UK Granny Tax and Cutting a Shilling off the old age pension

beeftotheheels

CSO data released last month evidenced that the elderly were the least affected by the economic down turn. Public sector pensions have barely been touched, the State pension hasn't been touched (although I realise fuel allowance etc have).

The FT did a very interesting piece entitled "no country for young men" during the week on the fact that there has been a significant wealth shift from younger generations to older ones which we can all see.

An elderly couple with no mortgage and two pensions are likely to be much more comfortable than their children struggling under mortgages, childcare costs etc.

The imbalance is there, but as the British chancellor is finding out there is still a huge political cost associated with trying to cut a shilling off the old age pension.

Could it be done in Ireland? If the Government specifically linked the funds raised from cutting the pensions into working family tax credits? Take the money off the pensioners (who are economically under productive) and give it to their grand children, give it to taxpayers who will spend rather than save in the current environment. Could a link to children prevent the militancy we saw when they tried means testing medical cards or are we doomed to accept the situation that has arisen which means that today's pensioners are benefiting from today's workers at an unprecedented level, while tomorrow's pensioners who are today's workers won't have the same situation?

Geuze

State Pensions have not been cut, but PS pensions have had a (small) cut, known as the PRD.

But, yes, I agree with the overall theme of your post.

later12

That was a wonderful piece by the FT, I thought it was their most interesting economic commentary in a long time, and it was treated quite comprehensively. Professor John Hills's contribution was striking:

The thing to focus on isn't so much the generational conflict itself, because a lot of the wealth of the previous generation will be passed down, or is being passed down... it's the people who are locked out of that in both generations. It's clearly harder as a young person if you don't have that kind of family support.

I heard Moore McDowell speaking on this subject too quite recently, when he pointed out the absurdity of being in his position, with a comfortable pension, entitled to benefits like free public transport (just 2% of which goes to rural users, by the way).

As for Ireland, we really know very little about the distribution of wealth amongst the elderly, which is thought to be significantly overstated by the use of averages and aggregate figures. We do know that in the USA, for example, inequality between the elderly themselves is greater than amongst any other demographic. I would imagine the situation is similar in Ireland.

So what we are really talking about here is allocating greater resources to the less well off, particularly those who are starting off in life. It all makes sound economic sense, but Beeftotheheels question is also political: can it be done?

I don't think so. We have seen the grey fury in the face of the means test. It is a brave and a principled government who would dare to cut 'the pensioner's shilling', a fate so ghastly that the name Ernest Blythe is still a synonym for sadism in some Irish households.

That said, the voter is no longer the only fiscal influence overseeing the work of Government, and the Government does have a massive majority. There is no credible opposition nor alternative coalition party in Dail Eireann. So if it were to be done, it should be done quickly.

But unfortunately I think it is hugely unlikely that the elderly will notice any notable deterioration in their entitlements over the course of the Irish programme. And after that, it will be completely out of the question, I would have thought.

beeftotheheels

later12 wrote: »

but Beeftotheheels question is also political: can it be done?

I don't think so. We have seen the grey fury in the face of the means test. It is a brave and a principled government who would dare to cut 'the pensioner's shilling', a fate so ghastly that the name Ernest Blythe is still a synonym for sadism in some Irish households.

That said, the voter is no longer the only fiscal influence overseeing the work of Government, and the Government does have a massive majority. There is no credible opposition nor alternative coalition party in Dail Eireann. So if it were to be done, it should be done quickly.

But unfortunately I think it is hugely unlikely that the elderly will notice any notable deterioration in their entitlements over the course of the Irish programme. And after that, it will be completely out of the question, I would have thought.

So you think no? No hope, wait until they pop their clogs and inherit?

Maybe inheritance tax is the way to go, increase CAT up to income tax levels, reduce any exemptions other than for lifetime transfers to children in negative equity? You're then incentivizing them to transfer wealth to their own children rather than to the State and back to other people's children.

Doesn't help young families without elderly relatives but it would help some.

Actually the reason I asked the question was because years ago I remember the parents of a girl I was in school with winning some money at Bingo and buying a "new" (Japanese import this being the eighties) car. The kids were so excited about it, they didn't have a car previously, father was a small farmer.

