The boomers ate all the avocados
Comments
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To a degree yes, but very few people buy an annuity any more, even with rates having improved significantly post 2022. You are now looking more at sustainability of withdrawals from a fund which is different. People want and usually need flexibility in retirement which an annuity doesn't offer, altough it does offer security (assuming you make the right choices when it is set up).
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Workplace pensions, probably the biggest success of the Tory Governments of the last 14 years. The success contrasts massively with the failure of Gordon Brown's stakeholder pensions.
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Yes, but you can just look at the plain vanilla CPI annuities available on a load of websites to determine this. You don't need to tweet the world to get an intricate irrelevant calculation. Most people would then compare this to their current salary.
I posted about this in the context of the lifetime cap. What's the maximum annual annuity it will provide? It's a lot more now than it was then.
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Ok. So say the state pension is now £250k and that it was £500k three years ago. What's next in the conversation?
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If a universal, triple-locked SP is more expensive than taxpayyers are prepared to stomach, do we A) make it not universal or B) keep it universal but change the model such that those tax receipts accrue some growth?
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
No and no. Did I need to know whether it was £257k or £250k to answer those questions.
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Let's put Dan to one side. Getting upset that a tweet is not a fully developed argument feels a bit like buying a bag of crisps and being disappointed there was no starter, drink, or dessert.
I think it's worth pointing out to the 'I paid my taxes' crowd that even the Taxpayer's Alliance think that the average household contributes just £180,000 of NIC in a lifetime, so it's a pretty good deal. Twenty years of SP is ~£240k. So that roughly answers my B) - paying it direct from taxation is comparable to the cost of an equivalent annuity, (I think it should be at least slightly cheaper). Total annual cost of state pension is reckoned to be £125bn this year. Total NIC receipts are higher than that thanks to Employer contributions (which the TPA bizarrely think can be counted towards individual's tax contributions) at ~£170bn but that doesn't leave much for all the other things NIC are notionally supposed to cover.
Both major parties think the public won't stand a higher NI rate, so something has to give. A lot of people say they are willing to pay more tax for better services, but when asked how much more, I think it tops out at about £100-£200 per year, which is not going to change anything.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition1
