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.

and this is happening all across the country. They are demotivating people to work hard and save. I mean why bother when you can not work, get the same money and then pension credit because you haven't bothered paying in.

So people work less hours to avoid the tax bands or don't work at all, or work a small number of hours to claim working benefits.

I wonder what would happen if they just applied some really basic rules and scrapped the rest.
20% tax on everything regardless of how much you earn.
No working benefits so you support yourself.
Everyone over 70 gets a pension of x amount regardless.
Out of work benefits for max of 6 months and then you can't claim again for 5 years.

@BringOnTheHandyMan having no healthcare is unrealistic. More sick untreated people will impact the economy and increase crime. We would have to pay more for it though.

Degree in accounting and economics done over 30 years ago now. Further professional qualifications done in my twenties. Continuing CPD (continuing professional development). Now retired in my fifties and watching a ton of current affairs/listening to well known economists.

Also watching the decline of the country, experiencing for myself the lack of GP appt, the overcrowding, the insane housing market, the lack of policing, the rising unemployment, rising inflation, rising food prices, fuel costs, people's anger and frustration

actually if there was no healthcare - the sick who were also poor would die off. The sick who were comfortable would pay for private care.

Thus the population would shrink and we would be left with only the healthy and or comfortable off.

Assuming these poor and unhealthy people were also claiming welfare, the bill would go down.

Unpalatable but that is what would happen.

The economy would likely be better off if we are only look at finances. Crime may rise in the short term as people get sicker/hungry.

I mean if you worked to 55 and then got diagnosed with Parkinsons which nobody is going to argue with, then you are one of the genuine claimants (obviously).

I actually think the mass payments for fakers/piss takers are making it worse for people like yourself.

The country can probably afford to support the sickest but not everybody.

Just checking - you do know you can claim your private pensions from 55. I stopped working at 51 and live on savings/investments. I will start claiming my pension at 55.

As someone who has needed extensive and expensive healthcare literally from cradle to my grave, whenever that happens (possibly sooner rather than later if anticipated heart surgery goes wrong), I find this "survival of the fittest" (because that is essentially what it is) not only unpalatable but extremely upsetting. I think it can only come from a privileged position of good health (taken in the round) for a large chunk of someone's life.

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

The NHS was born in country that was broke and heavily in debt. The war debt was only fully repaid in 2006. The post war government was the most radical of all time and responsible for the creation of the welfare state and the biggest social house building programme before or since. A country can’t create economic growth with an unhealthy workforce.

No health care means that your workforce reduces. But the only pensioners left would be the ones with either loving families or enough resources to fud their own healthcare. It's already happening as you dont want to spend years in pain waiting for the NHS if you have money to pay. https://www.phin.org.uk/press-releases/more-people-self-funding-routine-operations-as-nhs-waiting-lists-reach-record-levels

Over 60% of UK pensioners now pay income tax, and for the first time, people aged 65 and over are more likely to pay income tax than working-age adults. So the government is already increasingly taxing those pensioners who saved into their pensions and didnt rely on the state. Not much incentive for anyone to save now, is there, when the government take it from you again.

The triple lock mainly benefits the poorest pensioners, the ones who are most likely to be spending all their income in this country. Focusing on that is simply window dressing, distracting attention from the increasing reliance of the tax system of those who saved for their retirement.

I'm not particularly lucky healthwise. I have a heart valve that dosen't work properly. I have asthma, I have other things wrong.

It is unpalatable. I agree.

My response was just because someone said it was unrealistic for the UK to have no state healthcare.

I was just pointing out it was actually quite realistic for a broke nation in decline to do away with something that costs a fortune and let people pay for it privately.

No offence meant to you or anyone.

You are right. We had a huge debt burden after the war. 230% of GDP.
However we had a smaller population and the NHS was only ever set up to deal with a small percentage of what it does now. Mainly because the technology/science hadn't invented most of it yet.

I agree in an ideal world free healthcare equals a healthy workforce equals productivity.

The NHS is now trying to service millions more people than it was ever set up to do. It also tries to provide so many advanced things that years ago didn't exist. Think for one babies being kept alive much earlier. Old people also used to die much quicker and so not only was the population much smaller, there would be practically nobody living in their eighties and nineties with complicated conditions like heart failure.

I mean logically speaking if the UK could afford the NHS now it wouldn't be such a mess would it with long waiting queues and chaos in A&E/lack of GP appointments.
The only alternative I guess would be the UK could afford it but was deliberately running it down so everyone would be forced to go private much like nhs dentists.
Either way both roads lead to no state healthcare.

