£610 a week pension demand is insane

[Thisismyfinesthour]

Just read that there is an online petition doing the rounds for a £610 a WEEK pension demand to the government.
WTAF? Is the heat melting some peoples brains? It seems over 5000 have signed it.
Where do they think the money is coming from?

Think someone is mixing her couple income up with an individual income !

the average income for a single pensioner is 17k a year which is about half the median and less than half the mean income for an full time employed person

i think the first figure is a mean not median

If you mean me. When I get the state pension my income (mine) will be 29k.

Our joint will be 62k when husband gets his.

Of course they can.

The state pension would require a pension pot of approximately £300k to buy privately as an annuity (same income, and not just index linked but triple locked - this is based on actuarial calculations because obviously no private annuity provider actually sells a triple locked product). That’s £600k for a couple. Female workforce participation used to be far lower so many women in particular contributed nowhere near enough tax even to fund their pension payments. Healthcare is now also far more expensive and complex and they paid nowhere near enough tax to fund their pension payments social care and NHS services they are expecting in retirement: pensioners consume not just 50% lf the welfare bill but 50% of all public spending, despite being 15% pf the population.

Yet they have benefitted from a very favourable tax regime. Tax rates were much lower during most of current pensioners’ working lives. Yet many received much more generous state help e.g. free higher education and adult education. State pensions they paid for their own parents and grandparents were much lower as were care costs plus there was a huge sell off of national infrastructure, assets and natural resources, the windfall from which was taken as in lower taxes during their working lives or highly lucrative investments that the public was encouraged to participate in.

Then the huge one: enormous asset inflation in both property prices and other investments, which also enabled even many of those in the private sector to retire with DB pensions without contributing anything like such a large percentage of salary to this compared to the percentage of salary that would be required to achieve the same percentage of pre-retirement earnings with a DC pension. Pensioners have huge property wealth from untaxed growth in property prices far above inflation and this is exempt from CGT even if they downsize because of PPR (if their main home). They also had MIRAS for much of the time when interest rates on mortgages rose temporarily (and even then the mortgages were a lower percentage of household income on average due to the lower underlying property costs). They were also the primary beneficiaries of the buy to let boom, buying up additional properties with cheap interest rates at that time and won’t have been taxed on the asset growth until the property is sold.

So of course it’s perfectly possible for them to be wealthy and have higher incomes and have underpaid on tax proportionately to the state services and welfare they receive. I’m not sure why you think this is impossible?

Maybe you “know this stuff” if you work in economics?

Sorry that you think it’s odd for someone to reply to a thread with economic facts when people are discussing an economic topic. If you find it boring, why read the thread?

All posts on a discussion are written by one person (unless you’re a scizophrenic?) so are by definition “a monologue” in writing.

Perfect response. But yet you’ll still get people harping on about how unfair it is that we aren’t giving them £610 a week.

What a ridiculous comment. Childcare is for 11 years per child if both parents work.

Of course it isn’t a choice to have massive mortgage or rent costs. People don’t do it for fun, they do it because they need somewhere to live. The vast, vast majority of pensioners either own a property outright or, if renting, have their rent paid by taxpayers as well as receiving state pension. Given housing is the largest essential cost to the rest of the population, it is of course relevant to a comparison of disposable income.

As for commuting costs, again it’s not “optional” unless you’re suggesting people give up work. Many people have to live a significant distance from their workplace because of the high housing costs.

It’s obvious that a realistic comparison of pensioner incomes to those of working age needs to be after tax, student loans, commuting costs, housing costs, childcare costs etc are deducted to them reach a meaningful comparative figure of money left for food, utilities and free to spend on luxuries. Even food and utilities will obviously be far higher for those who have children to house and feed.

Not on this thread.

@NotNowBernardNotEver that is a seriously awesome post. I am sure we will still hear anecdotes about outside toilets avocado munching young'uns. But this eloquently sets out what several of us have tried to illustrate.

Yet they have benefitted from a very favourable tax regime. Tax rates were much lower during most of current pensioners’ working lives.

Basic rate was 33% plus 9% NI when I started work.

1972–1973: The standard rate was set at 38.75%, but combined with the surtax on investment income, top marginal rates reached up to 88.75%. 1, 2]
1980s (The Lawson/Howe Reforms): Top rates were slashed dramatically from 83% (earned) and 98% (investment) down to a unified 60%, and eventually a 40% higher rate with a 25% basic rate by 1988.
1990s–2000s: Introduction of a lower starting rate, moving to a standard 3-tier structure (starting/savings rate, 22% basic rate, and 40% higher rate), before the 2008 introduction of a 50% additional rate for high earners (later reduced to 45%). 1]

Yet many received much more generous state help e.g. free higher education and adult education.

Only 5% of the population were graduates.

State pensions they paid for their own parents and grandparents were much lower as were care costs

Not in real terms. Perhaps you have a link to some statistics?

plus there was a huge sell off of national infrastructure, assets and natural resources, the windfall from which was taken as in lower taxes during their working lives or highly lucrative investments that the public was encouraged to participate in.

Well, yes, we know exactly what Thatcher did. It was egregious and many of the apparently intractable problems we currently have are directly due to her misguided and myopic (I’m being kind here) policies.

So of course it’s perfectly possible for them to be wealthy and have higher incomes and have underpaid on tax proportionately to the state services and welfare they receive. I’m not sure why you think this is impossible?

See above.

