Blue Labour 2

chewmylegoff

happy for the foreign aid budget to be reduced as well. to zero. and for tax relief for pension contributions to be scrapped for HRT payers as well. but i don't see why either of these things should be done instead of stopping benefits to pensions earning more than £40kpa. they are all unnecessary measures which result in poorer people paying more tax than they need to.

CLAPTON

N1AK wrote: »

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.

I can't find those figures... are they for all government pensions (i.e. including NHS/Teachers/civil servants etc ) or just for the state (old age) pension?


http://www.dsdni.gov.uk/index/publications/retirement_pension.htm

from the pdf it gives for the state pension (OAP)

pension 2010/11 is 84billion which is 5.7% of GDP

2020 /21 will be 97billion which is 5.2% of GDP

2030/31 will be 142 billion which is 6.1% of GDP

2040/41 will be 196 billion whic is 6.8% of GDP


the figures do not seem unsustainable or excessive and seem proportionate in view of the number of pensioners concerned

grizzly1911

chewmylegoff wrote: »

happy for the foreign aid budget to be reduced as well. to zero. and for tax relief for pension contributions to be scrapped for HRT payers as well. but i don't see why either of these things should be done instead of stopping benefits to pensions earning more than £40kpa. they are all unnecessary measures which result in poorer people paying more tax than they need to.

OK Lets do it.

What next.?

chewmylegoff

grizzly1911 wrote: »

OK Lets do it.

What next.?

Next....appoint Hamish as housing minister and Graham as chancellor and get some popcorn in.

TruckerT

Maybe we should abolish the whole idea of state pensions, and simply assume that everyone is capable of work until the day they die (unless they can prove otherwise). This would mean that an 85-year-old would be 'entitled' to the same benefits as a 25-year-old. The retirement age is already approaching 70, for both men and women.

It would of course remain an option for everybody to start paying into a private, or employment-based, pension scheme at any stage in their working life. But instead of offering tax relief on pension contributions, the state would agree not to take the pension income into account when calculating benefit entitlement in later life.

TruckerT

N1AK

CLAPTON wrote: »

I can't find those figures... are they for all government pensions (i.e. including NHS/Teachers/civil servants etc ) or just for the state (old age) pension?


http://www.dsdni.gov.uk/index/publications/retirement_pension.htm


pension 2010/11 is 84billion which is 5.7% of GDP

2020 /21 will be 97billion which is 5.2% of GDP

2030/31 will be 142 billion which is 6.1% of GDP

2040/41 will be 196 billion whic is 6.8% of GDP


the figures do not seem unsustainable or excessive and seem proportionate in view of the number of pensioners concerned

My figures are from http://www.ukpublicspending.co.uk/ and I would assume include all government expenditure on pensions. I couldn't find the data on the social development website that you are using, could you point me in its direction as I'd be interested to see how it is calculated?

I'm not sure those figures account for the most recently agreed changes in pensions. However even if they are accurate it means ~3.5% more of the governments budget would have to go on pensions by 2040. There would also be a considerable increase in healthcare costs. Even that 'small' change is actually a vast amount of money to free up.

Add on that other public funded pensions will also increase considerably during that same time window (probably by more in fact).

Finally factor in that the figures you quoted for % of GDP appear to assume that UK GDP in 2040 will be double GDP in 2010. It's interesting that they are assuming nearly 2.5%pa GDP growth when we haven't even managed to average half that in the last 30 years.

If UK GDP increased by 1% per year over the next 30 years then the pension % of GDP figure would be nearer to 10%.

grizzly1911

N1AK wrote: »

Finally factor in that the figures you quoted for % of GDP appear to assume that UK GDP in 2040 will be double GDP in 2010. It's interesting that they are assuming nearly 2.5%pa GDP growth when we haven't even managed to average half that in the last 30 years.

If UK GDP increased by 1% per year over the next 30 years then the pension % of GDP figure would be nearer to 10%.

Presumably if GDP isn't growing pay won't either and likewise pensions.

N1AK

grizzly1911 wrote: »

Presumably if GDP isn't growing pay won't either and likewise pensions.

That may be your presumption, but that says more about you not being informed about pensions than anything else. We have a 'triple lock' on pensions meaning they increase by the largest of:

• The rise in average UK earnings.
• The rise in inflation (as measured by the Consumer Price Index).
• A standard rise of 2.5 per cent.

So as you can see the best case if we have average economic growth (1.25% tops) is that pensions will increase by twice that rate. If we have any periods of high inflation then it'd be an even larger difference.

The triple lock effectively shows the lengths politicians will go to to get the elderly vote, and the selfishness of many of the elderly. If the minimum wage for 16-17 year olds increased by the same formula it would have gone from £3 in 2003 to £4.54 now but it's £3.68 and the rate for 18-20 year olds would be 5% higher; however who cares about young workers right...

CLAPTON

N1AK wrote: »

My figures are from http://www.ukpublicspending.co.uk/ and I would assume include all government expenditure on pensions. I couldn't find the data on the social development website that you are using, could you point me in its direction as I'd be interested to see how it is calculated?

I'm not sure those figures account for the most recently agreed changes in pensions. However even if they are accurate it means ~3.5% more of the governments budget would have to go on pensions by 2040. There would also be a considerable increase in healthcare costs. Even that 'small' change is actually a vast amount of money to free up.

Add on that other public funded pensions will also increase considerably during that same time window (probably by more in fact).

Finally factor in that the figures you quoted for % of GDP appear to assume that UK GDP in 2040 will be double GDP in 2010. It's interesting that they are assuming nearly 2.5%pa GDP growth when we haven't even managed to average half that in the last 30 years.

If UK GDP increased by 1% per year over the next 30 years then the pension % of GDP figure would be nearer to 10%.

my apologies; I think I posted the wrong reference


but

http://www.ons.gov.uk/ons/rel/pensions/pension-trends/chapter-5--state-pensions--2011-edition-/index.html


click 'pension trends chapter 5' which opens a pdf file

and then table 5.14

antrobus

N1AK wrote: »

....Finally factor in that the figures you quoted for % of GDP appear to assume that UK GDP in 2040 will be double GDP in 2010. It's interesting that they are assuming nearly 2.5%pa GDP growth when we haven't even managed to average half that in the last 30 years.....

The UK trend rate over the last 25 years is around 2.5%.

http://www.economicsonline.co.uk/Managing_the_economy/Sustainable_growth.html

By my calculations UK GDP growth in the years 1980-2010 was an average 2.59%; GDP increased by a factor of 2.15. Hence it is not entirely unreasonable to assume that GDP will double again in the period 2010-2040.