Are_Government_Pensions_Unfair_On_Younger_Generations
This research report by Intergenerational Foundation is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
Are Government Pensions Unfair On Younger Generations
This research report by Intergenerational Foundation is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
I am shocked and dismayed by the number of professionals – both public and private secter – of my age group, or older who seem to be sitting on massive guaranteed FS schemes, underwritten by us all – some of them have retired at 55, or before 2011 at 50! (eg Hospital Psychiatrists are still given very generous index-linked pensions at 55). The most infamous example was Fred Goodwin, who manage to sneak under the wire and start drawing his hige pension in his early 50′s, after wrecking RBS.
As someone who is 55 , with only limited pension prospects, despite putting huge amounts into Money purchase I will have to work into my late 60′s to afford a decent pension at all.
I feel passionately that we should campaign for a ‘Fred Goodwin Pension Tax’ which would tax more wealthy pensioners who have in effect raided their company schemes over the last 20 – 30 years by retiring early on generous final salary terms, leaving the next generation to work longer to pay for the public sector schemes and exacerbating the hole in most private pension schemes.
i.e. Why not have a special ‘Pension tax’ that cuts in at 40% for pensions over £25k, then goes up to 60% for pensions over £40k. And if they all flee abroad, then make sure that this tax can be backdated, if they come back to the UK, once they need healthcare !
The tax could be used to fund better pension provision for the younger workforce and diffuse the increasing ‘inter-generational’ animosity that is emerging.
This is rather a one dimensional view of pensions issues. The issue is not simply inter-generational fairness. Just as the young can feel aggrieved, so can the private sector worker (of any age) paying through tax for a public sector pension that is more generous than his defined contribution scheme pension; the worker (of any age) whose employer provides no pension; or indeed the public sector worker (of any age) who is or was on low pay and whose pension therefore is tiny.
Moreover although there is an issue of inter-generational fairness, saying so doesnt make more money appear. If you assume that the UK economy will never again grow at the rate it did before 2008 then do or say what you like, future generations will be worse off, whether they are at work or retired, because the wealth that we had or seemed to have is gone.