Where are all the tax revenues going?

You're quite right, Monica, although NI has now increased considerably and contracted-out workers still have to pay the full amount (currently 12%). From the time I started work until I gave up full-time employment, I could always reckon that my total deductions (tax, NI and pension contributions) were about 40% (give or take a bit).

NI was set up to cover pensions, health and unemployment. As far as I know, it's never been ring-fenced. Governments have stealthily increased NI, while reducing the headline tax figures, but most people have ended up paying the same - apart from those who don't pay NI. I think that those who can afford it should pay the 'health' part of NI for life, as people in other countries continue to pay for health insurance.

The thing is I worked overseas for a number of years. I continued to pay contributions as I knew I would return home.
The asset stripping of the nations wealth maybe seems more apparent to me since I came home, it appears very stark.
As a nation we used to own our hospitals, schools and the land they were built on, we used to own our transport systems and our utilities. We used to own major industries. All of these are now owned by overseas investors and we have no say in what happens,. Eg. Tata Steel, EDF, etc. etc. etc. As a country we have been asset stripped by overseas investors. Any profit from these would previously have gone into the treasury coffers to fund library's, roads etc.now it goes overseas as profits, yet we are still being taxed as though as a nation we still have these assets to maintain.
Because we are now having to service rental payments and PFI Loans on things that we previously owned our general infrastructure is falling apart. To those who have remained here it has been an insidious process like someone stealing pennies from your savings jar little by little and you don't realise till you need it. You didn't check the jar because you trusted the thief. To me I just wonder what on earth is going on.

NI payments do not cover the full cost of providing our pensions, If those who have private pensions look back to their working days they will find that their payments into their occupational pension was always considerably higher than their NI payments, which also included payment for the NHS.

Joelsnan You are getting confused over privitisation. Privitisation is to do with who provides the service not who pays for it. Except for nationalised industries which were sold off 30 years ago, the current privitisation is to do with supply not payment. The state instead of running a service like education directly now pays someone else to do it for them. That usually ends up being more expensive.

PFI (private finance initiatives) where private companies built hospitals but then charged rent etc have proved to be inquitously expensive as the hospitals were often tied in to having all maintenance and other work done by the PFI company at outrageous, non-negotiable prices. Then there is the quality of PFI construction, as has been shown by the problems that Edinburgh is currently having with its schools. If the PFI firm had been the contractor working for a hospital trust then their work would have been checked and supervised by hospital appointed surveyors. But because they were building a building at their own cost to be gradually paid for by the hospital over a long period of time none of these checks were in place and nobody pulled them up if they used shoddy construction methods

Annie talk about pot calling kettle .....................! How on earth do you know who I mix with? It seems to me it is quite the opposite. You have no understanding of people who do own houses, do have pensions and savings, work full time and hard to do what they can for their families.

I have no intention of telling my story on here, none of your business but I can tell you I know a lot about people living on benefits, social services, children in care as well as people who are so well off they don't know how to spend all their money. Having lived in several different places my horizons are far wider than people who have always lived in roughly the same area. Having worked with all sorts of people and having more than my share of empathy I have an understanding of many people outside my own environment.

As a result of my experiences I don't go round making assumptions about other people nor do I judge them. Unfortunately it is abundantly clear that there are some on here who are quick to make such assumptions and to judge. I feel sorry for you with your blinkered attitude, you are missing so much.

Nonnie, wish you would mix with people outside your own circle. I could not afford to buy a house because I was widowed with two small children to bring up. I do not have a pension because I had no choice but to work part time in jobs which didn't have pension schemes, I worked part time because bringing up our daughters I was then carer for fifteen years for my parents , we did not claim any form of carers allowances . I do not drink alcohol ,

I did own a sweet little cottage, my parents, God parents and siblings bought it for me and my daughters . When elder daughter had second child and younger daughter had to have IVF I sold the cottage and gave the money to our daughters to help them, I moved into a private let. No social housing because I had made myself homeless ,fair enough.

Do not judge people from your ivory tower Nonnie please

I think NI has always gone into the general pot which might be why there is an issue. Maybe if it had always been ring fenced for says the NHS things would be clearer.

I am sure I am not alone in being annoyed that pensions are part of the Welfare Budget, makes it sound like we are getting something we haven't paid for. I am pretty sure that DH and I have paid in far more than we and our family have ever taken out and far more than we will get in state pension.

Nowadays there are a lot more people who pay for their own operations through insurance than there were when we were young, for which the NHS should be grateful. If I have a necessary operation privately surely everyone else should be delighted that they don't have to pay for it. Yes, you could take the line that it is privilege but I make the point that we have a choice how we spend out money and if you choose PMI rather than booze or whatever there is nothing wrong with that.

