Back to a wealth tax then. Otherwise that money gets more and more pooled into 'haves', and that will need to include pension pots.
But you also need to recognise that you've made lifestyle choices that mean you're never going to get much of a pension
The best argument for it IMO is simplifying the tax code. I would far prefer the tax income required to be raised from a few major tax codes (VAT, Income tax etc) rather than adding complexity to try and raise cash without people noticing by taxing everything.
Definitely, those on minimum wage (based on 40 hour week), +£1k, should not have to pay income tax.
However it isnt only income tax, pretty much everything you buy or do has another tax on it. I don't know how we compare to other Countries, but the UK certainly seems to be a highly taxed Country, and even that isn't enough to pay the bills, so something is going seriously wrong.
But you also need to recognise that you've made lifestyle choices that mean you're never going to get much of a pension
That for me?
I figured a long time ago that it'll be expected that I have to keep working till I'm 70. Decided to use the time and money I have now to enjoy life and do the things I didn't have time for when I was working 50-60 hours a week, paying €1600 a month rent and constantly chasing my arse.
See enough pensioners who have all the time and money in the world, but not the health to make the most of it.
I'll potter about when I'm older doing odd jobs. If you have a trade you'll never be out of work and I doubt AI is going to replace my skillset anytime soon.
I'm not complaining. I've never been as content as I am now.
I'm writing this as I sit on a chairlift in the Italian Alps. In 45 seconds I'll be hurtling back down the mountain (unless I stop for a coffee).
I don't know how we compare to other Countries, but the UK certainly seems to be a highly taxed Country
I hate to break it to you, but we are not even averagely taxed. And compared to the Scandinavian countries many of us aspire to be more like, what with their higher standards of living, better healthcare and education and consistently top scoring on happiness surveys.......our tax levels are laughably low.
And slightly counterintuitively to what it 'feels' to be British, we rely on our high earner, high rate tax payers a lot more than most countries to keep the lights on.
UK has the wealthiest pensioners based on assets, but only median income compared with peers (about 90% of median working income if i recall correctly)
They put my retirement age up to 67 over the 10 years I never bothered to check (It was originally 66). I have, however made other arrangements and not planned on the state pension - of which I have completed my 35 years already.
For Mrs TiRed, we buy extra years, one only needs to live three years post retirement for these to pay back. Thats the big problem with the state pension , nobody is paying/saving anywhere near enough. And don’t get me started on the five lost years we had to buy due to the Child Benefit scandal a few years back. We didn’t get CB due to my income, but weren't told she had to claim it to get the NI credits and pay it back. So we are buying those years and don’t expect any refund. About 2.5 million stay at home parents affected times £900 per year x 5 years is an £11bn hole. Forget WASPi’s.
The boomer generation should be getting taxed much harder.
I think that's too general and let is not forget that for every retiree in a mansion, with pots of cash and a high monthly income, there's a lot more living on nothing but state pension in a rented home....
I do think wealthy pensioners should pay tax at the same rate as everyone else. The proposal earlier about getting rid of NI is good, and ensures that pensioners who earn more immediately get a hike in tax. As a retiree you still get the same public services as I do.
I also think we have a huge issue looming where instead of just delaying retirement we may start limiting pensions - but that would break a huge social contract in the UK over NI = pension. Perhaps we need politicians looking ahead to break the connection between NI and pension.
For me much of the issue is not pension, it's inherited wealth, it's tax avoidance, it's progressive tax policy...
And I know my 20-something kids will get nothing. Therefore I think there is something in the suggestion that today's pensions are the cost of the younger generation...
Ramin knows a lot about this sort of thing. His message is change is likely but "don't panic".
The part that annoys me is the shifting goal posts on your private pot. It lags the state by 10 years
So when I started my workplace pension I could withdraw from 50-55-57 next year
Under these proposals that will rise again . I've still 28 years to go. That's some pretty radical change in not even half my working life.
So while the tax free pension wrapper is tax efficient it's not complete plan.
Yep, I remember starting a private one you could take at 50 but then they change the age to 55,I thought it was a bit iffy.
The boomer generation should be getting taxed much harder.
And I know my 20-something kids will get nothing. Therefore I think there is something in the suggestion that today's pensions are the cost of the younger generation...
TBH the older I get the more I think that U.K. peeps actually hate kids.
