Mr & Mrs Average In Ni

[Shotoflight]

Autumn Statement 2011: struggling families to lose £1,200

Families will lose about £1,200 each because of cuts to tax credits over the next five years.

http://www.telegraph.co.uk/finance/budget/8924500/Autumn-Statement-2011-struggling-families-to-lose-1200.html

The Chancellor had promised last year to give an above-inflation increase of £110 in 2013, but this will be cancelled.

He will also freeze working tax credit, which will save around £250 million per year from those who claim the benefit.

Figures from the Office for Budget Responsibility suggested the cuts would technically push 100,000 children into poverty.

It is the Government’s second raid on help for parents since it cancelled child benefit payments for top earners last year.

Fiona Weir, the chief executive of Gingerbread, a charity for working parents, said the new measures would mean more parents “who can’t afford to work”.

“The families who will be hit by the raid on tax credits are those that are determined to work despite low wages and high child care costs – exactly those people the Chancellor says are doing the right thing,” she said.

Sarah Jackson, the chief executive of the charity Working Families, warned that the statement was “bad news for working parents”.

“The Chancellor has reneged on last year’s promise to fund significant above indexation increases to the child tax credit, which he said would protect against child poverty,” she said.

“What he gives with more free child care for two year-olds on one hand, he removes with the other by failing to address the rising cost of child care for working parents.

“Working Tax Credits have been frozen and childcare is becoming unaffordable. “Making work pay is vital to the recovery – we need to invest in Britain’s social infrastructure as well as its roads and bridges.

"Today’s measure will lead to higher levels of in-work poverty, or to more parents being priced out of work.”

[Shotoflight]

George Osborne's every blow falls on those with less not more

With his autumn statement, the chancellor has declared class war: a Tory assault on the public sector and the poor

http://www.guardian.co.uk/commentisfree/2011/nov/29/osborne-class-war-autumn-statement

What was missing from his list? Not one penny more was taken from the top 10% of earners. Every hit fell upon those with less not more. Fat plums ripe for the plucking stayed on the tree as the poorest bore 16% of the brunt of new cuts and the richest only 3%, according to the Resolution Foundation. Over £7bn could be harvested with 40% tax relief on higher pensions, while most earners only get 20% tax relief; £2bn should be nipped from taxing bankers' bonuses, but the bank levy announced was nothing extra. There was no mansion tax on high-value properties, though owners don't even pay their fair share of council tax, and property is greatly undertaxed compared with other countries.

Worse still, two-thirds of properties worth over £1m now change hands while avoiding all their 5% stamp duty, by using offshore company accounts. But not a word passed Osborne's lips on tax avoidance and evasion. Another 12,000 tax collectors are losing their jobs while some £25bn is evaded and £70bn avoided. In a time of national emergency, Osborne had no breath of rebuke about the responsibility of the rich not to dodge taxes, no threat to curb the culture of avoidance. Despite the High Pay Commission report on out-of-control boardroom pay – which even the Institute of Directors has called "unsustainable" – the chancellor said nothing. How adamantly he ruled out the Tobin tax on financial transactions, called for by those dangerous lefties Nicolas Sarkozy and Angela Merkel.

Instead came the great attack on public sector employees on the eve of the biggest strike in memory. This was a declaration of open class war – and war on the pay of women, 73% of the public workforce. After a three-year freeze, public pay rises are pegged at 1% for two years, whatever the inflation rate. That means this government will take at least 16% from their incomes overall.

But the plan to abolish Tupe – the rule that ensures public workers are not paid less if their service is privatised – is outrageously unjust, and will lead to mighty resistance to all privatisation from senior as well as junior staff.

As bad is the plan for reduced public pay rates in poorer regions. What draws good teachers and doctors to work in hard places is the same pay with a lower cost of living. Cut public pay in the north-east or the most impoverished places and their economies will plummet, making them poorer still. This will drive a yet deeper divide between north and south

Edited November 30, 2011 by Shotoflight

[BelfastVI]

George Osborne's every blow falls on those with less not more

while most earners only get 20% tax relief;

They get the same tax relief on their pensions as they get charges at.

[BelfastVI]

In a recent Gov report I came across the following table, which articulated the issue much better than I was ever able to. I have always believed that the average income of a house owner would be above the average income of someone who didn't own their home (I'm sure there are many exceptions) and therefore above the average income of the region.

Average Gross Weekly Household Income By Tenure

Owned With Mortgage £856 per week

All Dwellings £584 per week

If these 2009 figures are reflective they show the average income of a house owner with mortgage at 46% above the average income in Northern Ireland.