Thank you daphnedill I think I may be off tangent with my thoughts, but doesn't NI contributions pay or at least provide the majority of finance for pensions and benefits. My concern is where actual taxation raised through PAYE, VAT, Captal gains, inheritance, road tax, petrol tax, etc. etc. go when we are seeing increases in these taxes (maybe not PAYE) but other indirect taxation yet are having drastic reduction in provision. It appears to me like going shopping where last week you got a basket of food for a fiver, now you get one broken item for more cost. With all this covert privatisation of services going on I get the feeling (maybe unjustifiably) we are being fleeced to feed offshore investors.

I don't want to start a squabble about private versus public pensions. I was just correcting some misunderstandings.You are correct that current workers pay the pensions of current pensioners, which is why cutting the number of public service workers INCREASES the amount they're having to pay for current pensioners, who are living longer than the people they paid for.

You wanted to know where the national income goes and you've been given the figures. Just over half goes on state pensions and benefits for the elderly, the NHS and education.

It has always been the case that current workers pay the state pensions of current pensioners.

Workers in private companies have also had to increase their contribution by a lot or have reduced pensions. My choice was to take a lower pension overall or pay more and still get a lower pension but not as low as if my contributions had been the same. Very, very few private pensions are inflation linked.

JN, only a small percentage of public service employees are civil servants. The majority work for the NHS, schools, police, fire service, local authorities, etc. Their pension schemes are all separate.

The liability to pay retired civil servants will hardly have been reduced by cuts in the current workforce, except that there are now fewer people to pay the current liabilities, which is why current workers have seen massive rises in their pension contributions and an increase in the age when they can claim. This is to pay for the current pensioners.

Interest on the national debt costs about 6% of the Treasury's total income.

This is the current spending on pensioners:

Social security spending on pensioners, 2015---16

State pensions £92.1bn
Disability living allowance and attendance allowance £10.7bn
Housing benefit £6.8bn
Pension credit £6.5bn
Winter fuel payments and TV licences £2.8bn
Other £2.1bn

Total £121.0bn

www.ifs.org.uk/uploads/gb/gb2015/ch9_gb2015.pdf

This is about 55% of all social security spending and about 20% of all state spending and it's increasing in real terms and as a percentage every year, as spending in other areas is cut.

To put the amount into context, the Education Budget is about £84bn.

I thought that a lot of tax etc revenue goes to pay off the interest on the national debt, which continues to soar.
France has a special tax levied for the same thing (social charges.)

daphnedill I recognise that the government do still have the ongoing costs of current running civil service pensions, however this liability is drastically reduced through privatisation of services. I am not sure what the pension liability is to those employees TUPE'd from public to private employment. I assume that contributions will have been transferred to the private employers pension scheme at that time and the pension liability will have ceased.

Joelsnan, Yes, the 'ageing population' is the stock answer because it happens to be a fact. The elderly have never been so relatively wealthy as they are now and they live for much longer than even 30 or 40 years ago.

Don't get me wrong. Of course the elderly should have good health care and live in relative comfort etc, but the current generation of pensioners didn't pay enough, so somebody has to pay for it.

JN: 'But even then taxes went into the treasury to build, maintain and support, I don't think that this is wholly the case now.'

I agree with you. The post-war consensus is being dismantled.

JN, The government DOES still have to pay the pensions of former public servants. Local authority pensions have never been paid by the state. Employees pay quite a hefty chunk of their income and the employers (whether they are the local authority or a private provider) pay about the same. The reduction in the number of public servants actually means that the pension funds are having to pay the pensions of retired employees with a reduced income from existing employees. The Teachers' Pension Fund has always been different, because it is 'not funded'. The money from contributions goes directly into the general Treasury 'pot', which pays out to retired teachers. The scheme has actually become much more expensive for employees over the last few years and former public seervice employees won't get the full new state pension. The public has never directly subsidised the pension funds of public service employees. Most pension funds are actually in surplus. The public pays indirectly whenever a service or product is provided by human beings, but that's the same if you bought anything from a company which operates a pension scheme, because the cost of employer contributions will be factored into the cost of the product or service.

However, it's the cost of STATE pensions and all the associated costs of an ageing population which are the big expense to the government.

As for PFI buildings, the state still pays for them. I agree with you that they are a big liability and, with hindsight, the contracts were expensive. They were supposed to save money and stop the government from having to borrow money to pay for crumbling schools and hospitals, which had been neglected for years.

I agree with you about the deterioration in social care. I would add libraries, leisure centres, adult education and school transport to that list. There is no doubt that it is becoming more difficult for people at the bottom of the income ladder to access many services. Personally, I think it's short-sighted, but money has been taken out of the system. I would love to know how much money is being siphoned off to shareholders and CEOs of services previously provided by the state. I read somewhere that the internal market is currently costing the NHS approximately £3 billion a year for procurement teams - the accountants and lawyers who arrange for private companies to provide care. Academy chains are also top-slicing money from the education budget...and so it goes on.