The boomer generation should be getting taxed much harder.
And I know my 20-something kids will get nothing. Therefore I think there is something in the suggestion that today's pensions are the cost of the younger generation...
TBH the older I get the more I think that U.K. peeps actually hate kids.
TBF, the Tories really truly did.
Here's the flaw in all this...
- those with the ££££ and ability will dodge the rules and still get the money. Just as the very rich avoid tax already.
- the lazy who never contributed will still get payouts
- the middle will get shaften further.
What means testing will do is encourage people to not bother saving for old age. Or to spaff it away in the good health years so the apparent 'means' is reduced as far as possible before state pension age. Coke. Hookers. Gold, Land Cruisers. Dogs. That's what I'm doing. Though its more diet Pepsi and coat hooks.
Buy stuff you can sell 2nd hand for cash later. The talk of Insurance- err that's what National Insurance was for originally (yes I know it disappears into general wastage)
I do think wealthy pensioners should pay tax at the same rate as everyone else.
In what way do they not ? Asking for a (not very wealthy) friend.
In what way do they not ? Asking for a (not very wealthy) friend.
You do not pay National insurance once you reach state retirement age - essentially an 8% income tax on your first £50k (Ish) and 2% on everything after that.
You do not pay National insurance once you reach state retirement age
OK, but I don't suppose many people are in paid employment after state retirement age?
And I know my 20-something kids will get nothing.
i plan to pay my state pension into my 20-something’s personal pension plan. I have saved hard into a private pension and think I will just escape means testing said state pension.
You do not pay National insurance once you reach state retirement age
OK, but I don't suppose many people are in paid employment after state retirement age?
But you don't pay it on your pension either.
This is the point of getting rid of NI and creating a much more progressive set of tax "steps" - it places burden on those who can afford it and still have a decent amount of disposable income.
I also think things like adding more levels to council tax above what we have currently is also part of this.
But you don't pay it on your pension either.
Im not sure reducing the state pension by 8% will win you many elections
The really wealthy love this type of discussion, with the little people trying to drag each other into the shit while they sip champagne in Monte Carlo.
If the load was spread wider (so paid on income regardless of it was investments and pensions and the rate didn't fall off a cliff to just 2% on everything over £50K) the rise in income tax rates would not have to be anything like as much as 8%.
You propose confiscating old people’s savings?
You propose confiscating old people’s savings?
That makes zero sense - you might have to explain.
I propose a society that pays for itself in a more equitable way than it does now, through all ages.
Given my age, scraping it now and switching to a new system instantly would disadvantage me more than most. Doesn't mean I don't think it would not be the right thing to do though.
That makes zero sense - you might have to explain.
Pensions largely consist of people spending money they have saved over their lives. You seem to be advocating confiscating that money. How you arrive at the idea that that is "equitable" you might have to explain yourself.
I think that's too general and let is not forget that for every retiree in a mansion, with pots of cash and a high monthly income, there's a lot more living on nothing but state pension in a rented home....
Then let's tax the ones living in mansions with big incomes they cant/won't/don't spend.
I think this attack on the elderly would be more "equitable" if it was accompanied - or, better, preceded - by concrete steps to improve the social care system and the NHS. Taking peoples' money and then leaving them sitting in their own shit hardly seems fair.
You seem to be advocating confiscating that money
Taxing wealth.
you might have to explain yourself.
Think of it over a whole life rather than fixating just on the pensioner age of our little journey through life.
Working people on bang average wages are currently paying 8% NI in addition to their income tax. They are doing this alongside saving for a deposit for a house, bringing up kids, maybe paying their university loans. They are in a PAYE job without 'tax dodges' like paying themselves in dividends and they don't have investments that don't attract NI.
Now imagine a world where that person is no longer paying out that 8% month in month out. Instead they are paying a more achievable 4% or 5% extra income tax. The difference they can use to pay for everyday stuff or getting that deposit saved a bit earlier, or they can put it into their pension. They get to pensionable age a little better off and yes they'll be paying a higher rate of income tax than currently but I'd hope they'd get there in better shape to pay it.
Along the way, I'd hope we'd have made taxation more equitable, with income from investments and big pensions not avoiding it.
Given a choice, I'd want to live my whole life in my reformed model of taxation rather than the current one.
