Is bankruptcy inevitable now for the UK

[BringOnTheHandyMan]

In the most layman of terms the UK is actually broke.

Every month we cannot pay the interest on our outstanding debt and thus have to borrow more. (Note this is not repaying the capital, just the interest)

The rate we pay to borrow used to be quite low and that is not the case anymore.
The bond markets have lost faith in the UK and charge us a rate that reflects it.

We have systems we can no longer afford (welfare, NHS etc)
We have little to no growth
We have inflation issues (so printing money is out)
Raising or cutting interest rates is problematic due to having both growth and inflation issues together
Our politicians are scrapping like rats in a barrel and even prior to that they seem incapable of making hard decisions or even facing up to the mess we are in.

We do actually need a PM that stands up and says okay folks we are in deep shit. We are broke. Actually worse than that. In debt and unable to pay even the interest.
So any borrowing we do must be for investing/growing the economy only. All spare money must be used for paying down debt or investing/growing the economy. That means for the foreseeable future all state funding is scrapped. We would enter a period of being very much a 'poor country' and acting like it. If we worked really hard we might be able to turn it around but it would take years, hard decisions and many, many sacrifices.

Since I can't see any party being able to actually do that. Then I honestly don't see how we can go anywhere except an IMF bailout. Then they will play the tough guys and cut the lot anyway.

I try to plan for my retirement but honestly it's sort of impossible.

For those with public sector pensions I wouldn't be sure you will get it paid
For those with private defined contribution pensions, the stock market is vastly overpriced just now and your pension is likely to fall once the AI bubble bursts.
State pension - yip not convinced we'll be getting that
Costs to be budgeted for - healthcare but how much?
Downsize my house - perhaps but will house prices tumble making this impossible.

Does anyone think that any government (regardless of party) can fix the country. If not what happens. The UK used to have no NHS or welfare so do we just go back to that. How long will it be until the wheels come off?

Lots of threads about which benefits should be cut etc but nobody seems to be shouting that actually it ALL needs to be cut regardless of what hardship it causes.

You’re right. It is being flagged.

A big issue is no government wants to do anything that would upset pensioners as they’re such a powerful voting block. I know that’s an unpopular opinion. It means the triple lock won’t be touched, and the government won’t do the sensible thing and roll NI in with general tax. Older people use the NHS more than anyone so it makes sense they pay NI imo. They should set the state pension at whatever the tax threshold is and make income above that subject to tax and NI (for all ages).

There is a lot more that would need to be done to sort out this country’s financial issues of course, but I do think a big issue is the reluctance to make any changes which upset certain demographics.

@summermidnightsun agree

Actually I was talking more about the period before we had any welfare or NHS. Families often lived in very crowded conditions as that was what they could afford. Those who were worse off ended up in the workhouse or on the streets. People don't seem to realise that we have only had a welfare state/NHS for the last 80 years. Prior to that you were on your own. No money, no doctor. No money, no accomodation. It was that simple.

What is unrealistic is refusing to face up to the fact the UK is currently borrowing to pay the interest on it's current debt. Not to repay the capital. Just the interest. Let that sink in for a while.

Benefits need to be replaced with mechanisms to get get more people working. You get out based on what you have put in an it is time limited. It should be a minimum not to bring you close to what you could have if you were working full time.

It’s tough out there, I claim pip for me stage Parkinson’s, a strange beast that affects you mentally and physically, I’m 64, had it since 55, diagnosed since 60, no way can I work.
Affecting my concentration and physical abilities, varies tho, I’d never be employable again.
By changing Pip , you theoritcally push up theft, I agree that anxiety and depression, should have evidence of treatment before being signed off.
i’m convinced that boredom, lack of proper a wise apprenticeships would help.
Currently we have an ageing population , lots taking it more than they paid in

Actually I was talking more about the period before we had any welfare or NHS. Families often lived in very crowded conditions as that was what they could afford. Those who were worse off ended up in the workhouse or on the streets. People don't seem to realise that we have only had a welfare state/NHS for the last 80 years. Prior to that you were on your own. No money, no doctor. No money, no accomodation. It was that simple

I don’t think people have forgot that but it’s completely unrealistic to think we are going to go back to those days of no healthcare etc

Not sure this is 100% true - there was welfare available from as early as the Tudor period via either the parish council or various charities. You could apply for a small income if you weren't able to work and the parish was legally obliged to help you if you convinced them you weren't faking. I'm reading a book about it now! And there was the Poor Law and charities but I'm just coming to that.

Currently we have an ageing population , lots taking it more than they paid in

And we can’t tackle welfare without addressing the cost of an ageing population

Basic economics is not at all basic. I know enough about it to know I don’t know enough about it. May I ask what your qualifications in economics are, OP?

Yes, and we need to start manufacturing within the UK a lot more, plus more farming in the UK etc. We've relied on "cheap" imports for far too long, and ignored the social and financial costs of unemployment, plus the damage of having a balance of trade deficit. We should spend the money currently spent on unemployment benefits (and social and other costs of unemployment) on subsiding manufacturing firms in the UK to produce a lot more of what we consume.

And even if we are, our current cohort of older people certainly wouldn't accept it for themselves - though many seem to think the younger people deserve it! Just the old "Pull up the drawbridge behind you" mentality of some of the older generations these days.

Like the way some seem "happy" for youngsters to make their own pension provision rather than relying on state pension in 40 years' time, but of course, they want the triple lock maintained for "their" pension, don't they?

