Boomers have their hand out again!!!

[LandOfConfusion]

29 minutes ago, kzb said:

When is that plot from?  Is that the situation with this year's changes (i.e. -4%) or before ?

I lifted this from Moneyweek who in turn lifted it from GAD as mentioned at the bottom of the graph. And no, it does not include any recent NI changes; there's a more recent article here from "The Actuary" but it's dated 25th January 24 and says much the same thing.

TL;DR: in ~20 years time don't rely on the state pension to give you squat let alone anything like the rates currently being paid under the triple lock. That benefit is reserved for Boomers.

[kzb]

1 hour ago, winkie said:

You are living in the past, Franco right fascist days

I'm not that old !

[kzb]

1 hour ago, LandOfConfusion said:

I lifted this from Moneyweek who in turn lifted it from GAD as mentioned at the bottom of the graph. And no, it does not include any recent NI changes; there's a more recent article here from "The Actuary" but it's dated 25th January 24 and says much the same thing.

TL;DR: in ~20 years time don't rely on the state pension to give you squat let alone anything like the rates currently being paid under the triple lock. That benefit is reserved for Boomers.

OK I failed to notice the reference at the bottom of the plot.  It turns out to be outdated (from 2010) and I've now found the 2020 version.

https://www.gov.uk/government/publications/government-actuarys-quinquennial-review-of-the-national-insurance-fund-as-at-april-2020

Just think, @Unmoderated, only a couple of days ago people said I was lying that there was such thing as a National Insurance Fund.  But look at all these careful analyses we have found about it since.  Pretty good for a made-up fund out of my own imagination I must say.

Anyhow it looks very interesting but got to dash now.

[Unmoderated]

33 minutes ago, kzb said:

OK I failed to notice the reference at the bottom of the plot.  It turns out to be outdated (from 2010) and I've now found the 2020 version.

https://www.gov.uk/government/publications/government-actuarys-quinquennial-review-of-the-national-insurance-fund-as-at-april-2020

Just think, @Unmoderated, only a couple of days ago people said I was lying that there was such thing as a National Insurance Fund.  But look at all these careful analyses we have found about it since.  Pretty good for a made-up fund out of my own imagination I must say.

Anyhow it looks very interesting but got to dash now.

LOL.

It's notional. The 'fund' isn't there. It's loaned by the government to itself to pay for all the other entitlements.

It's a fabrication. 

[Unmoderated]

On 05/03/2024 at 22:28, kzb said:

Yes in theory, but only in theory.  Ask yourself this.  If they cut the employer NI contribution, would your employer automatically pass on that saving to you as increased salary ?

In general the answer is no.  Salaries are governed by market forces.  You could argue that it gives employers more headroom to offer better salaries, but there is no direct link.  They are just as likely to pocket the difference for themselves.

Whereas cutting the employee contribution rate gives you an automatic increase.  There is a direct link.

As we've seen, the personal allowance was lower in real terms pre-Osborne.  The basic rate of income tax was 34% in the 1970's and has been gradually reduced to its present level of 20%.  The highest rate reached 98% sometime in the 1970's and was reduced by Thatcher to 60%.  The highest rate today is 45%.  It's true the higher rate thresholds have not fared as well as the basic rate threshold, but they have more or less kept up with inflation over the long term I think.  Anyhow that is a first world problem.

Yes I saved money as a student.  But there were far fewer of us, you actually had to be clever to go to university in those days.  It was a privilege to go to university as they kept reminding us.

It does not miss my picture.  Income taxes are lower than they were historically, tax has been shifted onto consumption instead of earnings.  To some extent you have a choice; if you don't spend you won't pay tax and vice versa.  There is no such choice with income taxes.

First point - yes they would receive higher salaries. Maybe not overnight and maybe not by staying in role (comapnies are greedy). But a business has a budget to hire someone including all on-costs (pension benefits, bonus and ers NI). Total budget remains the same so there is now more to be allocated to gross salary. So there is a direct link.

In your example of a cut to Eee's NI theen the impact is immediate of course but it is all NI and it is all paid for by the employee, one way or the other.