Now imagine a world where that person is no longer paying out that 8% month in month out. Instead they are paying a more achievable 4% or 5% extra income tax.
And the source of those numbers is?
And the source of those numbers is?
Its an educated guess but it won't be far off. I looked with a little ai assistance at the revenue from NI and how many were paying it, the number of pensioners 'earning' enough to meaningfully contribute, looked a some stuff to do with dividends and mashed it all up back if dag packet style.
The deal breaker would be the fall away at £50k to just 2% with NI and how brave you would be at taxing the higher earner more when you came up with the thresholds.
@alpin that's some sweeping generalisation you make there based on two cases you personally know . I've been following this debate and the infighting being stirred up by the media . I'm 70 Mrs OF 67 so right in the middle of that Boomer generation. All this talk of Boomers sitting in huge houses worth over half a million £ certainly doesn't apply to us if only 😔 we'd be lucky to get £300000 for our 3 bed semi and what we could get to replace it after all the legal stuff wouldn't be any better off .
Those two cases you mention sound a bit like the in-laws until they both got dementia and had to pay £1000 a week each for care . Doesn't take long to rattle through that nest egg at that rate .
But back to the high value houses you and others talk about . If the occupants did want to downsize two things where are all these buyers for 1/2 million plus houses coming from if Joe average is struggling now ? Then if they do find a buyer and buy a small one bedroom house and live on their " I'll gotten gains " 🤔that's a large chunk of the first time buyer market left with nowhere remotely affordable to buy ?
I like most people don't have the answers even if some claim to but pitting generations against each other has gotten old really quickly 😔
I don't know how we compare to other Countries, but the UK certainly seems to be a highly taxed Country
I hate to break it to you, but we are not even averagely taxed. And compared to the Scandinavian countries many of us aspire to be more like, what with their higher standards of living, better healthcare and education and consistently top scoring on happiness surveys.......our tax levels are laughably low.
And slightly counterintuitively to what it 'feels' to be British, we rely on our high earner, high rate tax payers a lot more than most countries to keep the lights on.
Point well made and good to recognise UK over relies on the top few % to for tax receipts so the majority pay disproportionately less tax when compared to the rest of the EU.
We get the services we deserve and always going after the better off is going to blow up at some point as people realise striving isn’t worth the return.
Yup, they're generalisations. I only gave two examples (those closest to home), but I've got many more from extended family and friends.
As I see it, the older generations (in developed countries) are (generally) much better off than their kids are.
Friends that have bought their own gaff have done so thanks to the bank of mum and dad or thanks to inheritance.
If the occupants did want to downsize two things where are all these buyers for 1/2 million plus houses coming from if Joe average is struggling now ?
Maybe if there were more properties on the market the prices would reflect that.
I could, without much thought, give ten examples of retired singles or couples knocking about in houses way too big for their needs, where more than half the house isn't used.
Most youngsters don't want a small gaff if they're planning on having a family of their own. They need the houses that are currently occupied by their parents or grandparents.
It's the same story in Germany, in Switzerland, in Italy, in Australia and much of elsewhere in the western world.
Yes, after researching it, we are not a 'highly' taxed Country, but more mid-range rather than low.
The linked article HERE breaks it down half way through, income tax and VAT are roughly comparable among Countries, Scandinavian Countries have a higher income tax income, where UK falls down is 'Social security contributions' which are lower here than many other places, and broadly similar to the USA, which, as we know , has a very poor benefit system.
Even so, the system is failing, we all know that, but tweaking the edges isnt going to do any good in the long term.
you do understand that the money went into the pension tax-free?
It did, and it’s taxed coming out of the pension pot, but now convert wants me to pay NI on it a second time.
i do agree that young people have been given a shitty deal - the student loans scam is a prime example, screwing up the climate is another - but a rolling programme of impoverishment is not the way forward.
Im not sure reducing the state pension by 8% will win you many elections
But balancing removing NI with tax allowance levels would/could balance out. And a more progressive tax approach would see our poorer pensioners (and rest of population) no worse off, while moving burden of tax upwards.