[Sure thing!]

They get the same tax relief on their pensions as they get charges at.

Shhhh they need to make it sound like its a benefit to high rate tax payers, don't go introducing any logic to it

[Shotoflight]

Shhhh they need to make it sound like its a benefit to high rate tax payers, don't go introducing any logic to it

The logic is - is it affordable - in this age of austerity that we are all in together?

Tax avoidance and loopholes are legal. That doesn't mean its fair. And laws can and do change.

NB Polly, the author, is in the 40% bracket.

[Shotoflight]

Is £40,000 really a liveable income for families in the UK?

The average income for a British family with two adults working is £40,000 a year.

http://www.bbc.co.uk/news/magazine-15197860

Monica and Bryan Adams lost £85,000 in a failed business venture and now owe £360,000 on their £310,000 house.................

[Shotoflight]

Incomes to fall 7.4% in three years, says IFS

http://www.bbc.co.uk/news/business-15969165

The independent Institute for Fiscal Studies (IFS) says George Osborne's economic plans will mean a sharp drop in household income.

The think tank said real household income would fall by an average of 7.4% between 2009-10 and 2012-13.

The IFS said that following yesterday's Autumn Statement by Chancellor George Osborne, the median average income was set to stagnate.

It expected it to be no higher in real terms in 2015-16 than in 2002-03.

The IFS said it was running out of words of sufficient strength to describe the current economic climate and the chancellor's plans.

Its director, Paul Johnson, said he was "running out of superlatives".

http://blogs.telegraph.co.uk/news/jameskirkup/100120851/ifs-briefing-how-the-median-british-household-will-be-7-4-per-cent-worse-off-by-2013/

For a couple with two children, that's the difference between £638 a week and £590. It's the biggest fall since the 1970s, and equal to the biggest fall since records began

Worse, disposable income in 15/16 will be no higher than it was in 02/03. That's 13 lost years, a period when we have become no

better off. That, the IFS says, is "easily" the longest period without growth ever.

We can no longer assume our children will be better off than us.

Edited November 30, 2011 by Shotoflight

[Sure thing!]

The logic is - is it affordable - in this age of austerity that we are all in together?

Tax avoidance and loopholes are legal. That doesn't mean its fair. And laws can and do change.

NB Polly, the author, is in the 40% bracket.

The logic is pension contributions are tax free and any change to alter this would have some pretty horrific consequences, pension money taxed on the way in AND the way out? Any movement to do this would be double taxing -not- closing a loophole/whatever.

And Polly, the author, is a total loopy tune.

[Shotoflight]

The logic is pension contributions are tax free and any change to alter this would have some pretty horrific consequences, pension money taxed on the way in AND the way out? Any movement to do this would be double taxing -not- closing a loophole/whatever.

And Polly, the author, is a total loopy tune.

You mean like savings?

[Sure thing!]

You mean like savings?

What, you get taxed on every withdrawal you make from the bank? Damn, must go buy me some gold or a BTL

[Shotoflight]

What, you get taxed on every withdrawal you make from the bank? Damn, must go buy me some gold or a BTL

No just the interest.

Though your and my taxes did also bail the banks out - without asking us! Is that treble taxing?

Edited November 30, 2011 by Shotoflight

[Sure thing!]

No just the interest.

Though your and my taxes did also bail the banks out - without asking us! Is that treble taxing?

As it should be and that can be avoided with an ISA to a level, but that's not what Polly is suggesting which in your savings account example would be taking 20p off every pound a high rate tax payer takes out of their savings account. Pensions are a tax free wrapper, if you want to change that then admit its extra taxation of people that are already paying a higher rate to begin with and don't be going saying its a benefit or tax break/loophole.

It would absolutely destroy pensions at a time they are wanting people to save for their own retirement creating a big problem/cost down the road. And to bring it to HPC relevancy it would create an unholy BTL stampede from high rate tax payers.

My taxes do a lot of things I wish they didn't, bank bailing is low on my concerns there but its an easy scapegoat.

[Shotoflight]

As it should be and that can be avoided with an ISA to a level, but that's not what Polly is suggesting which in your savings account example would be taking 20p off every pound a high rate tax payer takes out of their savings account. Pensions are a tax free wrapper, if you want to change that then admit its extra taxation of people that are already paying a higher rate to begin with and don't be going saying its a benefit or tax break/loophole.

