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"End pensioner benefits to help the young"

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BBC News article today:  https://www.bbc.co.uk/news/uk-politics-48046595

Some peers are calling for benefits like free TV licences, bus passes and the triple lock to be abolished now that pensioners are no longer the poorest cohort.

Obviously not all pensioners are living a life of luxury on final salary pensions - but I agree with this approach, as there are already means-tested Pension Credit benefits to make sure the worst off pensioners have a minimum level of income, so there's no need to hand out random extras, and the triple lock can't possibly be affordable in the long term.

Perhaps most interesting though is how the tide of opinion is firmly shifting towards recognising that it's the young - not the old - who are the generation under most financial pressure in today's society.

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An old article from the Torygraph but it clearly shows that the UK's state pension is well below the average for the EU.  I think some pensioners are well off but many arn't and this all looks like more divide and rule to me.

https://www.telegraph.co.uk/finance/personalfinance/pensions/11189414/Why-Britains-state-pension-is-one-of-the-worst-in-Europe.html

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Likelihood of the Tories doing anything at the moment to alienate their core voting base? Lower than absolutely zilch. See pensioner saving bonds gimmick just before 2015 election.

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I can see things changing just in time to ensure that people my age, screwed as younger adults, become royally screwed once/if we retire too.

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Anybody could be fooled in to believing that we have pensioners living the high life, cruising from tax haven to tax haven on the Queen Mary checking up on  their loot.

Its appalling how many people can be whipped to a frenzy and believe that being austere to pensioners is going to help them economically.

There is wealth locked up in  tax havens all over the world, it doesn't belong to pensioners. And we have recently found out that 50% of this countries wealth is owned by 1%, 

Lets send Granny and Grandad to the guillotine tout suite..._

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My Dad & Granddad have often mentioned in recent years that the age for free bus pass has risen significantly, there are time of day restrictions on them (i.e. only off-peak times when buses would be virtually empty) and cover less forms of public transport than they used to (most train services excluded). 

Is isolating the old from getting out, socialising and spending in shops/tourism really the way forward?

These 'peers' really don't know what they're on about.

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36 minutes ago, rantnrave said:

Likelihood of the Tories doing anything at the moment to alienate their core voting base? Lower than absolutely zilch. See pensioner saving bonds gimmick just before 2015 election.

They tried at the 2017 election and got royally spanked for it.

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6 minutes ago, Bruce Banner said:

More theft!

A further drift to the evil of means testing, whereby you are forced to pay for something and are then denied it, if it is deemed you don't need it.

True although I would say that pension credit should be ended for those who live in homes worth more than £600k (whether they own them or are a tenant).

I don't think that the triple lock is a good idea pensions should go up with inflation nothing else.

I doubt the bus pass really costs that much.

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Hopefully all the pensioners will switch to the Brexit party in time for the general election.

(rich pensioners should be means tested on benefits though, while protecting poorer ones)

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Why can't we do both? 

Never personally had a problem with any sort of benefit. Know that goes against the grain somewhat. 

But even if Joe the scrounger does spend all his dole on fags and booze, 90% of that goes straight back to the government in taxes. 

Majority of benefits get spent in the UK economy. They find their way back to the government in taxes or end up being spent in local areas (which benefits local businesses/shops). 

It's never ever been the problem with our economy tbh. 

 

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21 minutes ago, byron78 said:

Why can't we do both? 

Never personally had a problem with any sort of benefit. Know that goes against the grain somewhat. 

But even if Joe the scrounger does spend all his dole on fags and booze, 90% of that goes straight back to the government in taxes. 

Majority of benefits get spent in the UK economy. They find their way back to the government in taxes or end up being spent in local areas (which benefits local businesses/shops). 

It's never ever been the problem with our economy tbh. 

 

I do mind when the benefit goes to give someone a home that I cannot afford.  I don't mind people who live in cheaper housing than me getting benefits - but not those in expensive housing.

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"Today's young are tomorrow's older people."

Yes but today's young when they are old will be poor and living in cramped and squalid conditions.

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3 hours ago, Si1 said:

The elephant in the room is untaxed property wealth.

There is a second smaller elephant in the room, which is the huge difference in tax rates for wage income vs investment income.

27yo wageslave on £25k pays 20% basic rate income tax + 12% employee national insurance + 13.8% employer national insurance = 45.8% marginal tax rate (okay I've done the maths lazily here but you get the idea)

67yo pensioner of leisure on £25k pays 20% basic rate income tax + er, that's it.

Why on earth there can't be a single rate of income tax I don't know. Actually I do know why, it's electorally inconvenient.

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25 minutes ago, Dorkins said:

There is a second smaller elephant in the room, which is the huge difference in tax rates for wage income vs investment income.

27yo wageslave on £25k pays 20% basic rate income tax + 12% employee national insurance + 13.8% employer national insurance = 45.8% marginal tax rate (okay I've done the maths lazily here but you get the idea)

67yo pensioner of leisure on £25k pays 20% basic rate income tax + er, that's it.