Did you know that after the NHS was set up they had trouble getting people to use it. People were so used to being sick and just putting up with it because they were too poor to see a doctor. They literally couldn't believe it was free doctors and thus were hesitant to use it at first (watched a super interesting documentary about the set up of the NHS in the forties)

Anyway thanks for posting.

Pay with what, though? I could probably afford my monthly medications and the odd GP visit here and there, but factoring in all the consultant visits, blood tests and scans I have to have, I would have to start making choices about what I could afford and what was a priority. And medical insurance in this country is not set up to for people like me with complex conditions.

Not sure who your post is addressed to. If me, I agree with what you have said. Only rich pensioners would survive (or perhaps poorer ones with lots of family support might).

I also agree they are eroding the state pension by putting up retirement age plus keeping tax allowances frozen. I do think the triple lock will have to be abolished as part of getting the UK back on it's feet.

I also agree that if they just give pension credit to anyone who hasn't bothered to pay into their state pension they are taking away incentive to pay in.

I suppose the point about the workforce is it would be smaller yes, but only those who were healthy (and thus able to work and not claim benefits) would be left. This is going to be far cheaper than supporting lots of sick, out of work people.

It's an unpleasant thing to talk about but it was in response to someone basically saying the UK could never do away with the NHS because it was 'unrealistic'. I was just arguing it's unrealistic to keep it if we can't actually afford it.

If there was a freeze on increasing benefits for a set period then private landlords should also be forced to freeze rent from the same date.

I agree with you about the triple lock.

In terms of SEN provision I think the only ethical cut would be travel spending for some not all.

Disability eligibility criteria should remain the same.

I don’t know enough about social care costs to comment. I’m going to look into that.

I know what my parents told me about the birth of the NHS which is that the rush towards it was an absolute torrent. Particularly for free glasses and dental care. It’s why prescription charges had to be introduced in 1952, much to Bevan’s disgust.

A huge national debt and a smaller population to pay it off would be an excellent reason for not creating a free at the point of delivery health service. Fortunately politicians were more far sighted in those days and appreciated that rebuilding the country required a healthy workforce.

The reason the NHS is a “mess” is because it’s badly organised. Where I live you can get a GP appointment the same day if your need is urgent and if you’re really, life threateningly ill it’s amazing.

Much as you seem to want the demise of free healthcare - God knows why - it won’t happen.

I think we have got used to boom bust years and now it’s more stagnant it’s a shift and not one we are just facing in the UK and we are all waiting for things to get good again

it’s very disappointing that Labour with such a huge majority (and that doesn’t mean all Labour MP’s will support and vote with their government) could bring in some radical changes but this just isn’t how Starmer does politics he is extremely cautious and spending cuts have to also take place, of course this won’t be popular but as pp stated the next government won’t reverse them

but then for many many people their wages have been often stagnant since 2008 it’s now hitting the middle classes that there seem to be more of a panic on mn

Sorry to hear you have your own health difficulties, by the way. Surely that would make you all the more keen to keep hold of the NHS, or at least not get rid of it without a clear plan as to how people will be able to fund their health care going forward. I'm not necessarily averse to some sort of insurance-based or contributory model, but I don't have much faith, if any, about how we get from A to B without causing lots of pain and suffering to those already sick in particular.

I think the point I am making is if the UK can no longer afford the NHS, the it can't afford it. Full stop.

If you can't afford private healthcare, then yes that's another matter but I guess a private problem for you to sort out/solve.

I mean the thread is discussing the financial viability of the UK, not the personal financial situation of each individual.

I mean for those who can no longer access an NHS dentist (me) and can't afford to pay privately (thankfully not me) what are they doing? I'm guessing their dental health is just going down hill gradually.

If their is no NHS and I can't afford private healthcare then I guess I will live until my heart causes me to die whatever age that is. I think I will be able to afford my asthma medication but I could be wrong. However if I can't afford private healthcare (and I don't know what it costs so I can't answer) then yes I would be in trouble if I needed an expensive heart operation. So like my grandparents I would just live a shorter life and then die of heart problems younger that I might have done under the NHS.

I mean it happens with pets just now doesn't it. Several times my dog has needed very expensive care (thousands of pounds for operations or scans) and each time I have managed to find the money. However if I couldn't find the money and didn't have insurance (which I don't as he is old now) I guess I would have to have him put down. This would be utterly devastating to me but financially the only option.

