Raising the pension age in order to pay for pensions

Loughton_Monkey

chucknorris wrote: »

I note that the gin and tonics seem to considered a necessity as they aren't listed as one of the luxury items requiring intended to be maintained. I am of course assuming that you are not intending to give them up before hell freezes over.

That's pretty much spot on.

In my own case, not being able to afford a couple of large gin & tonics a day [Trebles. Lots of ice. Gordons. Schweppes tonic - not Sainsbury's own....] would by my own definition put me in "poverty".

Funny that. My parents didn't consider themselves in poverty either. I remember the "alcohol in the house" consisted of ½ bottle Scotch, ½ bottle advocat + 6 Babychams, and 6 bottles of beer. Only at Christmas.

The Government had me in fuel poverty quite firmly for several years. Rich as Croesus, but only choosing to draw down an "income" equivalent to the tax free limit. About £6K. I think it was something to do with 'saving for retirement' that allowed me my rations of G&T......

..... but not a word to anyone. I don't want my simple secret to get out. They might all start doing it!

coastline

Thrugelmir wrote: »

Government doesn't fund. The taxpayer does. Rents could always fall..........

There's no magic money tree that many people seem to think exists.

The government or taxpayer...whatever term you use...has been funding a surge in housing benefit in the private rental sector...
The link ...although 2 years ago...shows a 50% increase in housing benefit for private rents..
Even if rents were to fall which is unlikely its the sheer numbers in millions of homes that will cause the problem if current trends continue.

http://www.npi.org.uk/blog/housing-and-homelessness/rise-and-rise-private-renting/

more recent..

http://blogs.lse.ac.uk/politicsandpolicy/archives/35111

Loughton_Monkey

coastline wrote: »

The government or taxpayer...whatever term you use...has been funding a surge in housing benefit in the private rental sector...

There you are. Working hard. But very deep in debt. But you've pulled in your horns and are starting to pay down your debt.

Then your daughter comes home with unexpected bun in oven, and demands she can't live at home. You must find her a house.

Do you:

(a) Borrow another £200K, and buy her one? Cost, say, £800 a month.

(b) Tell her to rent a similar one, and cough up £900 a month?

All eyes - your neighbours, your bank manager, your credit rating are on you. What are you going to do?

I think option (b) is the better in the short term.

Even better, maybe, would be to kick her out with a strong message to find the father... make him pay £400 a month.... and rent whatever you can for that!

coastline

Loughton_Monkey wrote: »

There you are. Working hard. But very deep in debt. But you've pulled in your horns and are starting to pay down your debt.

Then your daughter comes home with unexpected bun in oven, and demands she can't live at home. You must find her a house.

Do you:

(a) Borrow another £200K, and buy her one? Cost, say, £800 a month.

(b) Tell her to rent a similar one, and cough up £900 a month?

All eyes - your neighbours, your bank manager, your credit rating are on you. What are you going to do?

I think option (b) is the better in the short term.

Even better, maybe, would be to kick her out with a strong message to find the father... make him pay £400 a month.... and rent whatever you can for that!

What happens if the trend in private renting ends up at 50% private renting and 50% ownership.
Only 20%..?? were owner occupied in the early 1900's.
Whos going to pay the £500-£1,000 a month rents on these homes....the government are happy to do it now even with a £25,000 a year benefit cap.
We could end up with a situation where monthly rent is higher than the state pension for millions of people...benefits through the roof.

Loughton_Monkey

coastline wrote: »

What happens if the trend in private renting ends up at 50% private renting and 50% ownership.
Only 20%..?? were owner occupied in the early 1900's.
Whos going to pay the £500-£1,000 a month rents on these homes....the government are happy to do it now even with a £25,000 a year benefit cap.
We could end up with a situation where monthly rent is higher than the state pension for millions of people...benefits through the roof.

Well there's two entirely different points there....

We have tended to have one of the highest % owner-occupied rates in the world. This is trending down, slightly, but I am sure will improve after this temporary economic cycle...

Totally seperate from that is the issue of what number (or %) of people who rent should get a subsidy from other taxpayers.

We are probably moving rapidly to a situation where we "cap" the benefit bill for the country, and divi a certain amount up per qualifying person. Then, within that, we pay a specific person £X and let them decide the degree to which they want to spend it on rent, food, travel, heating, 'stuff', drugs, or bingo.

