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.

any solution will take years & need cross party consensus but a lot of the electorate want which fixes.

This

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.

Ah but this is not so simple. This has happened because of the huge erosion in basic teaching pay that means no one can afford to be a classroom teacher in the more expensive parts of the country any more. No one will stay unless they can secure additional responsibility to improve their pay.

If teaching pay had kept pace with inflation, this would probably not be happening.

We have a massive massive number of people "taking out" far more than they ever put in, and too few people working full time paying

@ToffeeCrabApple this isn't unusual, more pensioners increases the state burden. In the 60s it was 5 workers to 1 pensioner, we are at 3:1 now and not far off 2:1.

There are already more over 60s than under 25s, that’s an insane shift!

A lot of it is ageing demographics. I understand people become disabled with old age, but i do believe attendance allowance & pip should be stopped at a certain point as it’s pretty much granted you’ll be disabled as you go into old age. That would save a lot of money.

There are lots of reasons already mentioned on this thread. An additional one is the effect of healthcare rationing during and following the arrival of covid. There is the obvious and well documented effect of repeated covid infections on health too.

So why don't they just borrow more money then?

Keeping old people alive past their natural lifespan. Think how much that costs in pension, attendance allowance, constant Gp/ hospital visits.
Before I get slated I am one of those old people and I do feel guilty about it.

I watched Simon reeve the other night and Norway have an incredible sovereign wealth fund built up from the money the Country has earned from oil. I guess the wealth in this country went to private businesses.

It's an utterly depressing state of affairs.

I totally agree that something seismic needs to happen but God knows what. The housing market and cheap debt kept the economy going for years, remortgaging to release equity which was then spent in the economy, kept things going for a bit. Cheap debt lead to insane house prices but now the debt isn't cheap.

Our mortgage has recently increased by £1k a month. That is money that is no longer being spent in the economy on other things. Similarly the £400 a month of VAT added to ds' school fees is no longer spent elsewhere in the economy.

Just feeling like everything is a bit shit

So fucking boring seeing the civil service slagged all the time. Half my family are in it and work their arses off. And a lot of the stupid stuff is handed down by government ministers.

Check out the millions being paid to Palantir and other AI companies in advance of digital ID.
And the books for many government departments can't be audited due to fraud and negligence, so no one knows where the money has gone

Oh, and teachers. Also predictable. Teacher pay in UK is pitiful compared to say, Canada, lower than Ireland, and teachers are more respected in those places too.

But who decides what is a natural lifespan? Do we pick an age and just stop ALL treatment? Even simple treatment that could save someone? So at 70 we ban any prescriptions or surgeries. Except painkillers maybe or them as well? If someone had type I diabetes from childhood can they continue getting insulin etc after 70? If so, why should a 71 year old be denied blood pressure medication or blood thinners which could be a simple solution to extend their life significantly?

Don’t get me wrong, there should come a point where treatments should stop in very elderly, frail people. But a lot of doctors already will advise against certain treatments for very old people. But there are some generally very healthy 80 year olds and some very unwell 50 year olds. It’s not as simple as not letting people live past their natural lifespan, because everyone’s is different.

And if you feel that guilty about being kept alive, you really do have the option to just refuse any more medications or whatever it is that you feel is keeping you alive.

It’s very simple we continue to have an ageing population. People are living longer and fewer children are being born.
The burden on the state pension continues to grow and as fewer people are contributing more are ‘withdrawing’ money.
In very simple terms (like it or not) the country cannot afford the triple lock.
The state pension is considered a ‘benefit’ and we as a country are paying out more in ‘benefits’ than we are receiving tax revenues.
I absolutely do not begrudge anyone a decent state pension but it is not affordable.
Any government that scraps the triple lock or increases state pension age would immediately become unbelievably unpopular and would be voted out at the following election. Principally older people tend to vote more than younger people and any government knows what would happen.
its been a ticking time bomb since I was taught O Level economics (50+ years ago).

We aren’t generating enough money. We spend more than we make. Jobs are taxed. What companies make matters. Make nothing - have no jobs. Pension funds invest for pensions.

We have a ludicrously expensive nhs with poor productivity. The civil service grows and grows, as do benefits and pension payments. We spend £110 billion a year on government loans. Brexit and Covid are partly to blame but so are stupid argumentative politicians.

Everyone in this country needs economics lessons - mandatory before being allowed to vote! We think we can have it all, but we simply cannot.

I think a lot of people feel this way now. We’re paying more tax but public services and everyday life feel worse, which makes people wonder where the money is going.

It’s probably a mix of things rather than one cause... Brexit, Covid, wars, energy prices, inflation, huge government debt, and years of weak economic growth. At the same time, frozen tax thresholds mean ordinary workers are paying more tax without big pay rises.

The result is the country looks “busy” economically, but normal people feel poorer because wages just haven’t kept up with the cost of living.

I don’t know about Australia, but America most certainly had the equivalent of furlough payments and government support of people who lost income due to Covid in some states. Paying people not to work during Covid, as you put it, was not unique to the UK.

The problem with threads/discussions like this, is they think that all other countries are doing so much better than the UK despite facing the same macroeconomic factors. And that’s just not true at all. What has screwed the UK over (wars, Covid, hyperinflation) has screwed over pretty much the rest of the world.

The national debt for public sector pensions is in the multiple TRILLIONS of pounds.