MOnica I certainly am not looking back to the 50's with rose tinted glasses. I came from a poor family, my father was a miner, he suffered badly from dermatitis exacerbated by his working environment so was frequently off work. I remember scrabbling on the coal waste tips for coal to burn on the fire, my mother would eke out food to almost homeopathic dilutions to feed us. I saw school friends die of TB and polio. But even then taxes went into the treasury to build, maintain and support, I don't think that this is wholly the case now.

Daphnedill we have an ageing population is the stock statement to use for increased costs. It may be the case that the birth rate was falling, but is now levelling and this ageing generation is the healthiest of previous and potentially current generations. Financial input of this older generation through tax on savings and purchases is massive, only the most needy of this generation require pension credits or housing benefit as the majority have saved, bought their own homes, paid into private pensions, taken care of their health have been the longest working and therefore contributing than their predecessors. Even many of the younger generation will have worked fewer years due to longer stays in education. The older generation are therefore a lower burden on society than some would portray.

Daphnedill with the reduction in public service employees the government does not have to pay the work related pension. Of course there is still the state pension, but as tax payers we also paid the wages and pensions of those public service employeesf. Many of our infrastructure projects are now built by private investors and are rented back to end users. Majority new schools and hospitals are now built using this method. Sadly as a result of this our government now pays rent on building that were previously state owned and of course all of these private financed projects gave to pay investor dividends so rather than our taxes being reinvested into the treasury, they are now adding to the funds of mainly offshore investors.
Nonnie when I hear of 'older' people being thrown out of private nursing homes because of bankruptcy or similar when previously they would have been cared for in council run homes, when an 'older' person could get reasonable home help rather than the current maximum 15min slot. When you could safely drive on pothole free roads, when patients were not discharged from hospital 24 hours after major surgery. When new mothers received adequate pre and post natal care and support. These are a few off the issues that come to mind.

We came out of the both world wars with enormous debts and we still have debts from WW1 that have not yet been paid and exact annual interest payments.

But I do not think things were as ros yin the 50s as you paint them Joelsnan. Transport facilities were pretty awful, railway stock was extremely old, 50 years or more, stations were shabby and rundown. Ditto buses. The transport infrasctructure was partly protected and survived because of the mass exodus to the roads, which we used much less because most families were careful about buying petrol and using their car much.There were no motorwayas and much lower traffic densities and no huge heavy lorries meant that roads got much less wear and could be built to much lighter standards. I can remember casually accepting walks of up to 5 miles to get to somewhere I wanted to go because of the lack of buses or trains.

Nor was the care of the elderly anywhere as good as it is now, it was not unknown for elderly people to die of starvation and an aunt of mine who was a nurse, gave me some graphic descriptions of the condition of many of the elderly patients she was nursing, malnourished, frozen, living in one room with no facilities. Nowadays that can happen, but it is rare. No Pension Credit, no housing benefit or Council tax relief. All had to be paid from a meagre pension.

Electronics has not made health care cheaper. Until the 1960s hospitals could provided patient care; nursing, xrays and a few tests. Since then advances in medical care mean that many people who would simply have had nursing care until they died will live, but will need medication and ongoing out patients treatment until they died. Much run of the mill medical equipment such as CT and MRI scanners cost 100s of thousands of pounds and so does other equipment. Highly specialised beds, trolleys and other such equipment, much better salaries for medical workers all mean the cost of providing the health service has rocktted.

It is a simple fact that we have an ageing population. If you delve a bit deeper into the figures, you'll see that not only does the state spend 20% of its money on pensions, but the NHS spends a disproportionate amount of its funds on the elderly. Quite a high proportion of 'welfare' is also spent on the elderly for housing benefit, pension credit, bus passes, TV licences, etc. I think that's how it should be, but it needs to be paid for.

When state pensions were first introduced, they were from age 70 and most people only lived for a couple of years after that, even if they survived to 70. There was no housing benefit or pension credit, so if old people weren't quite wealthy, they had to live with families, who were expected to take care of them.

When I was researching my family history, I discovered one family in the early 20th century, who lived in a two bedroom house. One of the bedrooms was occupied by the two widowed mother-in-laws. Apparently they hated each other, so their last few years must have been hell for both of them. I can't imagine anybody these days would willingly tolerate those kind of conditions.

"Are our expectations greater now to expect at least the same provision as we had before? to my mind we are paying more and getting less." Please clarify what you mean by this.

Joelsnan, I'm not sure what you mean by 'pensions asset and infrastructure maintenance are now no longer a central government liability'. Pensions and infrastructure are very much a state liability.
20% of state spending goes on pensions. Pensions, health care and education cost approximately 50% of all state spending. The state funds major infrastructure projects, even though they are contracted out. Unfortunately, it’s not spending enough to maintain infrastructure, which has a knock-on effect not only on the state of our roads and public buildings, etc, but also employment. In the 1930s, the UK built its way out of recession, which provided modern homes and employment, which was then recycled into the economy.

PS. Basic income tax is lower, but most working people still pay something over 30% of their income directly to the government, because National Insurance Contributions are now 12%.