Pension Pot

bigadaj

Jamesd- I think you should turn your question into a series of polls, you can never go wrong with a poll.

That way you'd also see the correct answer!

Nice to see you back by the way.

Ceres1

James the text I quoted was taken from a yahoo news item. This is the actual High Pay Centre report (an independent non-party think tank established to monitor pay at the top of the income distribution and set out a road map towards better business and economic success).

They examined the OECD Better Life Index and state that ‘’Analysis of OECD figures suggests the poorest fifth of the UK population are the poorest in Western Europe’’. Maybe clarify things a bit better.

http://highpaycentre.org/blog/what-would-the-neighbours-say-how-inequality-means-the-uk-is-poorer-than-we-think

If page is 'not found' and you are interested in viewing it go to the 'Home' page.


The situation also varies from region to region in the UK as per Eurostat, the statistical office of the European Union.

''Recent figures from Eurostat support the High Pay Centre’s analysis – Eurostat found that only the richest 7 of the 37 UK regions used for EU classification had an average GDP per head higher than the EU average. The poorest 7 UK regions were all poorer than any region in North West Europe''

http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/1-27022014-AP/EN/1-27022014-AP-EN.PDF


However putting aside the findings of OECD and HPC in relation to the UK I see that the OECD figures highlight that the 20% worst off in society would have a 'better life' in:

Australia $11,150
Austria $13287
Belgium $12350
Denmark $12183
Finland $12790
France $12653
Germany $13381
(no mention of Luxemburgs lowest 20% which would have been interesting)
Netherlands $11274
Norway $14916
Sweden $12101
Switzerland $12880
US $10854

I notice that most of these countries are in Europe and are small so I may not have to ‘emigrate’ too far away at all if Scotland gets it’s Independence I see they've also generated more tax per head than the rest of the UK over the last 33 years if that information is correct.

http://youtu.be/SxaQxZBXPpI


‘’Are you unhappy that about 10% of the British population are millionaires? Who do you think those people are and do you think it's fair or right that they are millionaires?’’

No I’m not unhappy about anyone being a millionaire at all James nor am I interested in who they are. I’m unhappy about … no disgusted in fact … by inequality in the UK … the widening gap between the rich and the poor. Unhappy with the fact that the wealth in this country is unfairly distributed: that’s what’s not fair or right as far as I’m concerned. With the ‘’richest 20% having 60% of all the wealth, twice as much as everyone else put together, and 100 times more than the bottom 20%. The richest 1% having as much wealth as 60% of the UK combined’’.

This is a 3 minute animation video outlining the scale of income inequality in the UK based on someone earning £27,000 a year which we know doesn’t equate at all .. far from it .. to the wages earned by the 20% of lowest paid workers in this country.

http://youtu.be/Oj2LA8rEqQ4

‘’ The UK has the fourth highest level of inequality in the OECD after Mexico, the US and Israel. It is going up quickest in some countries that have traditionally been the most equal such as the Nordic countries and Germany.’’

http://highpaycentre.org/blog/New-film-the-shocking-rise-of-inequality-in-britain


‘’What percentage of all income tax paid by everyone in the country do you think would be fair for the top 1% and top 10% of income people to pay? Maybe you think that the top 1% of income people should pay 10% of all income tax? Or 20%? Or what percentage do you think would be right?’’

I’m more interested in people being paid a decent living wage in this country (minimum wage £2:68 / £6:31), doing away with zero hour contract work (as some of these people are actually earning less than the minimum wage), slashing UK Executive pay increases / bonuses and something being done about the greedy fat cat energy providers etc, etc.

http://highpaycentre.org/pubs


As far as income tax is concerned I think it would be fairer if it were on a progressive sliding scale such as in Luxemburg (page 14) not 20% for all earning between £11,000 and £30,000 (approx) as in the UK or jumping to 40% for over £30,000 (approx) for that matter.

http://www.deloitte.com/assets/Dcom-Luxembourg/Local%20Assets/Documents/Whitepapers/2013/lu_en_wp_essentialguideindividuals_04022013.pdf

Dunnit

One wonders why so many people come to this country. Presumably they are feeding themselves into the bottom 20% thereby depriving themselves of the wealth they could avail themselves in other countries. All those mugs at Calais trying to deprive themselves of a good life.

jamesd

Ceres1, what clarifies it better is looking at the real data in the OECD report that I linked to, which shows that the claim made by the High Pay Centre about what the OECD report said was false and the poorest 20% in Britain are not the poorest in Western Europe.

You do know, I hope, that the parts of the UK with lower than average per capita GDP also have lower living costs than the higher GDP per capita areas and unlike the OECD report, the numbers are not adjusted to allow for that?

Since you didn't want to answer the question about who the millionaires are, I'll tell you. Most of them live in the South East and have most of that in their homes and most of the remainder are near to retiring and have to live for the rest of their lives on the money. Not all of them, but this is most.

