jonno
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Post by jonno on Oct 12, 2022 13:08:49 GMT
A system where pensions are paid through general taxation effectively means young people in work are paying old people who are retired. This was fine when the population pyramid looked like in 1966, but it's quickly becoming unsustainable as the percentage of the population of pension age keeps increasing due to demographic change(Source: Living longer: is age 70 the new age 65?) Is it fair that young people have to see more and more of their taxes allocated to paying for pensions, when they themselves cannot even be sure there will still be a state pension for them by the time they're old? Just bear in mind that if it wasn't for the struggles, hard work and determination of the majority of today's pensioners there may well be no democratic, reasonably wealthy society for them to inherit. I am not yet a State pensioner, but have always worked hard, paid eye watering tax and NI, yet felt privileged to contribute toward the health and wealth of our nation's elderly. It is often said that a nation is best judged by the way it treats its' elderly; don't be too hasty to engage in a race to the bottom.
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keitha
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Post by keitha on Oct 12, 2022 13:22:08 GMT
I have younger friends who see the state pension as a burden and the cause of high taxes, interestingly one of the most vocal is disabled and constantly says without the state pension the disabled could be given far higher benefits. Of course, because he's never going to recover, he will always get disability benefits, I do wonder if his view would change if they said all benefits stop at 66/7/8.
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jlend
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Post by jlend on Oct 12, 2022 13:30:46 GMT
Genuine question - do we actually "pay in" or contribute to the state pension? I thought they were paid out of general taxation? - My DB pension is effectively paid from the returns on investments that were funded by the contributions that my former employer and myself made over a number of years into the pension scheme
- My SIPP is funded by a pot of money my former employer and myself paid into over a number of years
- There is no pot of money reserved for state pensions, it's paid for by current taxation.
One of the great cons of government economics is that debt figures don't include the liability to make future pension payments.
As somebody who gets his first government pension payment in about 2 weeks time (along with me bus pass), I'm not too keen on it suddenly being means tested. Unfortunately, the government has a difficult task in trying to decide who they should help in society. Just consider help with fuel bills. I have dual tariff electricity with storage heaters and in the winter use about 4 times as much during the night as daytime. Fortunately, my recent quote saw the night time rate go down by 20 %, so:
- monthly payments 24 months ago were about £100
- monthly payments are currently about £140
- based on historic winter use (and the reduced night time rate) my bill for the next 6 months will be about £136 / month minus the £66 / month government rebate = £70 a month. That's the lowest monthly rate for about 5 years.
Should I be getting the £400 rebate - probably not, am I going to send it back - no.
I don't know anything about your circumstances and this isn't in any way directed at you for avoidance of doubt. We have donated our £400 to charity. I have friends who have done the same. Something a few of us could at least consider depending on our circumstances and other charity contributions.
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adrianc
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Post by adrianc on Oct 12, 2022 13:39:05 GMT
I am not yet a State pensioner, but have always worked hard, paid eye watering tax and NI, yet felt privileged to contribute toward the health and wealth of our nation's elderly. It is often said that a nation is best judged by the way it treats its' elderly; don't be too hasty to engage in a race to the bottom. My suggestion is to give ALL of the needy the same future-proofing as recipients of state pensioners get now, not to remove that future-proofing from those who need the state pension. I'm explicitly not suggesting any change that would affect those older people for whom the state pension is an important part of their income. My suggestion is to trade off provision of benefits from those who do not need it, in favour of those who do. I am suggesting moving prioritisation from simple age to need.
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jlend
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Post by jlend on Oct 12, 2022 13:42:24 GMT
I have younger friends who see the state pension as a burden and the cause of high taxes, interestingly one of the most vocal is disabled and constantly says without the state pension the disabled could be given far higher benefits. Of course, because he's never going to recover, he will always get disability benefits, I do wonder if his view would change if they said all benefits stop at 66/7/8. One of my younger brothers is severely disabled now due to a hereditary condition that hit him in his 40s It is very unlikely he will make it to state pension age so we have organised his finances around that. He is very fortunate that he has a good ill health retirement pension as an ex head teacher, together with PIP allowance etc.
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jlend
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Post by jlend on Oct 12, 2022 14:23:25 GMT
I am not yet a State pensioner, but have always worked hard, paid eye watering tax and NI, yet felt privileged to contribute toward the health and wealth of our nation's elderly. It is often said that a nation is best judged by the way it treats its' elderly; don't be too hasty to engage in a race to the bottom. My suggestion is to give ALL of the needy the same future-proofing as recipients of state pensioners get now, not to remove that future-proofing from those who need the state pension. I'm explicitly not suggesting any change that would affect those older people for whom the state pension is an important part of their income. My suggestion is to trade off provision of benefits from those who do not need it, in favour of those who do. I am suggesting moving prioritisation from simple age to need. It is an interesting idea. It depends on ones general feelings on wealth distribution and inequality i suspect. We already have pension credits where pensioners income is topped up. 1.4 million people get pension credit and it is estimated 850,000 additional people would be eligible. Total state pensioners is circa 12.5m Any scheme would have to consider someone's income and capital just like pension credits, else you may end up with some strange anomalies as some wealthy people arrange their finances around capital rather than income. I do think generally we may be storing up issues that future generations will be saddled with, and pensions and saving for old age needs generally is just one of them....
