Economy Home Truths

[Magschoice]

Just read this article:

Former Chancellor Lord Hammond has said the government & the prime minister must risk unpopularity and tell "some difficult home truths" about the state of the economy.

“That (cost wise) it has been the equivalent of fighting a war. The effects of which are going to be with us for a very long time”

“There will continue to be a rise in unemployment post pandemic, which is already at the highest level it has been since 2015.”

The government are 2 trillion in debt. I fear massive job losses and spending cuts. I do think the housing market will hold up though, to a certain extent

What are everyone’s thoughts?

@ItsAllBlahBlahBlah

Without sounding really dim, what does it mean if the house market crashes.. In real terms, to ordinary people. I have brought my house with a reasonably chunky mortgage, me and DH work in the utilities sector so are reasonably safe (please god I hope) but have two very young children. I just don't understand what this would mean for us, can someone explain it to me?

It means your house might be worth less than you paid for it and if you sell there might not be enough to repay the mortgage.

@Jo99996

Yet some of the lockdown fanatics on here believe we can keep borrowing billions per month to pay for furlough and keep everything shut until we've cured death.

The resulting economic mess and lack of funding to the NHS in years to come will be a bigger issue than Covid has been

This.

@CherryRoulade public sector pensions were changed a few years ago. Have you a link for this or your opinion ?

house prices are ridiculous, there has definitely being stagnation in my part of London in the last 5 yrs when you factor in stamp duty. The only people I know who move up the ladder either bought at least a decade ago or have family help.

[quote Pomegranatespompom]@CherryRoulade public sector pensions were changed a few years ago. Have you a link for this or your opinion ?[/quote]
Front page of Times today.

That's not news or rather it shouldn't be
This is why rather urgently normality has to resume

Inheritance tax/ gifting again targets the middle classes, giving no incentive to own your own house/ study +++ years for higher paying occupations.
Much fairer for everyone to pay a portion. Less corruption would save a great deal

Agreed. My dad grew up very very deprived, but is a grammar school, self-made success story.

It’s not fair for people who did the ‘right thing’ all through their lives to be considered fair game now that we’re all screwed.

Much more sensible to spread the load.

And I say that as someone who is a lower-middle earner (teacher), and who will struggle considerably when things get harder.

Unless you're older or went into the public sector very young the public sector pensions aren't great. I work with people who have 1m pension pots on normal salaries. That's just not possible today

@CheeseJalapenoBread

I agree with the above about significantly reduced public services. None of it will be overt, it’ll just be stuff you notice if you currently have it or when you need it in future. Grim for people who rely on those services.

I also think we’re going to see the start of a conversation about whether the NHS model is really fit for purpose in the 21st century. That’s not a reflection on anyone who works for it, but rather the model of tax-payer funded free at the point of demand public healthcare.

Currently, politicians are terrified of raising the possibility that the NHS might not be the best model in future; it’s akin to a religion amongst the public. However, we need to have a sensible, grown up discussion about it and look at other models from around the world (not just the US).

We need politicians with the balls to change the NHS. We've had a couple of decades of "reform" which has been nothing more than re-arranging the deck chairs on the Titanic. It's cost a fortune but has achieved very little - just tinkering around the edges without tackling the fundamental problems.

There's far too much of the attitude "we've always done it that way" and a complete reluctance from top to bottom to make any real changes. For the few who actually see the need to change and want to change, it's like pushing water uphill.

In a way Covid has been good for the NHS. It's forced doctors and consultants to communicate with patients by phone, email and online webcam. They could have been doing that for the last decade but they needed a pandemic to force them to do it. Obviously there's still a need for face to face consultations but lets hope that waiting around for hours in tiny cramped waiting areas to finally see the consultant only to find the test results aren't back are long over!

My OH is having cancer treatment. He needs an MRI scan but can't tolerate the tube. He had one 3 years ago when first diagnosed, but came out dripping with sweat, heart palpitations, etc and his heart rate was so high they took him to A&E to calm him down. He's tried 3 times since then to have another, but every time is the same, he just can't tolerate the tube. The MRI operator said that they have loads of people who either can't go in when they see it or have to abort it mid way - maybe up a quarter or a third of patients every day don't go through with it. That must cost a fortune in wasted appointments. We did a bit of googling and found you can have private MRIs in an open tube, sitting or standing up. We asked his consultant about it as we're happy to pay to avoid the stress of an old fashioned MRI tube and she didn't even know there was such a thing! I was genuinely surprised that a consultant wasn't up to date with what modern equipment was available outside their NHS "bubble". Surely things like that are mentioned/publicised in their medical journals??

