to hope the government has the guts to tax WEALTHY pensioners more

[ReallyTired]

The Fabian society has suggested that wealthy pensioners pay more tax.

www.bbc.co.uk/news/education-22220345

Some how I can't see a conservative wanting to tax wealthy pensioners more when they all vote Tory.

I find it unfair that pensioners with an income more the average family's income get free bus buses, winter fuel allowance, TV licence as well as paying less tax and national insurance. It is about time that the the wealthy pensioners took their share of the pain of the cuts.

I am in favour of well off pensioners having free bus passes, winter fuel allowance as these things encourage independence and improve health. I would like to see the money for these things clawed back by WEALTHY pensioners paying more income tax.

Only 1 question really that no one has answered (that I can see) despite the question being asked several times.

What is the definition of a wealthy pensioner?

If you mean that it's someone who has more than those on state benefits then that is hardly objective. Do you mean someone who owns their own home having paid of the mortgage, who gets a private pension as well as the state pension, then where do you draw the line in terms of value of the private pension.

It seems to me that the definition being applied is someone who is better off than me.

All of those who want to tax wealthy pensioners define them, then lets do a comparison with the general population and make the tax burden equivalent. Otherwise you just sound bitter and envious.

Actually one way to do something about it is to increase the rate of inheritance tax, but how many would want to see their own inheritance taken away by the state.

See my post above re final salary public sector pensions. Many people entered professions which were lower paid, but the good pension was a trade off. They may well have lived their working life far more frugally than other people on higher incomes but who don't have the benefit of a high pension now. How is it equitable to take away from one but not the other? Tbh this kind of thinking wont help anyway because it will lead to people spending their money while it's in their hand, NOT saving, NOT making pension provision etc just in case the govt moves the goal posts and takes away from them later on for having been prudent!

Morebeta

1. the state pension is what, £100 per week? do you think this should be cut?

2. higher taxes at the top end - please expand

3. you assertion that some one receives a higher pension than the person now doing a the job. please can you include a link. the only person is know on a 'gold plated' pension is an ex policeman on about £12,000 per year, plus his state pension. so much less than the same level police officer now.

the ceiling for someone doing the same job now is £36,500.

Faster - this is what I think should happen.

State pension should be at the level of National Minimum Wage and taxed like everyone else with the same allowances but with no other special pensioner benefits or top ups and should only go up when NMW goes up - not automatically as the higher of the rise in average earnings or CPI or 2.5% as happens now.

Public sector pensions that are currently being paid out to pensioners on the basis of the final salary before someone retired should be scrapped. They should be rebased to the avergae earnings of that person over their career - in other words the same basis as the current pension schemes that younger public sector workers are being forced into. There is no way the current pensioners should continue in final salary schemes that younger workers can no longer access.

What is good for current workers is surely good for current pensioners?

But you can't change the pension that people are earning now - they have based their retirement on this. Yes, it may mean that we don't get the same pensions but we have the opportunity to plan and make additional savings (or use up our savings and live off the state). Retired people don't have this opportunity - some of them may have chosen to work longer or save more but they didn't because it wasn't expected of them.

Bobbywash. If you take the fabian societies definition it was anyone with disposable income of more than the working average. They defind those who had paid mortgages off and so didn't have housing costs as being wealthy. They went about things the wrong way, they thought who has spare cash and how can we get it.

I did some calculations last night. We bought are first house many years ago it cost £350 a month for the mortgage the same house although its gone up in value would now be £330 a month mortgage as the interest rate has more than halved. Tax rates have fallen so even without pay increases my take home would have risen. In so many ways i am better off now than i was when my first was born nearly 20 years ago. Yes i've lost cb or will do when i do my tax return. I couldn't get a year off on maternity, i didn't have the right to a career break or to ask for part time work. These are all changes between my first and last child. I know how much harder i have found it in the past. So to pay for all the perks we have had the government is in debt but one question who to? Most of it is us, most of that debt is our savings and investments. Punish people who saved for the future and you will destroy the future. Pensioners are being brought in line on tax payments and the difference it will make is minuscule but what you can't do is say they are over 65 so need to pay a higher rate if tax. Most pension pots would be sufficient if either the money had be properly invested or where it was if brown hadn't robbed them calling it a windfall tax.

So on a 6.41 per hour for a 40 hour week, you'd put the state pension up to 252.40 per week (more than double what a pensioner gets now) or £13k p/a of which they would pay approx £1K tax. (presuming you scrap the tax relief for older people)

That way they are all better off from the state (I accept I may have the math wrong) and private pensions then boost that even more. Yet in the same breath you argue that we can afford the pensions we pay to public sector workers now.

What school of economics is that?

Oh and that should be can't not can and also in response to morebeta post

Morebeta have you any idea how much your idea would cost? It would more than double the state pension for starters as they get nowhere near nmw

janey68 It is not about Mr B being 'Wealthy" but about Mr B getting back much more out than he ever put in through no fault of his own, or anyone else, just changing demographics. Yes, it's what he expected but, no, it has turned out not to be fair as someone else has to pay for it and it will be a whole generation of the young.

morebeta I couldn't agree more that drastic action is needed. I just think that one should address unwarranted benefits paid for by taxpayers (and sadly that does include public sector pensions which are out of all kilter with private sector pensions) before one takes away money that has been individually earned.

morebeta just read your latest post. I couldn't agree more.