You've decided to pick some arbitary date for comparison (why not pick 1963 the year the first boomers turned 18 and the majority began working properly?)

I do recall hearing about teh 98% tax rate. It was paid for by people with extraordinarly high income and even then only for a year or two? The highest rate today is actually 62% and higher still if you're in a benefit tapering trap.

It's certainly a privilidge to get university paid for. Scotalnd somehow manages this. Netherlands too and in Netherlands state pensions are higher. Guess what though - there is no personal allowance so everyone is paying a minimum of just under 10% up to around EUR35K.

Back the UK, there are more adults paying higher rate, additioanl rate and silly marginal (62%) rate than evver before.

https://ifs.org.uk/publications/deepening-freeze-more-adults-ever-are-paying-higher-rate-tax

Can you show my a a source that supports your claim that income taxes are lower now?

I've already agreed with you on the university point. 

LOL, what choice is that? Spend zero money and don't heat your home or travel so you can avoid tax. You could just avoid tax altoether by not working as a huge chunk of the populaiton seemingly do these days. 

[Unmoderated]

23 hours ago, kzb said:

Well it looks like @Unmoderated et al got their way with this budget !

The maximum benefit occurs for well-off employees on £50-60k, and zero benefit for pensioners.

It's almost as if the Tories are doing exactly what these people want.  They are even saying that abolishing NI is a target.  I wonder if we'll be getting people on here saying how marvellous this Tory budget was ?

 

Incredible. Someone getting an 8.5% increase in their benefits this year complaining the tax burden on the people paying for this is reduced while they get nothing. 

Pathetic!

Tell you whhat I would like to see. 10% tax rate replacing the personal allowance. Everyone with any income can pay into the pot. Abolish NI totally and remove the dumb AF tapering for other benefits. 

If someone earning £80K doesn't need child benefits with a mortgage and kids to pay for then a boomer with assets over £X doesn't need a state pension. 

The utter hypocrisy of your arguments amazes me!

No doubt Labour will give you all a nice increase in pension and a zil lane for GP appointments so you can crowd out the next generations paying for you all and raising the one behind them. 

I'm glad of the tapering though. I'm going to end up with a retriement level of funding well ahead of retirement age. I can kick back and stop paying taxes into a system that's eats its young after avoiding them for quite a few years. 

Maybe I can produce everything I need since consumption is a choice apparently. 

[kzb]

2 hours ago, Unmoderated said:

Incredible. Someone getting an 8.5% increase in their benefits this year complaining the tax burden on the people paying for this is reduced while they get nothing. 

I told you already I am not a pensioner.

[kzb]

5 hours ago, LandOfConfusion said:

in ~20 years time don't rely on the state pension to give you squat let alone anything like the rates currently being paid under the triple lock. That benefit is reserved for Boomers.

This plot is interesting.  It shows the forecast NIF balance from forecasts made in 2015 and 2020.

What a difference.  The forecasts are only 5 years apart, but the 2015 forecast was clearly very pessimistic.  In the five years between forecast the fund exhaustion occurs fully ten years later.

 

Now I am not saying the 2020 forecast will turn out as wrong as the one from 2015.  The pandemic will have hit the NIF hard.  But maybe the idiots Hunt and Sunak looked at this plot and thought we can afford to cut this.

[Confusion of VIs]

On 06/03/2024 at 22:23, kzb said:

We've been expecting collapse at least since Thatcher if not before, but it's never happened yet.  The "debt" is largely owed to ourselves and is at least partially fictitious.

You are the one saying that ordinary people are dirt poor and unable to afford to heat or insulate their homes or even buy decent food. In 2010 the average Brit was about as well off as the average German now we are 20% poorer. 30% for the bottem half of the country.

How poor do you think the average Brit needs to get before you would consider it a collapse in living standards.

On 06/03/2024 at 22:23, kzb said:

That's right, and it is going to be even more unpopular if they abolish NI completely as they've been saying.  Or maybe they realise the next election is lost whatever they do, so the objective is to leave Labour with as many problems as possible.  The NI fund will likely gradually lose money after these cuts, and Labour will have to increase NI again in the future.

