I believe the implementation of taxation on the state pension (because adjusting DWP’s pensions system to act like the payroll system it actually is and apply tax codes will be too hard) will have this effect. I await the squeals in a few years as fiscal drag bites and we see similar impacts to that of “coding out” Child Benefit”.One example of a hoarder isn't representative of the pensioner community - what's more representative is the numbers that frequent cafes midweek (especially garden centres) - squeeze that group and you will soon find unemployment going up (business closures), benefits going up and tax take coming down. Don't underestimate the grey pound:
Why the 'Grey Pound' is Shaping the UK's Future
The UK's aging population, and the combined wealth of individuals over 65 – often referred to as the "grey pound" – is fundamentally reshaping the - Discover articles on Retirement. Updated on April 30, 2025.britwealth.com
"The UK’s aging population, and the combined wealth of individuals over 65 – often referred to as the “grey pound” – is fundamentally reshaping the nation’s economic and social landscape. This demographic shift impacts everything from healthcare provision and housing demand to pension systems and workforce dynamics, presenting both significant challenges and exciting opportunities for the future.
"The term “grey pound” simply refers to the collective spending power of older generations. It’s a vast and growing economic force. Consider this: according to the Office for National Statistics (ONS), the number of people aged 65 and over in the UK is projected to continue to increase, reaching over 13 million by 2030. These individuals often possess considerable assets, including property, savings, and pensions accumulated over a lifetime of work. This concentration of wealth creates a powerful consumer base with distinct needs and preferences, driving demand in specific sectors."
That said, I do think that the old age pension should be locked at the rate it is when someone starts to pay 40%, and maybe reduced gradually (perhaps by the rate of inflation) for every maybe £10000 "other income" increase (but that would be complicated).
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Inequality between generations
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Railwaycat
Member
State pension is not taxed, but it's taken off your personal allowance - my state pension is £10000 (didn't have enough nics apparently), so I only get £2,570 of my British Coal pension tax free. So in effect it's already part of the tax system.
Snow1964
Established Member
Can look at tax free allowance both ways.
I have retired using company pensions which were available from age 60 (actually can take adjusted amount anytime from 55 on), part of that is taxed, so when I hit 67 and get state pension that will be 100% taxed at 20%
Really depends on which order you count the state, personal, company pensions (and I don't yet know which order HMRC will put them on my tax coding notice), as to which is tax free.
Railwaycat
Member
No, that will be tax free, but you will receive little or no allowance on your company pensions. They just do it for you.
The State Pension isn't tax free, but is paid gross. It is already possible through the old state pension to be earning more than the personal allowance.
Indeed, Reeves has signalled that people earning over the personal allowance due to state pension will be exempt from tax on the additional income:
People deriving income solely from state pension won’t be taxed, says chancellor
Clarification creates prospect of two-tier system for retirees solely on new state pension and those on private schemes
www.theguardian.com
Guardian said:
Though as that says that’s only the old basic or the new state pension. So existing pensioners who weren’t contracted out and have ended up with a total state pension above the threshold will continue to pay tax?Indeed, Reeves has signalled that people earning over the personal allowance due to state pension will be exempt from tax on the additional income:
People deriving income solely from state pension won’t be taxed, says chancellor
Clarification creates prospect of two-tier system for retirees solely on new state pension and those on private schemes
Way back in 2001, whilst on holiday in Florida, I watched one of the Barnes and Noble bookshop presentations* where the author of a book about inequalities in state education was in discussion of the book. I remember it was about something called The Canary Project. The project was conducted in an environment where every year, the state university looked to the same 'top' schools in the state for suitable freshers. The precept was that only the 'top' school could provide scholars that would succeed in university.
For a period, this was changed to selecting entrants from the best at every school including those establishments in the most deprived areas. The results after these students had reached the end of their graduate courses were that consistently, those from the poorer areas performed better than those from the 'top' schools, especially where their motivation was a key factor.
* Barnes and Noble is a large bookshop in the US and there were televised sessions of authors presenting their works and answering questions on the subject.
Check out prices of UK holidays. Benidorm, Malaga, Amsterdam are much cheaper than a weekend in Cornwall, the Lake District, Skegvegas etc.
