If you can work you should... But why?

[Tryingtokeepgoing]

So, Rachel Reeves is of the opinion that if you can work you should. However, there are millions of us in the 50+ bracket who can work, but don't need or want to work. We are financially self sufficent, happily (ish) paying tax and spending money supporting the services economy on which so much of the country depends. Why should we work? Altruistically, I see my choice not to work as creating opportunities for progression for others...

Why should we work?
What is achieved by encouraging us to work?
If there are benefits to us working, how can she incentivise us to do so?

caveat - I am not a fan of the Telegraph, but it is a direct quote

“If you can work, you should work,” she said after official figures showed worklessness in Britain rose to its highest level in more than a decade.

Well I'm 50 and I'm exhausted already.

I've been lucky to have a job that's community oriented but if I'm going to work till I'm 67 I definitely want to be doing something that helps others, helps the community. Say baking bread for the local playgroup, cooking for elderly/unwell neighbours, ironing sheets for a local care home, planting trees, doing the gardening, mending clothes, fixing furniture.
I would like to be paid for these things then I would happily work till I was perhaps even 70.

But, if I had to work in a supermarket or doing some crappy admin job for a money making entity rather than a social job - I would just refuse to do it. Sod that.

I will work if the conditions are good, I'm helping others directly and I'm not being exploited. End of.

Otherwise I'll retire early when I've had enough and claim my work pension then state pension and volunteer for free doing the jobs above instead.

Wasn't it Galbraith who said "there are two classes of economist: those who don’t know and those who don’t know they don’t know"

I don't suppose it matters if you stay at home but don't claim benefits. I think RR means people who claim benefits should work if they can do so as not to be a burden on the taxpayer.

@feellikeanalien

I know that there are some people that do seem to game the benefits system but I find it hard to believe that there are as many as reported on MN.

It's endemic throughout the tax/benefit system to "game the system". It's certainly not just the stereotypical "lazy" people who are lifestyle benefit claimants who never work (or only work in the black economy, "no income tax, no vat" etc).

Lots of people restrict the hours they work or the money they earn to stay under particular tax/benefit thresholds. Yes, they may be working, so contributing something, but they're still "gaming the system" when they refuse the promotion or refuse an extra shift, etc., so they don't go into a different tax band or don't lose their tax credits/UC for that period.

Back in Brown's days, I had loads of clients with "pretend" businesses claiming to work the requisite number of hours to qualify for tax credits - all manner of businesses from car boat/market traders through to cleaners and car washers, through to odd job men. All knew how to "justify" the right number of working hours by doing "research", "administration", "training", etc., and funnily enough just earning enough to break even and cover their costs, with not actually making any profit, so basically working the minimum possible in reality. Funny how so many of these "pretend" businesses either closed down or suddenly turned into "proper" businesses making a profit when the eligibility and minimum income level rules came into play for UC! That was "gaming the system" too!

This is exactly why I advocate for simpler tax/benefit systems without all the nasty cliff edges, high marginal rates of tax/benefit loss, etc. The current winter fuel allowance change is classic tax cliff edge which should never have been approved by Parliament as it's another nonsensical rule which discourages self sufficiency and increases reliance on the state.

Yes I agree with this. It's shocking that big employers like Tesco make millions in profits and yet a lot of their staff earn so little that they are on in work benefits. That's a taxpayer subsidy of a massive profit making business.

Without looking at the reasons why people give up work or never start nothing will change. I'm mid 40s with 2 tax payer funded degrees. I haven't worked properly since dc1 was born 9 years ago. I was exceedingly ill postnatally and lost all confidence in myself professionally. Dh earns a lot, I have a private pension and a civil service one from when I did work. I volunteer with a number of charities including Home Start and doubt I'll ever go back properly to employment. Although I do plenty to keep my hand in, chairing meetings, successfully applying for funding grants etc and of course home visits through Home Start.

Motivating those of us who aren't claiming benefits is extremely tricky. My ex boss (Civil Service) thinks the choice should be repaying tuition fees or returning to work but I can't see any Government going for that.

I retired at 56 but only because I had enough secondary private pension to do so. I got my Teachers Pension at 60 and pay tax on both pensions and btl income. When I reach 67 I'll get a full State Pension too. Then I'll pay the higher rate tax on the combination of 3 pensions. I haven't claimed any benefits since retiring so I don't suppose RR would care. I think I'm leaving paid jobs for younger people to do.

I work full time as I enjoy it. I pay a shit load of tax and that’s fine.

But at some point soon I’m going to stop working, and will not be claiming any benefits. I won’t obviously be paying tax as before. I don’t care one jot what Labour think of this and tbh I don’t care on the impact on society. I’ve paid much, much more than most and don’t want to work anymore. I will volunteer and do more in my community.

I also know of several sets of parents who are pulling out of private school due to VAT, and the mothers (not the main earners) are stopping work now too, as they don’t need to pay the fees and need to be more available as the school has less flexibility.