Now that those kids have grown up and the parents are pensioners they're driving a brand new 2012 car which struck me as odd. Not that they didn't work and scrimp and save (and produce more than enough workers to pay for their retirement, think there was 7 kids in it), but just that they're so noticeably better off as pensioners than they were as young parents, and so noticeably better off as pensioners than many of their kids who are now young parents.

Geuze

My suggestions:

(1) Abolish the lower income taxes for over 65s, this means abolishing the Age tax credit and the 18k / 36k tax exemption.

So over 65s pay the same income tax as everybody else.

(2) Bigger cuts to existing PS pensions, and very large cuts to PS pensions over, say, 60k.

(3) Less totally free travel, i.e. maybe half-price tickets, etc. [Allowance somehow made for medical visits]

(4) Less generous Household Benefits package, i.e. not automatic for all over 70s.

(5) Medical care - this is something I wouldn't change. Older people value security and peace of mind, which the medical card gives them. So let them keep the card, but charge them more tax.

(6) Most SW payments, except the State Pensions, have been cut, twice. So cut the non-contributory SP, the reason being these people have not paid PRSI, or enough PRSI. Cut from 219 pw to maybe 210 pw.

(7) Leave the contributory SP alone at 230 pw.

beeftotheheels

Geuze wrote: »

My suggestions:

(1) Abolish the lower income taxes for over 65s, this means abolishing the Age tax credit and the 18k / 36k tax exemption.

So over 65s pay the same income tax as everybody else.

If we could do it I'd be completely in agreement, the tax exemptions makes no sense in the context of spending power of a pensioner couple vs a young family on that income.

Geuze wrote: »

(2) Bigger cuts to existing PS pensions, and very large cuts to PS pensions over, say, 60k.

They'll say it can't be done due to "legitimate expectations" so we'll need to follow Brian Lenihan's lead and do it through an additional tax. A public sector pensions surcharge of say 5% on pensions' which exceed a certain limit leading up to an 80% surcharge on pensions in excess of, say, 60K. The arguments around not having excessively high income taxes don't apply to pensioners because even if they emigrate we still get to tax their pensions as we pay them.

I'm not suggesting we try to impoverish the elderly, but I don't see that they should be left better off than younger people for no particular reason other than they are elderly.

Scofflaw

On that topic, it's interesting to see the effects of austerity on Ireland:. From a recent (March) paper by the EC:

Box 1: Income distribution effects of consolidation measures

The Social Situation Observatory's study,16 commissioned and financially supported by the Directorate General for Employment, Social Affairs and Equal Opportunities of the European Commission, compares the distributional impact of consolidation measures implemented over the period 2009-2011 in six European countries, namely Estonia, Ireland, Greece, Portugal, Spain and the United Kingdom.

The analysis captures only first-round effects on household income distribution of changes in direct personal taxes, cash benefits, and public sector pay. In other words, the impact of the consolidation measures on the structure of labour markets or on households' labour supply is not taken into consideration. Micro-simulations are based on the EU partial equilibrium model EUROMOD and the Irish national model SWITCH.

The results show that, as a result of the fiscal adjustment, the Irish households experienced in relative terms the largest reductions in income across the whole income distribution, reflecting the earlier start of consolidation in Ireland. The study also found that the distributional impact of Ireland's consolidation measures was among the most progressive in the sample, though with a hump-shaped profile (households in mid-to-low deciles of the income distribution—predominantly pensioners—experienced proportionally lower declines than households in the lowest and highest deciles). In terms of Ireland's individual consolidation measures, cuts in benefits have a larger effect on low-income households, while reductions in public sector wages and changes in income tax and social contributions are found to impact proportionately more on high-income households.

Based on the available evidence for the other European countries included in the study, the recent VAT increases in Ireland—which are not included in the model—are likely to reduce the overall progressivity of Ireland's consolidation efforts.

http://ec.europa.eu/economy_finance/publications/occasional_paper/2012/pdf/ocp93_en.pdf

[EDIT]Yes, sorry about the graph! The brown line apparently marked "E" is actually "IE" for Ireland.[/EDIT]

cordially,
Scofflaw

Hotblack Desiato

Good graph but the labelling is terrible. I thought the brown line was Spain!

jonsnow

George osbournes millionaires budget might have been right to bring in a granny tax but the optics were dreadful.Tax cuts for millionaires (like the 19 in cabinet) on the one hand and hitting middle-class pensioners(lower class and upperclass won,t be effected by the changes) on the other.They will suffer the grey whirlwind for this.