The Tories know they are going to lose the election and the cut was deliberately intended to be unsustainable to ***** over Labour. 

In addition

• The head of the OBR has publically stated that the spending figures provided to him by the government are a work of fiction and probably unachievable.
• The OBR also has to use the goverments figures for immigration. The continuing high immigration rate is needed to make the books balance  
• No provision had been made for paying compensation for the infrcted blood scandal - maybe £11bn
• No provision has been made for paying compensation for the Post Office scandal - ?????? 

On 06/03/2024 at 22:23, kzb said:

On the plus side, I suspect the triple lock is safer under Labour than the Tories.

Maybe but given the above, I think its days are numbered. 

Edited March 7 by Confusion of VIs

[Confusion of VIs]

38 minutes ago, kzb said:

This plot is interesting.  It shows the forecast NIF balance from forecasts made in 2015 and 2020.

What a difference.  The forecasts are only 5 years apart, but the 2015 forecast was clearly very pessimistic.  In the five years between forecast the fund exhaustion occurs fully ten years later.

 

Now I am not saying the 2020 forecast will turn out as wrong as the one from 2015.  The pandemic will have hit the NIF hard.  But maybe the idiots Hunt and Sunak looked at this plot and thought we can afford to cut this.

And Brexit?

The head of the OBR said yesterday that it has cost us twice as much as the pandemic (so far, with according to Carney much more to come).

[kzb]

6 minutes ago, Confusion of VIs said:

And Brexit?

The head of the OBR said yesterday that it has cost us twice as much as the pandemic (so far, with according to Carney much more to come).

Irrelevant.  The projections are based on life expectancy, earnings, fertility and migration.

I dread to think what the same projections would look like in France, Spain or Italy.

[Confusion of VIs]

53 minutes ago, kzb said:

Irrelevant.  The projections are based on life expectancy, earnings, fertility and migration.

I dread to think what the same projections would look like in France, Spain or Italy.

What's irrelevant?

What projections?

[Bruce Banner]

4 hours ago, Unmoderated said:

Incredible. Someone getting an 8.5% increase in their benefits this year complaining the tax burden on the people paying for this is reduced while they get nothing. 

Pathetic!

 

When I started drawing my state pension I spoke with an adviser from "The Pension Service" who explained to me that the state pension is an entitlement, not a benefit, because it is something that I have paid for. Although I believe that the "New State Pension" that came out in 2016 is classed as a benefit.

 

 

Edited March 8 by Bruce Banner

[kzb]

1 hour ago, Confusion of VIs said:

What's irrelevant?

That word you used.

1 hour ago, Confusion of VIs said:

What projections?

The projection in the post to which you were supposedly replying.

[kzb]

1 hour ago, Bruce Banner said:

When I started drawing my state pension I spoke with an adviser from "The Pension Service" who explained to me that the state pension is an entitlement, not a benefit, because it is something that I have paid for. Although I believe that the "New State Pension" that came out in 2016 is classed as a benefit.

 

 

They started calling it a "benefit" some years ago now, long before the new state pension.  I don't like it either.

They could call it "contribution-based pension" to differentiate it from "pension credit", in the same way we have "contribution based" jobseekers allowance.

On the other hand it is very much paid out of recent NICs.  There is only about one year in reserve; there was never a long-term investment fund.

The idea that we contribute in order to benefit later is a good one and needs strengthening not weakening.  This is much stronger in European countries actually.

[winkie]

6 hours ago, kzb said:

They started calling it a "benefit" some years ago now, long before the new state pension.  I don't like it either.

They could call it "contribution-based pension" to differentiate it from "pension credit", in the same way we have "contribution based" jobseekers allowance.

On the other hand it is very much paid out of recent NICs.  There is only about one year in reserve; there was never a long-term investment fund.

The idea that we contribute in order to benefit later is a good one and needs strengthening not weakening.  This is much stronger in European countries actually.

Don't expect anything, then everything you get will be a bonus, no entitlements......that doesn't work claim benefits, as millions are already doing, a state pension will not pay the rent.

