To ask where has all the money gone/where does it go

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DH and I are late forties.

It feels like the country is crumbling around us and there is just no money for anything.

I've just seen something showing the tax thresholds that have been frozen for decades and this got me thinking where does all the tax go.

Why does the country feel so poor these days? Is it a slow.decline due to Brexit or it is world wide events wars etc that are biting.

The ridiculous summer savings scheme is hardly going to help but what can the govt actually do to get the wheels of the economy turning again.

There must some money but where has it all gone?

This isn't political just a genuine puzzlement that we are paying more tax than ever but the country and lots of people in it are skint.

I agree that there's enormous wastage in the public sector. School senior leadership teams are too big - teams of six or more where you'd previously have had a head and a deputy. I worked in NHS audiology for a couple of years, and while there were usually up to four of us band 3s doing the legwork, there were more band 7s and even 8s doing self-important 'research' in the same department and taking up clinical space doing it.

Ageing demographics mean huge amounts spent on state pensions. Not enough young people to pay tax to cover it.

We're in a situation where the civil service (and i mean that in the broadest sense, ie people who work for the government), especially at local council level and in the NHS are over staffed in management roles and not enough on thd front line. Despite austerity, nothing has changed that
Typical utter idiocy from someone who doesn't have a clue.

Abroad.

Through various different mechanisms, but the same underlying plot.

There’s a concept in economics called balance of payments, which looks at whether more money comes into a country or goes out of it. Ours has shifted hugely towards money going out.

Take a look at how you spend money over a week and where that goes. Eg.

Milk - British farmers - but they’re then spending it on dairy equipment from abroad.

Bread - probably not British wheat.

Your Amazon orders - pretty much every penny is going abroad.

You car - was made abroad

The fuel from your car - imported because we’re cutting North Sea production.

The gas from your boiler - Russia.

Your cleaner - probably not British, probably has family elsewhere with a lower cost of living and sends some of their income to their family.

Now think about what the UK exports……..

U.K. total govt debt is 2.9 trillion.

spending on Covid is actually quite tricky to measure and various economists are arguring about it - eg most nhs spending 2020/21 was covid related but whether to include or not?

furlough and other support packages were give up thread as 169 billion.

There are 1000 billions in a trillion.

so uk covid support is less than one percent of the national debt.

100 BILLION and counting on HS2, which wont be High Speed because they didn't stick to the original plans and in the end will cut just 20mins off the old train journey.

The other thing is that our monetsysyem has run out of road. We never earned enough in tax to pay for what we were spending, but back in the day we could always borrow a little bit. Now that little bit of borrowing has pushed our credit limit to the absolute max. Think of the 100k a year couple in Surrey. Their bills have eaten up all their disposable income. Now they are effectively broke, earning lots, but still broke. Same with the UK. The government wastes so much money, and piles tax on top of tax until nobody has any thing left to spend. That just means the government gets less tax overall because the people are broke too.

Quite. The pension scheme for the civil service is something only the private sector can dream of. It’s a job for life and lots of cottage industries within this sector making things so complex they are able to spin out a project for years

We never recovered growth wise from the 08 crash but low interest rates masked a lot of that and of course inflated assets. Housing is a huge part of the issue.

During those years of cheap money businesses & government didn’t invest in infrastructure, people etc

Brexit/covid

We have an ageing population and people have not paid in anywhere near enough to support their state pensions & healthcare costs. Unsustainable with changing demographics. Far too many refuse to acknowledge this & gov policy has consistently favoured the old over the young.

Now money isn’t cheap so lots of tax is just servicing debt

the shit has hit the fan unfortunately and very little manoeuvre room left.

The pension scheme for the civil service is something only the private sector can dream of.

Those schemes are far less generous now though. It’s current pensioners who have benefited.

Think of the 100k a year couple in Surrey.

100k today is equivalent to 70k 5/6 years ago due to inflation. How many will have seen their salaries increased by that much? So much more of that salary is also going on tax due to frozen tax bands.

