Male state pension at 66 from 2016?

jamesd

To give some context for £43.5 billion, £67.7 billion was the total income tax paid by every basic rate taxpayer in the country in 2007-8. Say hello to about a 30-35% basic rate of tax if they are serious about spending the £43.5 billion.

The "the injustice in which the higher paid contribute a smaller proportion of earnings than the lower paid" seems like a bad joke. The higher rate tax payers paid £93 billion in tax in 2007-8. That's just 13.8% (one in seven) of tax payers paying more than twice the total income tax paid by the rest.

In 2007-8 the bottom 10th decile of tax payers (£8,240 income above personal allowance) paid 3.6% of their income in income tax. The top 90th decile of tax payers (incomes from 44,900) paid 18.5% of their income in income tax. The top 95th decile (£61,500) paid 23.9% and the top 99th decile (£149,000) paid 30.9%.

DiggerUK

Hugheskevi,
The National Pensioners Convention, identifies were up to 200 Billion pounds in savings could possibly be found, to fund what you claim is an expenditure increase of 40 Billion pounds for a State Pension increase. I think it shows just how affordable such an increase is.

You also seem to believe, that the majority of workers in this country earn more than 43,888. Nobody at Digger Mansions earns, or has earned, that ammount.
I doubt if many on MSE get anywhere near such an annual wage either.

DiggerUK

jamesd wrote: »

To give some context for £43.5 billion, £67.7 billion was the total income tax paid by every basic rate taxpayer in the country in 2007-8. Say hello to about a 30-35% basic rate of tax if they are serious about spending the £43.5 billion..........

Governments don't raise revenue from Income Tax alone.

There are dozens of taxes were the extra money could come from to fund the state pension increases proposed by The National Pensioners Convention. They have identified up to 200 Billion pounds from non Income Tax areas alone.
This is just anti State Pension increase propaganda, and not a very good scare story.

jamesd

The basic rate of tax is a good way of explaining the effect of the increase in taxes that they are proposing. Doesn't much matter where they are coming from, so long as we're all paying them. But of course doing it with NI means we're not all paying them, because the retired don't pay NI. So it's a huge tax hike for the children and grandchildren to pay for the retired who don't need the money proposal.

It's a huge transfer from those trying to buy houses and raise children to those doing neither.

"Don't need the money" because the average pensioner income is around £18,000 a year, way above the poverty level. Those who are on low incomes and who need the help can be better addressed in less expensive ways.

hugheskevi

The National Pensioners Convention, identifies were up to 200 Billion pounds in savings could possibly be found, to fund what you claim is an expenditure increase of 40 Billion pounds for a State Pension increase.

Taking into account means-tested benefit and higher income tax receipts, the net cost would be in the region of £25bn ish.

I think it shows just how affordable such an increase is.

All of the alledged £200bn extra income would be taken in extra tax. The Conservatives have been heavily criticised for proposing cuts be made too rapidly, and their plans are to make savings of about half this amount, mostly be reducing spending (80/20 reduced spending/higher tax). So this proposal would increase taxes by roughly factor 10 over and above what the Conservatives propose.

This would cut our entire annual fiscal deficit, and leave tens of billions left over. But perhaps increasing taxes to the tune of 15% of GDP might just have some negative impacts on individuals and firms.

I think a lot of people just see large numbers and lose all perspective, classing £100m in much the same basket as £15bn - Jamesd's posts are helpful in this respect.

You also seem to believe, that the majority of workers in this country earn more than 43,888.

Stats show it is about 10% in total, and about 2% of pensioners who would also benefit from this big increase in Basic State Pension.

Being just 10% of the population, there is a limit how much tax can be extracted from them - Labour have increased the tax burden on this group quite considerably already.

I doubt if many on MSE get anywhere near such an annual wage either.

Across MSE as a whole, no. On certain boards, of which this is probably one, the percentage is probably higher.

I'd find the NPC a lot more credible if they put their plans to an independent organation such as the Institute for Fiscal Studies to evaluate. Without this their claims of £200bn of extra taxation being fairly easily available, particularly in the current climate, are...dubious

zygurat789

DiggerUK wrote: »

As can be seen from the ammount of responses to this thread, state pensions are a big issue.