[Stewy]

16 minutes ago, winkie said:

Don't expect anything, then everything you get will be a bonus, no entitlements......that doesn't work claim benefits, as millions are already doing, a state pension will not pay the rent.

At the rate people are postponing being an adult, the majority will reach pension age still renting. It's really sad (well, for them). 

[winkie]

1 minute ago, Stewy said:

At the rate people are postponing being an adult, the majority will reach pension age still renting. It's really sad (well, for them). 

Sad for the tax payers also.....I don't agree with housing being monetised and financialised......should be not for profit and any rent profits plowed back into the said property for updating and building more.....acres of land are still publicly owned, owned by the people.

[Unmoderated]

8 hours ago, Bruce Banner said:

When I started drawing my state pension I spoke with an adviser from "The Pension Service" who explained to me that the state pension is an entitlement, not a benefit, because it is something that I have paid for. Although I believe that the "New State Pension" that came out in 2016 is classed as a benefit.

7 hours ago, kzb said:

They started calling it a "benefit" some years ago now, long before the new state pension.  I don't like it either.

They could call it "contribution-based pension" to differentiate it from "pension credit", in the same way we have "contribution based" jobseekers allowance.

On the other hand it is very much paid out of recent NICs.  There is only about one year in reserve; there was never a long-term investment fund.

The idea that we contribute in order to benefit later is a good one and needs strengthening not weakening.  This is much stronger in European countries actually.

It's an entitlement AND a benefit. It is not contribution based either and has not been for quite some time. What you receive has no bearing on what you did(n't) pay in. You just needed to make a payment. £1 a month or £1K a month for X years gets you the same entitlement. 

You might have paid more tax than anyone else in the country, or not. But it is not something you've paid for. 

The idea of the NI fund is clung onto by many but there is no fund. It's a notional accounting reference and that pool is not ring fenced. More to the point, even if there were a fund it is a pay as you go system. The idea that there's some magical NI fund full of your contributions is not real nor is the idea it's in surplus beyond a spreadhseet in the Treasury. It's all the same money and can be spent on whatever the governmetn wants to spend it in. There's not a net asset position when the country owes about a trillion in debt. 

There was a good article in the FT on this recently. I'll try and find it later and post a link. 

The only pension that works as something you've paid into is a DC private pension. 

I agree with your last point @kzb but most European countries don't give the same tax breaks to pensioners. Netherlands reitrement age is indexed to average life expectancy so if that rises the age goes up. It's actually fallen recently as a result of Covid. Single person would get about EUR13K a year there on state pension but would pay just under 10% on that. NL taxes income regardless of sources (in this simple context of earned income versus pension income). People pay only about 10% tax up to EUR35K. Seems fairer to me that our system.

I also note there's no triple lock on their state pension either. 

[Bruce Banner]

17 minutes ago, Unmoderated said:

It's an entitlement AND a benefit. It is not contribution based either and has not been for quite some time. What you receive has no bearing on what you did(n't) pay in. You just needed to make a payment. £1 a month or £1K a month for X years gets you the same entitlement. 

You might have paid more tax than anyone else in the country, or not. But it is not something you've paid for. 

The idea of the NI fund is clung onto by many but there is no fund. It's a notional accounting reference and that pool is not ring fenced. More to the point, even if there were a fund it is a pay as you go system. The idea that there's some magical NI fund full of your contributions is not real nor is the idea it's in surplus beyond a spreadhseet in the Treasury. It's all the same money and can be spent on whatever the governmetn wants to spend it in. There's not a net asset position when the country owes about a trillion in debt. 

There was a good article in the FT on this recently. I'll try and find it later and post a link. 

The only pension that works as something you've paid into is a DC private pension. 

I agree with your last point @kzb but most European countries don't give the same tax breaks to pensioners. Netherlands reitrement age is indexed to average life expectancy so if that rises the age goes up. It's actually fallen recently as a result of Covid. Single person would get about EUR13K a year there on state pension but would pay just under 10% on that. NL taxes income regardless of sources (in this simple context of earned income versus pension income). People pay only about 10% tax up to EUR35K. Seems fairer to me that our system.

