Pensioners now have higher Incomes than workers

PasturesNew

I would also say that, Ed Investor (RIP), who used to post here did tell me that "Pensions aren't for people like you. Pensions are best for people who earn 40% tax and whose employers pay in". She confirmed that having "done nothing" would be the right answer for me.

kabayiri

lisyloo wrote: »

The problem is that people don't know how long they have to live and hence how long their assets need to last them, hence many err on the side of caution.
I'm not sure what you are actually suggesting but equity release schemes are generally a rip-off.

They absolutely are a rip-off if left to the private sector in many cases, but perhaps it's just small volumes not generating enough of a market.

I feel the state could offer a scheme to help people. I thought there was merit in placing a deferred charge on people's estates in return for social care provision, for example.

I do realise that suggesting a state backed scheme is not exactly in vogue nowadays!

princeofpounds

It's interesting for all the commentary that few people are expressing surprise at the overall finding of the study.


Certainly one would not be surprised if the average pensioner was wealthier than the average worker. But to have a higher income? Quite remarkable really.


It would be very interesting to understand how much of that income is derived from funded capital (i.e. own pensions savings, real estate rent etc.) compared to unfunded capital (basically transfers from government, whether pension, fuel allowance or unfunded final salary pensions)

kabayiri

princeofpounds wrote: »

...

It would be very interesting to understand how much of that income is derived from funded capital (i.e. own pensions savings, real estate rent etc.) compared to unfunded capital (basically transfers from government, whether pension, fuel allowance or unfunded final salary pensions)

Plus, have we reached the zenith of final salary schemes? How quickly will these generous schemes taper off in years to come.

I am led to believe, also, that under New Labour there was an additional 1m jobs created under the Public Sector. Outsourcing of lower roles like cleaning should mean these jobs were reasonably well paid, with reasonable pension provision.

I can't see the size of the state growing. It is probably set to shrink further to pay down our debts. How will this impact on future pension incomes?

Nick_C

lisyloo wrote: »

You won't get that if you have savings which start to kick in at £10K I believe and with £16K you get no pension credit at all, so it might be that some people with relatively modest savings don't qualify.

That simply isn't correct. You can have savings over £16K and still get Pension Credit. You are assumed to have an income of £1 a week for every £500 you have above £10,000

If you use the Pension Credit Calculator, it will tell you that a pensioner with income of £100 a week and savings of £20,500 will get PC of £30.20 a week (assuming no housing costs).

Nick_C

The story - that on average Pensioners are now better off than workers - doesn't surprise me at all. Pensioners don't pay pension contributions, they don't pay National Insurance, and they don't have the cost of travelling to work, buying clothes for work, or buying meals out.

A pensioner on £18K is better off than a worker on £27K who is paying £4000 a year for a season ticket and 6% into a pension scheme. And that's before you even look at housing costs.

Even pensioners on the Pensioner Credit safety net have a comfortable standard of living.

Giving State Pensioners a 2.5% increase next April while cutting other benefits is simply wrong. Time to axe the triple lock, as well as the non means tested pensioner top ups.

Quasar

Meanwhile, wages are seeing a race to the bottom. Companies pay as little as possible, all the while being praised by the government for creating jobs that in actual fact need to be supplemented by the taxpayer in order to reach a living income. Large corporations avoid paying most, if not all, the tax they rightfully owe, so many cuts here and there need to be made in order to continue this squeeze at both ends.

That many (NOT all, mind) pensioners are better off than many (NOT all, mind) workers shouldn't be a cause of dismay. In fact we should all seek to protect a good income for our old age. What we should be doing, instead of bemoaning pensions and attendant old age benefits, is to campaign for higher wages and less squandering left right and centre.

Oh wait, the Chinese are now buying Britain, so that's better wages down the drain then. Back to resenting pensioners, then.

CLAPTON

Quasar wrote: »

Meanwhile, wages are seeing a race to the bottom. Companies pay as little as possible, all the while being praised by the government for creating jobs that in actual fact need to be supplemented by the taxpayer in order to reach a living income. Large corporations avoid paying most, if not all, the tax they rightfully owe, so many cuts here and there need to be made in order to continue this squeeze at both ends.

That many (NOT all, mind) pensioners are better off than many (NOT all, mind) workers shouldn't be a cause of dismay. In fact we should all seek to protect a good income for our old age. What we should be doing, instead of bemoaning pensions and attendant old age benefits, is to campaign for higher wages and less squandering left right and centre.

Oh wait, the Chinese are now buying Britain, so that's better wages down the drain then. Back to resenting pensioners, then.

a race to the 'bottom' that 95% of the world would love to share

wage rates are increasing

Michelle Dorrell (unemployed) with only £ 400 per week take home (after housing and council tax) to spend

some race, some bottom

princeofpounds

pensioners are better off than many (NOT all, mind) workers shouldn't be a cause of dismay. In fact we should all seek to protect a good income for our old age.

It's not a cause for dismay, in itself.


But sanctifying the incomes of current pensioners does nothing to protect the income of those before retirement. That money comes from somewhere, and that somewhere (given we have a largely unfunded state and public sector pension system) is tax receipts.


Those tax receipts largely come out of the incomes of workers, and directly suppresses the ability of those workers to save for their own retirement.


'Nasty' corporations are not the people who lower the income of households.


Government does a very good job of that all by itself. The average person in the UK works from January until the last day of May simply to pay the tax that is due (aka Tax Freedom Day). The government then keeps spending money equivalent to the 29th June (aka Cost of Government Day).


June!

princeofpounds

wage rates are increasing

To be fair, they have slipped, a little, since the 08 crisis in real terms.


But they are up 40% since 1988, though various flavours of government (the time period is just the data I have to hand).