It was not an issue any of the parties had major campaigns on in the recent election, considering the size of the "grey vote" you would have thought that one of them would have gone for our vote.
I suspect that whatever they do, they will do it quick. They certainly will not want it as an election issue in the next election.
And that has to happen by 2015, a year before the changes proposed for 2016.

/QUOTE]
Surely the "grey vote" refers to pensioners. Once they've achieved that status you would have thought that they wouldn't care what age was put on starting. Last one up pull up the ladder.

DiggerUK

zygurat789 wrote: »

......Surely the "grey vote" refers to pensioners. Once they've achieved that status you would have thought that they wouldn't care what age was put on starting. Last one up pull up the ladder.

I usually see "grey vote" as referring to over 50's.

It's not just a question of when the State Pension starts. It is the ammount that for many is a big issue.
Salaries of 43,888+ are just not earned by many. A large section of the workforce dreams of a wage above 20,000 a year. That does not leave a lot spare to save for a retirement pot, let alone buy a pension.

For us here at Digger Mansions the ammount is not a big issue. Our pensions will be high enough to mean all we will get is Basic State Pension anyway. It is how this is scuppering our early retirement plans.
As other posters who have retired early have pointed out, it is funding the gap between going early and relying on savings to do so until the State Pension kicks in.

Nobody knows if the extra tax allowance for over 65's will suddenly move to over 66's. Or even if it will be 66, or 67, or.......?

zygurat789

DiggerUK wrote: »

I usually see "grey vote" as referring to over 50's.

It's not just a question of when the State Pension starts. It is the ammount that for many is a big issue.
Salaries of 43,888+ are just not earned by many. A large section of the workforce dreams of a wage above 20,000 a year. That does not leave a lot spare to save for a retirement pot, let alone buy a pension.

For us here at Digger Mansions the ammount is not a big issue. Our pensions will be high enough to mean all we will get is Basic State Pension anyway. It is how this is scuppering our early retirement plans.
As other posters who have retired early have pointed out, it is funding the gap between going early and relying on savings to do so until the State Pension kicks in.

Nobody knows if the extra tax allowance for over 65's will suddenly move to over 66's. Or even if it will be 66, or 67, or.......?

It is undeniable that the state pension age of 65 is totally outdated and I am sick of people whinging about it, it's a fact that you will have to retire at 65+(+not that much). If you have saved up enough to retire early then you have been (as your £20,000 dreamers would put it) grossly overpaid,
just think of Fred the Shred.
What we really need in this country is good hard workers in every job or the country will not prosper and will not be able to pay us all good pensions. The early retirees, by not being productive, are reducing the prosperity of this nation.
Knuckle down, work hard and enjoy it. Remember you are better off than your father and grandfather and will have more time to enjoy yuor retirement than they ever dreamt of.

jamesd

DiggerUK, there are a couple of problems with that. First, for an individual, around the lower 30% have incomes that before tax and benefits are below £20,000 (25% below 11,800 plus personal allowance) but that's not household income so couples do better.

Second, although I could spend more, I can and have lived comfortably enough on spending around £12,000 a year, while paying rent out of that. That leaves quite a bit spare for things like fun and planning for the future if income is £20,000. Less when you start to spend it on children or non-cheap cars or holidays but those things are choices people can make, not requirements of living.

You will get the additional state pension as well as the basic state pension unless you've been self-employed for all of your life.

One of the challenges with retirement planning is working out what can be afforded without setting tax levels that are high enough to cause the children and grandchildren to baulk by the time the tail end of the baby boomers starts to retire, in around 2030. It's still relatively cheap for individual taxes to increase pensions now because there are still a relatively high number of workers and low number of retired. The big baby boomer generation retiring may change that, depending on how good a job immigration does at boosting the population.

hugheskevi

Salaries of 43,888+ are just not earned by many.

Maybe not in your area, but median male full-time salary in London=£37,201 (mean=£54,440).

So not far off half of male full time workers in London earn that.

Source here, (table 5.7a sheet Male Full-Time)