Philip Inman’s article (Baby boomers, pay your dues, 14 February) ignores some important facts. First, the baby boomer generation inherited one of the highest levels of public debt in British history: 240% of GDP, following the war. They got that down to under 32% by the 1990s. The fact that they paid higher taxes than today during most of their working lives probably had something to do with it, as well as economic growth and the full-employment policy of successive governments before 1979.
On pensions he uses some unwarrantedly extreme language. He makes misleading statements like “monster payouts from guaranteed final salary pension schemes”, “the cost is unaffordable”, “people who have taken – and will continue to take – far more out of the system than they put in” as if they are unassailable facts. (Hasn’t Inman heard of compound interest?)
In fact a dispassionate consideration of the available evidence shows that a defined benefit pension scheme – that is run on an ongoing basis and invests long term in a growing economy, and with proper allowance for longevity – can provide good pensions sustainably. For example, the actuarial firm First Actuarial has shown that if pension schemes are valued on this basis then most of them will be in surplus, instead of the deficits that the blinkered short-termist perspective used by many accountants leads to.
Comparisons with the pensions being offered to today’s workers are indeed truly appalling, but this tells us more about how poor those pensions will be. There is going to be a serious social problem of pensioner poverty a few years down the line unless there is a rethink.
Emeritus professor of economics, University of Warwick
Phillip Inman’s grasp on postwar social history is clearly in need of attention. I am fed up to the back teeth of the whining and whingeing of thirtysomethings about us baby boomers, and how we are living in luxury like Marie Antoinette while others starve around us.
Facts, Mr Inman:
1: We were born into rationed Britain, which makes today’s austerity look like a walk in the park.
2: We didn’t get ferried to school, or anywhere, as there were few cars.
3: Central heating? Hot water? Holidays? Come off it.
4: At primary school there were 45-plus in our class, three to a desk. Many kids had no shoes or warm clothes. Many more had nits and fleas, and were prone to diseases now long forgotten.
5: The houses we now dare occupy while we count our hoards were bought fair and square. It was Mrs Thatcher who single-handedly caused today’s crazy house prices by giving council tenants the right to buy, thus reducing the available stock to rent
6: Yes, some of us (but by no means all) are on final salary pensions. Did we beg or steal to get them? No, that was how it was, and we paid tax on the money we earned, and again are taxed on the pension. So why should we pay a third time before it is taxed again as inheritance tax?
7: Successive governments try to buy our votes by giving us freebies and index-linked pensions because we vote. None of this was as a result of our demands.
So stop being so envious, get your fellow whingers out to vote, and you too may get some sweeteners.
There is much merit in Phillip Inman’s article, but he missed a golden opportunity to extend his argument by talking about the iniquity of the upper earnings limit on national insurance.
As a pensioner with a small private fixed pension and a reduced state pension due to part-time work when I made no NI contributions, I certainly don’t come into the category of someone whose pension “is higher than that of a working-age person”. Nonetheless I agree that the non-payment of NI by pensioners, who may well have large demands on the NHS, should end. And the UEL on NI should be raised, if not abolished.
I’m fed up with this baby boomer bashing. I’m genuinely upset about the poorer prospects of younger generations compared to mine, but I’m not going to be the fall guy for it. This baby boomer has paid her dues. Trade union dues. A strong trade union movement, which millions of my fellow baby boomers joined, supported and worked in all our professional lives, defended with some success our pay, conditions and pension schemes. I’d advise younger people, if they haven’t already, to start doing the same.
The national exposure given to the report of the Resolution Foundation on rising pensioners’ income suggests a further assault is planned on workers’ earned rights. The real scandal in 21st-century Britain is low pay and erosions of the salary package enjoyed by 1945-90 employees. Typical of baby boomers’ experience has been Maxwell’s raid on the Mirror Group’s pension fund, the ongoing BHS saga and the dilemma faced by British Steel employees in waiving pension entitlements to secure a working future for their communities.
Inman forgets that public sector employees were repeatedly told in pay negotiations that they were paid less because of their retirement package. Now, having been underpaid throughout their working lives, they are supposed to sacrifice their pension entitlement.
The idea that I and millions like me “have taken … far more out of the system than they put in” is risible. As Monday’s report (Pensioners now better off than workers, 13 February) makes clear, one reason for pensioner income growth is the number taking their pensions and still working – so that they can fund their family commitments. And then there are the aspirant baby boomer pensioners in Preston wards with life expectancy of 66 (‘The plan was to devolve cuts and blame councils’, 15 February).
Mike Chrimes (pension fund trustee)
The subheading on Phillip Inman’s article says “The average income of a pensioner is higher than that of a working-age person”. But the quoted report actually compares median figures for households. To qualify as a pensioner household, only one person has to be above state pension age, and they can still be working. Significantly, the incomes are compared after housing costs have been deducted. Pensioners in care homes have been excluded. Before housing costs, the median working-age household has a higher income than the median pensioner household.
Also, nowhere in the article does it mention that the household income attracting such a reaction is around £20,000. Hardly likely to support the fanciful picture of pensioner lifestyle portrayed by Mr Inman.
Barry, Vale of Glamorgan
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