The civil service pension is still not at the mercy of the stock market. Teachers get approx 27% paid into their pensions.

I have both types of pension so see the vast differences.

@PropertyD oh they are definitely better than many schemes today but they are less generous then they were.

The money is going to a combination of propping up crumbling public services and infrastructure and being hoarded by the super wealthy outside of the country.

For a country to grow and prosper you need key things:

1. Decent public services - for a population to be able to effectively contribute they need to be secure, healthy, educated and have a decent work life balance.

They can't contribute effectively if they are constantly worried about having a roof over their heads, if they have illnesses they can't get treated for. People won't be inclined to give more to work than the bare minimum if they are simply working to live.

Victorian businessmen like the Cadbury family knew this which is why they created Bournville for their workers.

We currently have a housing crisis, a NHS on its knees, schools that are falling down and a national curriculum with fails a significant amount of students and we are in a cost of living crisis which means millions of people can't even afford the most basic of treats.

2. Excellent infrastructure - businesses need good road networks to be able to transport their goods, high speed internet, decent public transport so that their workers can get to work, public buildings that serve their purpose well.

You have to invest to save in infrastructure. Think of it like a house - if your house is crumbling and poorly insulated you spend a fortune on constantly fixing whatever goes wrong next like a game of whacamole. You also pay more to live in the house for things like heating etc. It takes more time and more money to maintain in the long run.

However, if you invest a big chunk of money to renovate properly, you stop having to make all of those small repairs, your heating bills come down, you have more time and money to do other things.

Just look at schools for a good example of this. Building Schools For The Future was supposed to renovate or rebuild every secondary school in the country. Some areas kept their funding and have lovely new secondary schools. Others lost out when it was cancelled and now have crumbling buildings, RAAC issues, mobile classrooms, children having to sit and learn in coats because the heating doesnt work...

3. Less wealth inequality. Studies show that in countries with less wealth inequality, regardless of wealth overall, people are generally happier and healthier.

Wealth inequality in the UK has been increasing, so has child poverty. The top 20% own 65% of the country's wealth, the bottom 20% own 0.5%.

Billionaires hoard money in offshore bank accounts to avoid paying tax. People argue that if we tax wealth, the wealthy will leave the country - but even though the wealthy are taxed less now than in any time in recent history, they still do all they can to avoid it.

I'm not talking about high earners earning £200k, £300k etc, or millionaire business owners who have set their business up from scratch have £5million in the bank and a mansion in the south east, I'm talking about billionaires who have more wealth than they could ever spend and who spend 183 days a year in Monaco to avoid paying tax.

On top of that we subsidise their businesses by allowing them to pay low wages which we then top up with benefits and give them millions in public money to 'save jobs' when they are actively avoiding paying billions in tax.

We are fed a series of scare stories about them 'leaving the country' when in reality they already have, we give them knighthoods and titles so that they can increase their influence and demand even more subsidies and perks to continue stripping the wealth from the country and its population.

If you want a country that works well for everyone we need to invest in public services and infrastructure and stop the asset stripping.

Reward business that pay staff enough that they dont need benefit top ups, that genuinely create jobs (not false vacancies which they never intend to fill) and who display social conscience by contributing to their local area by sponsoring public spaces with tax breaks and priority consideration for public contracts.

If billionaires become domiciled in Monaco to avoid paying tax on their personal wealth, take away their knighthoods and titles. Don't bail out their privately owned businesses with public money when they are quite capable of paying themselves.

The right question, op.

Remarkable how politicians simultaneously claim the economy is so much bigger and better, and yet that we are so poor that we can’t afford half of what used to be considered normal.

The answer lies in what has been going on since. Mass privatization, the siphoning of all the wealth of a country into fewer and fewer hands.