There is a fairly straightforward general trend in the UK and many other countries. The young people have years of working lives ahead of them to make money while the older people have saved their income to provide for their retirement and have paid off a mortgage and own their home. The 20% or 10% "rich" level and most of the 1% aren't evil parasites on the young, they are the past young who just happen to be closer to retirement.

There is supposed to be inequality and there has to be because those close to retirement need that money and their accumulated pension rights to live on. Unless of course you want to take that away and have them rely on means tested benefits only, instead of the accumulated value of their state pensions, homes and other savings?

I don't know how old you are but if you've never looked at retirement planning, you might not know that to buy an annuity that will increase in value with inflation you need about 25 times the amount of income you want saved up. The 2013 21 and over minimum wage of £6.31 an hour for 52 weeks of 40 hours is £13,124 a year. To buy all of that in an annuity would take savings of £328,120. assuming a flat rate state pension of £144 a week would still leave £5,636 of income to get to that minimum wage and that in an annuity would cost around £140,920 to buy.

Hopefully by now you get the idea that a person at retirement is going to have to have a reported wealth of at least £328,000 in savings and accumulated state pension rights just to match what a 21 year old with no savings at all gets on minimum wage.

Of course, minimum wage isn't normal wage. The median average pay in this country is more like £28,000 a year. If someone wants to retire on 60% of that, the commonly accepted target, that's £16,800 a year and the person will need to have accumulated pension rights and savings of £420,000 to get it.

While you probably don't realise it, much of what you're saying really comes down to north v south and young v old. That's not really helpful for public policy or politics. You need to narrow down just who you want to mean unless you really do what it to be north or young v south or old.

jamesd

I'll cover most of the tax later but it appears from the Luxemburg case that it is a flat rate of tax on all income once your income is in a certain band. The UK achieves a similar graduated effective tax rate by having a personal allowance then income tax above that. This image from user Splash via wikipedia illustrates the way the effective UK income tax rate gradually increased with income, using the 2010 rates:



As you can see the effective income tax rate in the UK back then was about 15% for someone on £20,000 a year and using an exchange rate of 1.25 Euros per Pound the corresponding Luxemburg rate for income tax and employment fund surcharge has an effective tax rate of 23.54%, or just 22% without the surcharge. At about £40,000 it's about 16.5% vs 41.73% or 39%.

As you can probably tell from the numbers, the effective income tax rates are higher in Luxemburg and the sliding scale much more aggressively raises the income tax rates on normal earners, while the UK's personal allowance graduation effect keeps the equivalent of the Luxemburg higher rates mainly for those paying well above the start of higher rate income tax.

atush

Comparing the salary of the lower paid in the USA compared with t he UK is not very helpful.

In the USA there is no free health care, and the safety net of benefits pays less (and the number of children you can have is restricted).

The the poorest there, would have to pay huge sums from that reported pay just to see a doctor a few times a year.

Ceres1

''Dunnit: One wonders why so many people come to this country. Presumably they are feeding themselves into the bottom 20% thereby depriving themselves of the wealth they could avail themselves in other countries. All those mugs at Calais trying to deprive themselves of a good life.''

Dunnit maybe the ‘mugs’ at Calais, France have done their homework and realise that there are some benefits you can get in the UK that you can’t get in most other EU countries (France for one), such as child benefit for their children living outwith the UK. And on the subject of tax I see that some ‘mugs’ can work in the UK and pay tax at their homeland level...... much lower than UK level. The UK is often more attractive to those living outwith rather than within especially those living in poverty here :mad:


''Atush: Comparing the salary of the lower paid in the USA compared with the UK is not very helpful.
In the USA there is no free health care, and the safety net of benefits pays less (and the number of children you can have is restricted). Then the poorest there, would have to pay huge sums from that reported pay just to see a doctor a few times a year.''

Atush you are right and have pointed out the 'flaw' of such statistical reports, as they can 'camouflage' the reality of living in one country compared to another and of the complexity of one individual's circumstances, and even in their approach to dealing with life, compared to another.


James many thanks for putting the time and effort into replying to my post and points made, however we could go on and on ding donging backwards and forwards on this. I feel that UK wages, at the lower end of the scale, should be higher, zero hour contracts should be done away with, the fat cat brigade should be 'sat on' and taxation carried out in a fairer way to narrow the gap between the rich and poor. There are of course many other measures that could be taken that could make a massive difference towards dealing with UK inequality but they would probably have to be discussed on another forum, so I reckon we’ll just have to agree to disagree


Hope you all have a great day

jamesd

Ceres1, I also support things like a living wage and lower rather than higher use of zero hour contracts.

For taxation, try to answer the questions I asked. It would also be good to say who you think is a "fat cat". Is it really a person who has a few hundred thousand Pounds in their pension pot to provide an income in retirement? A few million? Where and for who do you draw your own "fat cat" line? Maybe it's a person earning more than £90,000 a year, like a lot of doctors in the NHS?