It would absolutely destroy pensions at a time they are wanting people to save for their own retirement creating a big problem/cost down the road. And to bring it to HPC relevancy it would create an unholy BTL stampede from high rate tax payers.

My taxes do a lot of things I wish they didn't, bank bailing is low on my concerns there but its an easy scapegoat.

Lib Dem seems keen enough:

http://www.telegraph.co.uk/finance/personalfinance/pensions/8762847/End-tax-relief-on-pensions-for-higher-rate-taxpayers-says-Lib-Dem-peer.html

Other commentators not so:

http://blogs.telegraph.co.uk/finance/ianmcowie/100011954/beat-the-treasury-tax-raid-and-grab-your-share-of-20bn-reliefs-now/

Brown showed Govts spoke with forked tongue over pensions. A small business scheme re pensions was postponed a few days ago.

Between now and the budget next March might be a good time to check out BTLs for those at 40%. I wouldn't trust this govt as far as I could throw it - on pensions or anything else.

[Shotoflight]

Osborne's impact laid bare: The rich get richer and the poor get poorer

Government warns of new credit crunch as the poor feel the pain

http://www.independent.co.uk/news/uk/politics/osbornes-impact-laid-bare-the-rich-get-richer-and-the-poor-get-poorer-6270235.html

The overall effect of the Treasury's new plans will be to reduce the incomes of those in the bottom 30 per cent of earners and to benefit those in the top 60 per cent.

Downing Street warned last night that the world's financial system is already experiencing another credit crunch, with banks refusing to lend to one another over fears of their exposure to sovereign debt in the eurozone. The Prime Minister's official spokesman said there was now "a serious situation in the financial markets", adding: "We are experiencing a credit crunch."

Mr Osborne's spending review last year was "clearly regressive", the IFS said, pointing out that decisions to cap housing benefit and to cut disability allowances hit the poorest earners harder than the wealthy. This week's measures will continue that trend, it added. "The new tax and benefit measures are, on average, a takeaway from lower-income families with children, and a giveaway to those in the middle and top of income distribution," said IFS researcher Robert Joyce. "It's a slightly regressive Autumn Statement on top of what was already regressive across most of the income distribution."

[Sure thing!]

Lib Dem seems keen enough:

http://www.telegraph.co.uk/finance/personalfinance/pensions/8762847/End-tax-relief-on-pensions-for-higher-rate-taxpayers-says-Lib-Dem-peer.html

Other commentators not so:

http://blogs.telegraph.co.uk/finance/ianmcowie/100011954/beat-the-treasury-tax-raid-and-grab-your-share-of-20bn-reliefs-now/

Brown showed Govts spoke with forked tongue over pensions. A small business scheme re pensions was postponed a few days ago.

Between now and the budget next March might be a good time to check out BTLs for those at 40%. I wouldn't trust this govt as far as I could throw it - on pensions or anything else.

While governments may do a lot of seemingly crazy things, I honestly think that would be the biggest mistake made by any government in 20 years and the consequences would sink the country and create uncertainty for its peoples future by killing pensions stone dead as next up would be 25% tax free lump then tax free contributions for normal rate tax payers. Civil serpents would be excluded from all this of course. Think it through, there's absolutely no good that would come of it and lots of bad.

[Shotoflight]

While governments may do a lot of seemingly crazy things, I honestly think that would be the biggest mistake made by any government in 20 years and the consequences would sink the country and create uncertainty for its peoples future by killing pensions stone dead as next up would be 25% tax free lump then tax free contributions for normal rate tax payers. Civil serpents would be excluded from all this of course. Think it through, there's absolutely no good that would come of it and lots of bad.

I'm not making a judgement call on it. I think the UK have some of the most complex tax (and benefit) laws in the world and I'm not au fait (or for the most part interested) in the technicalities.

What I'm saying is fairness, equity and consistency are not always considerations when it comes to tax or benefits - Someone in a £400k house pays the same rates as someone in a £1 million house or a household of 6 pays the same rates as a house of 1 with same RV. Some people must use cars, others don't have to. Winners and losers - some have no need of free travel/perscriptions, winter fuel allowances or child benefit. Depends, for the most part, what ones circumstances are and where you are in the food chain.

