Blue Labour 2

chewmylegoff

Whatever the situation we shouldn't be paying benefits to people who earn either £41k or £42k. My view is that benefits ( and the state pension is a taxpayer funded benefit it is not a money purchase pension scheme in any respect whatsoever) should only be paid to people who cannot survive without them.

Obviously we can afford to pay benefits to rich pensioners if we all pay more tax. I am sure you would be happy to pay more tax so that a rich pensioner can have more money, no?

CLAPTON

N1AK wrote: »

When the state pension came in it was tiny and the age to claim it was higher than the average age people lived to.

I get asked every 5 years or so who I am going to vote for. If a party comes along that I agree with the platform of and that platform includes cutting the amount of welfare for pensioners then I am in no way obligated to oppose it.

We can't maintain pensions at the current level, with the current ratio of retirement age to life expectancy without vast tax rises. This can only be resolved in two ways: control what we spend on pensions now and in future or decimate pension provision at some point in the future.

I'd vote for a pension system that includes pension spending now that can be maintained for future generations. That would likely mean a considerable delay to the pensionable age and decreased spending per pensioner.

Yes it'll suck for people retiring now who didn't put money aside for themselves; however the other alternative is that people working today have to pay for the current generations pension and have to provide their own pension as well when/if they finally get to retire.

I'm seriously considering giving up on a private pension (which I've paid into since starting work) because at best I expect saving more will just mean getting less state support and at worst things will get so desperate that those without decent pensions will need to appropriate some of the pensions of those who do. Better to pay the extra tax and lose the employer matching and put the money into savings that I can move around the world as I decide.

As a matter of interest how much do we currently spend on state pensions and how much is it projected to rise over the years?

grizzly1911

chewmylegoff wrote: »

Whatever the situation we shouldn't be paying benefits to people who earn either £41k or £42k. My view is that benefits ( and the state pension is a taxpayer funded benefit it is not a money purchase pension scheme in any respect whatsoever) should only be paid to people who cannot survive without them.

Obviously we can afford to pay benefits to rich pensioners if we all pay more tax. I am sure you would be happy to pay more tax so that a rich pensioner can have more money, no?

I am not so sure £40k is a "high rate" of pay these days in certain parts of the country.

You make an interpretation of pension based on information and facts that are now before us.

Many that contributed did so under a wholly different contract and facts presented to them.

I know that something like half my state pension will be clawed back once it becomes payable before I even enter the tax equation.

I am not disputing the fact that someone with a penison of ~£41K is indeed in a comfortable position.

By all means re write the pension arrangements but in doing so acknowledge that for many that state pension is a necessary part of their income often topping up limited personal pensions, that many will have contributed to.

A think a transitory introduction period commencing about 30 years hence would be a good starting point. That should enable people to make suitable arrangements.

Of course any pensioner having a declarable income above that figure could be certified at the same time.

chewmylegoff

I didn't say it was a "high rate" of pay. It's high enough for the person to be able to pay for food, shelter and heating though. Someone earning £40kpa doesn't need state support to meet their basic needs (and paying benefits to anyone on this sort of income is necessarily transferring wealth to them from a poorer person).

grizzly1911

chewmylegoff wrote: »

I didn't say it was a "high rate" of pay. It's high enough for the person to be able to pay for food, shelter and heating though. Someone earning £40kpa doesn't need state support to meet their basic needs (and paying benefits to anyone on this sort of income is necessarily transferring wealth to them from a poorer person).

So we have no moved form a higher rate tax payer to someone who can now meet their basic needs. Someone earning > 40K in County Durham may feel they have ample somone working in the city less so. it will also vary depending on whether you are Jack the Lad with no commitments to someone trying to provide for a family.

Perhaps it is cheaper to scrap the family idea and just resort to immigration.

Back to pensioners -apparently something like 200,000 pensioners are above the HRT threshold. The other 11 million are typically on much less according to the Fabian society.

Another survey (OTS) suggested 68% of pensioners had savings income to help, of which, 50% received £4 or less per week.

Some of those could , inadvertently be paying more tax and up to £3.6bn may be up for grabs.
http://www.telegraph.co.uk/finance/personalfinance/savings/9837905/3m-pensioners-could-reclaim-1200-in-tax-on-savings.html

N1AK

CLAPTON wrote: »

As a matter of interest how much do we currently spend on state pensions and how much is it projected to rise over the years?

In 2002 we spent £78,290,000,000 on pensions in 2015 it'll be £149,540,000,000 (nearly double). To put that in perspective that's an increase of 5.1% per year and equal to £2324 for each person (baby, child, adult) in the country.

The really scary part is that the only other section of government spending that is rocketing up is healthcare which is increasing because.... yes, you guessed it, the elderly consume more healthcare services on average now they are living longer.

I wish I could give you some figures for further out than 2015 but I'm struggling to find any. The changes in retirement age will decrease the rate of increase for a period of time (assuming we stick with current plans) but I'd bet money they'll continue to rise faster than government spending as a whole throughout that period.

chewmylegoff

grizzly1911 wrote: »

So we have no moved form a higher rate tax payer to someone who can now meet their basic needs. Someone earning > 40K in County Durham may feel they have ample somone working in the city less so. it will also vary depending on whether you are Jack the Lad with no commitments to someone trying to provide for a family.

Perhaps it is cheaper to scrap the family idea and just resort to immigration.