@wondarah

Unless you're older or went into the public sector very young the public sector pensions aren't great. I work with people who have 1m pension pots on normal salaries. That's just not possible today

Which is why NIC on occupational pensions is a good idea. Those on lower pensions would pay little, if anything due to the NIC earnings threshold. Those on higher occupational pensions would pay NIC on the amount of each pension over the threshold. Lower income pensioners are left alone, higher income pensioners pay some NIC on some of their pensions.

@CherryRoulade amazing - not. Pay stagnant for 10 years, plus increased pension contributions already,

@Kazzyhoward I agree, it's fair.

@wondarah

Unless you're older or went into the public sector very young the public sector pensions aren't great. I work with people who have 1m pension pots on normal salaries. That's just not possible today

Except those doctors, nurses, teachers who have given a lifetimes service are going to be hit far harder than those who are sitting on multimillion assets and hidden wealth. It’s always the public sector that get hit.

Unless you're older or went into the public sector very young the public sector pensions aren't great.

If they are defined benefit (and most are) they are still streets ahead of the defined contribution pensions most people in the private sector have.

To give you a sense of this, I’m ploughing in 600 a month of my pay into mine and I won’t get anything like the value of most public sector pensions.

They should stick inheritance tax up a lot, increase second home taxes and close tax loopholes for the JRMs of the world.

Sorry @CherryRoulade I don't understand what you're saying. Plenty of people in the public sector have wealth, a 1m pension pot is wealth. A lifetime of services doesn't mean you should pay less tax.

In terms of the global 1% it's unrealistic to just try & target then because the clue is in global. Not saying it's right but you need international joined up thinking. Plus we as consumers can take some power back.

They should stick inheritance tax up a lot, increase second home taxes and close tax loopholes for the JRMs of the world.

Wouldn't this affect doctors & teachers too?

If they are defined benefit (and most are) they are still streets ahead of the defined contribution pensions most people in the private sector have.

I don't disagree but contributions & things like AVCs etc are very different now. Private sector pensions are crap.

I agree with higher taxes on 2nd homes (did they canx the additional charge with stamp duty this yr?) & hither taxes for foreign owned properties.

The economic outlook is pretty scary, however this is not the price of lockdown, it is the price of not controlling covid at all.

The UK will continue to limp through the next year due to not tackling it this summer either.

It is draining to rehash the errors of the last year, but e.g. all the cash to SERCO now going to already wealthy shareholders and those £1k/day consultants. That amount of investment could have brought greater returns for the treasury.

'Currently, politicians are terrified of raising the possibility that the NHS might not be the best model in future;'

It was not a sustainable model even before covid which has been the recent last straw. I expect we'll be asked to do more ourselves rather than rely on the NHS in terms of looking after our health. Tbh I'd be happy to pay for my kids dental treatment if it meant I could be at least given a date for an appointment!

People started careers knowing pay was lower in the public sector but that pension was a benefit. It’s pretty unfair that’s changed so much and 1 million pension pots are only really for the consultants in the latter years of their careers. But these are consultants who are highly skilled ie neurology/ haematology. Is there the same appetite to pursue the large private sector pensions?
I’m guessing we’ll all need to pay more apart from the super rich/ tax savvy who will hide their money.
In the news - no nhs pay increase this year. They’ll be strike action. Especially as in Scotland they are receiving a £500 bonus this month.

@Nikki078 people ask for drugs to be prescribed they could buy ie paracetamol. They stockpile meds which they can’t be used for anyone else, miss appointments, I had 1 patients miss an mri scan because had a hair appointment. People abuse the system. I agree the nhs needs to be overhauled, there is too much waste and ineffective management despite most clinical staff working hard in difficult circumstances.

People started careers knowing pay was lower in the public sector but that pension was a benefit.

That's not strictly true. In many locations & lower skilled work public sector is better paid then private.

1 million pension pots are only really for the consultants in the latter years of their careers.

I work in pensions & that is not true. Plenty of teachers, civil servants, support staff fall into that if they are older now.

I was referring to hospital staff. It’s really easy to see nhs banding - many people on low pay. I’m sure people do have good pension pots but not the majority. It’s really unfair and incorrect to suggest otherwise.
Just adds to the narrative how lucky nhs are to have jobs - quite a lot it staff will leave this year despite that wrongly perceived amazing pension.

@StaffRepFeistyClub

Need to crack down on tax avoidance/evasion.

Sort out corporation tax - too many big companies paying insignificant amounts.

I was hoping this is what it meant by being unpopular. Sort out that and it'll be less painful for the rest of us I'll hazard a guess.