I was watching question time the other night in between primetime and vincent browne and I was amazed at how out of touch the tories were with the current mood in the UK.They have begun their fightback for the privileged after getting tired of pretending that they were outraged by bankers salaries etc claiming that wealth creators were being demonised, these people had vital skills,cutting taxes would bring in more taxes because wealthy people would suddenly stop trying to avoid tax overnight yaddayaddayadda.The audience were quite hostile to this line of thought.

This is the most personally privileged tory cabinet since macmillian and it shows.These guys are born to rule and cant understand why everyone doesn,t just fall into line

BrianD3

beeftotheheels wrote: »

Now that those kids have grown up and the parents are pensioners they're driving a brand new 2012 car which struck me as odd. Not that they didn't work and scrimp and save (and produce more than enough workers to pay for their retirement, think there was 7 kids in it), but just that they're so noticeably better off as pensioners than they were as young parents, and so noticeably better off as pensioners than many of their kids who are now young parents.

First of all, new cars are much more affordable now relative to average pay than they were 20, 30, 40 years ago. This applies to cars from Renault superminis to BMWs to Porsches. Used cars are also much more affordable.

And in any case, if these pensioners can afford a 2012 car, so what? There have been numerous posts in this forum commenting on people's cars and judging their means on it, this is quite immature in my view.

Are you intimately acquainted with these people's financial circumstances and what they spend their money on? Maybe they don't spend money on other things while maybe their children splurge on crap that you don't see.

Maybe they can afford a 2012 car in 2012 because they didn't buy a 1982 car in 1982, a 1992 car in 1992 etc.

Another spurious argument is that pensioners have their mortages paid off, are therefore comfortable and should experience cuts. Well if they have their mortgages paid off it's because they took out a mortgage that they could afford, paid what they owed over many years and were fortunate not to experience a property bubble. Again, so what?

They may well also have experienced very high income taxes, double digit inflation and interest rates, the marriage ban etc.

Also it's reasonable to assume that pensioners as a group have been hit far harder by the collapse in bank share prices than young families have. Life savings have been wiped out in some case but very little sympathy is shown.

later12

beeftotheheels wrote: »

So you think no? No hope, wait until they pop their clogs and inherit?

Or feed them deep fried mars bars and speed up the process perhaps.

No, I'm very much in favour of strategies that seek to improve the social conditions of the young workforce.

I think that from an objective, economic point of view there is a lot to be said for it. If we look around the EU, the alternative sort of deterioration in the conditions of the youth relative to their forbears is well known in France where this 'transmission rupture' has been apparent, and worsening, for over thirty years. It is known there as 'la fracture générationnelle'.

In other jurisdictions, we have seen that increased assistance for the elderly is often negatively correlated with education expenditure for the youth. This should serve as a possible warning to Irish economic policymakers. Unfortunately, Irish economic policymakers are particularly dependent on the grey vote.

And that is the problem. As real as the challenge is and as serious its repercussions and as strong the argument is, reform is up against an electoral brick wall.

I don't so much blame the elderly for trying to maintain their privileges as the youth for failing to make adequate demands for progress.

Sleepy

A large part of the problem is that the "youth" in this case aren't so young, they're in their mid twenties to early 40's and too busy in work / looking for work to hold the same demonstrations the pensioners have whenever they've been worried about having their privileges revoked.

"Youth-friendly" election dates would help reduce the demographic distortion of voters as well: holding General Elections on Saturdays when the majority of the work-force and students would be free to vote at their convenience. I've personally missed votes due to international travel for work and could hardly be alone in this. I'm sure it's a minor factor though: sheer apathy amongst the younger generations is possibly more of a cause. It doesn't help when you see how the likes of Stephen Donnelly fare when elected either mind...

Icepick

And generally speaking the older generations are responsible for this mess in the first place.

Hotblack Desiato

Good letter in Wednesday's Irish Times on exactly that theme...

http://www.irishtimes.com/newspaper/letters/2012/0328/1224314007968.html

Sir, – Derek Mac Hugh, (March 27th) considers our senior citizens to be this country’s bedrock, who have “watched in silence as their legacy is ripped asunder”.

