mrk
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Post by mrk on Oct 12, 2022 17:31:38 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. Here's a graph of pension spending as % of GDP (from ukpublicspending.co.uk/uk_national_pensions_analysis)
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Post by bernythedolt on Oct 12, 2022 17:35:13 GMT
But there's no reason pensions should cease to exist Did anybody suggest otherwise? mrk above used the phrase "quickly becoming unsustainable". (Obvs nobody here really wants to see that).
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Post by bernythedolt on Oct 12, 2022 17:41:44 GMT
'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. Here's a graph of pension spending as % of GDP (from ukpublicspending.co.uk/uk_national_pensions_analysis) That graph aligns well with the recognition in 2011 that they could no longer afford women's state pensions from age 60, so accelerated the adjusted age-65 dates. I would like to think that clever minds like Steve Webb (or those who've since taken up the reins) will continue to age-adjust to keep that graph on track.
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Post by crabbyoldgit on Oct 12, 2022 18:04:22 GMT
Yes increasing the retirement age , within reason , is the answer to the increasing age profile of the population.As a 68 year old who still does a 14hr day 5 or 6 times a month in a physical job clambering over roofs there is no reason many older people cannot be economically active. I pay tax on every penny I earn and all of my state pension .The reason I am comfortably off is I have worked non stop from the age of 16 and saved in effect 15% of my pay into a company pension. My wife has never had a foreign holiday, instead we payed off the morgage early , purchased solar panels and a log burner. Now our prudence is about to paying off. I am buggered if I am going to accept a reduction in my state pension when those who took short term choices with their money and now drive 3 or 4 year old cars will be untouched. Ps our old van is 23 years old and I still roll arround under the thing fixing it myself , hateing every minute, because it enables us to manage our money. So we have savings and means testing would punish us for our choices ,so where is the financial hazard in not making merry and letting the prudent mugs pick up the bill.Rant over, sorry.
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agent69
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Post by agent69 on Oct 12, 2022 18:47:42 GMT
Yes increasing the retirement age , within reason , is the answer to the increasing age profile of the population.As a 68 year old who still does a 14hr day 5 or 6 times a month in a physical job clambering over roofs there is no reason many older people cannot be economically active. I pay tax on every penny I earn and all of my state pension .The reason I am comfortably off is I have worked non stop from the age of 16 and saved in effect 15% of my pay into a company pension. My wife has never had a foreign holiday, instead we payed off the morgage early , purchased solar panels and a log burner. Now our prudence is about to paying off. I am buggered if I am going to accept a reduction in my state pension when those who took short term choices with their money and now drive 3 or 4 year old cars will be untouched. Ps our old van is 23 years old and I still roll arround under the thing fixing it myself , hateing every minute, because it enables us to manage our money. So we have savings and means testing would punish us for our choices ,so where is the financial hazard in not making merry and letting the prudent mugs pick up the bill.Rant over, sorry. You go by yourself?
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adrianc
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Post by adrianc on Oct 12, 2022 18:55:47 GMT
Be interesting to see that as a %age of government expenditure.
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Post by overthehill on Oct 12, 2022 19:03:02 GMT
Yes increasing the retirement age , within reason , is the answer to the increasing age profile of the population.As a 68 year old who still does a 14hr day 5 or 6 times a month in a physical job clambering over roofs there is no reason many older people cannot be economically active. I pay tax on every penny I earn and all of my state pension .The reason I am comfortably off is I have worked non stop from the age of 16 and saved in effect 15% of my pay into a company pension. My wife has never had a foreign holiday, instead we payed off the morgage early , purchased solar panels and a log burner. Now our prudence is about to paying off. I am buggered if I am going to accept a reduction in my state pension when those who took short term choices with their money and now drive 3 or 4 year old cars will be untouched. Ps our old van is 23 years old and I still roll arround under the thing fixing it myself , hateing every minute, because it enables us to manage our money. So we have savings and means testing would punish us for our choices ,so where is the financial hazard in not making merry and letting the prudent mugs pick up the bill.Rant over, sorry.
So your wife has never been to Scotland ? Better to wait a while now as it could be the new bulgaria in a couple of years.
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mrk
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Post by mrk on Oct 12, 2022 19:41:03 GMT
Be interesting to see that as a %age of government expenditure. You can see a breakdown for each year on the same site, e.g. pensions were 19.3% of total spending in 2019, compared to e.g. 11.9% in 1990 and 8.2% in 1960. They went down to 14.8% in 2021, mostly because the denominator (i.e. total spending) was a lot larger (£852.2B in 2019; £1,102.4B in 2021).
