State Pension

[francovendee]

Paying for pensions, health etc. is only possible by funding from those in work paying taxes. With a low birthrate and a drive to stop immigration where will the money come from?
The younger section of the population are unable to afford a house so you can't squeeze more from them.

[Nearholmer]

^^^

This is the whole “productivity” issue in a nutshell.

While we have an under-capitalised, and an under-educated workforce, money doesn’t flow round fast enough with a relatively small working population to allow the “tap off” that funds public services to flow fast either.

There is a bit more space to divert the flows, those who do have optional spending power could spend less of it on imported optional “stuff” and needlessly big houses, and more on public services (= tax), but not much, and nowhere near enough to make up for the productivity deficit.

[rjb]

Spare cash should not be spent but used to increase your retirement pension. We need to think carefully how we use our discretionary spending in order to fund our old age.

[Jdsk]

Paying for pensions, health etc. is only possible by funding from those in work paying taxes. With a low birthrate and a drive to stop immigration where will the money come from?
The younger section of the population are unable to afford a house so you can't squeeze more from them.

^^^

This is the whole “productivity” issue in a nutshell.

While we have an under-capitalised, and an under-educated workforce, money doesn’t flow round fast enough with a relatively small working population to allow the “tap off” that funds public services to flow fast either.

There is a bit more space to divert the flows, those who do have optional spending power could spend less of it on imported optional “stuff” and needlessly big houses, and more on public services (= tax), but not much, and nowhere near enough to make up for the productivity deficit.

Yes, higher productivity is crucial.

Hot off the press:

"A Growth Policy to Close Britain’s Regional Divides: What Needs to be Done":`
https://www.hks.harvard.edu/sites/defau ... WP_225.pdf

Jonathan

[djnotts]

^
"A Growth Policy to Close Britain’s Regional Divides: What Needs to be Done":`

Regional economic policy essentially abandoned by Thatcher under influence of Keith Joseph. Decline partly counteracted by EU Structural Funds, but closure of Govt Offices for the Regions AND Regional Development Agencies over 20 years ago (no one expected BOTH to go!) signalled biggest withdrawal of Govt from Regional policy since the 1930s.
It is easily, but expensively reversed, by reviving the Industry Acts of the 1980s.
Diverting what support there is to Local Authorities a guaranteed disaster.

[Nearholmer]

One of the recommendations of that report is a level of regional governance, and I personally think that is a good recommendation.

The UK has gone centralisation-mad, but left in place in many areas the inefficient, and anachronistic in the modern age, county council and district council structure. Decent-sized unitary authorities (quarter to half a million people) to look after public services, then regional bodies (five to ten million people, so nations in the case of Wales and Scotland) to foster economic well-being would, IMO, work far better, and I think that’s what they are saying. Local authorities at the present level are way too “low down” to have real economic impact.

But, but, but ….. even with that in place, and assuming that regions could somehow put the enabling infrastructure, and educational provision in place, I think there is still a problem around private-sector capital for investment in manufacturing.

And, spinning that flywheel up would take a long time, so we are going to be stuck with an economy that is running at low-revs, and therefore can’t provide decent pensions, or above-bog-basic public services, or a public realm to be proud of, for ages yet …… forever, and getting worse if we don’t do the sort of things that report recommends.

[rjb]

Plans are afoot to replace RPI by CPI then CPIH starting in 2030. These indexes are used to increase pensions in line with inflation. CPIH is less than CPI which is also lower than RPI. When a teacher asked her class what CPIH stood for one clued up pupil responded " Causing Pensioner's Increased Hardship".

[francovendee]

Spare cash should not be spent but used to increase your retirement pension. We need to think carefully how we use our discretionary spending in order to fund our old age.

Fair point for the lucky ones with spare cash but any money invested is at risk and when the time comes to retire the money may not be there in quite the amount promised/predicted.
I know first hand that it can be the case. Also my brother in law lost most of his pension pot when Equitable Life crashed. Luckily he was young enough to try and build up another pension, in his case he bought a second house taking the view he was less at risk of losing the lot.

[al_yrpal]

My pre 46 years old pension is about £11 per annum. But I have always saved (a crime according to some!). I paid into a few private pensions from that time and some of the companies demutualised giving members unexpected extra cash. So, going it alone has had some ups and downs. I chose to fix the pension annuities payouts and right now after 20 years their value has been considerably eroded.
The best pension of all has been the State Pension, with the graduated pension and Serps addition it has kept pace and sometimes exceeded inflation.
My advice is to get a good State Pension and work for National or Local Government or the armed forces. Then you will be well minted and secure in retirement.
As others have observed the State Pension isnt sufficient and should be higher but if it was Britain would have a higher public debt like France.

Al

[Jdsk]

...
As others have observed the State Pension isnt sufficient and should be higher but if it was Britain would have a higher public debt like France.
...

"Do pensioners in the rest of the EU get more cash than the elderly in the UK?":
https://fullfact.org/europe/pensioners-eu-uk/
(from 2018)

Jonathan

[rjb]

The basic and new state pension are uplifted in accordance with the triple lock but check your pension statements and you will see the additional elements such as graduated pension are only increased in line with CPI.
I delayed taking my state pension and this element is increased with CPI.
Don't know about Serps so worth checking.
It's too complicated for us mear mortals. Even pension ministers get confused.

[rjb]

Here's the details from the DWP .

State pension increase 2024

Sideways again.?????
Can someone flip it for me.

[Jdsk]

[djnotts]

I wonder what form my "furious backlash" might take. Perhaps I won't vote Tory....

"The headline in the Express reads: "Cut tax or lose grey vote"
Image caption,
The Sunday Express says the Conservatives have been warned they face a "furious backlash from pensioners" if they fail to cut income tax. The paper says the freeze in the personal allowance has meant the number of over-65s liable to pay income tax has almost doubled since the party came to power and that angry campaigners argue pensioners are being "ravaged by rampant inflation". It adds that Mr Hunt is "edging towards" cutting national insurance instead of income tax, but that over-65s don't pay national insurance, so wouldn't benefit from any cut." [BBC News]

[briansnail]

T

he Sunday Express says the Conservatives have been warned they face a "furious backlash from pensioners" if they fail to cut income tax. The paper says the freeze in the personal allowance has meant the number of over-65s liable to pay income tax has almost doubled since the party

A lot of my neighbours are pensioners.They prefer the old system where bank accounts etc were taxed at sourced.Now they do not know where they are with personal allowances etc.
What Mr Sunak and Mr Jeremy Hunt must realise is unlike them .Most of the public do not have access and can not afford an Accountant.
It was easier for the well off pensioners to reclaim any tax in the "old days".