George Osborne MUST now U-Turn 'Granny Tax'!

DiggerUK

The 'granny tax' is a side issue to the main attack on pensioners.

Yes, it is a reduction of the pounds in your pocket, but the main concern we should share, is the proposal to keep upping the age at which we can claim the state pension. That's the main attack on pensioners.

Click on 'NPC Briefing on the Budget March 2012'
First bullet point, second page.

Living longer does not mean we are all up to working longer.
..._

margaretclare

jamesd wrote: »

This claim is not accurate. For pensioner units as a whole (either couples or singles), just 42% of income is from the state pensions and benefits (page 15). 25% of the rest is from work pensions. The remainder is mostly earnings with some investment and personal pension income as well. So in general less than half of pensioner income has changes announced in April.

Claims that all pensioners are badly off or have been treated badly by successive governments are not so accurate when you look at the facts:

"The average net income after housing costs of all pensioner units grew by 68% in real terms between 1979 and 1996-97. Average earnings in the whole economy grew by 36% in real terms over the same period.

Pensioners’ average income has grown faster than earnings over the last eleven years. Net income after housing costs for pensioner units has grown by 47% between 1998-99 and 2009-10, whereas average earnings have risen by 14% in real terms over the same period." (page 8)

This doesn't mean that all pensioners are well off, though. The median income of the lowest fifth of single pensioners was £4,940 after housing costs. Around three quarters of those are women, many after the death of their spouse. The median of the next fifth was £7,124, much easier to live on. (page 51)

If there's need here, it's concentrated in those single pensioners with low incomes. And those have low enough incomes that their income is likely to already be completely tax free, with benefits paying for housing costs if not an owner, so this age allowance change isn't likely to affect them at all. Better to get rid of the general pensioner age allowance and concentrate the money where it's most needed.

That bit of saving is something around £40-50,000 worth of capital to generate the income that's allowed while receiving the guarantee payments plus the allowed savings capital. Those who grumble about a disincentive to save also tend to be those who aren't even trying to get to that sort of level, though I'm not including you in this, just making a general observation.

Removal of the age allowance will eliminate this high income pensioner effect.

Age allowance reduction doesn't start until £25,400 income. The middle fifth of pensioner couple income was £19,552 in 2009-10. Next fifth was £25,740. Single pensioners have less pension provision in general. The top fifth of those had a median income of £19,084. (table on page 51)

So income-based age allowance reduction for an individual pensioner doesn't really start until they are already likely to be in the top 20% of all pensioner income levels.

I agree with all of this, especially the 2 paras which I've emboldened.

There is an awful lot of hysteria and misinformation about. I take my financial information from people who write factually, as above, rather than from the Mail Online and I certainly wouldn't take any advice at all from the 'Granny Tax Song', which might have originated in a comedy programme like 'The Now Show'.

Age UK produced some statistics which showed that 1 in 4 of women in the older age-groups, 80+, were below the poverty line. I doubt if many of them are concerned with their tax bill though, because they'll be on means-tested benefits.

browniej

boozercruiser wrote: »

When the coliation was formed it promised a minimum 2.5% rise in State Pensions each year. The freezing of pensioners tax allowances for those people between £10000 and £24000 will not, in effect, receive this 2.5% but a 2% increase. This is because the way pensioners tax liablity is calculated by the Revenue. I would not object to freezing this allowance if the Government guarantees a FULL untaxed 2.5% minimum increase whilst the freeze is effective.

As you have received a 5.2% increase this April, you are way ahead of this promise.

This current year we received a reasonable increase but this was solely caused by inflation as recorded last September, not in our control.

It's still twice the minimum promised and much more than most workers.

The £140 minimum pension forecast will not be received by those already receiving a pension.

If you had taken time to find out details rather than relying on the Daily Mail for all your info, you would realise that the £140 simply replaces what the present basic state pension plus pension credit already is. The whole idea is to simplify the system.

To cap it all this generation paid a minimum od 44 years of NI to receive a full pension whereas the future generations will only be required to pay 30 years NI for a better pension. Mr Cameron and Mr Osborne should think this change through fully before applying it next year.

Most workers, especially males as you quote 44 years ( females only needed 39 years), will still pay NI for at least that length of time and quite probably longer. Anyone starting work at age 16 and working to retirement age of 68 will pay 52 years of NI contributions. Just because you now only need 30 years does not stop you having to pay NI whilst working.

The 30 years was brought in to recognise that females, in particular, would not manage 39 years due to child care issues.

browniej

teajug wrote: »

The companies listed above used to employ older members staff, not any more due to recession, they would rather employ younger people that are on visas for a year or so on a minimum wage, as they tend to be more malleable for retailer needs such as being able to do lots of free overtime and no problems with disability or taken the company to a tribunal for discrimination. No access to work involved making adjustments for disability and also if the get employee has one or two days off work with the flu they can be sacked with impunity.

I agree with you on this. Unfortunately this not only affects older workers but also affects younger workers too.

