What should the government do?

Tancred

hugheskevi wrote: »

It is all part of the same problem.

Welfare spend in 2017/18 is forecast to cost[STRIKE] £117bn[/STRIKE]£208bn in real terms, of which [STRIKE]70%[/STRIKE]56% will go to pensioners.

That compares with 50% of welfare being spent on pensioners between 1992-97, after which the proportion of welfare going to pensioners escalated, as well as welfare spend growing in real terms.

The amount of welfare spent on pensioners now is equal to the entire welfare expenditure for 1992/3 (real terms).

This is why the simplest solution is to increase tax on the wealthier pensioners, to redress the balance.

Tancred

Daniel54 wrote: »

Assume in the interests of fairness you would also remove the tax exempt staus of capital gains on owner occupied homes -40% on gains above £25,000?

It would certainly be worth examining a way of the changing the existing tax regime on capital gains tax. I'm not a tax expert, so I wouldn't be able to comment without an in-depth study.

Daniel54 wrote: »

Brilliant idea to tax savers in retirement at a higher marginal rate than workers in employment

No better way to throw more financial liability on to the state than to deter earners from saving for retirement?

Why? The 40% rate would only be introuduced on the upper 5% of pensioners or so. The vast majority would be unaffected. Very few who are not on generous defined benefit pensions would be affected.

Daniel54 wrote: »

I have not voted because none of these options are the ideal way forward

- birth rate needs to be above death rate -we are just about there

-those of employment age need to be able to work

-we need a growing economy to provide jobs for those who can work

-we need to educate our children so that they can fill the jobs available

This my friend is what government can do -bacause on a macro level that is their duty to the electorate.

Not saying this is easy

The government (at least a democratic one) cannot force people to have children - this is why Blair & co opted to open the floodgates to immigration. As regards the job market, much depends on the employers. Again, in a free market economy there is actually very little the government can do to force employers into bringing jobs in the UK rather than offshore.

Anyway, the heart of the issue is how to control state pension costs. My argument is that the government's preferred route of constantly delaying the state pension will hit poorer people disproportionately because they are the ones most reliant on it for survival. This seems very unfair to me and a better way would be freeze the state pension age and raise funds by taxing the richer pensioners more.

grey_gym_sock

there is little merit in ppl stopping working at 60-65, and then being very poor until they reach 70-75 and the state pension kicks in. the point is: is it realistic for ppl to stop working as soon, given rising life expectancy?

personally, i expect to achieve early retirement by having an extremely high savings rate. i aim to cover the pre-state-pension part of retirement 100% from my own resources, and will then need to draw a bit less on my own resources after it kicks in.

anybody can pursue this strategy if they can achieve a high enough savings rate. the question is: what should the government offer for those who can't or won't do that? (or should they force everybody to save something like 30% of their earnings?)

the shift from working c. 4 years for every 1 year of retirement, down to 2 years for every 1 year, and then perhaps lower, is a pretty major change. i doubt that moderately higher taxation of wealthier pensioners can cover the costs.

i'm not saying that higher taxation couldn't play a part. but i also don't see why wealthier younger ppl should be exempt from any tax rises. and in any case, the more obvious places to start raising taxes are not in personal taxation, but in corporation tax (currently being *reduced* towards 20%) and more effective anti-avoidance.

choir-girl

As someone approaching 60 who has had there retirement age moved twice already I would be reluctant to see it moved to 70 (although hopefully it wouldn't affect me).

I am still fit and healthy, but I know that mentally I am not as quick as I was 10 years ago and I worry that I may not be able to make it to 66 (my current retirement age) in my present job and I would probably find it difficult to find another job at this age.

I can remember when I was younger there was always the older woman in the office who could never quite keep up with current thinking and got things muddled, now I think I am that woman!!:rotfl:

clogger

Would it be right to assume that the people advocating lifting the retirement age to 70 years have never worked in heavy industry. I admit there is not a great deal of heavy industry left in the uk, but though we are told that life expectancy increases I think that very much depends on what sort of work you have been engaged in.

grey_gym_sock

well, ppl may need to switch to less physically demanding jobs if they're going to work for longer.

it's not exactly fair that LE rises, overall but especially for office workers, and then the retirement age is raised, which hits manual workers harder. i'm not sure what to do about this, though.

Thrugelmir

Tancred wrote: »

I'm tired of the government (and now Labour as well) using the deficit as an excuse to constantly postpone the state pension age when there is no need to do so. There is no hard evidence that people are living longer - only statistical projections which are very error prone.

You are also overlooking the post war baby boom. The number of people in retirement is increasing.

sleepymans

The government should be more honourable.
As a 59 yr old woman who has worked all her life (started at age 16....and still working) in jobs which have always promised decent pensions instead of competitive pay...I feel well and truly stitched-up.
Having had my statepension age raised twice (the 2nd time after I had made irrevocable decision to retire at 60 based on calculations in force at the time)....I feel conned, ripped off and basically f$%&kked over.
I have paid all my taxes, never claimed one penny in benefits since I left school in 1970...have now vowed to regain self esteem or is that revenge....by continuing to work but putting in the least effort and most inflated expenses claims I can get away with for the rest of my working life......
OH..And don't you think the bankers and poliititians that engineered this economic catastrophe they are asking me to sacrifice my old age comfort for.....are vile self interested pigs? I do

BobQ

Tancred wrote: »

What should the government do to control state pension costs?

1 - Increase the state pension age to 70
2 - Increase NI contributions to 15%
3 - Make the state pension fully means tested
4 - Increase basic rate income tax to 40% for all over 65s

None of the above. They have already taken steps to control state pension costs and in the long term they have reduced the costs of pensions by capping the pension at £144, unlike the old system where people could accrue more second pension.

In effect those close to retirement will benefit as will those who had caring responsibilities or who were self employed. Those you are younger will have to work longer but have the value of their pension capped at £144.

closed

reduce spa - the min age should be fixed for the next (rolling) 50 years, if taken early reduce amounts to match, remove the pointless political headline grabbing extra's, winter fuel, tv etc and benefits.