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Partially posted elsewhere but I think it probably deserves its own thread:

MPs launch major inquiry into 'intergenerational unfairness' - The Telegraph

Are the baby boomers' generous pensions and benefits being maintained at the expense of young workers' future security?

MPs have launched a major inquiry into “inter-generational fairness” over fears that the British state pension and welfare system is unfairly favouring pensioners at the expense of younger workers.

In what it describes as its biggest inquiry of the year, the Commons Work and Pensions Committee will investigate whether Government policies such as the “triple lock”, which protects pensioners’ incomes against inflation, are contributing towards the growing disparity in wealth between the generations.

If it finds the generous benefits received by today's pensioners are threatening the future security of future generations it could urge the Government to make drastic cuts.

The report was in part prompted by the recent revelation that average incomes of pensioner households have for the first time surpassed those of working households.

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It also comes amid concerns that current spending on welfare and state pensions is unsustainable and will have to be scaled back for future generations. The pot of money the Government uses to fund state pensions is on track to run out 20 years earlier than expected, the Centre for Policy Studies warned last year...

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Also covered in The Guardian:

The data will fuel concern that millions of younger people are suffering from the effects of what has been dubbed “intergenerational unfairness”, partly caused by the government targeting money and resources at the older generation.

The Department for Work and Pensions (DWP) issued the data to back up its assertion that the introduction of the new flat-rate state pension in April “will make millions of people better off” – but the figures also provide stark confirmation that younger people will be losers from the changes...

...Chris Noon, a partner at pensions consultancy Hymans Robertson, said 75% of those reaching state pension age in the next 15 years would apparently be better off, which amounted to about 20% of the entire workforce. He added: “What about the other 80% who will generally be significantly worse off?”

Noon said ministers were continuing to focus on the relatively small numbers of winners. “Far greater numbers across the whole workforce stand to lose out ... Surely it’s more important to tell those who are set to lose out that they will, so that they can make up the shortfall – and have time to do so.”

The DWP paper emerged a day after MPs on the Commons work and pensions committee launched a majoy inquiry into intergenerational fairness – the question of whether the current generation of people in or approaching retirement will, over the course of their lifetimes, have enjoyed and accumulated much more housing and financial wealth, public service usage and welfare and pension entitlements than younger people can hope to receive.

FT Adviser:

MPs question fairness of state pension to young

MPs are to look into whether today’s retirement generation have accumulated more wealth and public benefits that younger generations will ever do...

And Moneywise:

Have baby-boomers had it too good, for too long?

An inquiry into ‘intergenerational fairness’ has been launched by the Work and Pensions Committee to establish whether the generation of people in or approaching retirement is getting a better deal than younger generations.

The committee wants to find out whether older people have, over their lifetimes, built up more wealth, enjoyed better welfare and pension benefits and had greater public service usage than younger generations can ever hope to expect.

According to the cross-party group of MPs, people born between 1951 and 1961 – the middle of the so-called baby-boomer generation – are expected to receive 118% of what they have contributed to the welfare state. However, younger generations are anticipated to have less wealth at each stage in their lives than the generations that came before them.

Furthermore, ONS data shows that since the financial crisis in 2008, the average retired household income has increased by £1,800 a year while working households have seen their incomes fall by £800.

The inquiry will investigate whether disparities in intergenerational wealth are the result of government policy – for example the triple lock, which safeguards pensioner incomes, or the result of broader economic and demographic trends. It will also assess whether action can be taken to tackle any unfairness...

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The Work and Pensions Committee will be taking written submissions on intergenerational fairness until Friday 19 February 2016, for anyone who would like to contribute:

"Intergenerational fairness" inquiry launched by Commitee

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13 January 2016

The Work and Pensions Committee launches a major new inquiry on "intergenerational fairness" – the question of whether the current generation of people in or approaching retirement will over the course of their lifetimes have enjoyed and accumulated much more housing and financial wealth, public service usage, and welfare and pension entitlements than more recent generations can hope to receive.

