That 22bn

Lots of scope to increase air taxes given aviation fuel is tax free and leads to ludicrously low air fares.  Air duty per mile looks totally valid

Are you oblivious to the fact that it easily found nearly 400bn in 2020?  Did your taxes need to rise substantially to pay for it?

You’re trying to correlate what was a global crisis (COVID-19), and process done by almost all nations, to the UK using this as proof that they can do the same again as a singular nation without consequence?

Are you oblivious to the fact that it easily found nearly 400bn in 2020?  Did your taxes need to rise substantially to pay for it?

Taxes may not rise immediately, but the money still has to be paid for – mostly by future generations. We only finished paying off WW2 debts to the USA in 2006 and the last payment we made was £80smomething million.

and if it was all such a great deal, you’d all be rushing to come and join us i

It’s a great deal, but perhaps the working conditions are not. Current accrual is 1/60th of final salary, which for tax purposes is equivalent to 20/60 or 33% of salary contributed into a pension pot. In fact the best current annuity rates for retirement at 60 are about £6000 pension per £100k, a multiplier of 18x, so that 20x multiplier is reasonable (obviously it’s worse if you retire at 55). If a private sector company is contributing, say the minimum of 3%, then salary equivalence is achieved at 1.30/1.03 = 1.26 – the private sector needs to pay 26% more for the same overall return. That overage decreases as a private company contributes more, so at 10% it is only 18%. No company is putting in 30% of employees salary.

The best deal by far in pension land is to buy any missing NI years. Each missing year earns 1/35th of the state pension and you will pay £907 and for that year. BUT you will get an additional £328 in annual pension (at todays rate, but triple locked). You need only draw state pension for three years to pay for itself! In the private pension world, you would need to have 20*328 = £6572 in your private pension to get the same income – 7 times less real money out of your salary.

And you wonder why the economy is in trouble. Means testing of state pension in some form will come in time. The country can’t afford it. I always planned not to receive one. I hope I am wrong in 10 years time.

 In fact the best current annuity rates for retirement at 60 are about £6000 pension per £100k

And that is presumably a flat line with no inflation adjustment (and no survivor pension) which knocks a fair bit off the annuity rate.  The off balance liability of future public sector pensions is over £1.2 billion of which only a small proportion is funded.  Very few understand the true value of defined benefit pensions, whilst the gap between the cost has reduced as we have finally moved to a real interest rate, the discrepancy is still very high and undervalued by both employees and potential employees.

EDIT:  Defined Benefit Pensions are also undervalued by the tax system so you can build up a higher tax free pension pot – last time I checked the figures before the recent changes it was about double and I guess it is a further 50% now – subject to interest rate adjustments to which the calculations are sensitive.

Means testing of state pension in some form will come in time.

Not really needed if all income taxed appropriately.

The off balance liability of future public sector pensions is over £1.2 billion of which only a small proportion is funded

this is only true if no one contributes any more and everyone retires now.  The NHS pension scheme for example is in surplus in that the contributions from employees are a million a year more than the outgoings.  If my NHS pension had been invested then I would have received a lot more.  Its not our fault the government have used our contributions as revenue rather than investing them

Its also very different to a private pension in that there is no pot of money to access in many cases.  You get your benefits but there is no actual pot.  also rules between different schemes are very different.

Mrs TJ had 5 pension schemes.  4public sector ones, one private.  She died before accessing any of it  The private one I got the full pot.  A significant amount of money.  The various state ones I got differing benefits.  2 a small death grant – far less than contributions paid and then thats it.  The pension is gone.  One a survivors benefit and the pension is gone, one a death grant and the a very small widowers pension

I got far more money from 10 years of a private pension to 30 years of various government pensions.

for years folk have been trying to create a moral panic about public service3 pensions.  They are perfectly affordable, they are NOT the same as a private pension as in most cases there is no pot of money to access  They are much less flexible and benefits can be much lower

Do not be fooled by tory rhetoric about public sector pensions.  We accept lower pay now in return for these pensions and here is something – the average NHS pe4nsion is £8000 a year.  Funnily enough thats what mine is

without these small pensions most of us would be dependent on benefits in retirement – so this needs to be considered as well when doing the sums.

Tax is a pea shooter when it comes to managing the liability which is £3.8 trillion.

the average NHS pension is £8000 a year.

Index linked? Which would require a pension pot of approximately £160k (ignoring the 25% tax free lump sum). According to the ONS, the median average UK pension pot is for 55-64 year olds is £107,300. Which means that taking off the 25% lump sum (new car, child’s wedding, and a holiday), 60 year olds will be retiring with about £80k in their DC pot or about £4000 per annum (assuming flat rate and no spouse). They’ll be needing that £11060 state pension at 67.