Sticking with taxes, they can be regressive (disproportionately hitting the 'poor') or progressive. Sometimes it incentivises (tax free/exempt/low rates) sometimes it penalises (alcohol/tobacco) and sometimes it is political (50p tax rate). Unintended consequences (a rush to BTL or opt out) may not bother the Govt if it is about prerception or headline grabbing. And I don't think the double taxing argument will put them off either. The savings example was just to show taxation on already taxed income but also to show that whilst the govt would wish to promote savings like pensions as being sensible and prudent, they will happily shaft them with real term negative interest rates when it suits. Petrol & diesel, for another example, has 2 elements of tax - fuel duty and VAT.

The lib dems will push for this as cover for Tory policies. My gut feeling on this is that, depending on how desperate this government (and the economy) gets that this 'tax wrapper' will be, and perhaps already is, seen as 'low hanging fruit' just as public sector pensions are currently. Changing the goalposts doesn't bother them - I won't be surprised if it goes in March and, again as you pointed out, this will have consequences - much like all their ongoing tinkering - and articulated in the Telegraph article. But then, it was ever thus. They were voted in, as were the last lot.

Democracy, Eh!

Whether this is a good thing or bad thing is a matter of opinion. The articles I reproduce are mainly because they are free and not firewalled (Times/Irish News/FT). I rarely buy a newspaper and don't necessarily agree with all I reproduce - I just like all the info out there and am interested in others opinions.

A lack of confidence in the financial sector and inconsistent Govt policy (and taxation decisions) has led, as you rightly pointed out, to houses moving from homes to investments and assets - in the 'market' sense. For many this is logical and rational but for others it can lead to crowding (and pricing) out.

Bringing it back to Mr & Mr average in NI I would suggest they wouldn't be in the 40% bracket (and wouldn't be overly vexed on the issue due to this - people can be selfish and envious, again as the public sector pensions issue shows and depending on their own circumstances) but taxes on housing affects most of us.

New build - VAT free

Refurbishing - VAT

Heating oil - VAT @ 5%

Stamp Duty

Rates

Allowance for renting out a room

BTL/Accidental landlord

It could be a whole new thread.

Edited December 1, 2011 by Shotoflight

[tinbin]

Big squeeze hits home as families lose £2,500

British families are suffering the worst squeeze in living standards for more than half a century, and will be no better off in 2016 than they were in 2002. The Institute for Fiscal Studies (IFS) revealed yesterday that the average family on middle income will have £2,496 less to spend next year than just three years ago. On the day that 1.5 million public sector workers, including headmasters, teachers, nurses and civil servants, walked out in the biggest strike to hit Britain for a generation, the respected think-tank said that the coalition's offer on pensions would still leave public sector workers with a far more generous package than their private sector counterparts.

[The Times page 1 - 1.12.11)

[Sure thing!]

rarely buy a newspaper and don't necessarily agree with all I reproduce - I just like all the info out there and am interested in others opinions.

...

It could be a whole new thread.

It sure could. Well you know my opinion on this one item A change that would negatively impact everyone and hurt the averages the most while purporting to be a tax on the slightly wealthier.

[Shotoflight]

Worse than the 1970s?

Osborne's autumn statement shows a Britain worse than it was in the 1970s

http://www.guardian.co.uk/business/2011/nov/30/osborne-autumn-statement-fawlty-towers?newsfeed=true

There have been periods in Britain's history – the famine of the 1340s, followed by the Black Death – when there were colossal falls in living standards, but what the IFS has described has no precedent in modern times.

Families were able to consume more, but only by using their homes as cash machines. In the five years from 2002 to 2007, equity withdrawal from UK real estate exceeded £300bn, which kept spending and the wider economy going but only through borrowing growth "from the future".

The reason the squeeze has lasted for longer than expected is that inflation has been a lot higher than forecast over the past 18 months. The 25% drop in the pound's value has made imports dearer at a time when global commodity prices have surged, pushing up the cost of energy and food, and when VAT has been raised in two successive years, first to 17.5%, then last January to 20%.

Inflation has been running at 5%-plus since the summer at a time when average earnings have grown at barely 2%.

And consumers can no longer compensate for the hit to their real incomes by using their homes for cash, since house prices are no longer rising. So household consumption, falling in 2011, will barely grow in 2012.

The IFS has pulled no punches, confessing it had little good news to impart. Indeed, news that recovery from a deep slump will be slower than imagined, of a lost decade of real income growth, and austerity as far as the eye could see, could make you quite nostalgic for the 1970s. When at least there were Fawlty Towers and the Clash.

