Please come back

zagfles

EdSwippet said:

zagfles said:
While all the above are relevant in some areas, by far the main labour shortages are in low paid employment sectors rather than sectors where people are likely to be troubled by the LTA, personal allowance withdrawal, or even higher rate tax.

https://commonslibrary.parliament.uk/how-has-the-pandemic-affected-industries-and-labour-in-the-uk/

https://www.theguardian.com/environment/2022/aug/15/pounds-60m-in-uk-crops-left-to-rot-lack-of-workers-nfu-farming

Potentially a reductionist view. As a data point of one, I'd have no particular problem entering a job in hospitality, or manufacturing, or distribution, or retail, even though they make absolutely no use whatsoever of any of my qualifications. In fact, I'd enjoy the change of pace from my former job in IT.

But, I have LTA and higher rate tax considerations that together strongly disincentivise a return to paid work. At the margin, after NI, tax, loss of employer pension contributions, and so on, I'd probably be lucky to see 40% of the compensation package offered. No thanks.

Think youself lucky - for many considering low paid work they're looking at not much over 30% (UC taper combined with basic rate tax & NI). A lot better than it was under legacy benefits, but still (obviously) not enough to get them harvesting food even at a time so many people are apparently starving enough to use foodbanks.

EdSwippet

zagfles said:

Think youself lucky - for many considering low paid work they're looking at not much over 30% (UC taper combined with basic rate tax & NI). A lot better than it was under legacy benefits, but still (obviously) not enough to get them harvesting food even at a time so many people are apparently starving enough to use foodbanks.

Sure. I get all of this. The fact that there are significant tax and NI disincentives at both ends of the scale is going to make it very difficult for the government to achieve its aim.

But then, the government is the agency responsible for these disincentives in the first place. It alone is in a position to change these disincentives, but rather than focus on the causes of the problem and then look for remedies, they appear to prefer superficialities such as an advertising campaign.

Nebulous2

EdSwippet said:

zagfles said:

Think youself lucky - for many considering low paid work they're looking at not much over 30% (UC taper combined with basic rate tax & NI). A lot better than it was under legacy benefits, but still (obviously) not enough to get them harvesting food even at a time so many people are apparently starving enough to use foodbanks.

Sure. I get all of this. The fact that there are significant tax and NI disincentives at both ends of the scale is going to make it very difficult for the government to achieve its aim.

But then, the government is the agency responsible for these disincentives in the first place. It alone is in a position to change these disincentives, but rather than focus on the causes of the problem and then look for remedies, they appear to prefer superficialities such as an advertising campaign.

I must be in something of a sweet spot, without having recognised it.  

As a registered nurse I'm paid above minimum wage. My part-time earnings are enough to get NI credited, while making minimal contributions a month. 

I'm paying tax on my DB pension, but would need to work more hours than I intend to, to reach higher rate tax at my work. 

All of my earnings are at basic rate tax, and I'm paying 9.8% into the NHS pension scheme, but that's still leaving me with around 70% of my earnings on addition to building some NHS pension. 

It still isn't enough for many colleagues, although many of them don't understand the figures. A common theme if I suggest coming back part-time is"It isn't worth it, you just get hammered with tax." 

That may show there is some value in a mid-life MOT after all. 

michaels

Perhaps there are two drivers
1 lockdown showed us that a lower income, lower consumption lifestyle is perhaps preferable to a higher earning but full of stress lifestyle
2 All the QE has pushed up asset prices meaning more can afford to retire early with options like downsizing if needed

The government because they measure things in terms of GDP put zero value on the improved quality of life of those who retire earlier.

pensionpawn

The reason why we're retiring, semi at first then fully, and will not be returning to work is staying healthy (ish), and the time left to you to do the other things that you want to do, though can't find the time / energy for. I've watched two close colleagues at work lose their wives, another go through a serious brain operation and another I believe about to lose his wife. All had plans together. I know that's a depressing thought for Christmas Day however I don't have to be mega rich to enjoy life. Work has had enough of my time on this planet. I want to spend whatever we, as a family, have left together as often as possible.
Get out and do what you want to do as soon as you can. Enjoy those precious moments together for as long as possible.
Merry Christmas.

MoneySavingGerbil

I wonder whether part of the increase in over 50s retiring (or to use the modern parlance becoming "economically inactive") can be attributed to pension freedoms day back in 2015. My understanding is that prior to the reforms people with smaller DC pots would have been forced to buy annuities that would likely give paltry annual incomes if starting in mid 50s; probably not inflation linked and maybe not even joint life.

Now that nobody is forced to buy an annuity it's easier to generate a bigger income from 55 but possibly only because a lot of people won't have given nearly enough thought to how long they're likely to live or how much income it's actually possible to generate from a pot without draining it in x years.

nigelbb

Martin_the_Unjust said:

I know some won’t like this but one of (if not the only) benefit of brexit is that, with the reduction in the availability of workers, it has given some power back to those working in the lower paid jobs.

That could have been accomplished with less disruption to the rest of us by outlawing zero hours contracts & raising the minimum wage.

NedS

MoneySavingGerbil said:

I wonder whether part of the increase in over 50s retiring (or to use the modern parlance becoming "economically inactive") can be attributed to pension freedoms day back in 2015. My understanding is that prior to the reforms people with smaller DC pots would have been forced to buy annuities that would likely give paltry annual incomes if starting in mid 50s; probably not inflation linked and maybe not even joint life.

Now that nobody is forced to buy an annuity it's easier to generate a bigger income from 55 but possibly only because a lot of people won't have given nearly enough thought to how long they're likely to live or how much income it's actually possible to generate from a pot without draining it in x years.

and there they were, worried we'd all go out and buy Lamborghini's. Maybe this is the unforeseen consequence they were concerned over.

nigelbb

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

NedS

nigelbb said:

The obvious measure to raise government income & incentivise early retirees back to work is to make unearned income subject to National Insurance for those below state pension age.

Wouldn't that mean double taxation of pensions. If I've paid NI on pensionable earnings and then pay NI again when drawing that pension, I'm being taxed (NI) twice on the same earnings and would be worse off as a result.