To wonder on the future of generous welfare in the UK

[happybug1234]

It seems increasingly obvious that many middle-income families are becoming frustrated at how squeezed they are financially, while at the same time seeing people on universal credit receive a growing range of subsidies and support — £1 attraction tickets on days out, a 6% rise in benefits this financial year, childcare costs reclaimable through Universal Credit, housing benefit, and so on. I see thread after thread on this on this site and also increasing momentum in the media on this issue (income cliff edges etc)

In my own extended family, 1 unemployed parent with the other on min wage, in social housing appear to have more holidays and more disposable income than we do, despite us both working full time with a household income of around £95k. Once childcare, mortgage, insurances, commuting and tax are taken into account, we 100% have a lower level of disposable income than they do as they do not have any of these work related costs and their rent is paid. They have recently gone on a 2 week holiday whilst the most we can ever afford is 1 week.

Quite a few teachers in my friendship circle are declining promotion opportunities or TLR because the extra pay often doesn’t feel worth the additional stress once tax, pension contributions and childcare costs are factored in. Instead, some are putting more effort into private tutoring, which is tax free cash in hand.

What is stopping the government from addressing this as people seek to be responding accordingly in their behaviour!

I think UC can be very generous for families and set to become more so with the lifting of the two child cap. This is due to the generous taper rates and work allowances. An ex collegue of mine has been solely on benefits for a while and just returning to full time work as a professional and will still be eligble to claim UC on a salary of 40k ( one child, low rent) plus child maintainence on top. However for single people or people who cannot work due to illness or disability the rates are absolutely direand i genuinely struggle to understand how people survive. The system needs an overhaul.

Have you got a very expensive mortgage? Only affording 1 weeks holiday a year on that household income does seem unusual. I’m wondering about the breakdown of your household expenses.

As for your question. I think the media and public’s focus on the benefits bill and immigration as the root cause of the cost of living crisis is misleading. If you take away the spend on pensions, only 12% of government spend is on welfare.

When it’s broken down I imagine a lot of that spend you’d actually agree with, especially when you saw the personal stories (eg supporting severely disabled, supporting families struck down with cancer and other life limiting illnesses, supporting people who are suddenly made unemployed through no fault of their own, women leaving domestic abuse situations, and on and on).

If the government cut down the spend on the bits you disagree with, the overall saving would be minimal. You wouldn't see a saving on your individual tax bill, maybe a pound or two a month.

The rest of government spend goes towards things like universal education, healthcare, police, defence, infrastructure, highway maintenance, keeping a highly organised society functional and productive.

Focus on benefit claimants is an easy target and avoids focus on what’s actually making life expensive such as mortgage and rents, every day living expenses, energy prices (which the government is working to bring down through Great British Energy).

Tho is it also. If I fall in hard times there is very little welfare for me as we have a mortgage and so wouldn’t be entitled to universal credit.

The 6% increase in UC is £24 per month for a single adult. That won’t cover the increase in food.

It’s 6% on all the UC elements for a family.

Sure but it is still not a lot, so quoting percentages while true, is misleading.

Inflation has a disproportionate impact if you are on a low income because a greater proportion of your income goes on food, transport, electricity, water etc which are all hard or impossible to cut back on.

@happybug1234 its not the above inflation increase is on standard allowance only, so single or couple rate not on the add on elements such as child or disability.

Don't forget that if you have a mortgage you are buying an asset. In 20 or 30 years time you will be immensely better off that someone who rents for life.

You realise ~60% of welfare spending is on pensioners?

The £1 tickets for UC claimants barely moves the needle.

If you want to cut the welfare spending in any meaningful way, you need to look at pensioners, not working age benefits.

The welfare that I'm on isn't remotely generous. It's barely enough to exist on. Being chronically disabled is really expensive but able people don't believe or want to see that.

You can claim UC if you have a mortgage. Just not the housing element.

I wonder about the future of the triple lock on pensions in relation to the income tax personal allowance.
It makes no sense for the standard state pension to be higher than the personal allowance - so the pensioners are paid pension by the state, some of which they then pay back to the state in income tax.

I hear that UK state pensions are still much lower than in Europe (hence the reason for the triple lock staying) - do these countries have a much higher personal allowance also, or do they do tax calculations completely differently?

Genuinely interested if anyone knows.

The 100k cliff edge is an issue.

i think that does need to be looked at at some point as it’s a problem.

That isn't true, especially if you are lucky enough to rent social housing. You have secure housing at below market rate. You could invest the excess money in stocks and shares that often outperforms the housing market. You also avoid having to pay interest payments on mortgage payments. You can enjoy an excellent standard of living, enjoy your money and then have no assets to sell when you need a care home.

You can't invest if you're on universal credit even if you're in secure social housing. The limit is only 16k (never been increased for inflation in 13yrs).

There'd probably be fewer people on PIP if the NHS, mental health services, schools SEN was funded.

But council tax is rising horribly and there is all the cost of upkeep - new boilers, window replacement, repainting etc etc. And my “asset” (for which I paid ££££ not 50p like older buyers) will be taken by Mr Sunset Homes if I need to go into care. Or taxed at 40% if I manage to pass it on to my dcs.

Surely those £1 tickets to attractions aren't funded by the government?

You can have as much savings as you like and live in social housing. You don't need to claim UC to live there and can in fact be a millionaire taking advantage of cheap housing.

What will happen is the country will swing more to the right. It's already happening.

There's a huge difference between a pensioner who has worked for decades (and paid NI and tax) getting £200 or so a week in return, and a 20 year old living with parents claiming UC after paying nothing.

It can never be fair that a family with two FT earners can't afford a home and a decent standard of living, particularly when the one next door might have nobody in work but more money coming in, or that someone working full time gets the same as a colleague working part-time and getting topped up by UC. I would prefer to see universal payments for things like childcare and school meals, made directly to the nursery/school, and a benefit cap set at below minimum wage. That way, children wouldn't suffer, but there would still be an incentive for claimants to find work.

I'm not a fan of means-tested anything, as it just drags workers down if they have to pay for things that would be free if they didn't work. £1 entry fees to claimants might add up to a drop in the ocean, but it sends a message that working to support your family is pointless, and would be infuriating to a working parent who couldn't afford to take their children to the event. It's also wrong that wages are so low that many workers have to claim UC.

No matter how they’re funded, those who pay in full will be in some way subsidising those who aren’t.

2/10 try harder.

The UK welfare system is far from generous. It is one of the lowest in the EU for state pension and unemployment benefits. No matter what the right wing press and some politicians say.

Many people on benefits also work already but need to claim because of low wages and the high cost of housing, transport & utility bills. There are multiple issues that need to be fixed before you can reduce benefit spending

We have occupational (workplace) pensions that are either defined contribution or defined benefit, as well as a state pension. In most of Europe (pretty much all countries) the individual and their workplace pay the equivalent of the occupational pension contributions to the state instead.

so whereas we have occupational pensions and state pensions, they have a state pension that combines both. If you want to compare our pensions to the rest of Europe you need to add in occupational pensions to state pensions, and when you do, the UK sits bang in the middle of pension generosity. There is absolutely nothing to complain about when it comes to the value of the UK ‘state pension’.

No but they are still a perk that middle class families can’t access