May I suggest that he review the age profile of most actors in the Mahon tribunal. He should then look at the age profile of Fianna Fáil’s voters in 1997, 2002, and 2007. No demographic was so shamelessly courted by Fianna Fáil and feared by all parties. It was the same senior citizens who brazenly resisted means-testing of medical cards as special needs teachers were being cut. It was this generation who turned a blind eye to Haughey’s lifestyle as he destroyed standards in public life in this country, paving the way for Flynn, Ahern et al.

It is the much younger generation which is paying the price for the older generation’s morals and ethics. Ireland’s youth have never benefited from the wisdom of our elders. The Irish sow has always seen fit to consume its farrow.

I would suggest that the senior citizens reflect on their voting record and accept that they are every bit as culpable as the patriots they elected. – Yours, etc,

cast_iron

ninja900 wrote: »

Good letter in Wednesday's Irish Times on exactly that theme...

The argument form that letter appears to suggest that no one under 40 voted in FF in the 2007 election.
While the writer may have a point about the older people's mistakes, they didn't get caught up in the property bubble and make the crisis of today.

Hence, I would strongly disagree with:
It is the much younger generation which is paying the price for the older generation’s morals and ethics.
I would imagine most elderly were aghast at their kids buying ridiculously expensive houses and putting cars on 35 year mortgages. They are not responsible for that, nor did they engage in it in their day.
To claim "their ethics back in the day" caused the current mess we are in is a bit too much of a stretch for my money.

beeftotheheels

later12 wrote: »

Or feed them deep fried mars bars and speed up the process perhaps.

No, I'm very much in favour of strategies that seek to improve the social conditions of the young workforce.

I think that from an objective, economic point of view there is a lot to be said for it. If we look around the EU, the alternative sort of deterioration in the conditions of the youth relative to their forbears is well known in France where this 'transmission rupture' has been apparent, and worsening, for over thirty years. It is known there as 'la fracture générationnelle'.

In other jurisdictions, we have seen that increased assistance for the elderly is often negatively correlated with education expenditure for the youth. This should serve as a possible warning to Irish economic policymakers. Unfortunately, Irish economic policymakers are particularly dependent on the grey vote.

And that is the problem. As real as the challenge is and as serious its repercussions and as strong the argument is, reform is up against an electoral brick wall.

I don't so much blame the elderly for trying to maintain their privileges as the youth for failing to make adequate demands for progress.

Banning Lipitor etc might also help while improving the HSE expenditure in the short term!

I guess the issue for the "youth" is the fact that they'll be perceived as "selfish" by raising the issue, whereas somehow the grey vote have a pass on any such selfishness arguments, regardless of the fact that the data stacks up entirely against them.

Hence my original suggestion of directly linking any cuts with expenditure on grandchildren, the one bunch of people whose needs pensioners are incredibly sensitive to. The same should play for education spending, which in theory should be a sore point with a group who in many cases had no educational opportunities, and sought those opportunities for their children and expect those opportunities for their grand children.

But this is a political hot potato. Perhaps the fact that our current Minister for Finance is old enough to be entitled to a bus pass might give him greater lee-way than his predecessors. He can talk to the grey vote as one of their own, albeit one with a well paid job and a very nice pension waiting in the wings.

Manach

Perhaps the issue is the amount of economic spending to economic output in the UK. Under the previous government it grew to 51%. The State is now the largest driver of economic activity - so any type of policies should be directed at shrinking the State's roll which gathers the productive capital and "invests" too much of it in non-wealth producing means so driving down living standards for young and old.

Hotblack Desiato

cast_iron wrote: »

The argument form that letter appears to suggest that no one under 40 voted in FF in the 2007 election.

That wasn't the case, but may well have been for the 2011 election, what's hard to figure out isn't that their seats went down so much in 2011, it's that they were left with any at all.

While the writer may have a point about the older people's mistakes, they didn't get caught up in the property bubble and make the crisis of today.

Not for their principal private resiidence, but the born-in-the-1940s generation were riding the investment property bubble for all they were worth.

Hence, I would strongly disagree with:
It is the much younger generation which is paying the price for the older generation’s morals and ethics.

It very much is. Pensioners have actually experienced an increase in their standard of living since the crash, pretty much everyone else has had a substantial decrease.

I would imagine most elderly were aghast at their kids buying ridiculously expensive houses and putting cars on 35 year mortgages. They are not responsible for that, nor did they engage in it in their day.
To claim "their ethics back in the day" caused the current mess we are in is a bit too much of a stretch for my money.

