This is just stupid.
I am a tax, welfare and pensions simplification campaigner. Let's just skip the arguments, the morals, the economics and the politics and look at the maths:
a) Planned total spending on age-related benefits* (GB only) in 2007-08 per the Department for Work & Pensions: £68 billion per annum.
b) Number of people living in UK aged 65 or over, minus 2/60 for GB figure: 9,467,500
Divide (a) by (b) and you get £138 per week, or £276 for a couple. That would make a handsome Citizen's Pension**. Non-contributory, non-means tested, non-taxable.
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* Excl. Housing/Council Tax Benefit - different topic.
** Sure, there is a trade-off between restricting the amount for people who haven't always lived here with continuing to pay it to UK residents who move abroad in retirement. I can also see the political argument to say that SERPS/S2P should not go in the pot, in which case the amount would be £117 per week plus your existing SERPS/S2P. I can also see an argument to say that the taxpayer should only fund the bare minimum to keep pensioners from starving, which may be a few quid less than £138 per week. But those are all tweaks and complications, which is how we got to the sorry position that we are now.
*** I refuse to entertain the arguments that women should retire earlier (they tend to live longer so there is an equal and opposite argument to say that they should retire later) or the argument that married couples should get less than twice a single person (that just rewards cohabitees or home-sharers at the expense of married people).
h/t Remittance Man
Claptrap
11 hours ago
2 comments:
You can give it another tweak by allowing for the strange business of the age-related personal allowance for income tax. (Unless that's in your figures already.) It has the consequence of introducing an effective tax band structure for the OAPs of 20%-30%-20%-40%.
D, I was just looking at amounts paid out by DWP. Tax relief for pension contributions and the age-related allowance (with the corresponding higher marginal rates for people on lower incomes) will be the topics of later posts.
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