State pensions around the world

MattMattMattUK

arnoldy said:

The UK state pension is incredibly generous - because you continue to qualify for raising kids, being unemployed, on benefits, being grandparents looking after kids etc so it really is semi - contributory. In fact you could have contributed next to nothing in NI and still get the best part of £10k pa index linked. 

The other unusual factor with the UK state pension compared to many European schemes is its not linked to earnings - you get the same if you earn and pay NI on £12k pa or £1.2m pa.

Those factors are only generous if you are a low-non earner and make little or no contributions. 

arnoldy said:

The UK is also incredibly generous pension savings allowance of up to £60k pa (with full tax relief) , the high personal allowance of £12.57k pa before you pay tax, and no insurance (NI) to pay on retirement, 

Though the return on the pension investment is generally less than one would get for paying into the state schemes in other European countries.

arnoldy said:

a totally free healthcare with no co payments - all unheard of in Europe.

Healthcare is not free in the UK, it is mostly paid for from taxation, with some at point of delivery costs (prescriptions being the most obvious example). It also has far longer waiting times and lower treatment delivery than almost any other EU nation.

arnoldy said:

The UK truly is the land of milk and honey in terms of pensions and retirement, it is hard to understand otherwise when you tot it all up. 

If it is milk and honey they they have both been watered down and if you are high earner they are diluted so much as to be almost indistinguishable from water. 

arnoldy

MattMattMattUK said:

arnoldy said:

The UK truly is the land of milk and honey in terms of pensions and retirement, it is hard to understand otherwise when you tot it all up. 

If it is milk and honey they they have both been watered down and if you are high earner they are diluted so much as to be almost indistinguishable from water. 

I agree that the wealthier have been hammered with punishing rates of tax, especially the marginal rates of 60% plus. In fact concentrating the tax base on such a narrow section of society may not be the most healthy. But for most people, especially for lower and middle earners the UK system is very generous. That was the point I was trying to make - and if you are on pension credit you are often better off than those on a small works pension when you add in all the freebies.

Suhusa

The UK does have co-payments - for prescriptions. They should be a bit higher now than in Germany, where they are €5 to €10 depending on the cost of the medication. What the UK doesn't seem to have is a €10 per day payment for hospital stays (which essentially pays for food and cleaning and which is capped, although I'd have to look up at what amount). What the UK to my knowledge also doesn't have is all sorts of mobility and disability aids - whether that's electric wheelchairs, screen readers, rollatore or assistance dogs - provided through the health system, at a co-pay of again €10. I know that some health insurers try to fob people off at first, but knowing you're entitled to such aids instead of relying on charities to provide them or having to pay a substantial part of their cost yourself is well worth paying a higher share of your income towards the health system.

arnoldy

The UK does have co-payments - for prescriptions

Not for pensioners it doesn't. Even for working age there are so many exclusions very few <<1 in 5 pay them.

zagfles

MattMattMattUK said:

zagfles said:

MattMattMattUK said:

I would far rather the Germany system than the low quality pensions we have in the UK, their unemployment benefits system, which for the first year scales with previous average income and contributions also makes far more sense than ours. In the UK compared to Scandinavia, Germany, The Netherlands, Australia, Canada etc. high earners pay in a lot and get comparatively very little back, combined with poor public services, whilst low earners pay in little but comparatively get much much more, less than a third of adults make a net contribution in the UK in any one year, over a lifetime it is less than 5%, 50% of households receive more in direct cash benefits than they pay in tax.

The UK for some reason seems to have gone down the route of relying on an ever shrinking number of high earners to pay more and more of the tax bill, whilst reducing the tax lower earners pay. The rest of the world either recognises that you can spread the burden and have decent public services for all (most of Europe), funded by all, or you have poor public services but pay little tax (USA). I would rather that we took a choice that everyone pays more, but we use that to fund society, decent healthcare, decent pensions, well funded schools and childcare provisions, sensible unemployment and disability benefits, roads that are not filled with potholes etc. however too many people seem to think that "someone else" should pay for everything and they should benefit. I am prepared to pay more tax if everyone does, combine IC and NI into a single income tax, increase the rates charged, abolish the personal allowance, re-cap the lifetime pensions pot (although higher than it was previously capped) and we might have the money to make the country better, or we could carry on with the failed policies of the last fifty years and nothing will improve. 

When you look at tax rates for lower earners in other countries you need to account for tax allowances they get which we don't, such as allowing non earners (spouse, children) to use their personal allowances against the family income. In many countries couples or familiies are taxed jointly rather than (mostly) independant taxation we have here.

I agree that there are differences in taxation policies, but they key is that most people just do not pay enough in taxes. In the UK 54% (at least measure) of households receive more in cash benefits than they pay in taxes, in Germany that figure is only 28%. In the UK less than 25% of working age adults make a net contribution in any one year, that represents only 17.75% of the total population, around 4-4.2% make a net lifetime contribution, in Germany those figures are 46% and 18%. In Norway it is over 50% and the latter is closer to 30%. 

