What do you think of Burnham's plans re inheritance tax?

[JoyousOpalLemur]

He has said in the past that he wants to abolish inheritance tax and replaced it with a social care levy on inherited assets, which will incorporate unused pensions.

I don't totally understand this if I'm honest - I think it means everyone will be dragged into the inheritance tax threshold, but it seems like a fairer tax than what currently exists, and it's there for a purpose (to fund social care).

What do you think?

https://www.independent.co.uk/money/burnham-prime-minister-money-taxes-mortgages-bonds-stamp-duty-b3001078.html

No, it doesn't contradict the original point because two things can be true at the same time.

1. Some people have tried their best, followed the rules and still not contributed enough to cover their own care. Taking 10% of their assets to fund their care is perfectly reasonable in this scenario or even as some kind of insurance scheme effectively in case they do need care.

1. Some people have not tried their best and live their whole lives effectively milking the system. They will be 'insured' for their care costs by everyone else's 10% as they won't have any estate to tax. This needs to be tackled as this kind of approach has become a way of life for many and is disincentivising people from trying their best. What is the point when you end up in the same care home recieving the same care as the people paying?

Human nature is that there has to be consequences for our actions otherwise many of us will take the path of least resistance. In many ways it's an evolutionary feature of humans. We are intelligent enough to realise that we can exert far less effort and still come out with the same result. To believe otherwise is underestimating people massively.

How many people have spent their whole lives milking the system though & not contributed anything?

Many have actively chosen to be unemployed and underemployed. They have milked tax credits, unemployment benefits and other benefits to support their lifestyles. 57% of our working aged population work FT. That should tell you all you need to know

But that doesn’t tell me all I need to know! I work p/t as do the majority of my female friends. My boss has just retired at 58.

furimosa there are no figures for the scenario you are questioning because the Govn doesn't track people all their lives and make that information available to us.

Voluntary part time work is a form of underemployment. The fact that the majority of your friends are doing this is an indication this is a widespread issue. If we are all only working 45 years of a 80 year lifespan then there are pretty obvious problems associated with funding our non working decades which is almost half of our life. This is exacerbated by working PT or retiring early when we are working. It's much harder to build up a valuable estate or fund your own needs in old age if you're working PT for lathe chunks of your life.

And less of the retired population worked full time (when they were working age) than the current working age population. This is because, though many women worked, it was still more normal to be a housewife or a part time housewife. And women were banned from opening bank accounts without their husband's permission etc.

And now it's interesting the conversation has shifted. It's not just about people not working and claiming benefits. It's about people not working for any reason and therefore not paying for their future retirement. That might include people staying home to have children (in the past everyone would have recent child benefit l. Now it's means tested. So some SAHM might be on benefits, some might be relying on their husband's income. All would show up as non working).
But (I work myself and have children) someone staying home and having children is contributing to the future in different ways. We need children in the future to keep the system going. If you declare SAHMs are a drain and don't deserve care at the end of their lives then that could have negative long term effects.

@Itchthescratch financially we don’t need to work ft. I worked ft until my second dc and where my mother & her peers stopped work myself & my friends have pretty much all stayed in work. More mothers work now than before & more work ft.

I said on the other thread (I think) that the cliff edges keep me p/t as does work life balance. I will be retiring before 68 too.

My friends who work pt include a CEO, surgeon, senior teachers, GPs, we are aware of saving for the future…The 2 SAHMs I know are both married to millionaires.

@Persephonia1966Im actually quite taken aback by the shift in the narrative. As you say many current pensioners retired early and many mothers didn't work ft.

I work a 4 day week and am an elected member which takes up every other day and evening (and my soul)
Most of my friends my age work FT or have reached a position where they work for themselves and command a fee that enables them to have a better balance.

they mainly dropped a day or two when their children were very little and have worked full time, since graduation (barring maybe 5 years when they were part time) We are looking at almost 50 years of work, much of it as a HR tax payer.
both my parents retired from teaching at 52. They are now 30 years, and 28 years retired. I’d need to be almost 100 to manage that amount of retirement. Can you see how unfair it is that people my/our age are paying through the nose for a future we won’t get?

I had a job from the age of 14 and have paid NI since 17. I think I have worked enough 😆

What if you don't need social care? Why should those elderly people pay for something they haven't used?

Looking at my family, neither my grandmother or grandfather needed social care. They had provisions for their care if they needed it but they didn't so that passed to their children. Same with my parents, they both have money put aside to fund any care they may need if they don't use it that will pass to their children.

They won’t be paying
The 10% is deducted when they are dead

Those without children pay for education. Should they not?
Those who aren’t disabled pay for the disabled. Should they not?

It was also possible to have a single income without one person being very very rich. And houses were much more affordable. And child benefit wasn't means tested so even if one person was earning a lot they were still techbically funded by the system. The flip side is that women were more discriminated in employment than they are now and had less opportunities. I am grateful for the opportunities I had, and don't think it's fair to penalise retired women who might not have the money to fund their own care because of those circumstances. Likewise older people who spent their life in poorly paid but necessary jobs and don't have the assets to fully self fund their care. But it also is not right to paint the current working age population as lazy because some of them are looking after children, (or old people or studying or looking for work.)

agreed

This is pretty standard for working people. Do we all get to drop to PT in our 50s? Is this sustainable in any way? How do we fund decades long worth of retirement and elderly care if we all do this?

@Itchthescratchif you can’t afford to drop to p/t how is that on me? Who do you think will be funding my retirement and elderly care other than me?

Currently 25% of workers in their 50s are p/t.
40% of those aged 60-64 are pt

@Itchthescratchare you annoyed about all p/t workers or just me?

I’m still a net contributor if it makes you feel better.

Everyone will have to pay 10%? Generally taxes aren’t that politically welcome, even if mn seems the opposite. Good luck I guess on selling it in.

Who says I couldn't afford to? By doing so though I would be depriving the state of a lot of tax and NI. If we do it enmasse that's an issue. I'm also a net contributor btw and no I don't think it makes a difference.

I'm not annoyed. I'm just pointing out that it's unsustainable. Even if you can completely fund all your own costs and are a bet contributor ultimately we still need people like you to pay more to cover everyone that can't or won't pay for themselves.

I don’t only work to provide the state with tax though. My young dc and work/life balance come first. If everybody worked even p/t surely that would be more sustainable then expecting all mothers to work f/t?