Looking forward to seeing how the books balance in the coming years.

Yes I am a line manager and I have staff that I have offered more hours and career progression too, over and over in the last 12 years. They always say no as they don't want to go over the threshold to claim working tax credit (or the equivalent)
I find it really annoying as I could really do with people doing a few more hours instead of having to line manage loads of staff who do hardly any hours each so they can claim the credits.

I once did an analysis of Tesco's accounts. If they spread the profits over the number of employees and number of customers, it was a tiny amount that would make no difference to anyone. The numbers may seem big, but margins are tiny, employee numbers are high, customer numbers are huge. Crunch the numbers and it's really not excessive. Quite simply, even if you converted it to a "non for profit" entity and paid all the profits out to staff in wages, it wouldn't cover an increase of even 50p or £1 per hour on wages for all the staff. A big number (profit) dividend by a big number (number of staff) results in a small number!

I know Labour want us to work to 67 to push up GDP but I'm 61 and will stop in the next year or two.

I've got 43 years NI paid, I've paid higher rate tax for 35 of those years, and I'm being managed out of my job, basically because my CEO wants young blood.

I'll temp while I try to find a new job but at my age I don't hold out a lot of hope. I intend to stop paid work completely by my 63rd birthday.

I'm a parish councillor as well, don't get paid for that. And this weekend, we pruning parish hedges around roadsigns because the council can't afford to. So I still contribute, even if it isn't via PAYE.

I strongly suspect she is talking about people like the op, people who are self-sufficient and have taken early retirement. From an economic perspective you are taking up space, you're using resources like water, NHS, rubbish collection, roads etc and you're not adding anything to the economy. You may be buying stuff and services, but so would a working person. If you were a software engineer for example a new software engineer would've needed to be hired when you retired, as presumably the requirement for your position didn't go away when you stepped down. And we now need to find extra living space and resources for this new software engineer as you're still using yours. So now we have basically have two software engineers, both taking up houses and using up resources like water, NHS, rubbish collection, roads etc - and also both paying for services - but only one is actually doing any work and adding to the economy. If too many people do it, we'll find ourselves in a bit of a pickle where we don't have enough housing or resources for all the workers we require to keep the country running...

Plus, unless you paid millions in tax when you were working, it's extremely unlikely that you have paid for all of the resources that you will require over your lifetime, which means that you are being funded by the nation even if you're not officially taking benefits. And, in the nicest possible way, they're getting no net benefit from the cost of keeping you. Even if you have paid your way, if there's a choice between someone who's paid for everything they need and is continuing to add value to the economy by working, and someone who's paid for everything they need and now stopped working, the former is far more useful - from an economic, objective perspective.

Nail on the head. I have a few convenience store clients who say the same. The owners would love the staff to work more shifts but the staff simply won't because they'd lose benefits. Such a shame because usually the permanent staff are the ones who know the job, know the customers, etc., but instead they have to take on random casuals to cover sickness/holidays etc who are barely competent to do the job. I do the weekly wages for a couple of them and it's always sad to look down the list of hours each week and see most staff on exactly the same number of hours, which coincidentally is the requisite number for claiming maximum benefits. That's why I advocate for a better system where the tax/benefits system makes it so that work always pays, i.e. my idea of never being more than 50% worse off for working more/earning more regardless of earnings level. If you have the opportunity to earn £50 more one week, then you should come out with no less than £25 of it, after all things considered including loss of benefits.

This is exactly what happens when you "tax the rich till they squeak" - they can usually afford to cut down their hours or retire, especially when facing a marginal tax rate of 70%

This ⬆️. My earnings pay the school fees. Once thats done next year, I will possibly retire or go very part time…can’t say I give two hoots what some politician who will be long forgotten in 10 years time thinks!

This obviously refers to those who are on benefits but could, in theory, work.

The reality is that of those people, most of them will be:

• Too unpredictably ill to reliably work to a set rota
• Not capable of meeting the other criteria required to do the job - ie, could physically put a box on a shelf, press a button, answer a phone - but could not interact appropriately with other employees, get there on time, all the other bits that surround 'working for someone else'.
• So uneducated as to be unemployable
• So lazy and feckless as to be unemployable

Meaning that whilst in theory they could work, in practice, no employer in their right mind wants to do so, as it would cost them more than they'd bring in.

I am really worried that this government is going to waste money trying to force the unemployable into employment in order to tick boxes to please a certain sector of society - disregarding the costs, and conveniently not taking any note of the figures that show how rapidly these people fall back out of employment, only the figures that show the good stuff.

'Hurrah, we've got a 30% increase in new job starters... cough don't tell 'em about the 30% increase in sackings and re-claiming benefits Pike!'