In the UK we only collect 33.4% of GDP as tax, in Germany that figure is 37.5%, Norway 38.2% and France 46.2%, the USA for comparison is 27.1%.

UK is fairly average among OECD countries. Countries like Canada, Ireland, Australia and Japan collect less

https://www.oecd.org/tax/revenue-statistics-united-kingdom.pdf

The UK runs a deficit (and has done since 1999) and spends less on public services per head and as a percentage of GDP than any other advanced economy other than the USA which of course has no universal healthcare and weak social security provisions. 

zagfles said:

We also have a social security system that is far more means tested than other countries like Germany where it's more contribution based.

Our system is incredibly poor compared to most international systems, a model on those such as Germany, most Scandinavian countries and most of Northern Europe are far better than what we have. 

zagfles said:
We also have massively more people on long term disability benefits.

That has unfortunately been an issue for decades, an convenient way to keep the unemployment rate down. 

Social spending in the UK is higher than the OECD average. Pension spending is lower but family benefits are higher. Although they have reduced over the last decade - in 2010 they were the highest in the OECD. 

https://data.oecd.org/socialexp/social-spending.htm#indicator-chart

zagfles

arnoldy said:

The UK does have co-payments - for prescriptions

Not for pensioners it doesn't. Even for working age there are so many exclusions very few <<1 in 5 pay them.

Plus the most anyone should ever pay is £111 a year as that's the cost of a pre-payment certificate.

In some advanced countries you have to pay to see the doctor, for hospital stays etc.

zagfles

Suhusa said:

The UK does have co-payments - for prescriptions. They should be a bit higher now than in Germany, where they are €5 to €10 depending on the cost of the medication. What the UK doesn't seem to have is a €10 per day payment for hospital stays (which essentially pays for food and cleaning and which is capped, although I'd have to look up at what amount). What the UK to my knowledge also doesn't have is all sorts of mobility and disability aids - whether that's electric wheelchairs, screen readers, rollatore or assistance dogs - provided through the health system, at a co-pay of again €10. I know that some health insurers try to fob people off at first, but knowing you're entitled to such aids instead of relying on charities to provide them or having to pay a substantial part of their cost yourself is well worth paying a higher share of your income towards the health system.

In the UK there are generally cash disability benefits eg PIP/DLA/AA/motability cars etc. It would perhaps be better to pay for mobility/disability aids directly more, as some people getting PIP/DLA etc don't actually need to spend extra due to their disability. In some cases their disability means they need less!

MattMattMattUK

zagfles said:

MattMattMattUK said:

zagfles said:

MattMattMattUK said:

I would far rather the Germany system than the low quality pensions we have in the UK, their unemployment benefits system, which for the first year scales with previous average income and contributions also makes far more sense than ours. In the UK compared to Scandinavia, Germany, The Netherlands, Australia, Canada etc. high earners pay in a lot and get comparatively very little back, combined with poor public services, whilst low earners pay in little but comparatively get much much more, less than a third of adults make a net contribution in the UK in any one year, over a lifetime it is less than 5%, 50% of households receive more in direct cash benefits than they pay in tax.

The UK for some reason seems to have gone down the route of relying on an ever shrinking number of high earners to pay more and more of the tax bill, whilst reducing the tax lower earners pay. The rest of the world either recognises that you can spread the burden and have decent public services for all (most of Europe), funded by all, or you have poor public services but pay little tax (USA). I would rather that we took a choice that everyone pays more, but we use that to fund society, decent healthcare, decent pensions, well funded schools and childcare provisions, sensible unemployment and disability benefits, roads that are not filled with potholes etc. however too many people seem to think that "someone else" should pay for everything and they should benefit. I am prepared to pay more tax if everyone does, combine IC and NI into a single income tax, increase the rates charged, abolish the personal allowance, re-cap the lifetime pensions pot (although higher than it was previously capped) and we might have the money to make the country better, or we could carry on with the failed policies of the last fifty years and nothing will improve. 

When you look at tax rates for lower earners in other countries you need to account for tax allowances they get which we don't, such as allowing non earners (spouse, children) to use their personal allowances against the family income. In many countries couples or familiies are taxed jointly rather than (mostly) independant taxation we have here.

I agree that there are differences in taxation policies, but they key is that most people just do not pay enough in taxes. In the UK 54% (at least measure) of households receive more in cash benefits than they pay in taxes, in Germany that figure is only 28%. In the UK less than 25% of working age adults make a net contribution in any one year, that represents only 17.75% of the total population, around 4-4.2% make a net lifetime contribution, in Germany those figures are 46% and 18%. In Norway it is over 50% and the latter is closer to 30%. 

In the UK we only collect 33.4% of GDP as tax, in Germany that figure is 37.5%, Norway 38.2% and France 46.2%, the USA for comparison is 27.1%.