I don't see how discouraging younger people from saving is a good way to stave off a pensions funding crisis
These discussions are infuriating as they miss that actually life isn't as simple as stated by those on here. My parents are "boomers" (what a disgustingly lazy and demeaning turn of phrase) and they are in a nice flat in a nice building but it is 2 bedrooms and not worth much more than £250k. They have savings that they built up and now are not in a position to spend (one a teacher the other a nurse). But although house buying was in their reach it was not easy
We are lots of stews and I remember sugar sandwiches because jam was expensive. It was not all an easy ride and household spending was tilted differently.
The generalisations here are the sames as those where all Zs have the newest iPhone and nice cars on finance (undoubtedly true for some but not all)
Came back to add: so many posters are focussing on current pensioners.
However I'm looking at the whole tax system, from Income and NI, through VAT, investments, property tax, inheritance, everything. At present it's a over complex mix that favours the wealthy. That's what needs to change, not a harsh jealousness of current pension.
I'm resolutely ignoring this whole discussion so that in 30 years or so I can claim that it's caught me completely by surprise.
My parents are "boomers" (what a disgustingly lazy and demeaning turn of phrase)
Does adding 'Baby' to that make it sound any better? The post war generation have been known as baby boomers pretty much all their lives . Why does dropping the first word make it 'disgustingly lazy' and 'demeaning'? Some of us are so dull we only got an 'X' or a 'Z' to describe us, Millennials got a special name too mind. Gen W is not a thing - or rather it means something else. What would you have them called as a collective?
Yes, generalisations don't work too well when broken down to a granular individual level. And in emotive conversations like this the individual level and thinking of yourself is clearly hard not to focus on. As DrJ aptly demonstrates...
It did, and it’s taxed coming out of the pension pot, but now convert wants me to pay NI on it a second time.
Me Me Me
I wasn't actually, but I don't think big picture is your strong suite, so I'm going to leave it there.
The problem is just that - people defending their own position and fixating about the (perceived) impact on themselves and not able to put the big picture first and foremost.
Edit - Matt put it better than me above..
Your parents sound.......perfectly normal. And yes people do get very carried away with saying stuff that implies all older folk are sitting in mansions. Many are not. Statistically they collectively hold a disproportion amount of the housing stock but that does not mean all so.
Having said all that the boomers (sorry, sorry - "baby boomers' ) got to their modest house ownership and savings in a world that made it easier than it is now. Your dad will have got that degree he needed for teaching and his PGCE without attracting £60k of debt that he would pay off at 9% of his salary over £20 for the rest of his working life like a modern teacher. Same for your mum unless she was one of the last nurses not to need a degree. That's not to say there were not bumps in the road like the massive mortgage rates for part of the 80s. At today's house price to wages ratios that would be apocalyptic but even then I remember my parents struggling.
I guess what I'm saying is some sort of after the fact land grab on those in thier 70s and 80s would indeed be unfair. They didn't choose to be born in a time when overall economically it was easier to make yourself a more safe, comfortable life than it would be today in the same circumstances. Let them be, time passes faster than we appreciate and they will be only memories sooner than we all know it.
But......two things........
One- that does not mean we can setup a system that is fairer for those to come in the economic situation we find ourselves in today
Two - if the older generation(s) were able to just show collectively a little more empathy. It's hard - we look around at our peers of a similar age and see what we have as 'normal'. They need to appreciate the life their grandchild will have won't be like theirs. If they could just acknowledge that slightly more and have a little more 'holistic' with their world view - how they perceived their lot in life, how they talk about younger generations and how they vote that would be marvellous.
I don't think big picture is your strong suite
If by "big picture" you mean "wild generalisations", then no, I'll leave that to you. (The word you were looking for is "suit", by the way. Unless your intention was to insult my sofa and armchairs?)
I agree with matt - we need reform but one driven by actual fairness, not targeting of a vulnerable cohort while ignoring the actual cause of inequality.
It did, and it’s taxed coming out of the pension pot, but now convert wants me to pay NI on it a second time.
You what?
Is the hope people die before they can chill out a little?
The latest generation have it sussed. Chill out before you start getting a job. No rush to get into a job where you have to work until you are 70 and may never make it far enough to ever stop working.
The word you were looking for is "suit", by the way
😀Sorry, yes my spelling is as bad as your comprehension 😉
But thanks for the compliments about generalisations. If you are talking about whole scale reform that's where you have to begin. Start by considering the 'needs' of the hand wringers mostly worried about their own lot and you end up with rubbish systems like the one we have at the moment.