Have you seen the price of meat joints in the last five years?
At 32 I am in a very very small minority of friends, and the only person in my grade/age at work, to have had kids. Nearly a decade older than my grandparents were able to, with similar education. No one is having kids, it’s incredibly expensive and there’s minimal support, either from the state, or from your parents and family who are all still working!
Lewisham2221
Established Member
That's not the point I was making. People are going for a party weekend in Benidorm et al rather than a night out in pubs and clubs of their local town/city centre. That absolutely isn't cheaper. The Spanish resorts used to be where people went for their one or two week summer holiday. Now people are going there a few weekends a year, as well as going on a summer holiday to somewhere more exotic. There's nothing wrong with people doing that, but you can't have your cake and eat it.
Railwaycat
Member
The state pension is effectively tax free, because it takes up your personal allowance and you don't get offered the facility to have it taxed and your personal allowance transferred to an occupational pension or other earnings - I don't know if they would do this if you asked them. Can you explain how the old state pension is greater than your personal allowance?
I kind of have this idea recently that a lot of things are actually almost the same but show up differently because of different circumstances.
For example, I think marriage is something that seems harder to achieve nowadays. The money to raise a family as well. However, maybe the marriage rates seem worse nowadays because in the past, less well off people, people with low social status, orphans, were much more likely to die in childhood. And then there is the survivorship bias I of stories. Also we didn’t see photos and information of as many people back then. We don’t often hear from people that are considered undesirable. The less well off nowadays make it to adulthood most times but then I guess they are probably still seen as undesirable in society so the marriage problem ends up standing out much more because it isn’t as hidden. I don’t think declining birth rates are as bad as mainstream media would want us to believe because most of history had much lower human population.
Also I think social media gives less desirable people more of a voice, can be a great equaliser. Recently I saw information on racially motivated murders in the 90s uk. The sad thing was that police sometimes got away with not giving the suspects harsh sentences and I couldn’t find photos of the victim and suspects. I think nowadays because of social media and smartphones stuff like this wouldn’t be able to happen without some mass outrage.
So in a sense I think, in some aspects, not all, we are held more accountable compared to the past. But in the past, before smartphones, there might have been a bit more freedom and flexibility regarding opinions and stuff. This is good, but then I guess also bad.
I guess the over consumption of ultra processed food drives up illnesses so the life expectancy may drop or stabilise but then there is also much better healthcare and awareness that it’s not good to eat ultra processed foods. Maybe cancer being detected in younger people is somehow linked to earlier puberty, idk though.
The internet has solved a lot of problems but also brought a lot of problems with it.
Maybe generations don’t have it harder they just have different issues due to different circumstances????
For example, I think marriage is something that seems harder to achieve nowadays. The money to raise a family as well. However, maybe the marriage rates seem worse nowadays because in the past, less well off people, people with low social status, orphans, were much more likely to die in childhood. And then there is the survivorship bias I of stories. Also we didn’t see photos and information of as many people back then. We don’t often hear from people that are considered undesirable. The less well off nowadays make it to adulthood most times but then I guess they are probably still seen as undesirable in society so the marriage problem ends up standing out much more because it isn’t as hidden. I don’t think declining birth rates are as bad as mainstream media would want us to believe because most of history had much lower human population.
Also I think social media gives less desirable people more of a voice, can be a great equaliser. Recently I saw information on racially motivated murders in the 90s uk. The sad thing was that police sometimes got away with not giving the suspects harsh sentences and I couldn’t find photos of the victim and suspects. I think nowadays because of social media and smartphones stuff like this wouldn’t be able to happen without some mass outrage.
So in a sense I think, in some aspects, not all, we are held more accountable compared to the past. But in the past, before smartphones, there might have been a bit more freedom and flexibility regarding opinions and stuff. This is good, but then I guess also bad.
I guess the over consumption of ultra processed food drives up illnesses so the life expectancy may drop or stabilise but then there is also much better healthcare and awareness that it’s not good to eat ultra processed foods. Maybe cancer being detected in younger people is somehow linked to earlier puberty, idk though.