Back to pensioners -apparently something like 200,000 pensioners are above the HRT threshold. The other 11 million are typically on much less according to the Fabian society.

Another survey (OTS) suggested 68% of pensioners had savings income to help, of which, 50% received £4 or less per week.

Some of those could , inadvertently be paying more tax and up to £3.6bn may be up for grabs.
http://www.telegraph.co.uk/finance/personalfinance/savings/9837905/3m-pensioners-could-reclaim-1200-in-tax-on-savings.html

not at all. my view is that you should only pay benefits to people who need them to survive, but is very difficult to means test benefits to ensure that you don't pay a penny more than is necessary without a real risk that people get left in (real not relative) poverty as a result. It seems to me that you could easily cut benefits (including the state pension) off at the higher rate tax band without there being any prospect of you propelling a person into poverty as a result.

There are very few places in the country where you cannot live comfortably on ~£40kpa and there is very little justification for forking out loads of money to help people who earn ~£40kpa live in those area. You can exist comfortably almost anywhere in London on £40k.

It may well be right that there are relatively few pensioners paying higher rate tax. I know my own parents don't have sufficient income to pay higher rate tax and they are very well off. However, we're talking about moving to flat rate pension of £150pw or so paid to everyone - should we just pay £1.5 billion a year in benefits to higher rate tax payers because there aren't many of them about? It doesn't seem a good reason to me.

grizzly1911

chewmylegoff wrote: »

not at all. my view is that you should only pay benefits to people who need them to survive, but is very difficult to means test benefits to ensure that you don't pay a penny more than is necessary without a real risk that people get left in (real not relative) poverty as a result. It seems to me that you could easily cut benefits (including the state pension) off at the higher rate tax band without there being any prospect of you propelling a person into poverty as a result.

There are very few places in the country where you cannot live comfortably on ~£40kpa and there is very little justification for forking out loads of money to help people who earn ~£40kpa live in those area. You can exist comfortably almost anywhere in London on £40k.

It may well be right that there are relatively few pensioners paying higher rate tax. I know my own parents don't have sufficient income to pay higher rate tax and they are very well off. However, we're talking about moving to flat rate pension of £150pw or so paid to everyone - should we just pay £1.5 billion a year in benefits to higher rate tax payers because there aren't many of them about? It doesn't seem a good reason to me.

The net cost is probably closer to £0.5million on these figures perhaps less if IHT is taken into account.. Will the government do a better job of distributing that money into the economy I don't know. Conversely we could cut the aid budget to Thacherite levels and make much bigger savings. We could also remove higher rate tax allowances on pension contributions

Going forward planning to remove it fine but those in receipt, or due to be in receipt for the next 30 years, will have contributed under a "contract" and will be planned into their needs. requirements, budgets etc.

You are right, non are likely to be propelled into abject poverty.

chewmylegoff

grizzly1911 wrote: »

The net cost is probably closer to £0.5million on these figures perhaps less if IHT is taken into account.. Will the government do a better job of distributing that money into the economy I don't know. Conversely we could cut the aid budget to Thacherite levels and make much bigger savings. We could also remove higher rate tax allowances on pension contributions

Going forward planning to remove it fine but those in receipt, or due to be in receipt for the next 30 years, will have contributed under a "contract" and will be planned into their needs. requirements, budgets etc.

You are right, non are likely to be propelled into abject poverty.

I think you mean £0.5 billion and let's not forget that it is an annual cost not a one off. Who cares if someone with £40k of other income is "budgeting" on receiving a state handout and wants to rely on a "contract" which they didn't pay enough to fund. It's not going to harm them to lose their benefits and there is no justification for taxing people on lower incomes than them in order to preserve their welfare payments. It doesn't make any sense and it should end immediately.

grizzly1911

chewmylegoff wrote: »

I think you mean £0.5 billion and let's not forget that it is an annual cost not a one off. Who cares if someone with £40k of other income is "budgeting" on receiving a state handout and wants to rely on a "contract" which they didn't pay enough to fund. It's not going to harm them to lose their benefits and there is no justification for taxing people on lower incomes than them in order to preserve their welfare payments. It doesn't make any sense and it should end immediately.

Aid is an annual cost. Why did they decide on 0.7% of GDP?

Foreign aid spending to overtake police budget: Taxpayers to fork out £12.6billion a year on international aid in 2014

16% of which goes into the EU coffers apparently.

http://www.dailymail.co.uk/news/article-2217634/Foreign-aid-spending-12-6billion-overtake-police-budget.html

Nobody asks me whether I want to contribute or whether I want to fund wars in far off places. Doesn't make any sense either.

Nobody asks whether we can afford £32bn/£40bn/£80bn on HS2.

I am sure that if someone has amassed enough to provide a £40K + pension they probably have paid way over the odds into the system in their life time.

If they receive it they give at least 60% back into the exchequer.

Pension tax relief should end for those on HRT they can afford to pay for that too and cut annual and life time contributions by half.

Something tells me the odd £0.5bn (thanks for spotting the error BTW) is a rounding error that is probably offset by a rounding error elsewhere.

Or prosecuting fraud cases.

Hundreds of millions from legal aid budget helps banks defend fraud cases

http://www.independent.co.uk/news/uk/home-news/hundreds-of-millions-from-legal-aid-budget-helps-banks-defend-fraud-cases-8654539.html