Indeed!

I'm 70, and I think the triple lock should be suspended. I acknowledge that I say this from a comfortable position, but everything that is in my personal pension plan now has been put there by DH and I. And so, we are more than a bit miffed that the investments are going to be subject to IHT.

It’s funny because the more people talk about the state pension being removed and house prices crashing meaning everyone should save more for their old age etc just sends me the other way. I stupidly went into a profession that is self employed. I get no workplace employer contributions etc. No sick pay. No holiday pay. No maternity pay. I am aware this was my choice but I never really understood the implications of not having employed benefits when I was young and starting out my career. I saved and bought my house, I do pay a small amount into a private pension. I have savings and premium bonds. My long term plans were to downsize in retirement and my small pension with state pension would be enough to see me over. Then all I hear is well state pension will be removed, your house price will crash and be worth nothing, your private pension will also be worth nothing etc. So what am I bothering for? What is the point? Quite frankly while I’m young and healthy enough to enjoy my life I’ll just spend it all now then rather than save. Apparently I’ll be fucked regardless so rather than waste what is left of my heathy years (approaching 50 now so not exactly young) panicking and saving and never doing anything fun because it all costs too much I’ll just do it and sod the savings. Right now I’m healthy and have money. If in 20 years no matter what I do I won’t have any money, I may as well have decent memories to look back on. If it means that I’ll be on the streets or in a workhouse type place then I won’t exactly be alone will I. If everyone’s pensions and houses are worth nothing then we’ll all be in the same boat. But at least I’ll have enjoyed myself.

No its not wrong at all, who has been saying we are heading for an IMF bailout? certainly not the IMF or the BOE, you've just made that up.

Gilt yields are coming back down and before Iran, where lower than the levels seen under Sunak.

But Trump has scuppered any improvement in the worlds economies, inc the UKs.

https://www.telegraph.co.uk/business/2026/06/06/labour-may-need-help-from-the-imf-economists-warn/

https://liamhalligan.substack.com/p/leading-economists-are-finally-facing

"Labour risks being forced to seek emergency help from the International Monetary Fund (IMF) as Britain lurches toward a debt crisis, leading economists are now warning."

Do what i'm doing, spend your pension or gift it.

I can see why pensions would fall under IHT, after all, they are unearned income for your children etc.

However, i don't think the TL should be suspended, i think it should be means tested, certainly removed from higher rate tax payers or perhaps bought into line with WFA....

Many pensioners need this uplift.

I agree, no problem with triple lock for pensioners with no other income/assets, but yes, it should definitely be means tested. Though I think the H/R threshold is too low. To start with, I'd suggest use the same £100k threshold as used for the personal allowance withdrawal and free childcare withdrawal. No one with income of £100k or more "needs" the state pension, nor any other state benefits really. Then let it sit at that level, let "fiscal drag" reduce the threshold in real terms over many years. There are very few OAPs with incomes over £100k so it wouldn't cause electoral mayhem for the government, but the sooner it's introduced, the more effect it will have as the years pass and fiscal drag excludes more and more people from getting state benefits in retirement. Over 2 or 3 decades it would probably be at today's level of higher rate tax threshold in inflation adjusted real terms.

What caused the issue in the 70s?

Continuing de-industrialisation of the UK manufacturing base as developing countries could make stuff a lot cheaper.

Dinosaur unions inflicting strikes and industrial disputes, making the de-industrialisation even worse as the UK workforce became unreliable.

Government answering the challenge by a huge debt-fuelled economic growth program which caused inflation and ultimately led to a banking crisis and "stagflation" being high inflation without growth, i.e. a stagnant economy.

Quadrupling of oil prices.

So pretty similar to modern times in parts.

I think strikes are indicative of terrible management.... so take our once world leading motorcycle, car and bicycle industries and plenty of others too.

Companies failed totally in R&D, the Triumph M/C of the 1960s was based entirely on a 1930s design, meanwhile the Japanese were making bikes that far outstripped ours.
Same with cars...

Japan wasn't a developing country...

BUT new relaunch of Triumph has resulted once again proved we can make great 'bikes, despite higher labour costs and unions.

Bicycle manufacture sold/shut down, now we make virtually nothing for the market.

I worked in Telecoms, we had world leading designs for digital and IP telephony, but Govts allowed companies to be sold and companies like Siemens chopped these designs, in favour of their own and then closed it all down.... UK suffers.

Same with Nuclear tech, UK world leader in Nuclear power, now needs French and Chinese help.
What happened to our aerospace expertise?

Governments of all colours helped this along.

you are probably right in so far as there were churches that helped the poor and the likes. I suppose I was talking about an official welfare state. Your book sounds interesting though

Can you please just watch some podcasts on the UK economy. You can find them on you tube. Some feature people who have worked for the IMF. Some feature well known economists. Or you can just keep burying your head in the sand.

I don't get posters saying things like 'having no healthcare is unrealistic'

I mean if a country is broke, heavily in debt and can no longer afford to provide services it once could.....then the only realistic option is to stop the service.

People will be upset of course. It's still the only financially realistic option though.

Spending money we don't have with no end in sight is unrealistic.

I used to donate to dog charities. I can't afford it anymore so I had to stop. I am not happy about it. However continuing to do it when I was broke would have made me bankrupt/broke. I would think that was sensible/realistic if not unpleasant to have to action.