The internet has solved a lot of problems but also brought a lot of problems with it.
Maybe generations don’t have it harder they just have different issues due to different circumstances????
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It’s not tax free, because the amount you get though it counts towards your taxable income. A lottery win is tax free, interest on an ISA is tax-free, anything you get from them doesn’t affect what tax you pay.
Before 2016, there were various schemes called things like SERPS or S2P where NI contributions went into an additional pension on top of the basic state pension and the payout depended on how much was paid in. If you have a full basic state pension that’s £176.45 a week (£9,175 per year). The maximum potential from SERPS is £222.10 a week, £11549.20 a year. Add the two together and you’re over £20k a year, well over the standard personal allowance of £12,570.
If your a drinker/smoker for a night out then you’ll probably be quids in and have a warmer time.
GusB
Established Member
Unfortunately we're in the situation where many employers expect people to have degrees, even when applying for some supervisory or entry-level management jobs (regardless of relevance to the job). In this respect, a degree has more or less become essential if you don't want to be stuck doing a minimum-wage job.
Going to university can be a valuable life experience for some (it didn't work out for me at the time) and to an extent it is a rite of passage. I don't agree that it's simply seen as a means of leaving home or deferring entry into the working world. Staying at home isn't always an option for young people, either because the course they want to study isn't available nearby or because home life isn't a very happy one.
I think that it should be funded by society in general as everyone benefits from people having higher qualifications in one way or another. Let's also not forget that the option to go to university is also available for people who may decide to study later in life.
As has already been said, it isn't always possible to study locally. Also, it's not always possible for everyone to get a job in their chosen field once they've graduated so they have to look to other areas. I wouldn't say that's a waste of an investment because the individual will still have gained other skills throughout their period of study.
I completely disagree with your last point; are you willing to provide an exhaustive list of courses for which you think there is little or no ongoing need? Who are you to decide?
WelshBluebird
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In terms of the university argument, giving young people an easy and affordable way of seeing new parts of the country and being around people from different backgrounds is something that is easy to ignore if you are from London, or Bristol or whatever. But for those of us who grew up in more rural areas, where the vast majority of people dont ever move away from their small home village, its really important.
I grew up in the South Wales valleys where those who didnt go to uni by and large live a couple of miles away from their childhood home at most and maybe apart from work havent really expanded their circle of people they know. Sometimes it really can be night and day and is sometimes a culture shock when I go back home.
That isnt to say either is better, more that university education at the current scale gives people that option. If we reverted to only a small handful of people getting that option, you are removing that choice from people.
Now maybe that isn't something we should be finding university education for, but I absolutely think it would be a shame for young people to lose that choice.
I grew up in the South Wales valleys where those who didnt go to uni by and large live a couple of miles away from their childhood home at most and maybe apart from work havent really expanded their circle of people they know. Sometimes it really can be night and day and is sometimes a culture shock when I go back home.
That isnt to say either is better, more that university education at the current scale gives people that option. If we reverted to only a small handful of people getting that option, you are removing that choice from people.
Now maybe that isn't something we should be finding university education for, but I absolutely think it would be a shame for young people to lose that choice.
TravelDream
Member
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- 1,158
It's definitely a massive issue that is heavily under-reported.
And it's hardest for the middle. Often called the sandwich class in other countries given how they are squeezed.
Rents/ buying a home being a prime example of it, but there are many more.
Child Benefit is a great example of how the benefit system doesn't work for the benefit of the country or for young people. It pays £26.05 for the eldest child and £17.25 for each additional child. The amount is reduced if either parents earns over £60k and is zero if either earn above £80k.
That's bonkers.
£60k is a good salary, no doubt. But it hardly a great one if you work in London.
Second, two parents who earn £59,999 each (so £119,998 in total) get full child benefit whereas a single income home which earns £80k gets nothing. Make sense? I think not.
Then when we compare to other countries. 'Poor' post communist Poland perhaps.
Their child benefit is 800 PLN per child regardless of the number of children or parental income.
£26.05 x 4.2 = £109.41 per calendar month. 800 PLN is £165 per month.
Basically it's crap and does nothing to support young people start families.