[Shotoflight]

Younger people will be £43,000 worse off in retirement by delaying their pension by a year

The Government's decision to delay the new national pension scheme (Nest) will have devastating consequences for young workers.

http://www.telegraph.co.uk/finance/personalfinance/8931525/Younger-people-will-be-43000-worse-off-in-retirement-by-delaying-their-pension-by-a-year.html

More than seven million workers without any retirement savings were told three years ago that they would gain a legal right to have one from 2014 onwards. Better still, employers would have to contribute at least 3pc of payroll toward the new National Employment Savings Trust (Nest).

Now, three years before the deadline to deliver on that promise, the Government has decided to delay implementation by one year. That may not sound like much but the power of compound interest means the cash effect will be substantial.

"The Government is showing signs of panic. After 18 months of robust pension reform, they are now capitulating to the unions on public sector pensions and betraying small business employees in the private sector.

As regular readers will know, state pensions are a form of Ponzi scheme, where the funds available are insufficient to honour promises issued and so drastic changes are urgently required to avoid collapse. National Insurance contributions (NICs) collected this week are used to pay next week's state pensions.

Thank heavens I contracted out of the State Earnings Related Pension Scheme (Serps) – now known as the State Second Pension (S2P) – more than 20 years ago and used the rebated NICs to build up self-invested personal pensions (Sipps), from which I took tax-free profits two years ago. That provided nearly half the cash I used to pay off my mortgage last December.

Outside the public sector bubble, savers face a stark but simple choice.

Would you rather have an ill-defined share in an unfunded scheme or a pot of private property with your name on it? Do you want a DIY pension or to put your faith in politicians?

Saving sooner and harder is the only way to be sure your retirement plans will not be disrupted when some future Chancellor finds him or herself in a tight spot and moves the goalposts again.

Pension switch ruled lawful by High Court

http://www.bbc.co.uk/news/business-15999970

Michaela Berry, of pension law firm Sackers, pointed out that the ruling would bring some certainty to those private sector schemes which had also moved to CPI.

"Many private sector pension schemes have also seen their pensions being revalued by reference to CPI," she said.

"Whether a private sector scheme is affected by the switch has been something of a lottery, depending on whether the rules expressly built in a reference to RPI or referred to the legislation that relies on the government to determine what method of measuring inflation is used."

The Office for Budget Responsibility, the independent but government-funded economic forecaster, said that by 2016 the gap between CPI and RPI could be as high as 1.8 percentage points, predicting that CPI will go down to 2% by then, while RPI stays higher at 3.8%.

Lord Hutton's independent report on public service pensions, whose final report was published earlier this year, calculated that the unfunded public pension schemes (a definition that included all but the local government scheme) would save £1.8bn a year in cash payments by 2015-16 due to the move to CPI.

If state benefits and tax credits - also affected by the policy - are included in the calculations, then the average annual government saving could be £10.6bn by 2015-16, according to the 2011 Budget.

Pensioners to lose thousands after inflation measure change

Members of company pension schemes face losing tens of thousands of pounds in retirement income under changes to an inflation measure.

http://www.telegraph.co.uk/finance/personalfinance/pensions/8929766/Pensioners-to-lose-thousands-after-inflation-measure-change.html

Someone retiring with a private pension worth £10,000 will lose out on almost £20,000 of pension income, new figures suggest.

Edited December 3, 2011 by Shotoflight

[Shotoflight]

Cost of running a car soars 14% as motorists feel force of soaring fuel and insurance

http://www.thisismoney.co.uk/money/cars/article-2064661/Cost-running-car-soars-14-soaring-fuel-insurance.html?ito=feeds-newsxml

The RAC said the rise for used cars' running costs was 13.2 per cent.

The cost of running a new car is rising almost three times as fast as official Consumer Prices inflation of 5 per cent.

Mr Money: RAC wrong on the true cost of car ownership

http://www.telegraph.co.uk/motoring/columnists/mike-rutherford/8921407/Mr-Money-RAC-wrong-on-the-true-cost-of-car-ownership.html

The company says it has calculated that on average and comparing now with this time last year, we’re spending £160 per annum more on fuel, £38 more on maintenance, £33 more on finance and £6 more on breakdown cover. Fair enough.

But astonishingly, the RAC has also “calculated” that car insurance has risen by only £68 – from £483 to £551 year on year. Like its overall annual motoring inflation figure, this, insists the RAC, represents an annual percentage hike of only 14 per cent. But I reckon that’s an absurdly optimistic figure which fails to reflect the fact that asking prices for motor policies have jumped massively in price.