Baby boomers and younger generations

The group born in the middle of the baby boom (between 1956 and 1961) have been forecast to receive from the welfare state 118 per cent of what they contribute; while recent research shows that younger people are on course to have less wealth at each point in their lives than earlier generations had acquired by the same age.

The Committee’s inquiry will investigate the extent to which this disparity is a consequence of government policies, such as the "triple lock" which protects pensioners' incomes, and/or broader economic and demographic trends. It will consider steps which could be taken to address any intergenerational unfairness.

Aim of the inquiry

The Committee intends to:

  • Assess trends in, and the sustainability of, the intergenerational distribution of income, wealth and public expenditure
  • Assess the impact of recent developments in welfare policy on intergenerational fairness and the interaction of pensions and welfare with other policy areas
  • Produce a cross-party assessment of the sustainability of the existing welfare system, in its wider context
  • Take a view on the long-term viability of policy measures such as the triple lock in the context of financial pressures on younger groups

Committee's call for written evidence

The Committee invites written submissions addressing the following points:

  • What has been the collective impact on different generations of policies in recent years, including welfare reform and deficit reduction with areas of protected spending?
  • To what extent is intergenerational fairness a welfare issue?
  • What effects are these changes projected to have over time? Are they sustainable? What have the long-term trends been?
  • How does the welfare system interact with other areas of public expenditure and income and wealth in the wider economy, including issues of health, education and housing
  • Is the triple-lock necessary to prevent future increases in pensioner poverty?
  • What would be the effects of reforming the triple lock and how might the worst of these be mitigated?
  • How might other benefits such as Winter Fuel Payments be reformed?
  • To what extent will existing policies encouraging work and savings ensure a more sustainable system?
  • What are the options for reform?

Send a written submission through the Intergenerational fairness inquiry page.

The deadline for written submissions is Friday 19 February 2016.

Committee comments

Rt Hon Frank Field MP, Chair of the Committee, said:

"Voters have two priorities for welfare reform: ‘is it fair’ and ‘is it affordable’. Politicians of successive governments have ducked both of these fundamental questions when it comes to the different levels of income afforded to those above and others below retirement age. Is it fair and affordable to divert a large and growing sum of public expenditure toward pensioners – regardless of their circumstances – while mainly poor families with children face year-on-year restrictions on their income? Can the “triple lock” pension increase pledge be sustainable? Or are these policies necessary to guard against pensioner poverty? The Select Committee hopes to learn from voters of all ages what they believe to be both fair and affordable, so we can propose ways of restoring confidence across all generations in the welfare state."

Richard Graham MP, Committee Member and Chair of the APPG on Pensions, said:

"At a time when there is significant pressure on public spending, people are living longer, pensions are starting later and care costs rising there will also always be issues about relative fairness between generations.

How has public spending between generations altered over the years and what are the implications? The Committee will look at these issues."

Further information

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This also seems relevant (h/t northshore):

Office for National Statistics, Nowcasting household income in the UK: Financial year ending 2015

Figure 2 shows the growth of median household income for retired and non-retired households. For both groups of households, the provisional estimates for 2014/15 show the value of the median disposable income has increased since 2012/13, after taking account of inflation and changes in household composition over time. However, the pattern of change since the start of the economic downturn has been very different for retired and non-retired households. While incomes of non-retired households remain higher than retired households, since 2007/08, the median income for retired households has increased in most years, with the value rising to £21,100 in 2014/15, that is, £1,800 higher than in 2007/08. By contrast, the median income for non-retired households decreased, and was £2,300 lower in 2012/13 than in 2007/08. Since 2012/13, the value of the median for non-retired households has risen to £28,100, but is still around £800 below 2007/08 levels (£28,900).

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These same patterns for retired and non-retired households are also observed in the value of mean disposable income. The growth in the incomes of retired households since 2007/08 has been driven by a number of factors. One is a rise in both the amounts received and the number of households reporting receipts from private pensions or annuities. Another is an increase in average income from the state pension, due in part to the impact of the "triple lock"3.

