Govt To Find £82bn Extra p.a. for Baby Boomer Generation

Coeus

An article to highlight a potential future the younger generations face.

http://www.dailymail.co.uk/news/article-1366808/Taxes-soar-raise-extra-82BILLION-year-pension-health-costs.html

A few extracts:

"Taxes will have to rise £82billion a year to cover the cost of pensions and health care for baby boomers, an economic research body claims."

"The average 65-year-old has received £223,183 in subsidies over and above the tax they have paid."

"A child born today will pay £68,000 more in taxes over its lifetime than it gets back in pensions and health provision."

"A child born in the next decade will need to pay £160,000 extra"

"basic simulations suggest that taxes need to rise by about 6pc of GDP over and above the changes announced in the June 2010 Budget in order to put the United Kingdom's public finances on a sustainable footing"

abaxas

Negative tax codes for pension income would resolve most of it.

PasturesNew

Coeus wrote: »

"The average 65-year-old has received £223,183 in subsidies over and above the tax they have paid."

How do they work that out then? What subsidies?
Like what? Eh?

abaxas

PasturesNew wrote: »

How do they work that out then? What subsidies?
Like what? Eh?

Possibly due to borrowed money? Previous generations paying more tax etc.

StevieJ

abaxas wrote: »

Possibly due to borrowed money? Previous generations paying more tax etc.

Maybe a large chunk of the recent borrowed money has been used to feed and shelter the under 40's including tomorrows taxpayers.

shortchanged_2

Coeus wrote: »

"A child born today will pay £68,000 more in taxes over its lifetime than it gets back in pensions and health provision."

"A child born in the next decade will need to pay £160,000 extra"

God and all that on top of the huge mortgages they currently have to take out because of the vastly overinflated housing market.

It seriously doesn't look good for the younger generations but then I'm sure all the property rampers on here will have an answer for it.

torontoboy45

I stopped when I read 'daily mail'. shame on anyone for quoting this filthy rag.

Kohoutek

Commentary from the think tank that published the research

The discussion paper, "Generational Accounts in the United Kingdom", by David McCarthy, James Sefton, and Martin Weale, shows that on plausible assumptions about future spending pressures, taxes and spending will need to adjust by about 6-6.5% of GDP over time, relative to the projections, to bring the generational accounts into balance. This is mostly driven by the upward pressure on spending, especially pensions and health, resulting from demographic pressures. It is not driven primarily by the rise in the national debt resulting from the recent recession, which has had a relatively modest impact on fiscal sustainability for the long term - if there was no national debt at all the required rise would still be 5.5-6% of GDP.

It is important to note two points. First, these adjustments are required over the (very) long term and hence have little or no implication for fiscal policy in the short term; the paper takes the short-term profile of tax and spending as given (by the June 2010 Budget) until 2015, and projects out from there. Secondly, the paper does not take account of policy changes since then. Implementation of proposals such as those resulting from the Hutton Review of public sector pensions, for example, could materially impact the results.

ILW

I am a baby boomer, why don't I feel particularly well off?

PasturesNew

ILW wrote: »

I am a baby boomer, why don't I feel particularly well off?

Maybe you're p155 poor, like me

With all those "taking" somebody's had to be paying in. I think that's me and you.

sm1234

My parents both retired at 60; so 30-odd years working, 50,60, or more(?) years living off the rest of society. They receive generous public sector pensions & had a free university education. Both parents have within the past 5 years undergone significant, expensive (and thankfully successful) operations on the NHS in PPI funded hospitals. They bought property cheap, and before that were housed in (at the time) plentiful cheap council housing. They paid relatively low taxes during the period their earning power was greatest. By the time they shuffle off this world, £223,183 will be a fairly conservative estimate for their net subsidy. The governments of the last 30 years had it all ways - they made capital from the legacies of previous generations (free education, privatisation of state infrastructure, sell-off of council-housing); invested relatively little actual real money in similar legacies for future generations; and piled up huge debt mountains onto future generations (Govt Borrowing, PPI, Pension Plundering, Property price ramping).