UK is fairly average among OECD countries. Countries like Canada, Ireland, Australia and Japan collect less

https://www.oecd.org/tax/revenue-statistics-united-kingdom.pdf

Canada has much less debt, elements of social security are via compulsory insurance and so are not included in the state etc. Ireland is a tax haven, Australia has huge exports which counter part of that, has low unemployment benefits and pensions, although good healthcare and Japan is fiscally a basket case with national debt at 260% of GDP, so those are not really good examples or models to aspire to. 

zagfles said:

The UK runs a deficit (and has done since 1999) and spends less on public services per head and as a percentage of GDP than any other advanced economy other than the USA which of course has no universal healthcare and weak social security provisions. 

zagfles said:

We also have a social security system that is far more means tested than other countries like Germany where it's more contribution based.

Our system is incredibly poor compared to most international systems, a model on those such as Germany, most Scandinavian countries and most of Northern Europe are far better than what we have. 

zagfles said:
We also have massively more people on long term disability benefits.

That has unfortunately been an issue for decades, an convenient way to keep the unemployment rate down. 

Social spending in the UK is higher than the OECD average. Pension spending is lower but family benefits are higher. Although they have reduced over the last decade - in 2010 they were the highest in the OECD. 

https://data.oecd.org/socialexp/social-spending.htm#indicator-chart

It might be higher than the OECD average, but that list also includes countries where their social programs are hardly aspirational models to aim for. The list also ignore some of the nuances of the different systems, state, insurance, compulsory insurance etc. which nominally distort many of the headline figures. The UK wastes a lot of money in work benefits, we created a subsidy to low paid and part time work, no other major European country gives people money to work part time in the way we do.

Suhusa

Re the capped prescription charges - again that is not something that's unique to the UK.

zagfles said:

Suhusa said:

The UK does have co-payments - for prescriptions. They should be a bit higher now than in Germany, where they are €5 to €10 depending on the cost of the medication. What the UK doesn't seem to have is a €10 per day payment for hospital stays (which essentially pays for food and cleaning and which is capped, although I'd have to look up at what amount). What the UK to my knowledge also doesn't have is all sorts of mobility and disability aids - whether that's electric wheelchairs, screen readers, rollatore or assistance dogs - provided through the health system, at a co-pay of again €10. I know that some health insurers try to fob people off at first, but knowing you're entitled to such aids instead of relying on charities to provide them or having to pay a substantial part of their cost yourself is well worth paying a higher share of your income towards the health system.

In the UK there are generally cash disability benefits eg PIP/DLA/AA/motability cars etc. It would perhaps be better to pay for mobility/disability aids directly more, as some people getting PIP/DLA etc don't actually need to spend extra due to their disability. In some cases their disability means they need less!

Germany has both - because those are two different things. You need disability aids, but you may for example also have a lot higher taxi costs because you're not allowed to drive, or you need to pay someone to do your tax return for you, or you need to buy special food or... In Germany the cash payments and/or tax breaks are supposed to cushion the higher day to day costs because of your disability, which can't be mitigated by having the correct disability aids. Whereas the provision of disability aids is basically a reasonable adjustment, but for your private life.

zagfles

Suhusa said:

Re the capped prescription charges - again that is not something that's unique to the UK.

zagfles said:

Suhusa said:

The UK does have co-payments - for prescriptions. They should be a bit higher now than in Germany, where they are €5 to €10 depending on the cost of the medication. What the UK doesn't seem to have is a €10 per day payment for hospital stays (which essentially pays for food and cleaning and which is capped, although I'd have to look up at what amount). What the UK to my knowledge also doesn't have is all sorts of mobility and disability aids - whether that's electric wheelchairs, screen readers, rollatore or assistance dogs - provided through the health system, at a co-pay of again €10. I know that some health insurers try to fob people off at first, but knowing you're entitled to such aids instead of relying on charities to provide them or having to pay a substantial part of their cost yourself is well worth paying a higher share of your income towards the health system.

In the UK there are generally cash disability benefits eg PIP/DLA/AA/motability cars etc. It would perhaps be better to pay for mobility/disability aids directly more, as some people getting PIP/DLA etc don't actually need to spend extra due to their disability. In some cases their disability means they need less!

Germany has both - because those are two different things. You need disability aids, but you may for example also have a lot higher taxi costs because you're not allowed to drive, or you need to pay someone to do your tax return for you, or you need to buy special food or... In Germany the cash payments and/or tax breaks are supposed to cushion the higher day to day costs because of your disability, which can't be mitigated by having the correct disability aids. Whereas the provision of disability aids is basically a reasonable adjustment, but for your private life.

They're probably better targetted in Germany and other countries, the UK has massively more working age people claiming disability benefits than other countries, something like 7% in the UK compared to under 2% in most countries, there was a Scottish govt report on this.