The fall in average disposable income for non-retired households after the economic downturn reflected largely a fall in income from employment (including self-employment). Similarly, it is earnings growth at the household level, in part due to rising employment levels, which has been the main driver of the most recent increases in average income for non-retired households.

3. The triple lock is a government policy which guarantees to increase the basic state pension by the higher of CPI inflation, average earnings or a minimum of 2.5% every year.

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Another in a neverending articles that can be filed under 'Rolling back that useless one-eyed stnuc Vote-For-Me' schemes.

Pensioners who do not have a pension are given tax credits to top up there money.

If they've not finished of paying off that mortgage that they took out at 55 for 200K there's SMI , you know for a holiday, new car, and maybe a caravan.

Or you that free bus travels thats eating up all the council subsidy targted at local poor people trying to get to work.

Oh no, throw that under the bus - literally - so an OAP can park their moto-bility cat at the park+ride and have a free bus and parking into town.

And tax-credits - We all work for Gorddy now!

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Of course the solution won't be to re-distribute some of the wealth to younger people - it will be to tax the old people until they're as poor as the young people.

No, the solution is to stop taxing the working to pay for unfunded OAP perks.

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The Work and Pensions Committee will be taking written submissions on intergenerational fairness until Friday 19 February 2016, for anyone who would like to contribute:

Interesting reading. Was all set to post the link, but you got there before me, in a follow up post.

Personally don't hold out much hope the inquiry will lead to any real changes, but that the market will force a good few changes, including HPC.

This boomer story always knocks me out.

http://www.telegraph.co.uk/finance/personalfinance/special-reports/11524230/Tax-bombshell-for-66-year-old-about-to-retire-with-a-50000-a-year-pension.html

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Another in a neverending articles that can be filed under 'Rolling back that useless one-eyed stnuc Vote-For-Me' schemes.

Pensioners who do not have a pension are given tax credits to top up there money.

If they've not finished of paying off that mortgage that they took out at 55 for 200K there's SMI , you know for a holiday, new car, and maybe a caravan.

Or you that free bus travels thats eating up all the council subsidy targted at local poor people trying to get to work.

Oh no, throw that under the bus - literally - so an OAP can park their moto-bility cat at the park+ride and have a free bus and parking into town.

And tax-credits - We all work for Gorddy now!

That UTTER C T TOTALLY destroyed this poor nation ---- it took him just 13 years -- 10 as "Chancellor" and 3 as "PM" ------ and in that short time he UTTERLY, UTTERLY TORPEDOED this country.

LOATHESOME C T.

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Interesting reading. Was all set to post the link, but you got there before me, in a follow up post.

Personally don't hold out much hope the inquiry will lead to any real changes, but that the market will force a good few changes, including HPC.

This boomer story always knocks me out.

http://www.telegraph.co.uk/finance/personalfinance/special-reports/11524230/Tax-bombshell-for-66-year-old-about-to-retire-with-a-50000-a-year-pension.html

That boomer story is amazing. I've met a few boomers who got pension offers they couldn't refuse from public sector reorganisations in their 50s. Unbelievable costs to the taxpayer.

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It seems as if the British people are getting steadily poorer. The decline hasn't operated at the level of the individual, and doesn't necessarily show up in macroeconomic statistics, but each new generation of Britains is poorer than the last.

So there's your real economic growth.

The decline seems to affect people born after about 1979, but not before.

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State pension provision is certainly massively weighted towards the 'lucky generation' but that's a secondary issue for me. The real issue is that of the multiple ladders that have been drawn up at all stages of life. If only my generation (and the ones following) had had the same opportunities throughout our lives that our parents did!

That would have meant:

  • Free University for the brightest.
  • Secure jobs where wages kept pace with inflation.
  • Final salary pensions.
  • And decently sized houses in good locations available for 3 or 4 times single salary.

Almost every time I discuss property or education or pensions with an older person online I get told a fairy story about leaving school early and working hard and doing the right thing and it's only right that they have all the wealth now due to their life of toil.