Bletchleyite
Veteran Member
I'd agree. We should have a German style system of apprenticeships too.
I also think one of the worst education decisions ever made was turning the respected vocational Polys into third rate universities.
I think something we need to be careful in this thread is to make sure we're comparing like with like. It's easy to get muddled up in comparing low income people from generation a, with middle class people from generation b. We'd probably have a more fruitful discussion if we try and avoid such cherry-picking.
The phrase ‘educated to degree level’ on a job spec always annoyed me, and that was when I was doing the recruiting. As I found out far too often, a degree was no substitute for common sense and I felt desperately sorry for heavily indebted graduates.
Of far more use, if a truly relevant degree wasn’t needed, were verbal and numerical reasoning tests. I’m not a graduate and was put through that wringer many times in my own career.
Snow1964
Established Member
Yes, Martin Lewis checked it, Rachel Reeves statement pensioners won't pay any income tax only applies to those with no other income.
Thought to be negligible number, because even someone getting a token £20 per year from a company pension where they worked 50 years ago will fail the no other income test
My perception is that while housing (as a specific example) has gone way up, the amount of money needed overall to enjoy a "rich" life has actually gone down substantially. People talking about inequality keenly bring up the first part, which is very valid, while ignoring the second.
Anyone with an iPhone / MacBook / Spotify subscription etc has the same phone / computer / music collection as a billionaire. Owning a car is meaningless if you live in a large city (another reason high housing costs in such locations are strongly offset by other factors) and in the near future I suspect it will become meaningless for smaller towns as well; most cars sit parked somewhere all day and night so autonomous rented vehicles to fill the gaps of public transport make far more sense. Even luxuries like flights are far, far cheaper than they used to be.
In my scenario my income has increased in line with career progression but my spending has not, to the point where I spend <50% of my income. On a day-to-day basis there really isn't much to buy. It's true to note that I couldn't easily afford a property, but I wouldn't want to own one – I've seen what a nuisance that is with leaks, repair costs, heating problems, appliances, damp, neighbours, redecorating, service charges, selling, stamp duty, etc. Far better to rent in a fully-managed/furnished block, and if I don't like my property or its management anymore I just move. (Again, also ties into the fact that you don't need many material things anymore - all my possessions could fit into a few boxes, plus the TV; last time I moved it took less than a day and I did it all myself).
Which ties into a final point: current generations are far more time rich than their predecessors. Not only has the number of chores decreased, but those that remain can be done online. No spending your time in supermarkets, post offices, banks, ticket offices, travel agents, blockbuster video, photo developing shops, waiting at the takeaway, taking cash out or endless other nonsense most of which I've probably forgotten about! High quality ready meals very accessible making it cheap and easy to eat well. And for many you have the luxury of working from home on top of this.
Anyone with an iPhone / MacBook / Spotify subscription etc has the same phone / computer / music collection as a billionaire. Owning a car is meaningless if you live in a large city (another reason high housing costs in such locations are strongly offset by other factors) and in the near future I suspect it will become meaningless for smaller towns as well; most cars sit parked somewhere all day and night so autonomous rented vehicles to fill the gaps of public transport make far more sense. Even luxuries like flights are far, far cheaper than they used to be.
In my scenario my income has increased in line with career progression but my spending has not, to the point where I spend <50% of my income. On a day-to-day basis there really isn't much to buy. It's true to note that I couldn't easily afford a property, but I wouldn't want to own one – I've seen what a nuisance that is with leaks, repair costs, heating problems, appliances, damp, neighbours, redecorating, service charges, selling, stamp duty, etc. Far better to rent in a fully-managed/furnished block, and if I don't like my property or its management anymore I just move. (Again, also ties into the fact that you don't need many material things anymore - all my possessions could fit into a few boxes, plus the TV; last time I moved it took less than a day and I did it all myself).
Which ties into a final point: current generations are far more time rich than their predecessors. Not only has the number of chores decreased, but those that remain can be done online. No spending your time in supermarkets, post offices, banks, ticket offices, travel agents, blockbuster video, photo developing shops, waiting at the takeaway, taking cash out or endless other nonsense most of which I've probably forgotten about! High quality ready meals very accessible making it cheap and easy to eat well. And for many you have the luxury of working from home on top of this.