It’s the bitterness behind these posts I find unfortunate. I’ve always believed you should aim to reach a stage of mild contentment through life, especially by letting what you can’t change go, and only deal with the little you can have some effect on.

The people starting that petition must be completely delusional. It would roughly triple the state pension welfare expense, costing an additional £292bn per year (on top of the £146bn current state pension welfare expense). 🤣🤣

Where they think an additional 25% of tax revenue should be magicked up from to fund these handouts is a mystery. I presume they haven’t suggested how they propose for it to be funded? 🤦🏼‍♀️

Yes the petition is delusional. Nobody in their right mind thinks it’s anything but fantasy. The pensioner bashing posts are equally delusional. Nobody existing on the basic state pension is better off than someone on £100k, however you cut the figures.

Oh please, what disingenuous responses.

Firstly I stated “over their working lives”, not in particular periods of a few years that you decided to pick out to suit your agenda.

Secondly it is not just the tax RATES but the THRESHOLDS that determine the overall percentage of tax someone pays on their salary, plus the (far more generous in earlier decades) tax reliefs available.

Thirdly, as I stated it is not just about university degrees. Technical colleges (which provided the qualifications for numerous careers which now require a degree instead) were also free, as was adult education to retrain mid career.

Fourthly, yes I stated the comparisons that are in multiple robust economic studies in real terms accounting for inflation, otherwise they would be meaningless. I specifically stated this in my post to which you responded.

Fifthly, the tiresome obligatory Thatcher reference, like she just elected herself and that cohort who were the majority of voters at the time had nothing to do with it.

On every single thread about pensions you pop up demonstrating your economic illiteracy and denying well-established and widely published economic facts that people present which don’t suit your narrative. It’s so boring.

I stated the comparisons that are in multiple robust economic studies in real terms accounting for inflation

Link to them then. I like evidence. You appear to think I should just take your word for it.

You’re wrong about that, in certain circumstances, as has already been pointed out to you by others. Not to mention the fact that only 13% of pensioners have no savings, assets or private pension provision and exist on state pension alone. And those pensioners also receive pension credit, council tax exemption, pension credit and numerous other benefits so when you compare their actual disposable income yes it’s very easy for them to have more than someone earning £100k, receiving £4,967 per month after tax, student loan and pension contributions, then having to pay a mortgage (often £2k plus for a flat or modest family home), £2k childcare per child, commuting costs, Council tax, etc.

No, but the £100,000 you're talking about is earnings, not a government hand out. Selling your labour and expertise. So they are, in the most part, deserving of a decent wage. Those of SPA have paid NI for a lot of years and deserve their state pension, which I think most people agree on. The extent of their entitlement is what is up for debate here.

In regard to your previous post, i responded to a similar thread somewhile ago, explaining that despite being factually correct, the headline rates of tax you have quoted are misleading. That is because these top rates applied to an income several times the average wage, whereas now, HRT threshold is only like 120% of average earnings, and people lose personal allowance and suffer additional rate tax at like 2.2% and 2.6% ish of average salary.

No, I just can’t be bothered. I presume you’re retired given your irrational defence of pensioners milking the state dry so presumably you have plenty of time on your hands. Why don’t you try looking up some of the cohort analysis economic studies yourself instead of posting factually inaccurate nonsense. Or if that’s too challenging given all the data analysis and statistics involved, many newspapers have frequently run articles regarding the findings explaining them for non-economists.

I agree with all that.

Something else the boomers never mention is MIRAS - i.e. income tax relief on their mortgage interest. Nor that when income tax was higher, we didn't have the same levels of indirect taxes, such as VAT, insurance tax, landfill tax, vehicle taxes, alcohol & tobacco taxes, etc., all of which have increased (or introduced) over the past few decades.

And yes re Unis, it's true few used to go, but a few decades ago, most jobs didn't "need" a degree, but now they do, so youngsters often have no option but to go to Uni, such as jobs like Nursing or teaching or social workers, or in fact, virtually every decent job/profession. Long gone are the days when you can get a decent "office" admin job with a handful of grade C at GCE or a trainee professional role with 3 A levels (any grades!). It's not today's youngsters who changed all that, but they're the ones having to take out £50k of debt to get into jobs that they could have walked into straight from school 40 years ago!

And a big yes re Thatcher - she didn't vote herself in - the voters WANTED her policies. Likewise people in the 90s voted for building societies and insurance firms to "demutualise" because they were greedy and wanted their windfalls.

Older people, as a group, can't claim they were merely passive and were mere bystanders whilst utilities were sold off, politicians reduced income tax, etc - they VOTED for such policies.

I think they should lower it for your generation and make pension age 85.

How? I replied to a comment about pensioners paying £50 a week on council tax out of a state pension of £2r0. That's just not true

Never voted Tory. We never do up here.

It is true.

Why do you find stating facts to be “bitter”? What an odd response to someone correcting some of the factually incorrect assertions that certain posters were making trying to paint pensioners as an impoverished cohort.

It is literally the job of economists to analyse data in this way to inform economic decisions of companies and Governments so that they can make appropriate decisions on tax, spending, investment, etc which balance different objectives/ (in the case of Governments) the impact on different groups of people.

Not just UK state pension it won't be 62k

Up where? In recent years it was northern English voters who elected the likes of Johnson. Or by “up here” do you mean Scotland? In which case you’re excused from responsibility for some of the most catastrophic Governments and Brexit being forced on the rest of us largely by English pensioners. Not that the SNP is any better at managing an economy and public services!