No concept of how much harder they've made it for their children. Try leaving school at 16 and working for 30 years now - there's no way you'd be able to compete on wages without a degree. There's no way you'd live in anything but a rented house. There's no way you'd have a decent pension. There's just no way you'd end up back in your same comfortable position, at retirement.

Someone voted for these changes, and kept returning the same governments even as house prices went crazy and tuition fees arrived and council houses were sold off and pensions were raided and the banks were bailed out.

To resolve the 'intergenerational unfairness' I'd need my student loan back, in full, plus interest. I'd need house prices to be a third of what they are now. I'd need a decent return on my savings. I'd need my two measly private pension pots to magically become an employer's final salary scheme.

And finally, I'd need other people's children to stop receiving untaxed 'help' from their privileged, oblivious parents, who don't give two hoots about other people's children, as long as they can give their own children an unfair leg up.

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State pension provision is certainly massively weighted towards the 'lucky generation' but that's a secondary issue for me. The real issue is that of the multiple ladders that have been drawn up at all stages of life. If only my generation (and the ones following) had had the same opportunities throughout our lives that our parents did!

That would have meant:

  • Free University for the brightest.
  • Secure jobs where wages kept pace with inflation.
  • Final salary pensions.
  • And decently sized houses in good locations available for 3 or 4 times single salary.

Almost every time I discuss property or education or pensions with an older person online I get told a fairy story about leaving school early and working hard and doing the right thing and it's only right that they have all the wealth now due to their life of toil.

No concept of how much harder they've made it for their children. Try leaving school at 16 and working for 30 years now - there's no way you'd be able to compete on wages without a degree. There's no way you'd live in anything but a rented house. There's no way you'd have a decent pension. There's just no way you'd end up back in your same comfortable position, at retirement.

Someone voted for these changes, and kept returning the same governments even as house prices went crazy and tuition fees arrived and council houses were sold off and pensions were raided and the banks were bailed out.

To resolve the 'intergenerational unfairness' I'd need my student loan back, in full, plus interest. I'd need house prices to be a third of what they are now. I'd need a decent return on my savings. I'd need my two measly private pension pots to magically become an employer's final salary scheme.

And finally, I'd need other people's children to stop receiving untaxed 'help' from their privileged, oblivious parents, who don't give two hoots about other people's children, as long as they can give their own children an unfair leg up.

You missed a big one: young people are now competing for jobs with the entire world. Even local jobs.

This tends not to show up in statistics that measure the economy of the British Isles, but not the performance of British people.

Creating a job here doesn't particularly help someone born here, if that job will be filled by someone from elsewhere.

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Interesting reading. Was all set to post the link, but you got there before me, in a follow up post.

Personally don't hold out much hope the inquiry will lead to any real changes, but that the market will force a good few changes, including HPC.

This boomer story always knocks me out.

http://www.telegraph.co.uk/finance/personalfinance/special-reports/11524230/Tax-bombshell-for-66-year-old-about-to-retire-with-a-50000-a-year-pension.html

Tax bombshell for 66-year-old about to retire with a £50,000-a-year pension

John Byrne, 66, who is about to retire on a big pension, has discovered he needs to take imminent action to avoid paying a potentially huge tax bill. Our Pensions Doctor gives a diagnosis

At the end of this month, John Byrne, 66, will give up his £36,000-a-year job at Capita and fully retire. He already has £38,000 a year from a final salary National Grid pension he's been drawing since he was 50. He has an annuity worth £5,600 a year, paid by Canada Life, plus his basic state pension, giving him pension income of £52,000 a year on top of his salary.

As John hasn't needed to work for some years from a financial standpoint, he has been paying virtually his entire salary into his employer's money-purchase pension scheme, taking advantage of additional voluntary contributions as well as maximising the employer-matching contributions.

He has around £110,000 in his Capita pension...

His wife, Valerie, is named as the surviving spouse on his final-salary scheme, and she has a modest pension from her previous job at Santander.

The couple would like to go on long-haul trips to Australia and China. They own a home worth £650,000 and are mortgage-free. John wants to know what he should do with the £110,000 pension pot...

