Moral maze

Pobby

Graham does have a point. I think it is tragic that if someone who has been careful with money and maybe, as in my case, is intending to use it to supplement retirement to be told that spend those savings and come back when they have all but run out.

3 years ago I had the misfortune to go to the Job Centre Plus on business. Oh my, it was so depressing. Girls hanging around with push chairs, scruffy blokes sitting around the car park smoking.

Me I would do almost anything work wise to bring in the money rather than go back there.

nearlynew

One of the greatest con tricks the government has pulled (on behalf of their masters, the central bank, of course) was to convince people that National Insurance was "insurance" when in reality it is just another tax.

The word "insurance" was chosen to deliberately cloud the issue and sell it to the people.

Once again, the real villain slips away un-noticed.

JayScottGreenspan

Graham_Devon wrote: »

Its not as simple as that.

Your need, as your describe it, could be your own fault. If you earn 30k a year, spend 20k of that on the horses, booze and fags, and lose your job, the government will look after you.

If you earn 30k a year, and save as much as possible, and lose your job, the government will say "sorry, you can use your savings".

You get rewarded in this country for being completely reckless. You get punished for trying to look after yourself.

Trouble is, it's making more and more people think "whats the point".

Exactly.

It's a balancing act to :
1) help people
2) not cost too much
3) avoid moral hazard

Means testing helps in repect of 1 & 2, but it would be foolish to ignore 3. If you ignore it completely costs can spiral.

When you design your system you must be aware that:
whatever your system encourages people to do, more people will do.

If you encourage people to build up 'contributions', a lot of people will do so. If you discourage saving, there will be less saving. It's not difficult!

JayScottGreenspan

nearlynew wrote: »

One of the greatest con tricks the government has pulled (on behalf of their masters, the central bank, of course) was to convince people that National Insurance was "insurance" when in reality it is just another tax.

The word "insurance" was chosen to deliberately cloud the issue and sell it to the people.

Once again, the real villain slips away un-noticed.

Yeah, to pledge not to put up income tax in your manifesto, then to put 1p on NI across the board - that's lying in my book.

nearlynew

JayScottGreenspan wrote: »

Yeah, to pledge not to put up income tax in your manifesto, then to put 1p on NI across the board - that's lying in my book.

You are right of course when talking about the present government..

But my previous post refers to "government" in general and the fact that the introduction of NI in 1946 (coincidentally by a labour government) was sold to the people as "insurance" not a tax.

Mini_Bear

it does seem that those who are reckless with ££ get help, those who are careful get screwed by the low interest rates on savings!
i think the moral of this story is to only ever have 10-15k cash and put the rest into assets such as ur house or *wink* your wifes house. the govt cant make you remortgage ur house to pay for JSA. can they??
also can they make u liquidate your stock portfolio and treat that as savings?
I try to keep my IFA as busy as poss with these questions!!

JayScottGreenspan

nearlynew wrote: »

You are right of course when talking about the present government..

But my previous post refers to "government" in general and the fact that the introduction of NI in 1946 (coincidentally by a labour government) was sold to the people as "insurance" not a tax.

Yeah, it definitely ain't "insurance".

How long would esure/Aviva/Elephant/etc... last if:
1) They didn't pay your claim if you've got savings
2) They did pay your claim if you had never paid an insurance premium

kennyboy66_2

Pobby wrote: »

Like to know your thoughts.

A difficult one. I think Labour have tried to put too much "fairness" into many parts of the benefit system. So we have the ludicrous situtation of couples eaning £60k between them still getting "tax credits". There is no logic in this other than it counters the perceived "un-fairness" of you next door neighboor earning less but getting a government top up.

The other stupid area is the the minimum income guarantee for pensioners. For many low paid people approaching retirement there is no incentive at all to save. If you are planning your pension you probably want a large pot or none at all. A pot of say £30k is next to useless.

It also may be unfair that people have to sell their house to provide for nursing care when older - however, what sense does it make for the state to carry that responsibilty just so that persons children can have a juicy inheritance.
It was once childrens responsibility to care for parents in old age, and I appreciate that may be impossible if the children are possibly pensioers themselves - but their seems a move to "stick em in a home and how can I get the money from their house".

All this tinkering with the benefits system seems to try and address the growing resentment that there seem to be people who will hardly work a day of their lives get get cradle to grave state pay outs.

Perhaps politicians should address the causes rather than treat the symptons

Pobby

Could`nt agree more kenny.

Cidersid

When you have a job - The more they take!

If you have nothing - the more they give??


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