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Post by crabbyoldgit on Oct 12, 2022 19:46:32 GMT
Yes increasing the retirement age , within reason , is the answer to the increasing age profile of the population.As a 68 year old who still does a 14hr day 5 or 6 times a month in a physical job clambering over roofs there is no reason many older people cannot be economically active. I pay tax on every penny I earn and all of my state pension .The reason I am comfortably off is I have worked non stop from the age of 16 and saved in effect 15% of my pay into a company pension. My wife has never had a foreign holiday, instead we payed off the morgage early , purchased solar panels and a log burner. Now our prudence is about to paying off. I am buggered if I am going to accept a reduction in my state pension when those who took short term choices with their money and now drive 3 or 4 year old cars will be untouched. Ps our old van is 23 years old and I still roll arround under the thing fixing it myself , hateing every minute, because it enables us to manage our money. So we have savings and means testing would punish us for our choices ,so where is the financial hazard in not making merry and letting the prudent mugs pick up the bill.Rant over, sorry.
So your wife has never been to Scotland ? Better to wait a while now as it could be the new bulgaria in a couple of years.
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littleoldlady
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Post by littleoldlady on Oct 12, 2022 19:56:26 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. . Not so. Life expectancy has been falling for years, even before Covid. Many sources, eg from your favourite paper www.theguardian.com/society/2019/jun/23/why-is-life-expectancy-falling
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benaj
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Post by benaj on Oct 12, 2022 20:06:54 GMT
Life expectancy fallen? Or is it a plot to reduce state pensioners? TBH, the current pension system is not too bad if income poverty and housing costs have been tackled. researchbriefings.files.parliament.uk/documents/SN00290/SN00290.pdfShould the gov tell every pensioners to defer pension 25 weeks to get extra 5% boost and hope another unprepared pandemic coming?
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Post by crabbyoldgit on Oct 12, 2022 20:15:23 GMT
Nope never got to Scotland , made lake district a few times. Wales never thank god. Been up north a fair bit , ps north starts just below Bristol and anything above the M4 is deepest darkest north, coal mines, wippets and clogs, scarey stuff. I went to the USA and Canada in about 1975 for 3 months, but the wife was about 6 or 7 then and we had not met yet. Being nearly a Portlander , dad came from London.I am a bit of a failure too outgoing by far, true Portlanders only go to the mainland under exstream duress, terminal illness or to Bridport to gain a wife , stop the inbreeding.Never Weymouth girls ,old enemies,they supported Cromwell in the civil war you know, not to be trusted.
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pikestaff
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Post by pikestaff on Oct 13, 2022 8:26:21 GMT
Misleading headline. The referenced article is really about worsening health inequality. Life expectancy falling in some groups, but stalled overall. Covid will of course have had an effect, but that is fading and will continue to fade as immunity/resistance grows and it becomes (in effect) just another cold virus. Be that as it may, the demographic timebomb graphically illustrated by mrk earlier in this thread is the result of existing increases in life expectancy to date passing through the system as the existing population ages. The impact of Covid on that picture is pretty trivial. It's no surprise at all that, given the state of the government's finances, the state pension age will probably have to be raised more quickly than currently planned. Returning to the OP, I've said before that I support better targeting of the state pension. More generous pensions for those that need them, with a claw back from those that don't, would be an improvement on the present system. But getting there from here is not easy, given (1) vested interests generally, (2) the pervasive fiction that we have paid for our pensions through our NI contributions, and (3) the fact that it's not entirely a fiction, because the pension is linked to the number of years contributions and it has long been possible to make voluntary contributions to buy extra years (as we have done). The "Labour proposal" in the OP (which looks like a scare story) would effectively tax the first £30k of private pension (for those receiving the state pension) at a minimum of 70% (or maybe 69%), being the 50% clawback shown in the OP, plus basic rate tax at 20% or (if enacted) 19%. That's much too severe and won't ever happen. Also it looks only at income and not capital. There has to be a better way to do it. I'd start by simplifying the taxation of private pensions as follows: (1) Abolish the tax free lump sum, which lets people take out 25% of their pension pot tax free. (2) Tax private pensions on exit at higher rate (40%) reduced to basic rate for UK residents to the extent, but only to the extent, that they do not get a full state pension. (3) Abolish the limits on pension contributions, which would no longer be needed. I'd combine this with a modest wealth tax (with deferred arrangements for those who are asset rich but cash poor). I'd also like to see a reduction in other middle class tax subsidies (cap ISAs, reduce special allowances for savings income).
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adrianc
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Post by adrianc on Oct 13, 2022 8:31:10 GMT
Nope never got to Scotland , made lake district a few times. Wales never thank god. Been up north a fair bit , ps north starts just below Bristol and anything above the M4 is deepest darkest north, coal mines, wippets and clogs, scarey stuff. I went to the USA and Canada in about 1975 for 3 months, but the wife was about 6 or 7 then and we had not met yet. I find it deeply sad that somebody should be proud of such limited experiences and outlook, tbh.
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jonno
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Post by jonno on Oct 13, 2022 9:07:28 GMT
Nope never got to Scotland , made lake district a few times. Wales never thank god. Been up north a fair bit , ps north starts just below Bristol and anything above the M4 is deepest darkest north, coal mines, wippets and clogs, scarey stuff. I went to the USA and Canada in about 1975 for 3 months, but the wife was about 6 or 7 then and we had not met yet. I find it deeply sad that somebody should be proud of such limited experiences and outlook, tbh. I find it deeply sad that some people have what can best be described as "humour bypasses"
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