There was a reason for the triple lock. Pensioner poverty was a serious issue. Things have improved but this is a multi-generational timescale for serious improvements.

[Mod] quote now removed.

Really – these are actual pensions I have access to.  What I am doing is telling the truth not the moral panic created by tories.  Public sector pensions are deferred earnings and are perfectly affordable.  Meftys numbers are as if no further contributions are made and everyone retires now2.  Neither will happen

Tired.

If my contributions had been invested in safe investments my pot would have been at least £160 000.  Its nominally valued at £125000 but worth a chunck more really

But the key difference is there is no pot of money to be had.;  My pension will die with me.  A private pension I would have had a pot of money to leave to others.  This is why public sector pensions are NOT as good a deal as some like to suggest.  2 of Mrs TJs pensions died with her.  I got a very small death grant far less than the contributions made and that is it.  The pension is gone

A private pension I would have had a pot of money to leave to others.

ony if you don’t buy an annuity.

If you buy an annuity, the pot lasts as long as you’re alive, and possibly pays out a small amount to a dependent on death, just like a defined benefits pension

if you don’t buy an annuity, the pot is effectively just cash, which means it can run out, and you have nothing to live on.

you have a choice of risk profiles with defined contribution pensions, you often don’t with defined benefit pensions (although you can sometimes cash them in).

if you don’t buy an annuity, the pot is effectively just cash, which means it can run out, and you have nothing to live on.

Exactly – but you have the pot to live on / invest as you wish – whereas with a public sector pension you might well not have this ability

A short explainer on why government debt is necessary for growth and prosperity

Why government debt is crucial for growth and prosperity

I could have that for them…..

Why are we sending £11.6bn for foreign climate change? (Nothing to do with Milibands family having fingers in alternative energy pies is it???).

Why do we keep spaffing money on pointless crap instead of sorting our own issues out?

How much of that £11.6bn is ACTUALLY going to be spent on tacking climate change?

Not a lot I suspect – that’ll be spent on  pointless studies by consultants and government departments…….

might well not have this ability

Well the ONS data is clear, those retiring on private pensions do have a real pension pot of real money. But they don’t have much in that pot and their spending power will be half of the average NHS pension. Let’s hope they also have some savings, but I think we know the answer to that already (they’d have a bigger pension pot if they had savings). DB pensions were closed due to the liabilities being unmanageable for companies. Ours was closed to new entrants and then closed to all members. Other companies have followed suit. It is only time before the public sector starts to move in the same direction (career average salary was a small step). You could always try asking the government for that 30% uplift and invest it yourself 😉

DB pensions were closed due to the liabilities being unmanageable for companies

I wonder how many of these are the employers who stripped billions from their DB schemes through the contributions holidays they took in the 1990s?

Just because private companies were allowed to impoverish  their pensioners does not mean you have to punish state employees.  Public sector pensions are totally affordable and reduce the benefits bill.  Liabilities were only unmanageable because they were allowed to stop contributing to the pension pots in times of boom.  ~What would have been your decent pension has gone to shareholders as dividends

60 years of pubic service from two folk.  I get £830 a month in pensions.  gold plated.  for an amount of contributions that properly invested in a private pension would have got me far more – because public sector pensions have no real pot of money to access so much of the money just disapeared when Mrs TJ died

the NHS pensions – there was a deliberate attempt by the tories to justify cutting using the absurd numbers quote by Mefty.  they cut the terms significantly to new entrants making the terms much worse.  The hope and aim was to get all new3 NHS employees to take out private pensions instead so they could then close the NHS pension fund as no more money would be coming in.  fortunately this piece of chicanery failed.  I;ll just point out again that the NHS scheme is in surplus by millions a year.  and will continue to be so,.  contributions coming in are greater than pensions going out.

do not be angry with the public sector for the modest pensions as deferred salary.  Be angry at the private companies who gutted your pensions and at the tories who enabled this.

I’ll just point out again that the NHS scheme is in surplus by millions a year.  and will continue to be so,.  contributions coming in are greater than pensions going out.

And that is why the NHS and state pensions die with you. There is no money, only a Ponzi scheme that need to at least break even (except the state pension does not). To build a pot rather than cover expenses, there would have to be a large increase in surplus.

The USS, of which I am a former member, is the largest pension fund in the UK (which is why it’s always in the news). I will get 5/60th of my salary compounded to account for inflation, but I could choose to swap this final salary for a sum in a personal pension pot. And the USS would love this as it removes liability. If you have no dependents and would like to leave that pot to the Donkey Sanctuary*, this can be a good idea. Not an option for the NHS scheme as there is no pot.

There is about a trillion GBP in private pensions. It’s so big that governments looking for money can’t look elsewhere. Income tax receipts are about 0.3 trillion.

*Other charities and/or relatives may be available.