I actually fall into the first of those categories and I am very fortunate to have skills that mean I can make a living via self employment. But I have to be brutally honest - I would not employ me. Given the choice between me and someone who can turn up reliably, doesn't randomly go home sick half way through the day, or end up mysteriously ill for weeks on end..

I am going to employ that other person every fucking time, because businesses are not charities!

I don't see the benefit in trying to force the unemployable into work - theres plenty of willing, employable people out there wanting to work! Those who have a private income or are supported by a wealthy partner will almost always end up doing something constructive with their time - usually volunteering in some form.

If we got rid of all of those people in volunteer roles, a lot of our charities (many of which our government actually fucking depends on!) would be absolutely screwed.

I think (having spent a fair bit of time with them and at times, been them) a lot of the other categories of unemployables would also do something constructive with some of their time IF they did not live in fear of being told 'if you can volunteer 1 day a week, then you can work full time so we're stopping your benefits'..

Not all, not by any means, there will always be the rich, feckless and lazy who put nothing back and the poor, feckless and lazy, who put nothing back. But they really are the minority, even if the media wants to paint it differently.

I can absolutely blame the Tories. I lived through 18 years of the Thatcher/Major governments working for what is now the DWP and I watched them lay waste to adult training, close skillcentres and pull funding for what used to be Youth Training schemes and for those with disabilities.

@natalienewname

Looking forward to seeing how the books balance in the coming years.

Be careful what you wish for. Personally, I think it's inevitable that state pension will eventually be means tested. Maybe at a pretty high level at first, but then reducing as time passes, and possibly even phased out to be fully replaced only by pension credits for those with no other incomes, but with pension credit at a higher level than it is today. I wouldn't be surprised if means testing started with a very high income level, of say, £100k or £50k p.a. at first, so it would affect very few of the richest pensioners. But it would set the scene and set the precedent and make people realise that those with the highest incomes would need to prepare for not getting the state pension and have to rely fully on their own private arrangements.

Alternatively, I see rises in income tax which affect everyone, rather than relying on bridging the gap solely on increasing NIC (Like has happened in the past 20-30 years) which only affects workers. It wouldn't surprise me if NIC was actually scrapped and income tax increased instead - neutral effect on workers but an effective tax rise on those previously insulated from nic increases, i.e. pensioners, buy to let investors, etc.

It also wouldn't surprise me to see changes to ISAs to reduce the amount of interest/dividends and capital gains being tax free, or maybe make them taxable but at a lower rate, i.e. 10% income tax instead of 20%.

Something will have to be done. Maintaining the status quo isn't an option.

Not saying otherwise, but Blair/Brown were just as bad, especially the emphasis on the stupid aim for 50% of school leavers going to Uni which diverted virtually all resources into the Uns. They also spectacularly botched up the introduction of specialist technical based secondary schools.

I posted upthread about the drive to force disabled people back to work. The criteria for being considered severely disabled and not forced into work have become narrower and narrower, and the assessments more and more punitive and unfair. So RR’s words will strike the same fear into those disabled people who feared the Tories for much the same reasons. Until we fix the assessment system so that disabled people are assessed promptly and properly and not constantly harassed with reassessment for conditions which will never improve, we shouldn’t be introducing any kind of conditionality. It’s putting the cart before the horse.

@taxguru it is that fear that is driving me to seriously consider stop working. I am not well paid, but I have a pension and savings to top me up in retirement. If it became means tested I would be no better off than if I had no private pension and savings. So maybe I should just spend it now and have a good time?

I agree that Blair / Brown were the architects of the demise of adult education, but they also played a huge part in the stagnation of wages at the lower to mid levels by encouraging a massive increase in the number of graduates without investing in graduate jobs. They then compounded the problem by subsidsing employers to create low paid / part time jobs through in work benefits, further limiting opportunities for progression at the lower levels. Of course, at the time, both measures were actually just to maniplute the unemployment figures. Great politically in the short term, but devastating for a generation or two in the medium term.

The real kicker is that if they can also claim pension credit they'll likely be better off than you in retirement.

I agree the sentiment of you work if you can (or self fund yourself) but i can now see why some in forties and fifties who have made no pension provision continue to play the system knowing the state will still provide extra in retirement. I've worked since leaving school, having a p/t job in addition to f/t at times, and having built a small occupational pension to survive in retirement I do wonder was it worth it. Makes you think.

Oh hell no to volunteering.

I've done my share of that and I will never ever do such a thankless task again.
I've gone part time, I cannot see me quitting working part time before the state pension kicks in. I never see me going full time again.

If I came into enough money to see me through to state pension age, I'm still not sure I'd quit, but only because i love this current job so much. I might however cut my hours even more.

Yes, obviously. But I was talking from the point of view of working until retirement age and paying NI on wages earned.

This is exactly what is so disastrous about the talk of means testing pensions. Way too many people will choose to opt out of pension savings. You have to incentivise people to save and fund their own retirement.