They, over decades, abetted the culture of voting for cute hoors for short-term local interests, rather than honest politicians who might put the long-term national interest first.
They are wealthier than any generation of pensioners before them, and will probably be wealthier than any generation of pensioners after them, too (due to a combination of demographics and politics.)
They have lots of time on their hands and free travel passes to hit Leinster House in force any time they wish.
Fear them!!!

cast_iron

ninja900 wrote: »

They, over decades, abetted the culture of voting for cute hoors for short-term local interests, rather than honest politicians who might put the long-term national interest first.

Suppose this is correct.
The fact that they did this for decades, but never bankrupt the country, should make it plain enough that the "cute-hoorism" you describe was not the root of the problem. If it was, the country would have had the IMF in all those decades ago. I'm going by your logic here.

Sleepy

It never bankrupted the country because we were able to devalue the punt when they messed things up badly enough in previous decades. Without that mechanism, the cute hoorism has been brought home to roost this time.

I'd also question the assertion that the older generation were "aghast" at the property spending: just look around, how many of the people now struggling with such mortgages were encouraged to buy their homes by their parents, even to the point where many were gifted their deposits by those parents...

Dai John

I am recently retired and feel very well off now I have the pension, but as I have worked since and before I left school I feel an entitlement. We were brought up to save and live frugally compared to many today, if we could not afford it we did without. We paid 12.5% interest on the mortgage back in the 70's and were glad to as we could not get one in the 60's. We had to do a lot of manual work (kept us fit) the wealthy in recent times (besides the bankers and politicians) were the dossers and single mothers. But they need the money as they would die of malnutrition without the fast food outlets. We are well off as we learned to live on little and cannot lose the habit.We moved many times to follow work, remember that dirty word. Stop moaning get off your arse and get a job, even if you have to emigrate (we need you to send the money home for the pension). There were 8 kids in my father's family, 7 emigrated and sent money home, the youngsters now have to be given money to emigrate and a lot alienate the Aussies by turning up on a Monday drunk. If there is such a lack of work here how are there still so many East Europeans.? Stop moaning ,start working, I have a pension that needs to be paid.

Sleepy

Nice troll...

If it ain't a troll, it's a good indication of where the sense of entitlement that many of the celtic cubs have came from tbh.

Dai John

Troll ? 50 years plus of work and contributions should be an example to the cubs, that is what "entitlement" is in my book. I see whole families living off the state producing offspring that will never make a contribution either,between them, politicians,legal beagles and the bankers all I see is a country full of parasites, my generation carried them all. The older I get the more right wing I am, perhaps Adolf had some good ideas afterall.

beeftotheheels

Dai John wrote: »

Troll ? 50 years plus of work and contributions should be an example to the cubs, that is what "entitlement" is in my book. I see whole families living off the state producing offspring that will never make a contribution either,between them, politicians,legal beagles and the bankers all I see is a country full of parasites, my generation carried them all. The older I get the more right wing I am, perhaps Adolf had some good ideas afterall.

But the issue is that the actual contributions made by most people retiring will not have been sufficient to pay for their retirement.

If we go back 30 years the life expectancy was less than 70 for a man, today it is closer to 80. That's ten additional years of drawing down a pension which couldn't have been factored into account at the time that the contributions were made.

If we go back to 2000 the non contributory pension was practically half what it is now. It doubled in the good times but now cannot be trimmed back in the bad.

So over your working life you would have been expected to live ten years less than we now expect, and to draw a pension which is a fraction of what you will actually draw. All of which gets paid for through the taxes on the younger generations, who based on CSO data, are financially struggling already in a way that pensioners aren't.

If we look at the CSO data and who, as an age bracket, is suffering the least and could afford to take additional austerity, that's the pensioners. Who's suffering the most, and most in need of relief? The young working family.

Now this isn't an argument against additional taxes on higher earners but there aren't really all that many of them whilst there are an awful lot of pensioners who could afford to help out. But won't. And every Government is terrified of trying to ask them to. Because they think they're "entitled" based on the insufficient contributions they made over their working lives.

The numbers don't add up. The politics adds up. Just its bad politics, and bad economics.

Markcheese

cast_iron wrote: »

ninja900 wrote: »

They, over decades, abetted the culture of voting for cute hoors for short-term local interests, rather than honest politicians who might put the long-term national interest first.

