Updated May 28th 2006
28 NOV 2005
With the greatest respect, this is a no-brainer.
The criteria for devising a national pension scheme are that it has to affordable, fair but flexible and non-inflationary.
The following rules should deliver that.

1. There should be no fixed national retirement  age.

2. Certain occupations (e.g Airline Pilot, Train Driver etc where members of the public have no choice as to whom they entrust their life) should obviously have strict health criteria and an upper age limit, internationally agreed in some cases, which can be revised every 10 or 20 years if there is a sound case for this.

3. Any particular profession can have a set retirement age if it can be agreed with employees.

4. At the age of 65 and beyond, if old age renders an employee unsuitable or incapable of performing the job, they can expect to be 'retired' totally or put into a less demanding position at a lower wage, where there experience could be valuable.

5. Any individual should, with the exception of the above, retire whenever they wish.

6. There should be a basic state pension payable in cash or in kind or a combination to save people from destitution.

7. The cumulative cost of this should be the same per head regardless of retirement age. That means that anyone likely to, and intending to live to be 100 should take careful thought before retiring at 60 about how they will finance the next 40 years. They would have to either work at a part time job, or have saved up, invested in a supplementary pension or taken out an insurance policy to cover the situation. This is because the non-means-tested state pension would cover, for example, £5,000 pa. over 10 years or £2,500 pa. over 20 years etc.

8. The amount paid out monthly or weekly to the individual would be assessed at the date of the first payment on the actuarial likelihood of remaining life, to be revised each year.

9. The total amount set aside for payment could change in any budget as seen appropriate but would not decrease.

10 The amounts specified here are only indicative. It could be much higher without any risk to the economy and cost the nation much less than it does now due to admin cost savings and appropriateness of payments..

MARCH 18 2006
Globalisation brings some strange effects. A bunch of old people stuck on the upper floors in Scotland from Christmas till April while they wait for lift parts from Italy. In France, a country run on logical bureaucratic lines carefully drafted to ensure (up till now) adequate social security at a significant but bearable cost by enforcing participation through rigorous management, the strain has now resulted in an average 25% uneployment amongst the under 25's, and 50% amongst enthnic minorities. Pensions, state funded or employment based, to which individuals contribute during their lives, are nevertheless actually dependent on wealth generated by those currently employed. This is because the value of the invested funds depends on the overall state of the economy and levels of employment at the time the benefits are paid. The lesson is that even a country that tries to look after its own economy by defensive means rather than facing global challenges with openness, the downside comes in under the door and round the corner.

In the UK, Gordon Brown has tried to accept the global challenge competitively. But when it comes to pensions, he took options which have turned out to be painful for some who did not expect to be the cannon fodder.

The Maxwell affair had brought about new legislation to remove company pension funds from control by the management, and laid down some minimum funding rules designed to ensure that in the event of a company liquidating, the fund would survive and provide something near the expected benefit. The Labour government then did 4 things that destroyed the working of this. It removed tax relief on pension contributions and then twice reduced the minimum funding level, and yet it issued a government leaflet advising that company pension schemes were a sensible means of provision for retirement, to be considered as a prudent possible choice in the current financial environment

The combination of these actions, not just any one of them alone, served to encourage hundreds of thousands of people to rely on a process that the government was actually undermining. That is why more help than has been offered should now be provided to those whose retirement pension has disappeared. The PM says it would cost the taxpayer £15 Billion. He is misinformed. It would cost a tiny fraction of that a year, which could be means tested above certain limits, and the money would circulate in the economy in a perfectly legitimate way. It is unlikely to be spent on alcohol or drugs, will prevent people resorting to fraud or theft to make ends meet, and improve the health of the recipients in their old age.

As for the new State Pension, there is a discussion now in hand on the Turner proposals. May I suggest that whatever is adopted, it is not then immediately undermined.

MAY 25th 2006
The Turner proposals, which were an ingenious compromise to set out a long term pension plan for the country which could receive all party support, have been subjected to further compromise by the Treasury on grounds of affordability in the context of their projected financial management. At least this means that the plan has a good chance of being adopted and stuck to, whoever is Chancellor and whichever party is in power. This is good!! This is serious forward thinking !!! We have never gone in for this before.
However, it does not del with the problems of this year or the next five years, so these problems must be dealt with on an ad hoc basis. OK. That is probably the only way they can be dealt with. The thing to do is get the long term plan approved and voted and deal with some serious problems amongst those who have been hit hard through the failure of their pension plans.

Your questions on the White Paper answered here: