To think we are becoming a much poorer country?

[Felixss]

I keep seeing on threads increase taxes on the rich , increase salaries, increase nhs spending and increase benefits. People are acting like we are still hugely wealthy and everyone wants to come over. Poland is predicted to overtake us economically. I can earn twice my salary abroad and I'm thinking of leaving. Where is the money going to come from with a shrinking work force and low investment in new technology? AIBU to think the UK is hugely declining ?

You are literally talking to a global professional in the actuarial world with 20+ years of pensions and life insurance experience over the UK, US, and Canada.

Keep going, this is gold.

Note to viewers:

This is precisely one of the problem in the UK. Older people think their "views" are better informed than those of the experts. Its become a problem in the UK because the Conservatives know this and succesfully manipulate this feeling for their own political benefit.

"Views"? Views is more accurate. They are real attitudes.

This is more in the realm of psychology/sociology + behavioral economics which is a bit beyond my normal remit.

Some thoughts:

I have talked to a lot of retired folks over the years in the UK and the dividing line is pretty much always class when it comes to attitudes (I call it "views" because they tend to be based on internal biases).

The wealthier pensioners:

£10k is basically a rounding error for them when they have DB pensions, no mortgages, and 2M in investments. £10k is basically another cruise for them.

Below them however you will find:

The professional class (normally Drs and Accountants) who have DB pensions, and no mortgage. Less in investments. £10k for them simply makes them even more comfortable.

The top two groups are about 20% of folks.

Below that is when you get attitudes based largely on ideology going back decades. The "I paid in all my life" brigade comes from this group. The wealthier ones don't really care to that extent.

I don't begrudge POOR pensioners their state pensions (thats fine and you will not find many younger folks that are against this), but the dividing line must be those pensioners that actually need help given that the country is actively getting poorer due to demographics and pension liabilities that keep getting uprated far faster than real GDP growth.

And that precisely is the problem that I have seem in many countries over my professional career.

When pension uprating is not linked to real GDP growth, pensioners become disconnected from the success or failure of the UK economy. This is extremely dangerous socially and economically as it creates increasing inter-generational inequality, which further destabilises intra-generation inequality amongst the working folks.

You see this now when we have 0% real GDP growth and pensioners are still getting a 10% uplift (April 2023), and another est 7% uplift next year in April 2024.

Those payments are actively crippling the UK economy further after the shocks of Brexit, Pandemic, and Ukraine War.

This then makes the country stagnate (investment drops) and then poorer and poorer (as pensions crowd out other spending like education and healthcare).

And then, when the situation has gotten bad enough the State turns on those folks (pensioners) as the country is basically broke and needs revenues to invest.

@TheThinkingGoblin - great post. I worry that not enough is being spent on education and concerned at this. Also the population is sicker after COVID. We don't seem to be investing in our future in the U.K.

@TheThinkingGoblin your post is actually quite depressing because I can read the truth in it.
Obviously not all pensioners are like this but a very large proportion of them seem to be. Why?

Absolutely agree that pensioners should pay NI. Also, I believe you stop having to pay NI once you are too rich and are deemed to have paid enough. Its so wrong. I also believe pensions should be a good level, not just to keep the poor from absolute poverty . We could do with a wealth tax on top (I'm older and would very likely be affected by this). Inheritance tax needs to be increased as well.
Problem though, pensioners are very politically powerful and most would never vote for wealth or inheritance tax. They cling onto their money, despite the poverty they see around them and is inflicted on the young, ever after they are dead, they try to cling onto their money. The old, 'I've worked all my life' (not even true half the time) so what, everyone works all their life.

Why is a honeycomb hexagonal ?

I also hate that whenever the inherent unfairness of the current situation is put forward, especially if you suggest ideas for things that might help to resolve some of the disparity (like the NI suggestion) you get responses like this one
"While people like you are busy conducting intergenerational warfare"
Its gaslighting!!

It’s not gaslighting, it’s disagreement.

I’d support a wealth tax. I’d support higher inheritance tax and lowering the threshold because those would be targeted measures that would impact on the wealthiest - and not just pensioners. What I won’t support is a tax which would impact most on the poorest pensioners with the wealthiest barely noticing.

The way to achieve greater equality is to look at society overall, not home in on one group. The PM pays a smaller proportion of his income in tax than a nurse or a teacher - how about we start with people with wealth of that magnitude?

Sure but there are a lot less of those people
And they generally have the ability to move their wealth out of the country and therefore pay even less in. Sorting out the amount paid out to pensioners WILL save the country significantly more than going after a few super wealthy like the PM (although I don't disagree we should be doing that too)
The simple fact is the "poorest pensioners" should absolutely get help. But that's what means testing is for.
As a group pensioners are the richest in the country. Even ahead of working adults without children. Yet the consistently get given the most help and handouts. That needs to stop.
Child poverty is at 27% in 2023. Yes I'll say that again. More than a quarter of our children live in poverty. That is outrageous.

And of course you should home in on one group if that's where all the money is and is being diverted to!

Yes child poverty is absolutely shocking. Shame the highly effective Child Poverty Act was scrapped in 2015 and replaced with a two child cap on benefits. Let’s vote in a government that cares about it.

It’s not all rosy for pensioners though - one in five of them are living in poverty. And we already have means testing for all benefits above the basic state pension, the maximum is still a pittance though.

https://www.theguardian.com/society/2022/mar/17/number-of-pensioners-in-relative-poverty-in-uk-up-200000-in-a-year

Of course the other thing you’re failing to take into account is that all pension income, including the state pension, is taxable.

God, this debate has got nasty. One of the main reasons that pensioners get more (eg the Triple Lock) is they they're hugely more likely to vote. 'Decisions are made by those who show up'.
If young people can't be bothered to vote then they're going to get ignored. They can't just whine that it's not fair and do nothing about it.
I think the FPTP system needs to change. It disproportionately favours the two main parties, who are invested in maintaining the status quo. But FPTP is what we're stuck with for the foreseeable.
The Torys have famously said that they don't care about poor people because 'they don't vote for us'. I imagine they feel the same way about the young.

It's in the press this morning because wages are going up and that can engage the triple lock.

Pensions are an issue because we are spending more on those than education, defence, and policing for the next two years.

The triple lock is not a sustainable policy. The question is whether the Tories or Labour will deal with this issue. I don't hear a lot!

I do agree with you about voting. We need compulsory voting brought in. We won't get it though because pensioners (who currently vote) wouldn't vote for it. So we're pretty much fucked really

Say we got rid of the (Tory) triple lock tomorrow @Anxioys, how would you determine future pension rises? Bear in mind that all benefits, not just pensions, increased by 10.1% in April so aligning them would have had the same result.

@TheThinkingGoblin wow what a clear insightful summary. Thank you.

@Blossomtoes - well I wouldn't have a triple lock! Some are always anxious to say pensions are not benefits, but they are. Honestly I would decouple the policy and allow the Chancellor to set it each year. That worked acceptably, and it is what happens for near all other government spending.

More on pensions than education and policing is mad. We are literally not bothering with our future as a country. Children need good nutrition at school, for example.

Imagine a triple lock for education; what could be achieved for children and the UK if we focussed our tax income there? Instead we are fighting the people who teach them and spending less on their school meals than prisoners.

I think what annoys the young is the sheer entitlement from pensioners. They think they are entitled to the winter fuel allowance, fee bus pass, triple lock etc even if instead of being huddled around a single bar electric fire the winter fuel allowance is spent on a few extra drinks on their cruise.

the rest of the country could be turning to rubble and ruin and they’d still be insisting that the young work extra hours to pay extra tax so that they can keep the triple lock cause they’ve ‘paid in all their lives’.

Maybe aligning pensions with other benefits would be a good idea. Only all benefits increased by 10.1% this year so the result would have been the same. If that increase only paid for a few extra drinks on a cruise it’s highly likely the recipient paid most of it back in tax. Do you really want people huddled around a one bar electric fire @Jivens?

@TheThinkingGoblin

"Its self-evident now that you lack the basic education required ro even begin to discuss this topic.

Fell for the trap of wasting energy explaining things to a retired person again."

++++

Resorting to personal attacks undermines your arguments, it's bullying and unacceptable.

Let's stick to the facts here.

I don't think anyone wants that. It's just that really that's the reason the winter fuel allowance is paid isn't it? To avoid that situation. So if it's not occuring anyway then why is it being paid?
If be happy tying the pension increases to other benefits even if it would still mean a 10% rise. At least that would be fair. There is no reason why why one group of benefits recipients should be getting different increases to others.
And sorry but it's a lie to say "most of it would be paid back in tax" as we've stated before pensioners pay a lower tax rate than workers and even workers don't pay "most" of their money in tax!

Maybe it’s not occurring because winter fuel allowance is being paid @Rainyrunway. I’m not convinced it’s not happening anyway. Apparently 39% of Scotland’s pensioners are living in fuel poverty even with the payment.

https://news.stv.tv/scotland/pensioner-fuel-poverty-doubles-in-two-years-according-to-age-scotland-research

Most was the wrong word - I should have said “a lot”. Cruise going pensioners are almost certain to be taxpayers, possibly at the higher rate.

And sorry but it's a lie to say "most of it would be paid back in tax" as we've stated before pensioners pay a lower tax rate than workers

The tax rate for OAPs is the same as for other UK incomes.

https://www.gov.uk/tax-on-pension

You "think" /They "think"/ The country "could be".

Stop speculating and deal with facts. Make a real argument instead of making shit up.