Suppose this is correct.
The fact that they did this for decades, but never bankrupt the country, should make it plain enough that the "cute-hoorism" you describe was not the root of the problem. If it was, the country would have had the IMF in all those decades ago. I'm going by your logic here.

OK, just throwing this in to the mix we were bust in the 30s 40s and 50s had a bit of a boom in the late 60s and 70s were bust in 80s and early 90s boom late 90s and 10s now we're bust again.... So bust seems to be our default state ..... The people who drove our state into the ground (this time) are just about retiring now or retired....even without the bust we were heading for a pensions time bomb.... Now to expect pensions and benefits to be maintained at artificially high levels by the small number of working young is a bit unrealistic.... And soon it'll come crashing down.....

wolfeye

Remember we will all be old some day.
None of us are getting any younger and it would nice to look foward to a decent pension in the future.

Dai John

You both make valid points, and I agree the pension is good, but like I said I feel I worked long and hard enough and certainly do not expect to see 80. Are you saying you should work a willing horse to death, as it is the only one that knows how to work.I suggest you target single mothers ,T.D.'s, legal beagles,bankers, travellers etc. if you want to make savings. I earned my retirement. No doubt you are able to point to all the statistics in an effort to justify your point. The one they are so concerned about is the birthrate, it has to increase to support the old, but what is the point on increasing the numbers if they are only parasites? The groups with the highest birthrate are the most useless in society. Perhaps there should be an intelligence test before people are allowed to procreate.I would be interested in knowing your age, and do you expect the likes of me to work until I drop so you can enjoy your soft life ?My pension would not buy the printer ink for a TD.

RichardAnd

Dai John wrote: »

You both make valid points, and I agree the pension is good, but like I said I feel I worked long and hard enough and certainly do not expect to see 80. Are you saying you should work a willing horse to death, as it is the only one that knows how to work.I suggest you target single mothers ,T.D.'s, legal beagles,bankers, travellers etc. if you want to make savings. I earned my retirement. No doubt you are able to point to all the statistics in an effort to justify your point. The one they are so concerned about is the birthrate, it has to increase to support the old, but what is the point on increasing the numbers if they are only parasites? The groups with the highest birthrate are the most useless in society. Perhaps there should be an intelligence test before people are allowed to procreate.I would be interested in knowing your age, and do you expect the likes of me to work until I drop so you can enjoy your soft life ?My pension would not buy the printer ink for a TD.

I assume that by the bolded statement, you believe that such a test would actually be an accurate measure of intelligence (and extremely difficult thing to do) and also, that you would pass it?

Sleepy

Do you mind me asking what age you retired at Dai John?

As pretty much the typical tax-payer in this country (early thirties male earning a little over average industrial wage in the private sector, fortunate enough not to have been suckered into buying Celtic tiger property, stupid enough to have some personal debt acquired during that time, unable to afford health insurance or a pension), I don't expect to get to retire.

The age at which my generation will be let retire is going up almost as fast as the tax burdens placed upon us to fund the unable to find work, too lazy to be bothered finding work and the bloated public sector which seems incapable of delivering services commensurate with their funding level.

Then again, as David McWilliams pointed out in his "The Generation Game", most of my generation won't need pensions: at around the point we might expect to retire, our parents will be dying and leaving much of the vast wealth transfer that occurred between our generations during the Celtic Tiger to us in their wills.

Dai John

The attack on the "wealthy old age", could the attackers be trolls trying to divert attention from the real problems like corruption . Drastic action is called for to cure the current problems, but leadership should come from the top by example. If the Seanad was closed and the number of TD's halved it would be a start. It would be easier to scrutinise their expenses. They are grossly overpaid compared to other countries and the dangerous part is they think they are worth it. All we lack to be a banana republic is the weather and death squad. I live near a small town and new houses were given to a number of parasites, where is the incentive to work and save ? I assume this is repeated throughout the country on a similar ratio, what does that cost ? I am 66 and own my own house but it did not come easy. 33 years ago my mortgage was 12.5%, to give an idea of what that cost I paid 1,000 a year for 15 years to find that only !,000 had come off the original £7,500 loan, and you think we had it cheap and easy. Time for me to quit , do not want to raise the blood pressure and shorten my life expectancy and lose out on my pension. Look elsewhere to make the required savings, retirement is something most of us aspire to.

