Was surprised at this

Pobby

In yesterdays Mail

http://www.dailymail.co.uk/news/article-474973/Pensioners-57bn-debt-puts-paid-happy-retirement.html

I think that the average pensioner household income is way under what was stated.

Guy_Montag

All this after a decade long massive transfer of wealth from young to old too.

elfreako

It seems so low, It's not like the papers to get it wrong, is it?


I guess pretty mush all of us will be in as much debt as the pensioners.

Pobby

I might be wrong but it seems to me that the paper is saying that us more senior folk have got caught up in the ``I want it now`` lifestyle. Funnily enough that might well be right but it still amazes me. I know loads that have no other form of retirement funding other than what the state will provide. Many of those are not home owners.

mystic_trev

I can see the State Pension being 'means tested' within the next ten years. With millions of 'boomers' retiring it just won't be affordable anymore.

mizzbiz

I think that £22k annual income after tax is pretty good. I think many thousands of people would be thrilled with having that much to live on.

I thought pensioners income would have been less than half of that figure. I could live more than comfortably on that.

The most interesting thing is that pensioners are in so much debt. I think we are seeing this as the baby boom generation approach retirement as these are the 'I want it now' originals. I think the generation above this had very little debt, like my grandparents for example, because they lived through the wars and rationing and it never left them.

I think it must be awful to go into retirement with so much debt hanging over you, afetr all, after so many working years, it should be a time of idyll and a carefree time. I can't think of anything worse tbh. Saying that, I think the UK is an awful place to retire... it's cold, it's expensive, pensioners are overtaxed and at the first opportunity, the state will try to seize their assets, if there's anything left after equity release companies. Then, anything left over after that is taxed up to the eyeballs with inheritance tax, an absolute scandal considering that money has already been taxed over and over again.

Food for thought when I grow old I think.

Sir_Humphrey

mystic_trev wrote: »

I can see the State Pension being 'means tested' within the next ten years. With millions of 'boomers' retiring it just won't be affordable anymore.

The trouble with means testing is that it is a disincentive to save.

If it (and lots of other benefits) were switched to a more universal system, there would be higher tax, but more money would be returned to everyone in benefits. The incentive to save would remain, as you would not be penalised.

If people keep on getting older, then more money will have to be put aside now, either one way or the other. No point in cutting tax for instance, if it means to have to put the money aside anyway into a more risky private sector provision. Of course a lot of people have put their 1980s tax cuts into consumption, which may be part of the explanation as to why we are in such a mess.

Whether it is affordable is an irrelevant question: we end up paying for it one way or the other. It is a choice of higher tax, saving more (disintentivised by means testing so unrealistic), lower pensions, or working longer (ceteris paribus in relation to productivity etc).

If the British political process worked properly, these issues would be reflected in electoral choice.

dopester

mystic_trev wrote: »

I can see the State Pension being 'means tested' within the next ten years. With millions of 'boomers' retiring it just won't be affordable anymore.

Same here. Government will find ways to alter or reverse any and all explicit or implied guarantees
as it battles to cut back costs.

Sir_Humphrey

dopester wrote: »

Same here. Government will find ways to alter or reverse any and all explicit or implied guarantees
as it battles to cut back costs.

That is because people aren't prepared to pay the necessary tax to pay for them properly.

Britain is a low tax country, particularly for the rich (taxation is lower than the rest of Northern Europe and Scandinavia).

Simple choice. Lower tax and more consumption, or higher tax and a more sustainable economy.

dopester

Sir_Humphrey wrote: »

The trouble with means testing is that it is a disincentive to save.

Hmm fair points as well.

I think if they do means-test it then it will be through the crisis period we will enter, to shed their obligations, but change back in any recovery.

dopester

Sir_Humphrey wrote: »

Simple choice. Lower tax and more consumption, or higher tax and a more sustainable economy.

I prefer a tax system which is designed to increase savings rather than take on debt.

Maybe the tax system is favourable compared to Sweden for higher earners. Sweden isn't all it is cracked up to be anyway. I'm fearful of the delusion that the rich pay "low or zero" tax. When economies go in to recession throughout history you often get the rich getting blamed by those who want them brought down, punished, or a bite of their apple. "It wouldn't have happened except for the inequality of wealth" or variations on that.

And wealth taxes are the worst, which could come in during an irrational response to the crisis. Wealth taxes are vindictive and work against recovery. It makes the rich and able poorer or sends them abroad. Wealth is an antidote to recession and not the cause. Confiscatory taxes reduce savings, discourage work, increase indebtedness and hinder any economic recovery.