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.

I was working but due to the opiate crisis I had my painkillers stopped. Now on benefits. In a wheelchair. There are loads of people stuck like this. But who cares as long as it stops drug addicts. Who never seem to work anyway.

They were saying it - and had plans to implement it had they been re-elected. Labour were opposing it and from what I can see they are getting ready to implement similar changes to sickness and disability benefits, having refused to rule out taking on board the results of the consultation already in progress.

Why are you dividing the profits by both employees and customers @taxguru? If the business isn't profitable with paying living wages then it's a flawed business model surely?

I agree, talk of means testing SP will be the final nail for many already questioning why work hard, save, build up a pension when those opting out (not those genuinely unable to work) will be better off.

Unless you are very wealthy it will not make sense to try and build up a bit extra for retirement.

I take issue with the 'not adding anything' to the economy, as I am still paying what I consider to be a lot of income tax every year. I then pay people to do stuff, by consuming services. Yes, I would do the same if I was working - but probably not a lot more, as it was by not spending everything I earned that I am able to do what I do now... I would have paid more income tax and NI, of course. But the government is now getting that from the person doing the job I would be doing, who is in turn also consuming goods and services. As a key plank of her 'plan' is growth, that inevitably means more consumption/output and more economic activity.

I accept that by exiting the workplace sooner, we potentially have a larger population to house...that is a good point. But total tax income is still higher than if I kept working, so overall the govenment is better off. And building houses is part of the growth 'strategy'

And to your last point, the internet reckons you need to earn a little under £2.5m in your lifetime to be a net contributor. I can't speak for everyone, but I imagine that most people leaving the work place in their 50s have earned at least £2.5m in their working life in order to be in the position where they have saved/invested enough to live on comfortably before and beyond being able to access their pension. And along the way, the government continues to get more income tax from me...putting it into even more of a net positive position :)

Well actually that depends on what money you're living on. If you're drawing on a private pension then yes, you are taxed on that. Likewise if you had some investments or property investments that you are now selling - capital gains tax on that.

The only money you wouldn't be paying tax on is savings in an ISA.

I don't like the Labour party , but I think she means people claiming benefits .
If you've chosen to live off savings , living a pared back life on less hours , have a personal pension etc , you are still self sufficient .

No she does not mean people claiming benefits. There are more young people claiming sickness benefits than people this age. She means the vast numbers who just do not work or work part-time.

@otnot The point at which someone is a net contributor is an income level of £41k in today's money.

I've been a net contributor for 35 years. I don't feel the slightest guilt in stopping work. I've done enough.

I'm 57, well paid job, paid into private pensions. Always thought I'd work into my 70s, plenty of time to enjoy retirement after that.

Well now I've got cancer. So I'm a massive drain on the NHS and now after the brush with cancer I realistically have to acknowledge I may not have so many years left. Working is stressful I feel a lot more tired than pre-cancer. I have some workplace adjustments but my employers aren't hugely supportive.

So I'm pretty keen on retiring a lot earlier than I planned to enjoy my remaining years of reasonable good heatlh. Not likely to be enticed back to work unless employers are interested in supporting a tired disabled person with WFH opportunities, stress free time off for hospital appointments and so on.

I think this is what she means too

@ArseInTheCoOpWindow I agree. Working conditions in many ways were better in the 80s, in terms of employers looking after employees. Rights were slowly chipped away. In my job, overtime was abolished. Then the time and a half we got for working on weekends or bank holidays. Sickness sanctions became more and more punitive. About 5 years ago I was in a company wide meeting and noticed that I was one of the oldest there. Then three years ago I became too ill to work. I believe that my organisation didn't want any older people, and I was let go. In the end it was a relief. I never imagined being fully retired at 58, but that's the way it is. And I've noticed a lot of my contemporaries from school and university are also retiring.