I am aware that one of the companies above has now done away with giving staff time and half for working Sundays and bank holidays these days are now classed as ordinary days. Also managers can dictate when staff can take their holidays.

For all workers I assume?

The older people that are employed with the companies mentioned above are in good health and perhaps have shares in the company.

The main point is that older people do not have to retire at age 65 now as employers cannot simply get rid of people due to their age.

How can people plan to set up home or get a mortgage and plan to have a family if employers are going to sack staff if they do not like the look of them. No security of employment and do not know from one day to the next if they may be sack just because a manager does not like the look of you, or if they become disabled or god forbid if they get the flu and have a day or two off with it and be sacked for it. How can you contribute towards a pension scheme if you do not know if you are going to be employed the following week or not. :eek:

Totally agree. This is what most workers today have to put up with.

Gone are the days of finding jobs easily. Gone are the days of defined benefit pensions. Gone are the days of retiring at age 60. Gone are the days of getting your state pension at age 60 for women and age 65 for men.

Everyone is finding life difficult at the moment and today's pensioners have to take a bit of that too.

However thank you for engaging in a debate which is more than boozercruiser does. It is people like him who gives pensioners a bad name and doesn't help their cause at all.

teajug

Everyone is finding life difficult at the moment and today's pensioners have to take a bit of that too.

The scary thing is it is not just for the moment these changes will stay in place for good. :eek:

Working sundays and bank holidays for standard rate of pay is just for new staff and not for staff that has been there for years lots of different contracts for employees doing the same job.

Fella

DiggerUK wrote: »

The 'granny tax' is a side issue to the main attack on pensioners.

Yes, it is a reduction of the pounds in your pocket, but the main concern we should share, is the proposal to keep upping the age at which we can claim the state pension. That's the main attack on pensioners.

Click on 'NPC Briefing on the Budget March 2012'
First bullet point, second page.

Living longer does not mean we are all up to working longer.
..._

This is completely inevitable though, more so than any of the other cuts. No-one can expect to school for 20 years, work for 45 paying say 10% of their salary into a pension, then retire for another 15-20 years on good money.

People either need to pay far far more than 10% into their pensions for 40-odd years OR retire much much later OR retire on peanuts. There's no other way the sums will ever add up.

mumps

I suppose we all tend to see things from the perspective of how they will effect us, only human really. I just saw the granny tax change as another thing I will never get. I know everyone is having to tighten their belts but for me:
I started work, fulltime, at 15, I expected to retire at 60, changes announced some years ago and I expected to retire at 63 I think. New changes and now it will be 64 years 9 months.
For some years I was in a final salary pension scheme, changed jobs and had no scheme. Never mind state second pension will help. Now we have the new flat rate scheme coming in. My pension forecast shows me at just over £140 so it shold be neutral for me when new rate comes in? No I don't think so as I will lose something for the years when I was in the final salary scheme. So far I am working nearly five years longer and losing something on my S2P. Changes in NI mean that I will have close to 50 years contributions and only need 30. Didn't go for lower stamp to protect my pension but now talk about making it all "fair" for women who paid less. Won't have the tax advantage now either. It does feel as if they are picking on me, I know that is a bit paranoid but trust me after a long working life I am tired and just wish that the prospect of retirement didn't keep getting further away.

I hate to think what the accumulated loss of retiring 4 years and 9 months later, reduction in S2P and tax benefit loss actually comes to as a lump sum.

I don't want to just be selfish, I have children and grandchildren so don't want them to fund my old age but feel I need some protection.

mumps

browniej wrote: »

The 30 years was brought in to recognise that females, in particular, would not manage 39 years due to child care issues.

Speaking as a mother of four who currently has 43 years contributions and nearly 7 years to go until I get my state pension, can I point out that many women have managed to get 39 years contributions. In my experience it is many years since it was a given that women gave up paid work when they became mothers.

mumps

Fella wrote: »

This is completely inevitable though, more so than any of the other cuts. No-one can expect to school for 20 years, work for 45 paying say 10% of their salary into a pension, then retire for another 15-20 years on good money.

People either need to pay far far more than 10% into their pensions for 40-odd years OR retire much much later OR retire on peanuts. There's no other way the sums will ever add up.

The flaw with this is that so many young people can't find work, would it be possible that if people could afford to retire they would free their job up for a younger person. For example I am delaying my retirement, I intended to retire this year at 59 but as my state pension has now been delayed again and I don't know how much I will lose on my S2P, I will probably work for another year or two until my 2 youngest have finished at university. I have cut my hours and am earning £30k, if I was fulltime it would be £50k ish. So govt saving my £7k a year but if someone younger got my job govt might be saving money on WTC CTC Icome Support or whatever. It is all very complicated and the sums are simple.

The person who is in line for my job is 30 ish with young children, if they got my job this year when I had intended to retire they would stop receiving Child Benefit, for 3 children, CTC, WTC and housing benefit. She would be thrilled and I think the govt would make a saving. I don't know all the figures but I am sure someone could work it out.

gadgetmind

I wonder if the OP has got the poll at the top of the page on their ever-growing ignore list?