We'll have to agree to disagree there. I just don't think it's possible or acceptable to be looking at healthcare simply from a financial perspective without considering the social and emotional implications of leaving people without adequate healthcare.

Without the NHS, I almost certainly wouldn't be here, end of.

Why on earth would you think I want to have no free healthcare. I am in my fifties. Likely entering the phase of my life where keeping me alive will become more expensive. I also remember how wonderful the NHS was in the nineties. GP appointments the same day for all. A&E empty at times.

According to the documentary I watched their was a short time at the start of the NHS were people were hesitant to use it because it felt too good to be true. I can imagine after a few used it and told their friends there would be a rush to get yourself all fixed up. So I quite believe what your parents said too.

A smaller workforce means less people to provide healthcare to. So yes they did set it up with a smaller workforce but also to service a smaller work force. People's work ethic back then was quite different to the benefit claiming crowd we have today. Being out of work used to be shameful and so nobody did it unless they absolutely had to. Today we have millions it seems on benefits so not contributing but using the NHS anyway.

I understand why no government wants to tackle the UK's financial problems. I mean look at the flack I am getting for talking about it and I'm just a regular middle aged woman who will suffer as well and who does not have any responsibility for the NHS. Can you imagine the outrage/abuse that the govt who does it will get. I don't envy them which of course is why they keep kicking the can down the road and which is probably why nothing will happen till the IMF get involved.

I personally would like to keep free (and better quality) healthcare till I die. I would also like a bigger state pension as I go into my older age. I would also like cheaper houses that are not so crammed in together.

However it does not really matter what I or anyone else wants. It's what the UK can afford.

The NHS WILL collapse eventually without reform. We have the choice as to whether we want to accept a state backed insurance system or co-pay system like lots of Europe, or we stick our fingers in our ears chanting "la la la" and end up with the ruinously expensive US style insurance system by default. I know what I'd prefer.

One way or another, they need to get more money out of people, that can be charging for basic services like appointments, etc., or selling "enhanced" services, or making a state backed insurance scheme compulsory for all, etc., but one way or another, people WILL have to pay more. It can't be through general taxation because the tax system is already buggered and the pips are squeaking, so it has to be another way that means people WILL have to pay more, whether relatively modest insurance payments or relatively modest payments for appointments/treatments or letting the NHS "compete" with private providers to offer enhanced services.

A smaller workforce means less people to provide healthcare to.

And fewer people to pay for it. Income tax was 45% in 1948.

Yes, you are getting flack because you’re making a ridiculous argument. Other European countries fund their healthcare more through taxation and have copayments on top. The last thing the IMF would require of any country if it came calling would be the demolition of its healthcare system because it would mean its economy was fucked for ever.

The NHS is one of the few things that keeps wealthier pensioners in this country. If you end up having to pay for health care you may as well leave and live in one of the countries where health care is maybe better and/or cheaper. A heart operation might cost you £10k to £60k, depends what you needed. You could halve that in somewhere like India. Removing health care could drive out an increasing number of wealthier tax payers.

We keep people alive now who would quietly have been allowed to die in times past and that starts with birth. Before you abolish free health care you could limit the more heroic attempts to keep people alive, in some cases against their own expressed wishes. The majority of people in this country support a right to die when you want, parliament wont make it law. We could also stop seeing as many health conditions as an excuse for not working. Anxiety and depression never used to be seen as an excuse to do nothing. Free prescriptions could end for all except the poorest.

Banging on about the triple lock is avoiding the real issues. The state pension may cost the country £146 million but it gets quite a bit of that back now by taxing wealthier pensioners. The government wont allow you to find out how much of that is taxed at 20% and how much at 40% but it is getting a good chunk of it back directly in taxation.

I think the mistake that lots of people make is assuming that govt cares about you or I (the little man). They really don't. Especially today's politicians who seem very short sighted and only interested in keeping their jobs. That seems to be their goal not actually trying to fix the country.

If a country is broke and has rising unemployment, rising inflation, no growth, huge debt then surely it is acceptable (and sensible) to rethink what it can and can't afford to provide now. Not ideal, not planned but perhaps the only way out of the mess.

We have had some amazing politicians over the years who had great insights and a strong will to get things done for the good of the country and it's people. I don't know a single person in govt just now that fits that bill.

It's fine though for us to disagree. I wish you luck with your health.

I agree with you completely.