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Why do Baby-boomers get the blame? Never mind and top up your state pension.

Baby-boomers, I dunno. Tsk. And you naughty pensioners – you’re not much better.

Reading the Press these days you would have thought almost everything is all your fault. Inflated house prices, student debt, the death of final salary pensions, plague of locusts etc.Pension couple picture

The baby-boomers, for the record, born between 1946 and 1964, have already changed some of the old rules of society.
The first wave are already drawing their pensions – some have nice final salary ones too and a meaningful state pension too for those over 60 or 65 depending on your gender. According to the National Association of Pension Funds, a third of those aged 45 to 54, and almost one in five of those aged between 55 and 64, have some kind of earnings-linked pension scheme.

So for those sitting there on two-thirds of your final salary with your mortgage paid off on the house on which you’ve enjoyed almost unimaginable capital growth,  you can reflect on what the next generation can only look back on as sepia-toned memories of a glorious bygone age because if you’ve got kids or grandchildren you may well know what the word dependent really means.

The media, which is largely run by people in their 30s and 40s, seems unusually bitter about the baby-boom generation. Hardly their fault though. Robert Gardner, the chief economist at Nationwide, told the Daily Telegraph in 2011: "The baby boomer generation benefited from significant house price rises – in some cases over 100 per cent in real terms. Housing was also more affordable during the mid-Seventies and the Eighties, with a much lower house-price-to-earnings ratio than today."

Things that sit in the museum of our minds – like free university education, university grants and even free school milk – are largely gone. The second wave will now have access to its pensions with much more choice over how it uses its pension savings than ever before – leading perhaps to a round of Granlords and grey-haired property mandarins.

The jealous reporting goes on an on –apparently the pensioners are proper at it as well. With all the Government’s tinkering around the pension providers it now seems it has a become manufacturer of more decent-value returns meaning every single available pound in so-called ‘Pensioner Bonds’ has been snapped up from National Savings & Investments. And now it emerges that after October this year women born before April 6 1953 and men before April 6 1951 can pay a capital sum to the Government in exchange for a state-backed promise to pay a pretty generous income for life which is inflation-proofed and pays a spouse’s benefit of 50 per cent on death.  

In order to achieve the maximum £25 a week top-up you will pay £22,250. If you are a man of 65 this will translate into an ‘annuity rate’ of 5.84 per cent assuming you attain the average life expectancy – roughly 86.

As with any annuity your lifespan is key so is probably really only worth thinking about if you are fit and well – but given how much time you’ve all spent on golf courses, sailing round the Med, dancing lessons and goodness-knows-what the boomers are all as fit as butchers’ dogs.

The window is only open from October until April 2017 – so hurry, baby-boomers have a think. It’s a while until the next election!.

By Stephen McDowell

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