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adrianc
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Post by adrianc on Oct 12, 2022 14:35:20 GMT
We already have pension credits where pensioners income is topped up. 1.4 million people get pension credit and it is estimated 850,000 additional people would be eligible. Total state pensioners is circa 12.5m Indeed we do - the poorest ~10% of pensioners receive more from the benefits system than wealthier ones. As with any thing wealth- or income-related. There are always those who will game the system, or help others to do so for profit. But what lengths will the wealthy go to in order to wangle the value of the state pension? It's currently just under £10k - there simply isn't the risk-reward in the same way as there are for ways of evading taxes. Child benefit went from being universal to being means-tested nine years ago, let's not forget. And, yes, at the other end of the spectrum you have those who should receive it but will refuse to participate in means-testing out of some misplaced pride. It's one huge demographic time bomb, and it's closer than we think. But those who benefit from the status quo are the most likely to vote a certain way - and are rewarded for it.
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keitha
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Post by keitha on Oct 12, 2022 15:29:53 GMT
I agree with the "proud poor" adrianc made. many years ago my grandfather, who had been in the workhouse as a child was in need of state assistance, he refused to go as the Social Services office was based in what had been one of the workhouses in town. a couple of year later after a fall he was placed in a nursing home, and was very agitated when I visited, again it turned out the home was a former workhouse, and he thought he would be treated in a similar way to how he'd seen elderly people being treated when he was young. I know a couple of the local "proud poor" they are trying to survive on less that £150 a week. I help then out with "excess" veg from my allotment and I have on occasions purchased stuff to give them. But trying to get them to ask for help is like pulling teeth. I have replaced a lot of incandescent bulbs for both of them with "spares" I have where I am I see 5 groups of people Those who are working and have a decent income, or are retired with a decent income Those who are working or retired and are struggling because they are just above the intervention level Those entitled to benefits but are too proud to claim Those who get help, but for various reasons it's not enough, i.e. they aren't getting all they are entitled to and finally the relatively small group, who play the benefits system and have a decent lifestyle on benefits, and yes I know that we have a benefits cap but some seem able to either get round it or have an extra undeclared source of income. it's the middle 3 groups who we should be trying to assist, particularly with excessive energy bills
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keitha
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Post by keitha on Oct 12, 2022 15:39:59 GMT
General taxation to pay for pensions does affect the majority of pensioners who have a personal/private pension
As soon as my pension kicks in at £180 a week or whatever I will instantly be giving 19% back to the government in tax, taking the tax I pay on my pension into account then I will be paying back well over 50% of my state pension just in direct tax, let alone what I will pay in VAT, fuel duty, etc.
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adrianc
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Post by adrianc on Oct 12, 2022 15:43:05 GMT
Those entitled to benefits but are too proud to claim This is a sociological problem, not a benefits system one. There's charities dedicated to helping this group get all they're entitled to. Really, both of these groups are the same thing - the money is available to them, but they aren't getting it. Only the reasons differ. I rather suspect most of the "extra undeclared source of income" for this group is not within the law...
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Post by bernythedolt on Oct 12, 2022 16:55:56 GMT
A system where pensions are paid through general taxation effectively means young people in work are paying old people who are retired. This was fine when the population pyramid looked like in 1966, but it's quickly becoming unsustainable as the percentage of the population of pension age keeps increasing due to demographic change(Source: Living longer: is age 70 the new age 65?) Is it fair that young people have to see more and more of their taxes allocated to paying for pensions, when they themselves cannot even be sure there will still be a state pension for them by the time they're old? 'Twas ever thus, taxpayers supporting the elderly retired from working, who did the same for the generation before them, etc. Just as it should be in a civilised society. The model shouldn't really become unsustainable provided government continues to ensure the pensioned demographic remains correctly proportioned to the working population. Isn't that the very reason they are gradually pushing back the pension age over the next few years? It's being done in recognition of the problem you've rightly outlined.
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Post by bernythedolt on Oct 12, 2022 17:18:01 GMT
If course, those fortunate enough to enjoy the income off a couple of let properties, like adrianc , will feel cushioned and insulated. People in that position are not obliged to claim their state pension. Indeed. I am fortunate enough that I almost certainly won't need the state pension. It shouldn't be my choice whether to be given rapidly-increasing free money I don't need, at a time when others are being told that they have to sink deeper into poverty. With the greatest respect, I'm sure you can see how those who own multiple properties in the UK are not in a good position to lecture others about inequality and poverty in the UK.
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adrianc
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Post by adrianc on Oct 12, 2022 17:20:55 GMT
The model shouldn't really become unsustainable provided government continues to ensure the pensioned demographic remains correctly proportioned to the working population. Isn't that the very reason they are gradually pushing back the pension age over the next few years? It's being done in recognition of the problem you've rightly outlined. Mmm. Two rather mahoosive issues with that. One is that average life expectancy is growing faster than the pension age is changing. The other is that the proportion of people in the upper age bands is growing faster than the pension age is changing.
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Post by bernythedolt on Oct 12, 2022 17:28:21 GMT
The model shouldn't really become unsustainable provided government continues to ensure the pensioned demographic remains correctly proportioned to the working population. Isn't that the very reason they are gradually pushing back the pension age over the next few years? It's being done in recognition of the problem you've rightly outlined. Mmm. Two rather mahoosive issues with that. One is that average life expectancy is growing faster than the pension age is changing. The other is that the proportion of people in the upper age bands is growing faster than the pension age is changing. Yes, they will need to adapt the model to suit, granted. But there's no reason pensions should cease to exist, provided they get the projections right and adjust ages accordingly going forward.
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adrianc
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Post by adrianc on Oct 12, 2022 17:30:06 GMT
But there's no reason pensions should cease to exist Did anybody suggest otherwise?
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