Saturday, August 08, 2009

Fool Or Liar?

No tradition of turning out fools

Everybody who looks at it seriously comes to the same conclusion: the state pension age will have to increase to 70 soonest.

As we've blogged many times, with life expectancy increasing by leaps and bounds, we simply can't afford to keep it where it is. And even the planned increase to 68 by 2044 is nowhere near enough.

Three years ago, the Turner Report on pensions crunched the numbers and showed us that to stabilise the burden of state pensions spending at current levels (ie around 6% of GDP) we will need to increase the State Pension Age to at least 70 (see this blog). And although Turner himself wimped out on recommending that - going for 68 instead - he has since recanted and now says he wishes he'd gone for 70.

Then today, David Norgrove, the pensions regulator, tells us the same thing:

"People are going to have to work longer, partly because we're not going, as a nation, to save as much for retirement as we did in the past.

The government's recent legislation is increasing the state retirement age progressively to 68. I think it will end up higher than that."

Countless actuaries and economists of Tyler's acquaintance agree.

So why is it then, that the DWP's Minister for Pensions and Ageing, disagrees? Angela Eagle says there is "no point" raising the state retirement age beyond 68:
"We believe that we've covered the predictions of increased life expectancy adequately in the legislation and unless these statistics change we'll have periodic reviews, but it won't happen for another generation."

Can she possibly believe that?

Can she possibly believe busted Britain can afford to sustain growing numbers of state pensioners through 15-20 years of retirement?

Does she not understand that state pensions were only ever meant to pay for the small minority who were unlucky enough to live on beyond the average age of death? Has she not studied the long-term charts of life expectancy? Has she not realised that in 1908 when Lloyd George introduced his state pension from age 70, the average life expectancy at birth was less than fifty?

(And see this blog for more details).

Surely Ms Eagle must know this - after all, she went to St John's College Oxford (pic above), just like that brainy Mr Bliar.

But if she knows exactly what the rest of us know, what possible explanation can there be for denying it?

Surely it can't be because admitting the truth might be electorally inconvenient and anyway she doesn't give a stuff about the long-term consequences because she won't be around to pick up the pieces.

Can it?

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