I simply don’t recognise that picture as in any way representative. You have chosen to live a very asset light life, and that suits you. From your description, I also suspect that that you are single, and work very standardised hours.
You extrapolate from this to assume that this model works for others. My experience as a homeowner is that neighbours are as much or little a problem in any form of property or ownership, while the demands on stuff relate heavily to what one’s interests are and whether one has children.
For those who have jobs that are less regular, time is an issue. That goes double with kids, where much of life does involve taking them to and from school and activities - and that’s in term time.
There are labour saving appliances, but they have also transferred work into the house. When I was a kid in the early 80s, a friend’s mother (full time mother, wife of GP) had all their bedding laundered - a service that is very unusual now.
Do you have a partner and kids?
That needs to change. A starting point would be a return to the government working with employers to encourage more apprenticeships for young people coming out of school at 18, or even 16.
I'm sure it can be for some, however it really shouldn't be just about a rite of passage. Universities should really be about educating people in the most valuable of subjects, ones that give value back and lead to a career in that field for the graduate. And those should be publicly funded, not requiring student loans.
But university is not the only place where valuable life experience can be found, getting into employment, earning and learning real world skills can be just as useful, and maybe in some instances more so.
It really depends on the qualifications though. As someone who has been part of various recruitment drives into our department's sector, we're finding increasingly that many graduates that apply don't have the necessary skills even if they have qualifications. I know that sounds contradictory, but it's what we are seeing on the ground.
I know this is not going to be a popular opinion here, but as I've alluded to above some graduates come out of higher education don't seem to actually possess the actual skills they need. I can't go into specifics I'm afraid, but I've certainly seen evidence in my line of work where we ask for a specific set of skills yet many applicants seem to fall short despite the qualifications they posses that lead them to applying for specific roles.
I've wondered about the benefit of "University for all" for a long time, especially with the situation where many graduates carry serious debt into their adult lives, something that won't help them with things like their credit ratings. I do think a rethink is needed, where public funding is available to those aiming for the most valuable of studies (possibly needs a whole thread of it's own to define these, but a starting point might be the sciences) where students have the necessary O & A levels to qualify for them. For the rest I think if people want to undergo a "rite of passage", or to study in fields that may not be as necessary to the economy then they have to accept that there will be a cost to themselves, either up front or via loans.
This may not seem fair or promote equality, but I'm afraid the world doesn't often work on either. We need to re-focus higher education to getting the best of the best into careers where they can prosper and contribute, whilst also exploring new (or perhaps old) ways of getting everyone else into suitable employment and career paths that won't cripple them with debt for a bit of paper they will never use professionally.
I don’t hold out hope for this, though.
The last place I worked generally only employed people with post-graduate degrees, mainly PhD/DPhil types. I was recruited under a degree requirement, since I have one that was OK, but the boilerplate recruitment words required it.
After some muttering I was allowed to add “or equivalent experience” to my job adverts, which were generally for IT related jobs.
After I left I saw their job advert for a project manager requiring a “scientific” post-graduate qualification. I pointed out to the director that neither I nor the previous PM qualified, and she replied that she didn’t either!
I saw too many job adverts making requirements of things that should be desirable.
My first recruitment, where I got rid of the degree requirement, was more than adequately filled by someone who didn’t have a degree, but who had years of experience.
I was also fortunate that although my first job was through the graduate recruitment process, and I said I expected to get a 2-1, I was never asked to prove this, fortunately since I got a 2-2!
I agree with much of this but I would encourage you to have a second think about only needing to rent. That may suit your purposes now but what will happen when you are in your 60s or 70s, looking to retire? You don't want to be paying rent every month when your only income is your pension. That's not much of a retirement. Ideally, you should have bought somewhere and paid off the mortgage by the time you retire.
Employers are changing, as they realise that it's adding costs without adding quality.
My former employer is firmly mired in practises advocated by second-rate business schools from the 1960s, being part of the civil service and therefore not really accountable. But there’s always hope!
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