The bias against the under 65's by the English government

PoliticsNerd

I wonder how you expect me to answer that rafichagran.

Don't know, but I won't give it much thought, just my opinion. Agree, disagree it's up to you.
I thought my views were straightforward. You don't have to answer you know.

I wonder how you expect me to answer that rafichagran.

GrannyGravy13

PoliticsNerd and Doodledog forgive me if I am being a little dim this morning.

My savings are what I haven’t had to spend out of my taxed income, I totally accept that interest over a certain amount will be taxed (ISA’s profits are not) but why on earth should mine or anyone else’s earned taxed capital income be taxed once again.

Why are those who have saved for retirement and all that comes with it be penalised.

It’s time to go after the billionaires and multinationals, not those of us who continue to contribute to society and are not a drain on services (by funding own health/home care or retirement homes when needed)

Apologies if I have misinterpreted both of your posts.

I'm not sure what the question is here, so sorry if I answer the wrong point.

I completely agree that many people save to shelter their old age, and I don't think they should be penalised for doing so. This is one of the reasons I am so against means-testing. It hinders people who try to take charge of their own futures.

All the same, if someone has £millions in the bank (I don't think this will apply to many people who have saved those millions from earned income) it is not unreasonable for them to be taxed on the interest, as that can be an income in itself. It's fair enough to protect savings from inflation, particularly for older people who can't replace what they've saved, but after that, taxing the interest is fair enough, I think. It is not double-taxing, as it is the capital that is saved from earned income - the interest is not.

Lost not lose.

I have not long been in long, so in answer to you question Politicsnerd "How do you know" Doodledog answered part of the question, but it is people who I have listened too in real life, the virtue signallers, people who are very very comfortably of saying they don't need it. I read somewhere that it would cost too much to start means testing pensioners who do not get PC so lose the WFA.

This may sound harsh but if you don't need it need bus/train passes, or free prescriptions, keep quiet because others on New state pension, and only a small occupational pension do and find it helpful. You can always donate to charity if you feel you should not get it.

There is a section of pensioners who have always worked, get the new state pension and who are worse off than people who are on PC.

I'm not quite sure I understand what "earned taxed capital income" means to you

I'm not sure, either, but there is a common belief that once income has been subject to taxation it shouldn't be taxed in any way.

Which is ridiculous because it ignores the fact that this 'already taxed' income is subject to indirect taxation which comes into play almost every time a monetary transaction is made.

Just noticed this has gone from bus pass to state pension and pension credit . Before I was 60 had a yearly prepaid prescription card from 1988. I was born disabled took me 35 years to get disability benefits because I was told no diagnosis no benefit everytime. Thankfully went to PIP tribunal after having my diagnosis in 2022 and PIP giving me zero on everything. But the Brain Charity got me a solicitor but it took over a year to get too tribunal in 2023: which I won and get both enhanced PIP's indefinitely back dated to when I asked for the PIP forms in 2022. I got my state pension last year and bit of pension credit . I have little in the way of savings . But thanks to my PIP state pension and bit of pension credit when I my first holiday for 19 years last year . Just Monday to Friday . Went again in September. I can't go abroad due to health . I am not a wealthy pensioner but own my bungalow and paid to have it adapted to my needs . I had nothing but money worries after my husband died 21 years ago . But having what I am entitled to means I don't have to worry anymore but still careful with money . Don't smoke ,drink or have a car . And having the bus pass from when I moved here when I was 61 meant I could go out when I wanted and not worry about if I could afford the bus or local train fare. Meant I could join groups and have a social life . Which I didn't have from when my husband died in 2004 until I moved here in 2019.

GrannyGravy13 you are right to ask. My brain is often half a mile ahead of my finger and we can't see expressions, so confusion is always a possibility.

Firstly, I have a feeling most, if not all of us agree with your para starting "It’s time to go after the billionaires and multinationals,". We just sometimes get bogged down with the detail.

I'm not quite sure I understand what "earned taxed capital income" means to you (that's important). I think I see it as passive income from previously taxed capital. There isn't, as far as I can see, any suggestion to tax "previously taxed capital" while you hold it. It is the passive income it earns that is taxed. In my head the tax you pay currently is unlikely to change - unless you are a secret billionaire!

MaizieD

^Maybe there should be taxes on individual heirs rather than on estates, so people in larger families can inherit with a tax cushion compared to ‘only children’ who can get significantly more? Taxing a percentage of every bequest over £X is probably fairer than taxing an estate before it is split several ways.^

Apparently in France inheritance has to be equally divided among all heirs. The law stems from the French revolutionary period and was an attempt to stop the concentration of wealth in one heir’s hands. It doesn’t really seem to have worked, French wealth distribution figures are similar to the UK’s. I don’t know if your idea would work any better.

Nor do I. As you know, I am unknowledgeable when it comes to these things, but sometimes an Emperor’s New Clothes approach can be useful.

I, maybe naively, think that just because it may be unfair for one heir to get £Xm as an unearned inheritance, that shouldn’t mean that someone with many siblings shouldn’t be able to inherit a share of X in their own right.