I could point you to loads of reports all saying the same thing and all the economic literature of the late 2000s, before it seemed that all the avenues of discussion and democratic agency were shut down, but ‘The Spirit Level’ is always a good place to start and this report from the same people:

https://equalitytrust.org.uk/evidence-base/billionaire-britain-2025/

I would agree with this. We were warned by economists that it would happen 🤷🏻‍♀️

I also grind my teeth whenever people blame the 2008 crash! The public sector cuts started in 2006! Generational inequality is directly due to the privatization of housing.

Most of the country never even noticed the 2008 crash. 10 grand off knocked off housing that already cost 10x wages had no impact on those of us already priced out by unbridled neoliberalism and Blair’s papering over cracks with fancy-looking shite! Jobs cuts had already happened, along with the trend for making the middle ranks redundant and telling what are now called ‘entry-level’ job holders to do their duties for the same wage.

That comparison is the lie that has been fed to people - that the country's budget is like a household budget - it isn't.

Debt as a % of GDP is hovering around 95% - it used to be around 40%. That is partly Covid but it is also lack of investment.

If the government borrow to increase investment in infrastructure, GDP goes up so the % of GDP to debt comes down.

If you don't invest in infrastructure you end up borrowing just to keep the lights on. You are doing nothing to improve the ability to grow the economy and debt to GDP increases.

Take your £100k couple in Surrey - if they are maxed out on credit cards and have £100k of debt just trying to pay for day to day life then yes, they are broke. Their debt is 100% of their earnings.

But if they borrow another £50k to start or expand a business, or get qualified in a new skill, they increase their earnings to £200k. For a short while their debt is 150% of earnings, but very quickly it falls to 75% AND they are in a better position to pay it down quicker.

Obviously ordinary members of the public will struggle to borrow 150% of their income and it is a simplistic example because it is not like the government pops into its nearest bank to apply for the loan, but the concept and outcome is the same.

Look up Gary Stevenson’s YouTube/ Instagram channels.
largely the rich hoarding wealth, corporate greed and poor financial management from the govt.

Welfare not war

Completely agree!

Lack of productivity is the main thing I think, which many western economies are struggling with.

But I do wonder at the amount of stupid shit we spend stuff on as a society. For example, managing volunteers has in recent years become rather expensive. At my parish church which is very average where I live they all need criminal record checks every three years. They need safe food handling if they will work doing hospitality or at the soup kitchen. They have to do two separate courses that the diocese mandates, which is to say the insurance company mandates.

At my university which has a student body of about 2000, there are three separate FT positions dedicated to things like managing sexual assaults among students, supporting black and First Nations students, and supporting LGBTQI+ students. Each created ater some student or students were involved in an incident and the reviews recommended an "officer" position would help prevent future issues. (I will say I am very doubtful, these are CYA responses, and about liability mainly.)

At my bank they are constantly upgrading systems to prevent theft. A lot of my staff time at work lately is going to helping people learn to use phones they didn't want to buy so they can manage two factor authentication, and park in the city.

Last year my cash strapped organisation sent the whole staff to an event meant to get us in touch with the history of a particular minority group. Why? So we don't act like twats to them - which already we don't, actually. It was useless garbage for which the owner of the business was paid very highly, enough to make it worth her while to take a plane a fair distance to get to us. We did this instead of any training in our area of work which we have not had for several years.

I am not saying all of these things should necessarily be binned. However, all of these technologies, systems, new safety initiatives, etc, come with costs, and sometimes really significant costs, in terms of paying out, or loss of productivity because people are busy with peripheral shit. Some like the computer security we have really painted ourselves into a corner with imo.

Because we are playing catch up - our economy shrunk more than France in the financial crisis and more than both France and Germany in Covid.

Both France and Germany have a higher GDP per Capita than we do and although we were catching up to France at least, the gap widened again after Covid.

@JimBobsWife - forgot to attach the data

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Because they get paid less, it’s a trade off

Not even just state pensions but all the other benefits too. So many pensioners getting PIP and Attendance Allowance and all the extra pension credit that comes with disability benefits for many, all paid on top of state pension. Then the pension credit allows them to have free rent and council tax. The amounts are shocking and unsustainable for an ever increasing ageing population.