I also note there's no triple lock on their state pension either. 

Mine is most certainly contribution based. A sizable amount of my state pension is derived from the size of my monthly NI payments, in addition to the basic amount derived from my forty five odd years of NI contributions. 

It's still a pittance though, regardless of the triple lock, I most certainly couldn't get by on my (maxed out) state pension alone.

 

 

Edited March 8 by Bruce Banner

[Unmoderated]

6 minutes ago, Bruce Banner said:

Mine is most certainly contribution based. A sizable amount of my state pension is derived from the size of my monthly NI payments, in addition to the basic amount derived from my forty five odd years of NI contributions. 

I can't find anything that states this. From everything I've seen the state pension you're getting is based on the number of qualifying years and not on the actual value paid in.

Perhaps you've got a referencce you can share?

[Bruce Banner]

3 minutes ago, Unmoderated said:

I can't find anything that states this. From everything I've seen the state pension you're getting is based on the number of qualifying years and not on the actual value paid in.

Perhaps you've got a referencce you can share?

I thought you were an accountant .

[Bruce Banner]

1 hour ago, Unmoderated said:

I can't find anything that states this. From everything I've seen the state pension you're getting is based on the number of qualifying years and not on the actual value paid in.

Perhaps you've got a referencce you can share?

Ye Gods, the man's a fool, a chartered accountant posting verbose argumentative nonsense as fact. Highly unprofessional ...

https://www.housepricecrash.co.uk/forum/index.php?/topic/252634-boomers-have-their-hand-out-again/&do=findComment&comment=1104183691

Five minutes Googling would have given you...

Additional State Pension: Overview - GOV.UK (www.gov.uk)

 

 

 

Edited March 8 by Bruce Banner

[kzb]

2 hours ago, Unmoderated said:

It's an entitlement AND a benefit. It is not contribution based either and has not been for quite some time. What you receive has no bearing on what you did(n't) pay in. You just needed to make a payment. £1 a month or £1K a month for X years gets you the same entitlement. 

So it is actually like an insurance policy.  Also, it's only recently that the SERPS and State Second Pension were stopped.  These were earnings-related, the more you paid in the more you got.

2 hours ago, Unmoderated said:

It's all the same money and can be spent on whatever the governmetn wants to spend it in.

They'd have to change the law first.  National Insurance is a whole separate area of legislation and they can't spend it how they want on a whim.  It's true that in the 1990's legislation was passed allowing them to dip into it for NHS funding.  But that's all.  I would argue this should be reversed.  Social security payments should actually be itemised, like they are in many other countries.

2 hours ago, Unmoderated said:

Netherlands reitrement age is indexed to average life expectancy so if that rises the age goes up

OK maybe that's a good idea, but it is essentially what the UK has been doing anyhow, without putting it in so many words.

2 hours ago, Unmoderated said:

Single person would get about EUR13K a year there on state pension but would pay just under 10% on that. NL taxes income regardless of sources (in this simple context of earned income versus pension income).

  We also pay income tax on pension income.  It's structured a bit differently in that we have a personal allowance.  Most people would prefer our structure to one where you pay tax on truly small incomes.  Most people would vote for the personal allowance to be raised a lot.  It also uses a small amount of headroom to help the low-paid the most, so it's the most efficient use of the money.

IN contrast, if the government suddenly announced there would be a 10% tax starting at the first pound of income there would be outrage.

The responsible thing to do in this last budget would've been to raise the income tax bands, not reduce NICs.  The reason they did this was simply party political; to leave Labour with the embarrassment of having to increase national insurance in a few short years.

2 hours ago, Unmoderated said:

I also note there's no triple lock on their state pension either.

If the state pension is already at a decent level there is no need for a triple lock.  It's enough to index the pension to average income.  As things stand, an average NL state pension is 106% of the average wage, when you take into account other pensioner benefits.  It is nowhere near that here is it.

Edited March 8 by kzb

[kzb]

Correction, the Netherlands pension net replacement rate is now 95.4%.

Compare with UK on 54.4%

https://data.oecd.org/pension/net-pension-replacement-rates.htm#indicator-chart