Today in the High Court in London, there is a legal challenge against the raising of the state pension age for women. This affects women in born in the 1950s and it’s fascinated me for sometime due to the hypocrisy of it all.

Article from the BBC here. At the moment the case is still being heard. I am not in the legal profession – this is just an average persons point of view.

For a bit of background is that in the UK men used to get their pensions from 65 and women from 60. You had to pay into National Insurance for a number of years to get it (all). More recently, the government having realised how dangerous it is to guarantee a future pension amount to everyone (more or less) for possibly several decades. The future cost is huge and unfunded (except by future tax revenues). That burden is over £7 trillion from numbers of 2015 and is likely to only be higher now.

Demographics, rising life expectancy and lowering gilt yields have made the cost of servicing these onerous bullet prof pensions mushroom to make it a very big problem for future governments to have to deal with.

The increase in the state pension age for women (decided in 1995) gradually from 60 to 65 is to have gender equality in pensions and to reduce the tax burden of state pensions. The women against state pension increase (WASPI) and groups like back to 60 are against it because if you happen to be affected it means you’ll lose out financially. The cause is well organised and is regularly mentioned in the press.

pension timeline

How to solve the pensions problem is hard to work out. Pensioners are a powerful voice politically and these Waspi women are even more so! In any political decision there will be winners and losers. If there are only winners, the humble (future) tax payer pays in the end.

Of course it’s not fair that the goalposts were moved. I wouldn’t want to have to wait an extra 5 years for my pension. But it’s not a case of fairness. What really gets me is that they are not campaigning against the state pension age increase – I’ll be 68 before I get mine (and that’s a long way off) – but they feel that it’s unfair that their slightly older peers got their’s at 60 and they’ll have to wait a bit. Their slogan is “back to 60” but as a narrow minded special interest group they are not campaigning for my pension age to go “back to 65”. It’s less a campaign for equality and more a campaign for the status quo. I’m calling out the hypocrisy – they are like pension NIMBYs.

Their campaign is quick to point out that many women were not aware that their pension age had increased and they aren’t prepared for the shortfall that will come their way. I can understand their frustration but I don’t think that ignorance and being unprepared is a good argument.

For a bit of boomer bashing, you could say that those born in the 1950s have benefitted greatly from commonplace final salary pensions, cheap houses when they were young, falling interest rates, more secure employment and rising pension incomes. By any measure you’d conclude that they are lucky compared to the silent generation that went before them or Gen X or Millennials who come after them (and have to pay for their massive net drain on public finances as they age).

How to pay for an ageing population is a critical question for future governments. It’s as large a problem as Brexit or maybe comparable to Global Warming. Keeping the status quo isn’t going to be enough and tough decisions must be made. My hope is that the spurious arguments of the waspi are not successful in derailing the steps the government have in curtailing pensions spending. The country is still running a deficit and the reality is that if you don’t think about FIRE today, you might well be working long passed 68.

Anyway, back to work for me someone needs to earn money to pay taxes to allow entitled boomers enjoy their many years of taxpayer-funded retirement.

Backto60 won the right to a judicial review into increases in the pension age for women

Image from the BBC

Thanks, GFF

 

Advertisements

Published by GentlemansFamilyFinances

Happy family man, trying to navigate the family finances towards early retirement against the odds.

Join the Conversation

10 Comments

  1. The whole WASPI thing regularly has me fuming at Moneybox/You and Yours on Radio 4. If I had written this article it would have contained considerably more swearwords…

    Like

  2. People get very upset if they lose something they believe they are entitled to. Unfortunately that’s just how things can work out. Former colleagues of mine are very upset their DB pension is being closed because their employer states it is unsustainable, I was a little upset when my household could have lost child benefit ( because we earn too much ). I’m upset I’m charged full council tax on my empty property ( because the rules changed in 2013). I’m also upset that my pension age has been (currently) moved to 67. Long story short, the rules continually change so you better try and keep up with them. I also took time out from the workforce when my son was born to look after him, I subsequently returned to a lower paid but more flexible job so I could meet me family commitments. I always remember the phrase “the rich should pay their share. Who are the rich ? ….. anybody who has more than me !!)

    Liked by 1 person

    1. very good points – I am beginning to think that buddism or at least following commandment 10 is a good one to follow “Thou shalt not covet thy neighbor’s goods.”
      We’re not talking about stealing here – just the quiet rage of envy.
      The WASPI situation is all about what they think is fair – but they are only looking up and when they’re on the pension ladder they’ll want it pulled up as fast as possible

      Like

  3. I have been watching the WASPI campaign with a similar increasing bemusement. I hear the argument that they were not informed of the rise, but I have not seen anyone explain why they expected their retirement age to be 60 if they hadn’t done any research into it. It seems to be that they had this general expectation that they hadn’t bothered to verify since 1995 or so.

    There essentially seems to be an element of abdicating personal responsibility here. It’s why I struggle to have sympathy – but equally I can see why they are campaigning, if it results in them being thousands of pounds better off it’s worth them making some noise.

    For me, I hope that there will be a state pension when I get there but I’m not under any illusion that it will definitely be the same as today. If nothing else I can’t see the triple lock lasting a lot longer and I feel that means testing may well come along. As a result the state pension is part of my retirement planning but it’s not the only part.

    Liked by 1 person

    1. Their campaign is welm orchestrated and may have public opinion behind it – but their campaign is for unilateral fairness and they don’t care that I’ve never recieved a letter to say I will be 68 before I get my pension.

      Like

  4. I think the move to equality in state pension ages was overdue, even if it was given low publicity and was maybe a bit arbitrary at the point of change. I also think that none of us can assume that nothing under the control of politicians will change adversely, and that includes previously stated state pension ages. I remember being unimpressed when the personal pension age was increased from 50 to 55.

    Liked by 1 person

Leave a comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Create your website at WordPress.com
Get started
%d bloggers like this: