The reality of the Pension Debt (To encourage discussion)

jamesd

Using that average pension and a 9,000 zero rate tax band with 20% tax rate the expected 20% tax revenue from 15 million pensioners is 12 billion, which is 1% of GDP today (using the 90 billion is 6.1% figure). The required increase is 1.1% of GNP and it seems impractical to roughly double pensioner-based income taxes of 1% of GDP to 2.1% of GDP. These numbers are already assuming that pensioner incomes rise in line with inflation and ignoring the likely further increase of the zero rate tax band with incomes, to 11-12k to at least match the increased Pension Credit level.

I don't really want pensioners to be paying lots of tax even if it looked practical. Better to do it while employed instead, investing for retirement then not being taxed much when the income is more limited.

SquatNow

jamesd wrote: »

The ticked box is what SquatNow forgot: that undertaking that if the government takes the money from you to pay for those who are retired now, it'll make the generations after you pay for you when you retire. It was a good plan when the average man lived just three years after retiring. Not so good when that's now 23 years and the bill is much higher and going to be spread over fewer people once the baby boomers are retired.

Although I didn't mention the ticked box it was implied!

This basically sums up the problem... people are living much longer in retirement... often spending nealy as long in retirement as in work.

We are becoming a society were the younger generations will work solely to support the older generations with no hope of saving any money themselves or having a "life" beyond working 18 hours a day and paying 80% income tax.

We could, hypothetically, wipe out our country, with the younger generations being too busy working to be able to have children.

I think each person, on their wage slip, should get the name and photo of the pensioner they are supporting on their wage slip... in the tax deductions section... like when you sponsor an orphan and they send you photos and letters.

I'de suggest leaving off the address though, as when Little Johnny sees 60% of his wages have been deducted and used to support Grandpa Smith, he's likely to go round to see him with a blunt object.

SquatNow

jamesd wrote: »

That should make it pretty obvious how unrealistic your expectation that taxes on pensioners will pay much of the bill is: you don't get much tax revenue out of people on Pension Credit. A median earnier is expected to be getting around 12.5k and with the 10k planned tax allowance that's not a lot of taxable income.

I think it's a great idea. Pay everyone £200 pension a month. Tax them £100. Use all the £100s to pay the £200 pension.

Problem solved.


Can I also throw in that since most of the big private pension funds are heavily involved in the CDO/CDS game, I wouldn't expect them to be paying out much. In fact, they are pretty much worthless, and might in fact be a liability.

djbd1973

SquatNow wrote: »

Although I didn't mention the ticked box it was implied!

This basically sums up the problem... people are living much longer in retirement... often spending nealy as long in retirement as in work.

We are becoming a society were the younger generations will work solely to support the older generations with no hope of saving any money themselves or having a "life" beyond working 18 hours a day and paying 80% income tax.

We could, hypothetically, wipe out our country, with the younger generations being too busy working to be able to have children.

I think each person, on their wage slip, should get the name and photo of the pensioner they are supporting on their wage slip... in the tax deductions section... like when you sponsor an orphan and they send you photos and letters.

I'de suggest leaving off the address though, as when Little Johnny sees 60% of his wages have been deducted and used to support Grandpa Smith, he's likely to go round to see him with a blunt object.

:rotfl: The visiting with a blunt object would have to take into consideration the carbon footprint it would leave otherwise the government would tax Little Johnny extra for that too!!

EdInvestor

jamesd wrote: »

I don't really want pensioners to be paying lots of tax even if it looked practical. Better to do it while employed instead, investing for retirement then not being taxed much when the income is more limited.

Looks like the Govt is making a start on the problem at least, with no tax relief for HRTs available on the NPSS.

SquatNow

EdInvestor wrote: »

Looks like the Govt is making a start on the problem at least, with no tax relief for HRTs available on the NPSS.

Didn't know you couldn't get tax relief on Hormone Replacement Therapy provided by the Nuclear and Plasma Sciences Society.

EdInvestor

SquatNow wrote: »

Didn't know you couldn't get tax relief on Hormone Replacement Therapy provided by the Nuclear and Plasma Sciences Society.

Squat Now - never too busy to demonstrate his ignorance about pensions

SquatNow

Our parents have left us a few debts to pay... for a start theres a £1 TRILLION civil service pension debt. That's £1,000,000,000,000.00
Assuming 50% of the population is gainfully employed (fat chance) it works out at about £35,000 each. Currently 50% of the population is classed as being in employment, but that is expected to drop as more people retire, so expect to have to repay £50,000 each. Oh, and all the bills our parents left us? They're index linked to RPI, so they cant be inflated away... in fact your personal debt liability for your parents civil service pension bill will climb by £1400 in 2008. (With RPI at 4.1%)

So effectively if it was an interest only mortgage, it would cost you £119.58 a month. A repayment mortgage would cost £186.68. And those are assuming inflation doesn't rise at all. (Thanks to http://www.moneymadeclear.fsa.gov.uk/mortgagecalc)

Happy New Year.

poppy10_2

SquatNow wrote: »

How far will we go to give those in their 50-80s a comfortable life? They asset stripped the nation

Those bar stewards! We should shoot all old people :T:A

SquatNow

poppy10 wrote: »

Those bar stewards! We should shoot all old people :T:A

I love the way you think that isn't going to happen.

When half the population is in retirement and the other half is living in cardboard boxes, worknig in sweatshops and paying 80% income tax, what do you think will happen?

Pitchforks at the ready folks.