Ultimately, this might have a significant downward effect on rents.

For those not on housing benefit, and who are reasonably young, buying will still remain a massively cheaper alternative to renting, over one's life - ignoring any capital value increase - and so those with the means will continue to flood the market. Either you pay a 'predictable' rent all your life, more or less inflation linked, or you pay a deposit, plus repayments for 25/30 years at a relatively unpredictable and volatile level - otherwise unaffected by inflation.

You take your choice.

I cannot envisage any economic conditions under which we would be paying housing benefit to 50% of the population. By the time that happened (in theory) house values would have plummeted to a level that would have them being snapped up for cash....

Tancred

Graham_Devon wrote: »

George Osbourne is today likely to announce the raising of the pension age to 69/70.

It was stated last night on Newsnight that it's likely that 30 years olds today will face a pension age of around 74 based on projections.

Anyone born today could see the pension age rise to 78+.

Which is all interesting. They say this is because people are living longer. Which is true. But that doesn't avoid the fact that disease such as arthritis etc still takes hold at the same point in life that it always has done.

So, in terms of the pension age, how are builders, plumbers etc supposed to work until they are 70? I can understand a desk job will probably be viable, but plumbers won't suddenly be taken on as desk clerks when they hit 60. Plus it means less jobs for everyone else.

So is this pension age viable? Or do we need to start acknowleding the elephant in the room and look at increasing taxation?

I would like to avoid the argument over saving for personal pensions if possible as that always leads to a generational type argument, and focus on the state pension.

My personal opinion, looking at my own dad who has not reached 70, is that he would be in dire circumstances now, unable to work, no experience of anything other than the building industy, riddled with arthritis. If these are the sort of people Osbourne is expecting to work until 70, I just don't see it as possible for many people.

Raising the state pension will save the government little, because many people will not be employable at that age and claim benefits of one sort or another. It will also place a hiuge burden on employers, who will be faced with a geriatric workforce that will take time off for sickness etc. The whole idea is pure lunacy.
What the government should do to cut the state pension cost is tax the richer pensioners more! Lower the 40% tax rate threshold to £28k for all the over 65s as a starter for ten. That alone would pull in a lot of cash.

CLAPTON

Tancred wrote: »

Raising the state pension will save the government little, because many people will not be employable at that age and claim benefits of one sort or another. It will also place a hiuge burden on employers, who will be faced with a geriatric workforce that will take time off for sickness etc. The whole idea is pure lunacy.
What the government should do to cut the state pension cost is tax the richer pensioners more! Lower the 40% tax rate threshold to £28k for all the over 65s as a starter for ten. That alone would pull in a lot of cash.

a great many older people are fully capable of working:

in any event if one sees the problem as a tax issue rather than a GDP issues then taxing the richer more whether they be over or under 65 will solve the problem;
if the problem will be a shortage of people contributing to the income of the country (GDP) then tax changes of themselves won't help much.

Kennyboy66

Loughton_Monkey wrote: »

Well there's two entirely different points there....

We have tended to have one of the highest % owner-occupied rates in the world. This is trending down, slightly, but I am sure will improve after this temporary economic cycle...

Its been trending down for more than 10 years (peaked at 69.7% in 2002).
In fact, it is lower now at 64.7% than 25 years ago.

Not sure about the world, but the UK is 17th out of 27 EU countries in terms of % home ownership, it is below the USA, Australia, Canada and New Zealand so its hardly "one the highest" by any stretch of the imagination.

Still, maybe that's what you get subsidising landlords through the tax and benefits system, and have ludicrous planning restrictions.

grizzly1911

CLAPTON wrote: »

a great many older people are fully capable of working:

At present there are insufficient suitable jobs. We still have 1 million youth unemployed and several million underemployed.

CLAPTON

grizzly1911 wrote: »

At present their are insufficient suitable jobs. We still have 1 million youth unemployed and several million underemployed.

yes indeed that is so

however the thrust of the discussion is about the future situation when the demography has changed so that there are a lot more 'old' people and fewer people of working age.

if then there is large unemployment then there will be no 'old ' people problem as such (there may be declining GDP problem instead)
but if we are short of people to work then there will be employment for older people.