What concerns me most about the picture being painted by the RAC is that some drivers (particularly young, newly qualified or low-paid motorists) might be fooled into thinking that they can afford to own and run a car when they can’t. Of even more concern is that when it dawns on them how prohibitively expensive insurance can be, these eager drivers may be tempted to commit the serious crime of driving without cover.

[Shotoflight]

The Autumn statement apparently confirmed the following:

Basic rate personal tax allowance will increase by £630 (from £7,475 to £8,105) saving basic and higher rate payers £120 pa.

Alcohol duty to go up by inflation (RPI) + 2%, so a 7.2% rise in april

Ending of FTB stamp duty exemption (was 1% up to £250k I think)

Higher rate frozen at £35,000 so 40% tax paid on £43,105 and above - no lift for inflation.

From 2013 families with a higher rate taxpayer will lose child benefit - currently £20.30 per week for No. 1 and £13.40 per week for the others

Opinion piece on RPI v CPI

The Coalition's deft trick with CPI and RPI

http://www.telegraph.co.uk/finance/personalfinance/pensions/8930157/The-Coalitions-deft-trick-with-CPI-and-RPI.html

A quick glance at the Government receipts and payments shows that almost anything paid out is now linked to CPI, while monies collected still retains a link to RPI.

Edited December 3, 2011 by Shotoflight

[Shotoflight]

Miliband to PM: You will never be able to say again - 'We are all in this together'

The Camerons spent £6,312 on their kitchen table, the Smiths £50. Jane Merrick, Chris Stevenson and Matt Chorley meet the 'squeezed middle'

http://www.independent.co.uk/news/uk/politics/miliband-to-pm-you-will-never-be-able-to-say-again--we-are-all-in-this-together-6272119.html

In the wake of the Chancellor's mini-budget, the Institute for Fiscal Studies estimated that the average family would lose £2,500 in annual household income next year, compared with three years ago. Last Tuesday, Mr Osborne announced a freeze in the working tax credit, a scaling-back of scheduled rises to the child tax credit and a cap on rises to public sector pay of 1 per cent for two years. The wealthy – including bankers, who are to enjoy another bumper season of an estimated £4.2bn of bonuses over the next few weeks – faced little hardship, despite Deputy Prime Minister Nick Clegg's pledge a week earlier that the mini-budget would ensure those with the "broadest shoulders" bore their share of the burden.

But new analysis published today by the Resolution Foundation, the think tank which highlights the plight of Britain's "squeezed middle", shows that a family such as the Smiths will lose nearly £4,000 in annual household income between last year – before the coalition's policies were implemented – and next year, when the cuts will begin to bite. The grim picture applies not only to millions of public-sector workers, many of whom went out on strike last week, but also to people with jobs in the private sector.

A typical family like the Smiths will face these cuts between 2010/11 and 2012/13...

Post-tax income: 2010/11 £30,758; 2012/13 -£756

Working tax credit: 2010/11 £4,374; 2012/13 -£2,746

Child tax credit: 2010/11 £5,690; 2012/13 -£169

Child benefit: 2010/11 £1,752; 2012/13 -£127

Total loss = £3,798

[Shotoflight]

Pension deficits soar by 33pc as Nick Clegg proposes to punish savers

http://blogs.telegraph.co.uk/finance/ianmcowie/100013608/pension-deficits-soar-by-33pc-as-nick-clegg-proposes-to-punish-savers/

Deputy Prime Minister Nick Clegg proposes new ways to punish people who save for their old age

He wants to means test benefits that pensioners currently receive on the basis of their age alone and says this is necessary to balance the books. Free bus passes and TV licences are among the targets of Mr Clegg’s cost-cutting brain wave. Such dismal cheese-paring suggests this callow Cabinet Minister must really be running out of ideas.

But the inevitable unintended consequence if Mr Clegg’s weekend wheeze staggers any further toward fruition will be to discourage saving, encouraging more people to live for the moment and forget about the future. That’s not a plan to dig our way out of a debt crisis; it’s a description of how we got here.

While trade unions protest about diminishing inflation protection, losing linkage to the Retail Prices Index and switching to the Consumer Prices Index, fewer than 5pc of private sector pension savers who buy an annuity can afford any inflation protection at all. Meanwhile, 8m of the poorest people in the workplace have just been told they must wait another year before they are given the legal right to any company pension.

Those are the hard financial facts of retirement today. People saving to pay for their old age need all the encouragement they can get; not means-tested deterrents from doing so. Mr Clegg’s mean-minded proposals merely demonstrate that there is no problem so bad that politicians’ intervention cannot make it worse.