There used to be a tax office a few hundred yards from my house. It has long gone. The people who worked there couldn’t reasonably have been expected to work out numerous permutations of circumstances, but now it should be possible surely? As ever, the rich will employ people to squirrel money away, but algorithms and AI may well be able to circumvent that, too 🤞

"How long have you posted here, PN?" Obviously not long enough "Doodledog" Although, in my defence, I did once meet up with someone from another forum whose thinking I enjoyed. They really couldn't have been further from the person I had imagined!

PoliticsNerd and Doodledog forgive me if I am being a little dim this morning.

My savings are what I haven’t had to spend out of my taxed income, I totally accept that interest over a certain amount will be taxed (ISA’s profits are not) but why on earth should mine or anyone else’s earned taxed capital income be taxed once again.

Why are those who have saved for retirement and all that comes with it be penalised.

It’s time to go after the billionaires and multinationals, not those of us who continue to contribute to society and are not a drain on services (by funding own health/home care or retirement homes when needed)

Apologies if I have misinterpreted both of your posts.

It was free

I live in the north west of England. Men and woman get a free bus local train pass at 60 starts at 9.30 until midnight. When I reached 66 got a disabled pass which means I can use it anytime on buses and local trains . Needs to be renewed in 5 years. But I can use it from 9.30 anywhere in England.

Capital in a house is merely a notional income, the vast majority of people selling a house, do so to buy another house. You need also to take in to account the actual cost of the house to the ourchaser. Houses are usually bought with loans and interest is paid on them. If you were to take into account inflation and the very high interest rates most of us paid during our mortgage paying years, much of those huge gains would nearly disappear.

Savings are taxed, they are taxed when the money is earned and tax is paid on any interest earned, why should that money be subject to what would effectively be penal tax rates, by being taxed again and again and again, and what good would it do the country if, instead of saving for pensions, lifes little accidents, every time anything happened everyone looked to the state to help them, whether social loans, pension credit, or anything else.

and knowledge. and increasing knowledge

Thank you M0nica for your reply. I have to admit much of what I am posting on here is me thinking aloud.

I see a real problem of economic inequality growing wider and wider as do many talking about this in the media, who are far more knowledgeable on this subject than I am. Bouncing thoughts between us all should at least help clarify both the situation and possible solutions.

I have to agree with Doodledog however, that "savings" are not taxed, only the income from them. I think that paragraph pulls out some really interesting points.

"We need a much more sophisticated formula than the blunt instrument we have now, and this must be possible now that tax is not worked out by clerks but by computers." I think we should all be exposed to just how fast AI is (not sure how). My son is already using it on a daily basis in his business. It is not only saving money but a great deal of time and knowledge.

My daughter uses it too but in a very different way. It has seemingly boundless possibilities at this point. Government has always seemed overcomplicated, although I doubt that it is. AI could help greatly. It may also help in showing the possible outcomes of various ideas for greater economic equality such as you suggested. This may mean we don't need the "trial and error" plans that governments sometimes seem to inflict on the population.

Maybe there should be taxes on individual heirs rather than on estates, so people in larger families can inherit with a tax cushion compared to ‘only children’ who can get significantly more? Taxing a percentage of every bequest over £X is probably fairer than taxing an estate before it is split several ways.

Apparently in France inheritance has to be equally divided among all heirs. The law stems from the French revolutionary period and was an attempt to stop the concentration of wealth in one heir’s hands. It doesn’t really seem to have worked, French wealth distribution figures are similar to the UK’s. I don’t know if your idea would work any better.

How long have you posted here, PN?

I try not to let myself be swayed by knowing who has posted what, and answer the post rather than the poster; but as in ‘real life’ we do get to know a lot about one another after a while. When someone posts routinely about their extension, their Hermes bag and their holiday home in Barbados (any similarity to a real poster is 100% coincidental) we old-timers can build up a picture.

That is not to say that the ‘comfortable’ or even ‘wealthy’ can’t want a fair society. I do, and am probably in the reasonably ‘comfortable’ category, but only because I have worked to get there, which did not come without sacrifice. I want fairness to include a recognition of that, and will not be bullied into thinking that is unreasonable.

rafichagran

I finished work at 66, in receipt of new state pension, and a occ pension. I want to retain the bus/train pass, prescriptions and in my case the abolished wfa.
Putting up £2 on PC is fine but people who have worked all their lives don't have that luxury and some are worse off.
I don't see why I should not recieve the above, I have worked many years for a good life in my later years.
I also dislike that it is the wealthiest pensioners who say we should not have these things to help out, and have a good standard of living.

How do you know it is the wealthiest pensioners?

I’m understand what you are saying M0nica, and agree up to a point, but savings are not taxed - the interest is. Of course, interest gains may not match inflation, which does need to be considered, particularly for older people who can’t increase their income. Similarly house price gains represent unearned income, as does income from rent (after taking the work involved to maintain property etc is considered), and so many more factors come into play when looking at what is ‘fair’.