And that is why the NHS and state pensions die with you

correct – its a deferred employment benefit really.  I just point this out because its never mentioned when comparing private and state pensions – they are not comparable as there is no pot of money in most public sector pensions so it dies with you.

There is no money

For clarity, local government pensions are funded.

Government are also sniffing around Local Government pension schemes, as of March 2023 the market value  of all the schemes was £359.2 billion, income £17.3 billion, expenditure £15.3billion.

For clarity, local government pensions are funded.

But there is still no personal pot of money you can access.  However it does put lie to the “unfunded” nonsense we keep on being told.  I believe teachers are the same that there is an overall pot of money invested

If all pension contributions in the NHS had been invested rather than used as revenue by various governments it would be a huge fund with plenty to cover all future liabilities

Its not my fault the government spent my pension contributions rather than investing them

All electric vehicles are to pay £200 rfl. They are heavy and wear out the roads as much as everyone else.

The only exception is for electric cars, which are very heavy (Relatively speaking) and pay little/no VED

Electric vehicles registered from 1st April 2017 will pay £165 (likely to rise) from April 2025. Means that my EV will pay £135+ More VED than my old diesel estate…. These plans were already in place from the last government.

Local Government pensions do have a pot of money and you can access it by transferring it out of the scheme

This is actuallty great from Murphy.

All about the 22bn ‘black-hole’.

The Q/E option is a goer to me. Simple accounting.

Richard Murphy for Chancellor of the Exchequer, bring back Corbynomics!

How appropriate that thatcherite centrist should describe keynesian economics as “Corbynomics”.

How appropriate that thatcherite centrist should describe keynesian economics as “Corbynomics”.

Surely a Corbynista should know who the man behind Corbynomics is……

Local Government pensions do have a pot of money and you can access it by transferring it out of the scheme

In some circumstances.  I could not access it for Julies pensions – I got a small death benefit far less than the nominal value of the pot.  The only private pension she had I got the whole pot

To be fair to you argee you did say “bring back” which at least suggests that you accept keynesian economics was an established economic model.

To be fair to you argee you did say “bring back” which at least suggests that you accept keynesian economics was an established economic model.

I meant bring back our lord and saviour to deliver us from Starmer and Reeves

his is actuallty great from Murphy.

Are you sure you’re not being paid by him to post his content?

@nickc We learn by repetition and practice. Some need more than others before the information is assimilated and then applied as knowledge.

It’s “great” because he agrees with it.  I don’t agree with it because it is MMT and I think MMT is “new paradigm” BS.  I do have sympathy though with the underlying premise that Reeves is playing politics rather than doing economics with the £22bn black hole claim.

Remember when Gideon told everybody that Labour had “spent all the money” Of course you do, its a defining point in our  politics of the last few years. You know he was making that up, right?

Richard Murphy for Chancellor of the Exchequer, bring back Corbynomics!

So which bits of what he has said do you disagree with?

I meant bring back our lord and saviour to deliver us from Starmer and Reeves

Ah, so you don’t understand that what you label “Corbynomics” is in fact just basic keynesian social-democracy.

I had mistakenly thought that you did.

In that case I suggest that you do a bit of research and educate yourself 💡

So which bits of what he has said do you disagree with?

I don’t disagree or agree, i just think it’s the usual armchair pundit giving his tuppence worth, and most of the choices he supplies are more than likely discounted already by the those who work, or support the treasury (and many other government departments), as they are simple ‘create money out of thin air’, ‘create more bonds and increase debt’, ‘stop buying back bonds and use that to fill any deficit’ or ‘tell the BoE to lower interest rates’.

I doubt any of those options passed the brainstorming session at the treasury, and for good reasons.

Ah, so you don’t understand that what you label “Corbynomics” is in fact just basic keynesian social-democracy.

Again, you are going off-piste with the response, my original statement was regarding Richard Murphy, who is credited as being the man behind Corbynomics, i haven’t labeled Corbynomics at all, just linked a with b.

Today’s More or Less covers what this number actually is.

Again, you are going off-piste with the response, my original statement was regarding Richard Murphy, who is credited as being the man behind Corbynomics, i haven’t labeled Corbynomics at all, just linked a with b

No he was not.

He was in the initial meetings then was never involved in much else. James Meadway was really part of that package. He’s strongly anti-MMT but does engage on twitter.

Corbynomics for the record was built around the fully funded orthodox model. Not MMT – they rejected it.

Argee you just avoid evidence.  Tell us how 400bn was created then in the pandemic?

The fact that you can never demonstrate with any info to support your arguments tells me everything.

Honestly it’s not unusual for centrists and progressives to push back against MMT because they’ve been bought up on Tory style economics – usually without any insight.

It’s a wonder why we’re in the mess we’re in 😉