Parental income

[glassdarker]

So, context, just seen 10% pension increase.

At same time I've been talking about doing something jointly with my mum and dad. So as a result we talked about income. My parents worked in manual/ administrative roles, neither went to Uni, but worked hard all their lives. Retired ten years ago, own house and car. I appreciate that many pensioners won't be in that position.

They both have small final salary schemes (one less than 10k, one less than 20k). They both get full state pensions. After normal bills their disposable income is a 2k a month. 2k a month ! I am blown away !

But bloody hell we are both higher rate tax payers and we are counting every penny (though we have a lot of extra spend due to a disabled DC). But AIBU to be a bit shocked by the difference in how we are experiencing the cost of living crisis ? I am glad they are doing OK and we don't need money from them but I am still a bit jaw dropped by this... and fantasy spending even 1/4 of that monthly disposable income !

I do benefit checks for pensioners as part of my job. It's amazing how many think they are hard up and think they may be entitled to something extra ! I had one lady call me up looking for food banks in the local area. I did a benefit check for her and it turned out she most of her rent and council tax paid for her and actually had £1200 a month left for food and other bills. Even given increased energy costs I struggle to understand how someone with this income cannot buy food. There were no debts or anything. What on earth are they doing with it all ?

Pensioners "trying to survive on a state pension alone" should have saved more during their working years, frankly. It's never been billed as a cure-all.

Not all pensioners get any benefits and many still pay tax. I'm not pleading poverty but as the budget has left me worse off I could do without the blame game.

You realise that occupational pensions were rare back in the day, yes? And that personal finance is a very different thing now than it was in the sixties when even having a current account wasn't a given, never mind knowing anything about a private pension?

And of course paying your insurance stamp WAS 'saving for your pension' to all intents and purposes.

The 60s? The 1960s were 60 years ago. There is no one who retired then alive now in the uK.

personal and workplace pensions have been a thing for a long time. Definitely the last 40 years

Many of my mothers friends moan about being poor pensioners despite being very wealthy indeed. And also very few worked full time if at all during their working life. Yet my daughters generation are struggling.

“They both have small final salary schemes (one less than 10k, one less than 20k)”

So one has a FS pension of over £10K a year, from a manual / admin level career - and you’re calling that small ? Seriously?

the thing is though that young people are paying for your pension with current taxes. And given the state the country is in there will likely be nothing by the time they get there. So it’s understandable if they’re resentful at a 10% rise for pensioners they’re paying for while they don’t have enough themselves

I’m well aware pensions are a contribution based benefit (like jsa for example). That’s not in dispute.

There is no pot of money saved and no scheme though. If you think ni is paying into some fund for you prepare to be disappointed. It’s just a tax and any NI you paid in the past has been spent.

A benefit that they have contributed to like every other working person.

And quite a lot that haven't.

the thing is though that young people are paying for your pension with current taxes

Just as I was paying for older people's pensions throughout my working life. So what is your point?

The point is the dependency ratio, there is a demographic shift

I started paying my NI stamp in 1970 with my very first Saturday job. And you need to pay into a private or occupational pension from very early on for it to amount to much. Those on their 70s and 80s now were the ones who are getting cash on an envelope on payday in many jobs, and many women of that age didn't even have bank accounts for some years.

I remember when I was 16, my dad drumming into me that I had to get a job with a pension scheme, and by no means all had. My brother only had a pension to pay into through work when the govt made it compulsory for employers only a few years ago.
And I'm the very youngest of pensioners in the UK, having only just reached pensionable age.

I'm honestly really concerned that the hate for 'boomers' and the elderly is really going to ramp up now. It's going to be shitty, and those of us who are at present helping out younger and less well off people with our spare savings are going to end up feeling resentful, too, if all we hear is how selfish we are.

Yet more divisiveness in the country. Yay.

I don’t think anyone has come back to say at what level of income/wealth they think the state pension should not be paid and how the means test would be administered. What would be assessed? Annual income or assets?

Exactly. And that last question is one of the things that makes it close to impossible to means test pensions. Especially when the calculations would have to be revisited frequently with every chair to a pensioner's circumstances, especially if they suddenly need care and their savings plummet.

My mum was comfortably off with her own home and a decent pension, as well as a buy to let property. Then she had a massive stroke and needed care. Over the last decade or so her care has eaten all her savings, and the proceeds from the sale of both houses. At which point would she have been getting her pension back, and how much work would it have been for someone monitoring her savings and capital throughout that time? Then multiply that work by the number of people in care homes or receiving care in their own home.

It's absolutely not feasible.

Every CHANGE to a pensioners circumstances

I think everybody should get a state pension, at a high rate. Likewise, I think everybody should get child benefit although I would just make it payable for only the first two children. Universal benefits are a good thing in my opinion, everybody's included.

What I would do is reform council taxes and inheritance taxes though. Council tax I would do as a percentage of house price. This would mean that people in three bed semis up north were no longer paying more council tax than somebody in a ten million pound mansion. I would redistribute across the country as well so that London councils weren't suddenly super rich while councils up north poor. Hopefully this would go some way to turning homes back into homes and not investments. Oh, and I would triple CT on second homes.

Inheritance tax, I would just treat as income for the recipient and tax as such even if that income was delivered in the form of a loan or other tax avoiding nonsense.

Pensions, I would want to be as high as possible for everybody.

metro.co.uk/2021/04/05/council-tax-works-for-millionaires-and-not-for-the-millions-14346473/

my point is what I said. Young people with a fraction of the assets and income of the elderly are rightly annoyed that they are getting a 10% increase when (because pensions are so unaffordable) any universal state pension will be gone when they get to that age themselves.

Despite pensioners being the wealthiest demographic by far, the younger generation are paying for them (and as the government is borrowing to afford this) will continue to pay for them to get a benefit they don’t need. Yet when they reach retirement age, it’s unlikely there will be a state pension.

also increases in life expectancy and demographics mean the state pension cost a lot less when you were working age. It’s now over £100 billion a year - about 10% of all government spending.

God I hope they never make council tax a percentage of house prices! It's already expensive enough to live down South.

What we need to redress the balance is more taxes on wealth and less on income imo. Makes no sense to me that money you have to work hard for is so heavily taxed but money you don't have to work hard for is so lightly taxed.

I'd vote for most of this.

My particular bugbear is that wealth is taxed more lightly than income, and it shouldn't be.

universal benefits are incredibly expensive. State pensions alone cost about £100 billion- 10% of the all government expenditure. That’s about the same as the entire education budget. At their current level. Any further increase is going to mean even bigger cuts to public services.

an increase in the state pension is a wealth transfer from poorer younger people to wealthier older people. Of course many conservatives like to give money to rich old people but it seems like a bad idea to me. It’s also generally bad for the economy and equality (inter generational and economic).

total council tax receipts are about 30 billion at the moment and inheritance tax raises about £6 billion or so. It’s doubtful you could raise much more with those ideas which are pretty naive.

So yeah, if you want to give even more money to rich old people that’s your opinion. But you need to be honest about where it will come from

I suspect these threads are planted to sow the seeds for scrapping the state pension.
£2k a month disposable income sounds pretty reasonable for all that work and tax paying thank you very much. We have made good provision for ourselves and fucked if we are sharing it with people who haven't.