Why on earth there can't be a single rate of income tax I don't know. Actually I do know why, it's electorally inconvenient.

Very true, saying that if I were chancellor I wouldn't try to change it, a really bad idea politically - a good idea in other ways

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1 hour ago, Dorkins said:

There is a second smaller elephant in the room, which is the huge difference in tax rates for wage income vs investment income.

27yo wageslave on £25k pays 20% basic rate income tax + 12% employee national insurance + 13.8% employer national insurance = 45.8% marginal tax rate (okay I've done the maths lazily here but you get the idea)

67yo pensioner of leisure on £25k pays 20% basic rate income tax + er, that's it.

Why on earth there can't be a single rate of income tax I don't know. Actually I do know why, it's electorally inconvenient.

The employee rate of NI is notionally a contribution both to the state pension and to working age benefits. The employer contribution is a contribution by the employer not the employee.

UK NI rates for employees are a marginal 32% to £962/ week after which no extra NI contribution is made.

You may disagree with this but the notional structure is that those who are working pay a contribution to benefits and the state pension whereas those who are retired have finished paying and are now withdrawing, the principle being much like an annuity.

Also in this orgy of "let's get the oldies" you might do well to remember that in say 2006/7 the personal allowance was £5035 but there was an age allowance for those aged 65-74 of £7280, over £2200 more. That allowance has been discontinued (quite rightly). The withdrawal of that allowance @ 20% tax rate = £400 means that the old folks have already lost the value of the WFA; free TV licences and bus passes.

Edited by crouch

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Nobody commenting that its the BBC promoting this and their current deal is that BBC income is reduced by over 75s not needing a license.

Something they see as an problem and extra dosh up for grabs. Important to them as increasing numbers of the younger generation don't watch live TV.

replace "help the young" with "help the fat cat troughers at the beeb".

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1 hour ago, crouch said:

The employee rate of NI is notionally a contribution both to the state pension and to working age benefits. The employer contribution is a contribution by the employer not the employee.

With Pension Credit you now get the same state pension whether you contributed or not. Since the benefit is no longer based on contributions why are we still collecting the contributions?

The idea that employers NI has no impact on wages is nonsense microeconomics. Employers have an amount of money available for wages, if the government takes 13.8% before it goes anywhere near an employee then obviously that will leave less money to be paid out in wages. Imagine the situation where the government creates a pension fund tax where 13.8% of the pension fund's investment income is paid to the government before pensions are paid out to their recipients. "Oh but it's not paid by the pensioners, it's paid by the pension fund!" Yeah right, obviously pension payouts would drop.

NI (both E'er and E'ee) is a bad tax and should be scrapped. All it does is create complexity and distortions where people are encouraged to disguise wage labour as dividend income (IR35).

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1 hour ago, crouch said:

Also in this orgy of "let's get the oldies" you might do well to remember that in say 2006/7 the personal allowance was £5035 but there was an age allowance for those aged 65-74 of £7280, over £2200 more. That allowance has been discontinued (quite rightly). The withdrawal of that allowance @ 20% tax rate = £400 means that the old folks have already lost the value of the WFA; free TV licences and bus passes.

Am I supposed to feel sad that pensioners now get the same income tax allowance as everybody else? Everybody should be treated the same regardless of how they get their money: same tax allowance, same thresholds, same marginal tax rates. If a 27yo on £25k can afford to pay £6.5k in income tax and NI then so can a 67yo on £25k.

Edited by Dorkins

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There are pensioners, and pensioners......some had a freedom pass from age 60 (some still do, others don't, a postcode lottery) free buses and trains, some earn £300 per day for showing up.......most younger people are now not pensioners until they are almost 70, are unable to get free perceptions, a bus pass,  special fuel allowance or any of the add-on benefits, including income growth the triple lock that a retired person is entitled to just because they can claim a state pension.......younger people will and are losing thousands of pounds because of the state pension deferral......many are unable to stop working earning less than the tripelock protection and have to continue to work, paying for transport until they are almost 70 years old, you can see it all around you more older people working, let's hope they continue to be healthy enough.

Taking back what has been given is not the answer......there are other ways of seeing the poorest pensioners living on very little each month keep the perks, they are worth everything they get.....for the others there are fairer ways and means....... where any potential savings are directed will very unlikely be to young people.....or the people who thought they were getting something and it turned out to be nothing.;)

 

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2 minutes ago, Dorkins said:

The idea that employers NI has no impact on wages is nonsense microeconomics. Employers have an amount of money available for wages, if the government takes 13.8% before it goes anywhere near an employee then obviously that will leave less money to be paid out in wages.

I don't think it's quite that simple though - it's not like wages are what you pay with some kind of leftovers.  If employer NI didn't exist then employers are more likely to just keep the profit and distribute as dividend, or cut their prices (they may indeed HAVE to cut their prices if their competitors do).  It doesn't follow that they would pay the employees any more.  The employees are already working for a take-home pay of £X - the employer doesn't need to increase it, and so probably most wouldn't.

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  • 297 Brexit, House prices and Summer 2020

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