Retirement

[teamsaint]

I haven't seen them, of course, but what you write about them surprises me not at all; it is indeed a widespead problem that shows no signs of improving in the foreseeable future.

All the more reason for sensible, progressive people to support the state pension/benefit/whatever you want to call it loud and long I would have thought?

[french frank]

Well no it isn't as simple as that of course, because those above the NIC earnings threshold , around £40k, pay only 2% NI on their top slice.

No, it isn't as simple as the way either of us put it. But below £40,000pa, what I said is that simple.

Marginal rates for people on modest incomes of whatever age really matter, but the lower age groups which include so many graduates are getting much worse hit, with a treble whammy of high marginal rates, high house prices, and flat wages.
Oh, make that quadruple, as decent pensions company pensions ( final salary etc)are increasingly eaten away.

Well, I repeat, that that 'high marginal rate' will only be payable when/if they are earning at those higher levels. It's interesting, of course, that the graduates are likely to be earning more in the first place. And looking forward to pensions may eventually come to affect them, but not while they are actually in the lower income groups.

BUT - I accept that things are tough - and I think will become tougher. But GDP per head is going down, not up, growth is slowing, inflation is still trending upwards. And who knows what lies ahead? Most of the misery seems to me to be for the low income non-graduates, of all ages.

[Beef Oven!]

No, it isn't as simple as the way either of us put it. But below £40,000pa, what I said is that simple.

Well, I repeat, that that 'high marginal rate' will only be payable when/if they are earning at those higher levels. It's interesting, of course, that the graduates are likely to be earning more in the first place. And looking forward to pensions may eventually come to affect them, but not while they are actually in the lower income groups.

BUT - I accept that things are tough - and I think will become tougher. But GDP per head is going down, not up, growth is slowing, inflation is still trending upwards. And who knows what lies ahead? Most of the misery seems to me to be for the low income non-graduates, of all ages.

If we have 50% of young people going to university, won't supply-side issues render the likelihood of generally higher salaries for graduates as a thing of the past?

[french frank]

If we have 50% of young people going to university, won't supply-side issues render the likelihood of generally higher salaries for graduates as a thing of the past?

I don't think so. The jobs that demand degrees will still be there, and the better jobs which don't require a degree would surely still go to those with better qualifications?

[Beef Oven!]

I don't think so. The jobs that demand degrees will still be there, and the better jobs which don't require a degree would surely still go to those with better qualifications?

I'm not sure the jobs market structure is, or ever has been, a gradual hierarchy - it seems more terraced. Jobs requiring degrees will still be there, but they will go to the very best graduates, leaving those with a modest 2:1 out in the cold; I did refer to 'generally' higher salary levels, anyway.

[ahinton]

All the more reason for sensible, progressive people to support the state pension/benefit/whatever you want to call it loud and long I would have thought?

To the extent that it be possible, perhaps, but always mindful of the fact that there's no way that it could reasonably be expected to serve as anything more substantial than a top-up to income post "state retirement age". One fundamental structural problem with it is that, unlike pensions, not only is there no investment element and pension pot to be vested at the end of the invetment period but there's also no direct correlation between the amounts paid out to the recipient after attainment of "state retiremnt age" and the amounts of NIC that he/she will have paid up to that point (when all liability for it ceases other than for employers); it's all therefore based upon a largely arbitrary "entitlement", because the amounts of NIC paid by the beneficiary in the years up to "state retirement age" do not contribute to the benefits received thereafter, as they're paid out instead in a variety of benefits to those entitled to receive them shortly following their receipt.

A substantial overhaul of all of that would indeed presume the involvement of some very "sensible, progressive people" with considerable vision and expertise, but this might require a wholesale unfurling of the system back to its origins when, as someone long ago put it, "the much vaunted notion of 'ninepence for fourpence' sounded almost identical to 'something for nothing'", hence the allegations against it that it's partly analogous to a state sponsored Ponzi scheme. Quite how it could be reformed I have no idea as I have no experience in such issues, but I'm not suggesting that it couldn't be done by a team of people who do, although whatever solution was adopted would prsumably take quite a few years fully to roll out.

[french frank]

I'm not sure the jobs market structure is, or ever has been, a gradual hierarchy - it seems more terraced. Jobs requiring degrees will still be there, but they will go to the very best graduates, leaving those with a modest 2:1 out in the cold; I did refer to 'generally' higher salary levels, anyway.

