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Ageing population ‘as big an issue as climate change’

Only the super rich will not rely on state pensions in the future, according to John Cridland, who recommended a rise in the state retirement age this year.

 
Ageing population ‘as big an issue as climate change’

The UK’s ageing population is ‘as big an issue as climate change’ according to John Cridland.

Former CBI director general Cridland was appointed to review the state pension age (SPA) by the government.

He published his report earlier this year. It made a number of recommendations to help the UK deal with the UK's  growing pensioner population, including increasing the SPA to 68 quicker than planned. 

Speaking at an insurance industry conference, Cridland warned more needed to be done to address problems posed by an older population.

‘There is very strong growth in people hitting 80, then 90, then 100 and we need to find ways in telling that story because we have to bring that consequence home to people,’ he said.

‘I would argue it is not just a pensions issue, it is a health issue and the ageing society for the next generation is as big an issue for this country and the world as climate change. That is no way to devalue the significance of climate change, but I haven’t seen anywhere near as much debate in the media about ageing society than about climate change.’

Super rich

Cridland also said the state pension is becoming ever crucial for the vast majority of the population.

‘Even the top quintile of retirees on income get half of their income from the state pension, just a staggering statistic. It is only the super rich who won’t need the state pension,’ he said.

Cridland said stopping this group of super rich people from receiving the state pension would not benefit the government. 

‘The means testing is a little like the 50p tax rate debate it may have a moral purpose but it is not a financial panacea because when you set up a complicated tax regime to means test something that results from national insurance, you would be surprised at how little net finance you gain,’ he said.

13 comments so far. Why not have your say?

Nigel Meek

Jul 05, 2017 at 17:49

‘Even the top quintile of retirees on income get half of their income from the state pension' - blimey, by my very conservative projections, my state pension, (if I ever receive it), will be about 17% of my post-tax income. Fair do's, I won't get the full state pension, but I can't believe for one second that I am one of the "super-rich". PLEASE don't tell my wife!!

All I have done is lived fairly frugally, run a 13 yr old Honda Civic, and maxed out my ISAs for the last 10 yrs or so whilst putting additional savings into my SIPP. And no, they haven't blown any lights out either. Slow and steady.

Either I am a total knob-head, or lucky. But then my mantra has always been the harder you work the luckier you become.

I wonder if Mr Cridland has done his sums properly?

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PaulSh

Jul 05, 2017 at 18:05

Nigel, the article was spot on for me - the sum of my wife's actual and my projected state pension is pretty much equal to the combined natural yield of our SIPPs. Don't forget that average pension pot sizes now are £73,600 for men and £24,900 for women, so in very round figures that would mean the state pension was providing getting on for 80% of the average couple's income.

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Roger Savage

Jul 05, 2017 at 18:24

Easy problem to fix (and this is only just a taste of what could be done):

1) Ditch foreign aid @ over £1bn/month

2) Cut the benefits bill for the 'could work, can't be bothered brigade'

3) Cut the benefits for those who come here to 'make a better life for themselves' at other's expense

4) Ditch lucrative MPs' pensions and generous expenses and perks

5) Ditch lucrative public sector pensions

6) Make serious offenders pay for the cost of their incarceration (conservatively £40k pa/prisoner)

7) Ditch public sector waste

8) Stop using taxpayers' money to bail out reckless banks and/or fund schemes for political party donors (e.g. Help to Profit, aka Help to Buy)

Oh look - suddenly there's more than enough money to pay for pensions Mr Cridland.

But wait, you've obviously been paid to reach a pre-determined conclusion which provides a diversion to the real issue. That is, politicians commit daily acts of treachery and waste public funds to enrich themselves and those who pull their strings.

Those who contribute, work hard and expect nothing more than what they're entitled to after years of contributions get robbed by the same politicians who are themselves set to receive bumper pensions.

Meanwhile, those same politicians set about a policy of divide and conquer, using smoke and mirrors to divert attention from their own morally bankrupt, and scandalously wasteful activities. Chief amongst the latest tactics seems to be crowing about intergenerational unfairness, painting the older generation as burden / source of problems.

Sickening, immoral and corrupt. Welcome to contemporary British politics.

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Barry1936

Jul 05, 2017 at 18:42

Spot on Roger, couldn't have put it better myself. Time for middle England to start a 'Ukip' because none of the other political parties look after our interests.

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Jon Snow

Jul 05, 2017 at 22:44

All you need to know about this piece is in the first two short paragraphs -

"The UK’s ageing population is ‘as big an issue as climate change’ according to John Cridland.

Former CBI director general Cridland was appointed to review the state pension age (SPA) by the government."

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Michael Stevens

Jul 06, 2017 at 09:42

State Pension Age must be raised to 70 by 2044. It was introduced in 1909 at 70,then less than half the population obtained 70

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The Old Man

Jul 06, 2017 at 10:00

At last I've joined the 'super rich'. But could this be connected with the fact that I have saved hard throughout my life and worked hard at stock market investing for almost 50 years?

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david rogers

Jul 06, 2017 at 10:23

mr Meek,

i assume that your calculations rely on a useful tax free return from the ISA`s you have "maxed out".With all the recent publicity about individuals with ISA pots into seven figures are you not concerned as I am that this or a future chancellor will put a limit on tax free withdrawals?

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Andrew Stevenson

Jul 06, 2017 at 18:10

My parents were frugal, and saved all their lives. My mother ended up in a nursing home paying £1200 a week. This was twice the actual cost. Why ? Because she was being forced to pay the care costs of two other people, who were paying nothing.Their costs covered by my mother's extra contribution and the payments made by the local authority (way less than the actual cost).

She wasn't 'super' rich, and died before her money ran out. She was in effect being taxed at an unbelievable rate. You might argue why shouldn't her savings be confiscated.

The lesson ? Do exactly what there is every chance those two other people did. Have a nice new car every couple of years, take three holidays a year. Above all spend as much as you can. If you have any sort of money in the bank the local authority will go after it. If you try giving any large sums to your children they will demand it back from them.

My solicitor bragged that he had got his mother to sign over her house to him and his siblings She then paid them rent. When she needed to go into a nursing home they declared that she had no savings and rented the property she lived in. The local authority swallowed this hook line and sinker. He advised that this was the way to go. Just make sure you do it a couple of years before she needs to be admitted..

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The Old Man

Jul 07, 2017 at 08:07

Sadly I am not rich David as most people would define it and I certainly could not afford to buy a house anywhere in the South East, but I freely admit to having an active interest in business and investment after 'retirement'.

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Franco

Jul 08, 2017 at 11:46

Long live Trident. It will only cost a few hundred billions and it does not half make us feel big !

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steven fieldfare

Jul 08, 2017 at 16:19

Surely an ageing population per se is not the problem.

Increasing numbers remain work interested, highly experienced and potentially productive if their interest is harnessed and capitalised on.

What is alarming are seemingly increasing numbers falling by the wayside early, apparently unfit to continue and frequently through lack of self care.

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normski 2nd

Jul 08, 2017 at 17:46

Good evening,

No mention of growing the economy to pay for such costs, but the I suppose if they did it would still get squandered.

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