Britain is heading for the rocks, with the third-highest ongoing deficit in Europe, the fourth biggest debt-to-GDP level, and the third-highest cost of borrowing of any advanced economy in the world. But woe betide the Government that puts the state pension first in line for the required sacrifices. Mind you, the present lot seems to have abandoned the tough choices altogether. They spend like Gordon Brown, only without the money for it.
Irish Times
10-07-2025
- Business
- Irish Times
CIÉ's pension saga could be coming to a head
Trade union members in the State-owned CIÉ transport group will next week start voting on whether to accept proposals aimed at bringing to an end a lengthy saga over the future of their two pension schemes. This week unions warned that without changes the entire group could collapse in a future economic downturn under the weight of pension liabilities which could reach up to €4 billion within eight years. Writing in the recently published annual report, chairman Aidan Murphy said the CIÉ Group 'has the largest pension deficit in the State'. [ CIÉ could collapse amid potential €4bn pension liabilities if asset values fall, unions tell workers Opens in new window ] He said the cost of benefits were unaffordable and the risk inherent in the schemes, when allowance was made for the size of the liabilities relative to the economic value of the group, was too high. Murphy said that pension reform had happened years ago in comparable semi-State schemes but efforts to do the same in the CIÉ group had been ongoing since 2018. In that period there has been a lot of argument over who should be responsible for the pension bills: should the company, or the State as the shareholder be on the hook. In the background several thousand former staff have not seen a pension increase in 17 years as the rows over the future of the schemes dragged on. Ultimately union members will have to decide on whether it is likely that a Government could allow the collapse of the transport companies. Private sector companies already provide many bus services. But is it likely there would be much private sector interest in running the rail network? Minister for Transport Darragh O'Brien was careful that while he was supportive of the move to resolve the issues, he was not offering any guarantee with respect to any obligation or liabilities of CIÉ and/or the CIÉ pension schemes. But O'Brien will not be the only person in Government keeping a close eye on the vote at the CIÉ companies. Minister for Public Expenditure Jack Chambers reminded Ged Nash of the Labour Party in a recent answer to a parliamentary question that under legislation and the code of practice for the governance of State bodies, he will also have to approve any move to amend or replace any existing pension scheme.