In my day a 2.1 was a good degree http://www.bbc.co.uk/news/education-40654933

All wages and salaries are set to be depressed - even the BBC is talking about (male) presenters taking pay cuts:

http://www.bbc.co.uk/news/entertainment-arts-40663781

[jean]

...there's no way that [the state pension/benefit/whatever you want to call it] l it could reasonably be expected to serve as anything more substantial than a top-up to income post "state retirement age"...

I know quite a few for whom the state pension is their only income!

[french frank]

To the extent that it be possible, perhaps, but always mindful of the fact that there's no way that it could reasonably be expected to serve as anything more substantial than a top-up to income post "state retirement age".

What jean said. I imagine that for millions it is the largest part of their retirement income, possibly with some top-ups, possibly not, but definitely not a top-up to more substantial income. That seems raving as a normal expectation.

[teamsaint]

No, it isn't as simple as the way either of us put it. But below £40,000pa, what I said is that simple.

Well, I repeat, that that 'high marginal rate' will only be payable when/if they are earning at those higher levels. It's interesting, of course, that the graduates are likely to be earning more in the first place. And looking forward to pensions may eventually come to affect them, but not while they are actually in the lower income groups.

BUT - I accept that things are tough - and I think will become tougher. But GDP per head is going down, not up, growth is slowing, inflation is still trending upwards. And who knows what lies ahead? Most of the misery seems to me to be for the low income non-graduates, of all ages.

Just to try to make clear what I may have failed to make clear so far, is my concern that (especially as you agree in what is a generally tough financial climate for certain groups) what amounts to a 40% marginal rate is payable on really very modest incomes .

[Beef Oven!]

In my day a 2.1 was a good degree http://www.bbc.co.uk/news/education-40654933

All wages and salaries are set to be depressed - even the BBC is talking about (male) presenters taking pay cuts:

http://www.bbc.co.uk/news/entertainment-arts-40663781

2.2 was good 2.1 was very good and 1st was unattainable except for the superbright! And I guess it didn't matter about a 3rd, because no-one except graduates and some employers knew about any of this!!

But just look how cleverer the youngsters are than us - a quarter of them get 1sts!!!

Christopher Hitchens & Will Self were dolts?

Salaries may or may not go down, I'm thinking more about the structure.

[ahinton]

I know quite a few for whom the state pension is their only income!

I'm aware of that too - but what sort of standard of living does that allow those in so unfortunate a position?

[teamsaint]

What jean said. I imagine that for millions it is the largest part of their retirement income, possibly with some top-ups, possibly not, but definitely not a top-up to more substantial income. That seems raving as a normal expectation.

Yes. And not only is it a cornerstone of income , but it is an important part of our national life,something we should cherish, invest in, be proud of, improve.

In the company I work for,we have a compulsory deduction of 1%, employer contribution of 1%, plus the tax relief on that. You can make additional contributions, ( unmatched ), but thats it. And on the salaries that we can afford to pay most people, lets call it an average £25k , you can work out what kind of a pension pot that will provide. Probably enough to provide a small or cheap car and the occasional modest holiday on retirement at best.
Paying in extra voluntary contributions for most younger employees is probably a complete non starter.

[ahinton]

What jean said. I imagine that for millions it is the largest part of their retirement income, possibly with some top-ups, possibly not, but definitely not a top-up to more substantial income. That seems raving as a normal expectation.

I doubt that either jean or you or I have access to the precise statistics but, if indeed that is the case for "millions", there are "millions" living on the breadline, given the basic rates of state retirement benefit; those still having to fund mortgages or rent post-"SRA" will be in particularly parlous situations and it is surely not for nothing that ever more post-"SRA" people are continuing to work or recommencing work mainly out of sheer need?

[teamsaint]

2.2 was good 2.1 was very good and 1st was unattainable except for the superbright! And I guess it didn't matter about a 3rd, because no-one except graduates and some employers knew about any of this!!

But just look how cleverer the youngsters are than us - a quarter of them get 1sts!!!

Christopher Hitchens & Will Self were dolts?

Salaries may or may not go down, I'm thinking more about the structure.

Wise words about degrees , Beefy.......

Also interesting thoughts about structure.