From today's FT, headed, rather provocatively "Benefits scrounging by the over-60s":
Sir, That the government is to look now at the default retirement age of 65 is good news (July 4). But it has already created a culture in which people are led to think that they should hang up their boots well before 65. This it has done through an array of “concessions” that kick in at 60: free bus passes, prescriptions, swimming; the winter fuel payment and, of course, old age pensions for women. The private sector is also hot for concessions at 60: cinema tickets, haircuts, train tickets [1]. The list is very long.
There should be no concessions for mere age. It may involve less bureaucratic expense to make some benefits universal at a certain age, but 60 is no age. There should be concessions for disability, infirmity and poverty [2], of course. But both government and the private sector have conspired to give benefits scrounging a good name provided it is done by those over 60. Time to put an end to this saga.
Trevor Pateman, Brighton, UK
While I agree with the main thrust of this, I have two caveats...
[1] This practice, known as price discrimination, is usually observed with businesses with high fixed capacity, high fixed costs and low variable costs, and where the goods/services are consumed at point of sale. It makes perfect sense for train and bus companies on local routes to charge higher prices during the rush hour (because commuters are less price sensitive and have the money to pay) and lower prices during the day-time (which pretty much overlaps with when pensioners tend to travel to the shops etc). The fixed costs are there anyway and provided the ticket price covers the marginal cost of that extra bit of fuel, driver's salary etc it's still worth doing.
The same goes for cinemas, or for hairdressers or take-away restaurants who offer lower prices during the daytime on whatever day of the week most pensioners pick up their pensions. The strategy only works with goods and services consumed at the point of sale, of course, or else the old folk would just fill their boots and pass on the saving to their younger relatives.
[2] I hotly disgree on this. If we are to have redistribution, let it be universal, low-level and non-means tested.
Thursday, 16 July 2009
Reader's letter of the day
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11 comments:
One wonders how old Trevor Pateman is - no doubt not a pensioner otherwise it is hardly likely he would be writing as he does.
One would also like to ask how he would live on just over £500 (four weekly) as his sole income, whilst also supporting a parent in a care home?
On a personal level if 'benefits' are available, then I for one am bloody well going to take them, having paid into the 'system' for 50 years!
I regularly buy the OAP cod and chips from the shop near my office. Does that prove your point or just prove that I'm tight?
WFW, like I said, the letter is a tad provocative but not without foundation.
DP, as WFW says, if benefits are available, why not avail yourself?
One man's price discrimination is another man's marketing initiative, of course.
Much more rewarding for those of us looking at retirement on a non-public-sector package would be to have lots of lovely price discrimination against those receiving pensions from defined benefit, index linked pension schemes largely funded by the taxpayer.
It would match nicely the social discrimination (a.k.a. pensions apartheid) that will become even more evident in the next decade or two.
If i read this letter on a forum i'd just ignore it as trolling.
The point about concessions at point of sale is valid. OAPs are not necessarily saints in the sense of milking the but do you not allow any concessions for age whatever?
JH, as you may be aware, the MW pensions policy is to scrap all taxpayer-funded pensions (whether State Pension, SERPS, civil service, teachers' pensions, pensions credit, winter fuel, the lot total cost £100 billion) and tax-breaks for pension savings (total cost approx. £40 billion), and then decide 2 numbers:
1. What percent of GDP should go in pensions? Let's be generous and say 6% = £84 billion p.a. (about three-fifths of the sum total of everything that will be scrapped).
2. Decide what a 'fair' retirement age is, let's say 65 for men and women, but increasing by one month each year to adjust for rising life expectancies. That gives us about 10 million claimants for the foreseeable future.
Finally, we divide 1. by 2. and dish it out as a handsome Citizen's Pension of £161 per week per person, flat-rate, non-means tested, non-taxable, end of discussion.
I'd be very happy to surrender all my over-60 privileges (including the pension) if Mr Pateman could ensure that I receive a lump sum equivalent to the NI contributions (plus interest forgone) I (and, in respect of my employment, my employers) have coughed up over the last 40+ years. Since I'm one of the lucky ones and, apart from a very few visits to my doctor's surgery, have cost the NHS precisely nothing, my NI "pot" must be into 7 figures. I look forward to the cheque (not, I hope, drawn on Ponzi's Bank which is the usual vehicle for social security etc payments).
U, I'm afraid to tell you that "your NI" has been spent on the previous generation of pensioners.
"The secret is, there ain't no fund"
MW
Thanks - I knew that already - I was just pointing up (rather badly obviously) the paucity and spite of Mr P's arguments. I was particularly struck/appalled by his description as scroungers of those over-60s (most of whom have coughed up a fortune over the years) who are rewarded with such meagre benefits.
BTW a bit of googling has established that our Mr Pateman is apparently that glory of the 21st century - a Reader in Education at the University of Sussex. Such parasites have no business castigating those on whom they prey and on whose taxed labours they depend for their ill-earned bread.
Just for the record: I am 62 and run a VAT registered business. I intend to continue for as long as I can. I took early retirement from the University of Sussex in 1997 and much prefer working for my living. That screws two of your correspondents.
The concessions which kick in at 60(free bus passes and all the rest) help disguise the fact that the basic state pension, on which those in full retirement must rely, is inadequate and low in comparison to the norm in other European countries. I am much in favour of a higher retirement pension, which leaves people free to spend it as they see fit. Maybe they won't spend it on bus rides. I am also in favour of better provision for the elderly frail, but they don't vote and so are unlikely to get it. I am opposed to universal freebies at 60, sweets handed out by politicians in the hope that you will doff your cap to them at the next election. Some of your correspondents clearly will
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