I think that raising womens retirement age from 60 to 67/8 plays a part in this and has backfired. I think women get to 50 and assess their lives and the thought of working another 18 years until state benefit retirement is too much to contemplate, so look to get out sooner now whereas 60 might be enough for me to consider working for a few more years to boost my pension, but not 68....I would try and make do with less money and finish as soon as possible...or at least that is the case for me.

Oh how I love the "look over there" politics! the issue in this country is not the over 55s who are self sufficient, pay taxes and took early/semi retirement or choose not to work. Its the people between 16 and 65 who have NEVER been economically active. not those who are sick but the absolute lazy arses who milk the system and do nothing. And yes, I do know a large number of people like this and they see it as a point of pride that they have never worked. Some people will never work they are paid so much to stay at home why would they.

I totally agree. And you have to remember we are the generation that got way shorter maternity leave. So you either earned enough to stay home longer, or you went back to work very early.
Its also the age when you are more likely to have elderly parents needing support and/or you are bereaved sometimes many times over.
What is interesting is the research shows it is not well off people retiring early. It is people like my colleague who left at 60 and is living on her savings and a tiny pension until her state pension. She is very frugal, but what she loves is walking which costs her hardly anything. I also know a fair number of women who are only working ad hoc or very part time.

What job field were you in? At 18 am assuming military? Know of someone who similar happened to, first tour in Afghanistan at 18 caused horrific trauma.

I wasn't I did it both ways, by both workers AND customers. Two different figures, both tiny and trivial.

It's the increase for everyone from 65 to 67/8 that's the killer. Women's pension ages were always going to rise to match the mens because of equality laws. The subsequent rise for all from 65 upwards is damaging to both men and women and that's what is probably causing more harm than good in terms of reducing tax revenue probably more than the pensions saved by people saying "sod it". Not to mention people in their early 60s too ill to work who'd probably have just either soldiered on another year or two or self funded for a year or two until hitting state pension age who now have to go on disability benefits instead as they can't finance several years of self funding.

I paid NI for 35 years and in to my workplace pension for 32 years and paid a lot of tax as does DH. We will both be retired by 57.

UBI would go a long way to sorting out how much benefits cost the state. Would erase jealousy and I could give up working my rubbish job that is one that I'm great at and that people rely on but I feel no urge to work other than having to have money to pay bills.

I've said before on here, that I have worked with able parents who had never, ever had a job and had no intentions of ever getting one. Some members of this Forum seem to not believe that there are people who live like this, and that they can get round the benefits system. But they exist and this is who Reeves is talking about. I wish her luck.

Yeah I don't think its the self sufficient early retirees its the perfectly able <50's who claim benefits currently that she is targetting.
As an aside it's so tedious to hear 'DH has worked for 45 years...I've worked for 40 years we deserve to retire at 55 etc etc'. The next generation will be working their arses off for far longer for far less. It's less about what you deserve and more luck at the timing of your life. I'm an NHS nurse- older colleagues retire on excellent pensions or retire and return for double income effectively. This will never be an option our retirement will be later and shitter. So count your blessings rather than telling younger people 'you deserve this'.

More workers claim in work benefits 6.3 million claims for universal credit
Than job seekers, 88,000
I'd put a huge amount on a bet that at least half those on jobseekers allowance which is pitiful and I think less even than ssp, are unwell, but cannot yet claim illness benefits.
88 thousand people unemployed officially (I know loads dont work but also dont claim) in a country of 66 to 80million people is absolutely peanuts.

@taxguru

I wouldn’t object to the state pension becoming means tested. Nor to changes in NI vs income tax. There isn’t enough money for pensions as we all become older, those that can support themselves should.

To this point changing the tax profile of ISAs and other savings seems counter intuitive. We should encourage self sufficiency rather than penalise it.

He's retired in his 50s and doing "other things"? It's a long training (and expensive to taxpayers!) to retire more than 10 years before everyone else. Especially now there's a shortage of doctors. Reeves might also have her eye on the doctors' pension and pay scheme which seems to have some perverse incentives against older doctors working.