What the hell!!?

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Will this review be carried out by the same Boomer, troughing MPs that just awarded themselves a 10% pay rise and decided to keep their gold plated defined benefit pension scheme with minimal changes?

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And finally, I'd need other people's children to stop receiving untaxed 'help' from their privileged, oblivious parents, who don't give two hoots about other people's children, as long as they can give their own children an unfair leg up.

This is a very good point. Its a difficult situation but our 'society' is becoming more dog-eat-dog and yet its natural to want to helps ones own children. However the gulf between the have's and the have not's is getting so wide we risk a serious overreaction/revolution.

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Someone voted for these changes, and kept returning the same governments even as house prices went crazy and tuition fees arrived and council houses were sold off and pensions were raided and the banks were bailed out.

When you say "voted" for these changes you imply there was an alternative that people could have voted for but didn't. What was that alternative?

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When you say "voted" for these changes you imply there was an alternative that people could have voted for but didn't. What was that alternative?

What a cop out. 'There was no alternative'. Older people had a lot more alternatives than we do now.

Someone kept voting for Labour after tuition fees. Someone kept voting Tory after Right to Buy. I wasn't even old enough to vote.

A lot of people are still voting for the establishment. When have we ever had a government that wasn't red or blue? The vast majority of constituencies have more than two candidates.

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What a cop out. 'There was no alternative'. Older people had a lot more alternatives than we do now.

Someone kept voting for Labour after tuition fees. Someone kept voting Tory after Right to Buy. I wasn't even old enough to vote.

A lot of people are still voting for the establishment. When have we ever had a government that wasn't red or blue? The vast majority of constituencies have more than two candidates.

#VoteCorbyn

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What a cop out. 'There was no alternative'. Older people had a lot more alternatives than we do now.

Someone kept voting for Labour after tuition fees. Someone kept voting Tory after Right to Buy. I wasn't even old enough to vote.

A lot of people are still voting for the establishment. When have we ever had a government that wasn't red or blue? The vast majority of constituencies have more than two candidates.

Well, let me put it this way: which party would you have voted for since you were able to vote which would have given you at least some of what you wanted?

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have you all understood this point before you bash

the median income for retired households has increased in most years, with the value rising to £21,100 in 2014/15, that is, £1,800 higher than in 2007/08. By contrast, the median income for non-retired households decreased, and was £2,300 lower in 2012/13 than in 2007/08. Since 2012/13, the value of the median for non-retired households has risen to £28,100, but is still around £800 below 2007/08 levels (£28,900).

households = 2 people each with a state pension and personal allowance

lots of pensioners live alone and have far far less than that income

pensioners pay tax and council tax

the median for non-retired housholds is above that for retired housholds

families get topped up with tax credits - remember those and the amounts they bring in

pensioners only get tax credits IF they qualify under the means testing - approximately 1 in 10 I think

I note your wish list

  • Free University for the brightest.
  • Secure jobs where wages kept pace with inflation.
  • Final salary pensions.
  • And decently sized houses in good locations available for 3 or 4 times single salary.

you do realise that not every person iin a particular generation had the good fortune to have all these gifted to them

1 in 10 went to university

many did not have secure jobs with good wages (particularly women)

very few had final salary pensions

lots of them rented and had no access to mortgages and large houses

It never fails to surprise me that so many intelligent people have this blind spot about how things were in the 70s and 80s - some people were very lucky and were in the right job, the right place at the time and fortune smiled on them

if you want to blame someone blame nulabour and its 'open door', blame the policy to get 50% of young people to uni, blame 'globalisation' for the loss of manufacturing and skilled jobs

but you cannot really blame an entire generation for the mess we are in :o

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Olliegog. Boomer thread. Olliegog.

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No, the solution is to stop taxing the working to pay for unfunded OAP perks.

Yep, 100%

We actually need to be lowering income tax to get the economy on its feet. We should be cutting subsidies that allow OAPs to stay in large home the can't afford.

I'd be up for abolishing the state pension fir a 10% tax cut.

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