The problem with the benefit system

You keep telling us this but presumably that includes the value of their property. I think I'e asked this before but assuming that's the case do you expect them to sell their houses to realise their assets to live on? If, as you sometimes tell us, they're living in large detached houses with too many bedrooms do you want them to downsize and compete with those trying to buy their first home with buckets of cash available to outbid them? Who is going to be buying the million pound plus houses that become available? I know a lot of retired people and they range from early retirees with decent pensions (mainly people who worked in the public sector and especially teachers) to those who worked in low paid jobs all their lives with little spare cash to pay into any kind of private pension scheme, couldn't afford to retire when they technically could as a state pension wouldn't have been sufficient and are now just about surviving month to month.

Sure, we could means test everyone but whenever that gets suggested people say it would be too expensive to put in place (and I'm sure there'll be people who will take the view of why should they pay more into a private scheme only to get less from the State as a result.

@Pross - said “those who worked in low paid jobs all their lives with little spare cash to pay into any kind of private pension scheme, couldn't afford to retire when they technically could as a state pension wouldn't have been sufficient and are now just about surviving month to month.”

Is that the other 3 out of 4? 🏌️‍♂️

What about if you have a cheap house that's gone up in value a lot?

Inflation in the housing market might not mean what you think it does. The houses stay the same size I'm afraid.

So you think that people generate the ability to save money because their house value rises?

I'm just getting up to speed on some basic economic principles here. It's way more complicated than I thought.

The problem is that you see everything in terms of price. If you buy a house to live in, you have a house to live in irrespective of whether it goes up or down in value. It's a hedge against property prices.

I think there is a perfectly legitimate complaint against people monetising that gain and not paying any tax.

Why should someone who has, perfectly reasonably, hedged themselves be required to do that?

In any case, your wish is partly coming true as maintenance costs are now pretty chunky and many asset rich income poor pensioners are struggling. For example, some of my neighbours can't afford the service charge.

Bonds are a little different as you don't need to either buy or rent one in order not to be homeless.

As BB points out, energy prices etc may do the job for you but probably not at the rate you are hoping for.

Renting is fine if you can afford it. A mortgage is usually cheaper.

You're too fixated on the price of everything. People didn't invest £1m in a house, they bought a house for a lot less because they needed somewhere to live. Whether it is now worth £100k or £1m doesn't really matter.

Judging by the number of expensive but completely knackered properties we see, even in the freehold world, maintenance is something that many can't or won't spend on. Probably because the property market does not reflect those costs accurately.

It’s not as straightforward as that.

There’s a separate argument for more house building but I just don’t buy the argument because you made money on your house you should be exempt from being taxed on your gains.

Yes, with freehold properties, owners get the option of not paying for the upkeep, but that does reduce its value in the end. Either way, big properties cost money which many of the old can't afford.

I was thinking the other day that if a full refurb of a largish flat costs £200k and that the refurb probably lasts 20 years, then it costs around £10k pa. Throw in the service charge, utilties and general maintenance costs on top of the refurb, then it is going to be around £20kpa just to live there.

You're not dissuading me from the Oscar Wilde notion that you who know the price of everything and the value of nothing. Apologies if that is a bit blunt, but I'm channelling my newly learnt Dutch skills.

So you do want them to be in direct competition with people getting into the housing market then? Not sure that will be good for the younger generation.

Has a wealth tax been imposed anywhere else in the world?