People are living for a lot longer than expected, so those guaranteed pensions are costing far far more than expected. Those people also receive the state pension, which is not means tested.

Added to this an astronomical amount of people on welfare, and the huge amount of mass immigration which costs more than we benefit from in terms of taxes being paid in (those from non European countries on the whole we pay for over their lifetime). Caveating I'm all for skilled immigration, its a necessity.

The wealth is tied up with the older generations in their homes, huge DB pensions, savings etc.

Those people who simply state "Brexit" - what is the cost to us per year compared to pre Brexit? We paid in hundreds of billions pre Brexit, I'm interested to know.

So what are you going to cut, benefits, pensions, the NHS, Council spending, infrastructure spending? Would any government dare touch most of those, tax increases? Even if you tax the rich until the pips squeak it will be a drop in the ocean there just aren't enough rich people and they would vote with their feet and go somewhere more tax friendly. It's the masses of earners in the middle income range that would have to be taxed more (again).

Blaming everything on Brexit when most of Europe is in similar or worse plight just doesn't hold water. There was huge extra spending during Covid and world events recently have impacted economies around the world. And Trump's ever changing pronouncements don't help stability.

Perhaps they should use NS&I more to raise funds so at least the interest goes to the people of the UK. They used to do tax free index linked and fixed rate certificates which were quite good investments.

I did, but can't tell the time on it!

But that's the point. The civil service is packed with managers and consultants....and people like your family are working like stink because there's not enough people actually delivering what they are meant to.

3 Trillion in debt means over a BILLION per year in interest alone - more than the entire education budget.

Covid lockdowns etc cost us 500 BILLION - our children and grandchildren will be repaying that all their lives, causing massive lost productivity, huge numbers of ruined businesses etc.

We've been conditioned to think "cheap" imports are brilliant so we can have cheap tat made in China, but that has caused mass unemployment in the UK, not just costing in terms of benefits, but also crime and other social problems, mental health problems, etc all of which cost money to manage,

Alongside cheap imports, we've a negative balance of trade, i.e. money flowing OUT of the country, which no politicians seem to talk about anymore yet it was a big thing in the 70s and 80s. Presumably, we're now relying on "invisibles" such as the service industry and of course foreign investors buying UK property as investments and the Universities - partially contributing to the house price inflation due to increasing demand.

Still paying for the old style gold plated public sector pensions.

£100 BILLION spunked on the stupid HS2.

They need to start encouraging businesses rather than taxing them out of existence based on sixth form level economics/politics. Start giving grants again for people to start their own business. Proper support/grants/subsidies for existing businesses to take on staff or open new branches, etc. Grants and support for manufacturing businesses to increase economic activity and reduce imports and unemployment. Reform of the business rates system so an Amazon warehouse or out of town supermarket pays the same rates per square metre as a High Street shop rather than considerably less due to the "High street" premium which is crippling town centres. Reverse the insane NIC hike on employment.

It doesn't have to be cuts. Far better would be to encourage business and entreprenneurial growth to increase productivity, reduce unemployment, and therefore increase GDP, and ultimately tax revenues from the increased economic activity.

I think that we make things so very hard for ordinary people to do ordinary things. I know two sole traders who would like an assistant/apprentice. Both feel they cannot hire a young person/someone due to the risks and costs involved. We are just strangling any growth potential. Not just with the example above, but in so many ways. We have tax thresholds that penalise people for achieving. So they decide to work less and earn a bit less to avoid the penalties (ie gigantic marginal rate, loss of childcare, whatever). We allow councils to do petty shit that kills high streets. Near me, there has been a high street with 2 large free car parks for decades. Council decided they could make money out of this instead so put in charging via ANPR for the car parks very recently. Result = people won’t pay. Those car parks which were typically 90% full with busy/bustling shoppers are now about 20%
full. Surrounding streets are dangerously clogged with parked vehicles, lots of yellow line parking away from the car parks, less footfall, high street shops are closing. Well done council. Tried to steal a few
quid from decent honest people who already pay thousands for you fuck things up.

Everything is just squashed and spoilt.

Big yes to sole traders no longer risking taking people on. I've been a sole trader myself and have loads of sole trader clients, particularly plumbers, decorators, electricians, car mechanics etc who'd love to take someone on to train them up or just help out, yet don't want the risk of getting something wrong with the myriad of H&S and employment laws. So sad. When I started 40 years ago, it was commonplace for sole traders to have a trainee, but not a single one of my sole trader clients has one today. Successive politicians have really stifled small business growth. Likewise the VAT threshold that holds small businesses down as they often end up worse off with a small increase in turnover. So much is counter-productive these days. I'll be retired soon and in all probability I'll just have to give my clients away or leave them free to find a someone new - a trainee "could have" had a ready made business if I'd have trained one up over a few years and they could have taken over - but it's just not worth the risk and I couldn't afford to pay a wage whilst they were in the early training stages and not being productive. I've a plumber client who retired last year and said exactly the same. It seems successive governments have had a plan to get rid of smaller businesses, notably the covid support where 3 million were excluded.

I agree with the concerns the OP raises. For me the costs of Covid support which would have been a lot less under a competent Prime Minister as the period of time would have been shorter is a significant factor. And Brexit.

As for tax mentioned by other posters, the balance between personal and corporate tax is wrong, and within corporate tax is not based on the real business world and the amount that is now virtual instead of at physical premises.