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Can we afford to featherbed our pensioners?
Interesting comment piece from the Institute for Fiscal Studies -
Can we afford to featherbed our pensioners?
Here are two facts. First, state spending, after inflation, won’t be much different in 2019 to what it was in 2010. Second, we are in a decade of extraordinary public spending cuts, which will mean spending on services such as police, transport, local government and environment, being reduced by more than a third over the same period.
How can both be true? Debt interest payments and an ageing population are the main answers.
Because we have borrowed more, we have to pay more interest. That reduces the amount that can be spent on services. Ageing has a similar effect. More older people means more spending on them and a squeeze elsewhere. And we are living through a profound demographic change. By 2020 there will be about two million more people aged over 65 than in 2010. That’s an increase of 20 per cent in a decade.
One consequence is increased spending on pensions. Despite increases in the state pension age for women, we are likely to be spending about £12 billion more on benefits for pensioners in 2018-19 than in 2010-11. Spending on public service pensions for retired nurses, teachers, civil servants and so on, is also rising fast.
At the same time an ageing population puts increasing pressure on the health service. The NHS budget may be “protected”, but it has to cope with a bigger and older population. The Institute for Fiscal Studies (IFS) calculates that keeping health spending constant over the decade will amount to a 9 per cent cut if the population had remained the same.
In the long term these changes will continue. To accommodate them we have three choices and only three ...’
Interesting comment piece from the Institute for Fiscal Studies -
Can we afford to featherbed our pensioners?
In the long term these changes will continue. To accommodate them we have three choices and only three ...’
Nah, it’s only two. Revolution or barbarism.
Paying pensioners too much. Over generous public pensions. Cut more and tax more….......
Pity the City is having to face the same problems…..
“A proposed £25m pay package for the new head of oil and gas giant BG Group has been branded “excessive” and “inflammatory” by the Institute of Directors (IoD).” BBC webpage today
And i thought Logans run was science fiction…..
To my mind a very interesting and perceptive article. The national debt is now about £1.4 trillion and rising fast (despite nearly 5 years of “austerity”); we are paying approaching £60 billion per year just in interest on this debt.
I don’t pretend to have any idea how to deal with the problem but it will just go on getting worse if present policies remain in force. But I do believe its no use squeezing the uber rich or bashing the bankers & expecting that to solve the problem - it is on much too large a scale for anything worthwhile to come out of that approach.
In reality I suspect we have been sleep walking into a major crisis for years without realising it; I doubt there are many people who have a good idea of how to get out of it. Perhaps when the sleep walking ends we’ll be in a waking nightmare. I do hope not!
I’ve been working on a project for the Isle of Man government looking at their whole benefits system. Some stuff that’s been published illustrates a number of the issues which have been considered.
http://www.theguardian.com/money/2014/nov/07/isle-man-government-move-pension-age-74
Derek
I know it won’t solve the problem but If you’re suggesting that “bashing the Bankers” is taken from us it really will be a gloomy Friday.
P.E.T.E.
Far be it from me to spoil your fun but can’t you find another suitable target? I find going on with the same one for too long becomes a bit boring! And - to be more serious - politicians who know better (or should do!), eg the Miliband/Balls axis, use it to lead a lot of people to believe screwing the bankers really is the answer to the problem.
But please don’t read this as me supporting bankers - a lot of the things they’ve done are indefensible, as is the £25M you quote (if accurate).
I think it is one of those issues that needs to be discussed but is so difficult to do so. Not that long for me to reach the magic age now so I will…
To give one HB issue (bedroom tax): I remember someone from a Local Authority saying to me “how do I explain to a 58 year old with major health worries that her two bedroom flat is too big for her needs and she may have to pay extra when her friend in her 60’s in excellent health lives in a 4 bedroom council house around the corner ...and is exempt”.
Why do those of pension age have their own Council Tax Support schemes in small rural areas which is only 20% working age anyway? The latter cannot possibly make up the deficit in funding….
Where I live by the coast in South East England, there are petitons and campaigns…“no more pensioners”. Say no to more purpose built blocks, sheltered and supported housing and so on. People marching in support of this…
Seems extreme of course…yet the town is steadily getting older and the local Council is steadily being forced to close every service they were providing to non-pensoners.
hbinfpeter
South Coast Coastal Town with too many pensioners…...reminds me of a joke.
Driving south the roadsign sign said:-
“Dover for the Continent; Eastbourne fior the incontinent”
Eastborne is not far away….
The Office for National Statistics divides England and Wales into over 35,000 areas averaging about 1,600 people - and two of the top 10 areas with the most elderly populations are in Christchurch.
Most people over 65
Christchurch
West Somerset
North Norfolk
Rother, East Sussex
East Dorset
East Devon
Tendring, Essex
Arun, West Sussex
East Lindsey, Lincolnshire
New Forest
A pocket of Eastbourne has the oldest median age of 71.1 years.
Can we afford to featherbed our pensioners?
If we want to get our spending on “social protection” up to the level of comparable (not A 10s) European economies. We have to start spending more.
Any ideas how we can do this?