We need a much more sophisticated formula than the blunt instrument we have now, and this must be possible now that tax is not worked out by clerks but by computers. It would make sense to have things like inflation, house price increases, inheritance and much more factored into people’s tax codes, so earned income doesn’t do so much of the heavy lifting when it comes to taxation. That way, people’s savings could be protected against inflation but at least some of the interest taxed, someone making huge gains when selling a house could pay some of that back, and inheritance could be more finely tuned than at present. Maybe there should be taxes on individual heirs rather than on estates, so people in larger families can inherit with a tax cushion compared to ‘only children’ who can get significantly more? Taxing a percentage of every bequest over £X is probably fairer than taxing an estate before it is split several ways.

There will be many more tweaks that could be made to individual tax codes that would make for a fairer system.

Politicalnerd I like the word passive Maizie. it's very descriptive. However, I think I need an extra word. There is income you earn as a wage or salary - earned income. There is income you don't actively work for - passive or unearned income.

But the money you put in savings has been earned. If we are to have financial security, whether in old age, or just to deal with the slings and arrows of outrageous fortune in daily life, we need to have money tucked away that can be drawn on when appropriate. We save for a deposit to buy a house, to go on holiday, savings are the oil in all our lives. Those with no savings suffer constant problems because they cannot deal with the vagaries of life whether a child growing out of shoes within weeks of the previous pair being bought - to replacing a car needed for work.

New businesses rely on other people's savings to grow and provide employment. But not all businesses are successful and it is reasonable that any organisation borrowing money pays the lender for the privilege.

Savings save the country money. I do not claim Pension Credit, even though my state pension is below pension credit level because I was in a position to save money into a pension scheme when I was working. The welfare system would collapse under the volume of pension credit claims if the only income every pensioner had was their state pension.

As it is because many people have saved to provide non-state pensions, they are contributing very positively to the economy as a whole.

Passive capital is money that is not earned and usually comes to people through inheritance - and here I would make IHT payable on much smaller estates, but with a progressive tax, starting at, say, 10% on estates valued at £100,000, going up to 20% on estates valued around £250,000 and so on. having paid a capital tax on unearned capital, I see no reason why interest earned, whether through savings or investment should be treated any differently to earned savings.

rafichagran

I finished work at 66, in receipt of new state pension, and a occ pension. I want to retain the bus/train pass, prescriptions and in my case the abolished wfa.
Putting up £2 on PC is fine but people who have worked all their lives don't have that luxury and some are worse off.
I don't see why I should not recieve the above, I have worked many years for a good life in my later years.
I also dislike that it is the wealthiest pensioners who say we should not have these things to help out, and have a good standard of living.

Well said, rafichagran. I am less concerned about the WFA being universal, probably because I heard so many people say they didn't need it until it was cut, and then suddenly switched to how they would be destitute without it, whilst simultaneously talking about home improvements and luxury holidays, but I agree about the rest.

People should never be penalised for working and doing what they can to be self-sufficient. Minimum wage should be high enough to ensure that nobody working a full-time week can't afford to pay the rent, put the heating on, have a decent standard of living and pay into a pension. Clearly that has not been the case for a long time, and there are people who have not been able to provide for older age, and nobody wants to see them do without. But that doesn't mean that those who have followed advice to pay into a pension should find themselves worse off. Moving forward I hope to see the new government make it possible for all 'working people'* to provide for themselves and their families, and for those unable to work to be supported. In the meantime, I don't want to see those who have suffered under previous regimes suffer, but neither do I think that those who have worked should be worse off than those who haven't. We need universal concessions, not means-testing.

*by this I just mean 'people who work'.

I finished work at 66, in receipt of new state pension, and a occ pension. I want to retain the bus/train pass, prescriptions and in my case the abolished wfa.
Putting up £2 on PC is fine but people who have worked all their lives don't have that luxury and some are worse off.
I don't see why I should not recieve the above, I have worked many years for a good life in my later years.
I also dislike that it is the wealthiest pensioners who say we should not have these things to help out, and have a good standard of living.

I like the word passive Maizie. it's very descriptive. However, I think I need an extra word. There is income you earn as a wage or salary - earned income. There is income you don't actively work for - passive or unearned income. But ...

One of the things Gary Stevenson talks about is the hollowing out of the middle classes. The Democrats seemed to be saying much the same thing. This is nothing to do with class but everything to do business. If you go to Google (or other search engines) you can put in "passive income business ideas" and lots will appear. This to me is hollowing out.

What we do need is the modern day version of two friends of mine who each, in the 1970's, took their skills into their garages, and started up and grew companies. I don't think the money they earned directly from growing those businesses - both were the largest employer in their town - is, for want of a better word, "bad" money. However, once earned and invested it turns to passive income.

I am struggling with what we should call the money in the middle that grows companies (small or large) to differentiate it from the very passively earned income?

M0nica I too feel the "bells and whistles" are demeaning and should go but not all "extras" are bells and whistles or even "extras".

Many are separate, in their own right, income based benefits that anyone can claim. The reason PC appears to trigger them is that, if your income is at the eligibility level required for PC it will be at or below the eligibility level of these benefits. Many who go on to pension credit could/should have already been claiming these already.