I will I suspect be classed as a 'wealthy pensioner' when the time comes. I have been married once, no children from previous relationships which often cause a lot of financial issues. My DH and I work full time. We both will have pensions having worked 40 years each.

Square - you are not even working and all this bleating about paying your taxes, looking for another role etc etc. You sound very entitled. You want to take some time off (years!) at someone else's cost. Who do you think is paying your pension contributions whilst you live your lifestyle choice....Who is paying your children's eduction costs whilst you are not earning? Its us!!

These wealthy pensioners have worked and worked, if you dont work you wont get a private pension. We all make our choices in life but I am certainly not happy to pay for people like Square to stay at home.

Lets take it further, what about lottery winners, they dont pay tax on the payouts, what about people who buy shares and pick wisely, what about people who inheirt money from their parents... Where will it stop.

If you want a comfortable retirement - sorry YOU will need to work for it.

The best argument IMO not to touch existing pensioners' assets is that it means working people now will think "what's the point" and refuse to save at all, there has to be a real incentive to be responsible.

The Fabian view of "wealthy" seems to be roughly "anything above needing benefits" which is just dumb (or politically convenient, more benefit dependents = more Pro benefit voters?). IMO "wealthy" is probably the top decile, maybe quintile.

But the issue remains that the current system is unaffordable, seems to me that it is already being whittled away with taxes, reductions, low interest and inflation, question then becomes " is that enough"?

I also think ignoring the very real and increasing resentment from working people (typically those looking at their kids' futures) is dangerous, it needs to be talked about openly, no matter how " awful", "vile" etc some feel it is.

Just to clear up once and for all the sources of my 'wealth'. My teacher's pension is about £7000 pa and dh's is about £9000. In addition he has an enhancement of about £3500 pa and the rest is our state pensions. After helping five dc through united etc we have savings of less than £5000.

University not united!

rich pensions fall into different categories:

1. Asset rich - bought house cheaply, benefitted from house price rises.

2. Cash rich - like my parents they believed in cash so squirrelled it away for years and years

3. Pension rich - benefitting from final salary (index linked) pensions.

which ones would you 'tax' and why?

personally I would change how index linking worked for final salary schemes, so their pensions still went up but a slightly lower rate than at the moment.

1) Asset rich - bought house cheaply, benefitted from house price rises.

That group is already taxed as they are forced to pay for nursing home care or they eventually pay 40% inheritance tax. They are also forced to pay a high rate of council tax.

2) Cash rich - like my parents they believed in cash so squirrelled it away for years and years

I don't agree with taxing them, but like category 1 they will be forced to pay for nursing care and inheritance tax.

3) Pension rich - benefitting from final salary (index linked) pensions.

I feel that they should pay a similar propotion of their income to working working people. It is not about who has worked the hardest or who is most deserving. Its how to get the country out of an unholy mess.

Pensioners are far more of a burden than they were in the past. They take up far more NHS resources and often live for decades. State help like WFA needs to be targetted better.

Taxing families further hurts the ecomony as it reduces spending as many familes save very little.

thegreylady, you and your husband will pay very little (if any!) tax.

My FIL has a 30K pension and no mortgage. He really doesn't need a winter fuel allowance.

I agree with Yetanotherworry . Even where changes are happening now ( eg monthly pension contributions increasing which is happening righf now for many public sector workers) the pension accrued up to NOW remains untouched. Many people are finding that from now onwards, an average earning rather than final earning will be used to calculate their pension. But you can't possibly 'back date' these things so that people end up paying back things which they were rightfully given at the time.
Otherwise where do you draw the line? Do we demand payment back for child benefit given for the last 20 years? Or tell SAHM to pay back the NI contributions they've had state funded?!

So Fabian looks as wealthy as anything above benefits! What nonsense!

I agree with Lazy. it will discourage people from having any savings.

Using my DM as an example. Its the only example I have tbh where I know the figures!

Worked 40 years in teaching - private pension £9k per year
State pension - as normal

Savings £2k

House value - brought for £90k 30 years ago approx worth £400k. Its a small two bed house in London

So, how would people like Square choose to tax her..

bobbywash/jacks - we pay for it by reducing all other entitlements to zero, eliminating the Additional State Pension, Pension Credit, Income Support, Housing Benefit, Attendance Allowance, free bus passes, WFA, free TV licence, free prescriptions. Finally tax everyone at the same rate with no special allowance for pensioners.

The range of benefits (as listed above) exclusively available to pensioners has grown over the years and frankly I do not see why they need that any more than people struggling to make ends meet in the working population.

I strongly beleive we should actually have a proper Universal Benefit that everyone gets at the same rate whether retired, unemployed, employed, self employed, or SAHP. This is our basic entitlement from the national wealth and no other entitlement than NHS and free basic education to 18.

Instead George Osborne went the other way at the last Budget and offer 'more help for pensioners' and removed benefits (eg CB) for other vulnerable groups.

I suspect we are moving to that model and the new flat rate pension is the first step.

that model = that pension model

My parents are retired with personal pensions not public sector ones.

Free prescription being dropped would save as a couple £208 a year.

Wfa is £200 a year they don't qualify for any of your other benefits or don't use ie free bus pass so your ideas would save the country £404 a year however you would be increasing state pension by about £150 a week think they would be more than happy with that but we couldn't afford it.