Sleepy

You miss the point entirely. No one is singling out pensioners, merely pointing out that they too must share the pain of this recession.

Our incomes fall *way* short of our current outgoings therefore we must close the gap between the two.

1. Our welfare system is a disincentive to work and costs a fortune => we need to reduce unemployment assistance or look at a sliding scale where the longer you're on it, the less you get.

2. Our tax net excluded too many citizens who should have been contributing to the state => we have reduced tax bands, introduced the social charge and introduced property-based taxes.

3. Our public sector is bloated and over-paid => we have the Croke Park agreement to seek efficiencies without wide scale disruption and a pension levy was introduced. (Personally I'd go a lot further by merging many institutions such as the local authorities etc. using compulsory redundancies and pay-adjustments where necessary - available both ways, allowing better performing staff to leave the union scales and be paid on their worth rather than their length of service or the relative strength of their union and slashing the pay (or sacking) of under performing workers).

4. Our pensioners receive benefits exceeding their contributions to those pensions, will be receiving them for longer than foreseen at the time their contributions started and, given our demographics, this situation will only get worse. => we must reduce the benefits they receive from the state (I'd personally prioritise their medical cards over the pension rates but then again, I'd give everyone in the state the medical card if we could manage to run an affordable health system).

Yes, our politicians are over-paid, our electorate is over-represented and we have an underclass of work-shy parasites who seem capable of little more than producing unwanted offspring and law-breaking. Unfortunately, even if we *could* solve all of those things at the wave of a magic wand, we'd still have a huge deficit in our accounts. There's no magic bullet for this, regardless of what fantasists in Sinn Fein or the ULA would have you believe, we're *ALL* going to have to deal with austerity for the next decade or so. Currently, the pensioners are about the only group who have been excluded from any of the pain (possibly due to the average age of our politicians(?) and almost certainly due to our politicians fear of them as a voting bloc).

Dai John

Just an afterthought, why look to retirement age and not the age people start to work.My father left school at 14 and became a well educated man. I see them staying at school now until they are 18 and their level of education is poor. The "Gap year" was only a political trick to keep the number of unemployed down. Youthreach is abused, they give them a good breakfast and a number of traveller girls I spoke to admitted they lied about their age, they were 14 and made out they were 16 so got paid for going to school. My kids could read by the time they went to school ( they went at 3 and a half as we lived in Wales at the time and that was the norm). We call them kids but they are grown-up physically at 14 and a lot are frustrated at being kept in school causing disruption. If they are not suitable for further education get them out working and lengthen their working life that way, because believe me when you get to 65 you have had enough.

Sleepy

The problem with that theory is that a 14 year old isn't educated enough to find work in a developed country in today's globalised economy. Our cost-of-living is simply too high for us to be able to compete in low skilled manufacturing and our construction industry will never again require the same number of labour gangs as it did during the Celtic Tiger.

We will only be able to create jobs in high value areas. With those, we'll admittedly get some spin off low skilled work in retail or the provision of services to the high value workers but not near enough to allow for a significant number of early school leavers on top of the many poorly skilled people we currently have on the dole queues tbh.

Dai John

There are jobs for the low skilled and always will be. Highly educated East Europeans are proving this in my town . We have teenagers who cannot read or write after 10 years of school so why keep them there causing disruption and hindering those kids who want to be educated ? Tradesmen will tell you that they learned more on the job than in the classroom. You must have a good cross section of workers to maintain a society and we all have different skills to offer. Now get out there and start work earlier to keep me in a manner to which I am now accustomed too, and this will save you having to work until you are 70.

Sleepy

I'm in work thanks, just very quiet today as we're an exporting firm and most of our clients have today off as a bank holiday...

There will always be some jobs for the low skilled: we will always need some level of cleaners, bin men, shop assistants, politicians etc. We cannot, however, depend on being able to provide a large amount of employment in this area as a high-cost, first world, small island nation with an open economy on the periphery of Europe. We need the vast majority of our workforce to be educated and pulling their weight. Introducing the concept of apprenticeships for some professions or roles previously thought of as requiring a third level qualification may be a runner but I'd worry you'd leave people in the position where they end up highly skilled in one small area and unable to find work when/if demand for that skill dries up (akin to most of our tradesmen at the moment).