Public sector pensions for new entrants should be stopped immediately because they are an unsustainable drain on the country that the UK simply cannot afford

The longer the Government prevaricates the harder it becomes to implement and the greater the problem becomes. Furthermore, there is no good reason for refusing to introduce the changes as soon as possible

The Private Sector decided long ago that this type of pension was totally unaffordable commercially. Therefore why are they acceptable in the Public Sector because they are just as unaffordable and the only difference is that they are funded by the state (rest of the community). This results in normal commercial considerations being ignored because the State is percieved as a bottomless pit and not required to make a profit

Once again mutualising benefits for one sector over the entire community, who even though they contribute to Public Sector Pensions receive nothing in return despite having paid for a comfortable retirement for others; whilst possibly in pension hardship themselves!

Very simply just place all new Public Sector employees pension funding on the same basis as that of the Private Sector.

The benefit would be an immediate small reduction in state liabilities with savings becoming greater over time, until all Public Sector Pension liabilities have washed out of the system in say 50 years. The Public Sector Pension debt liability will only reduce and benefit the country immensly over time as well as doing away withe the current pension aparthide, where the only winners are those in the Public Sector

This is an equitable and practical solution to reducing liabilities and must be introduced with immediate effect for new entrants

Tags: | Categories: UK Government

This is a difficult area to address without the emotive language and strong feelings that inevitably result in any suggestions of change

Nevertheless, change must occur because the country simply does not have the resources to sustain an open ended funding requirement

There are a number of components that make up the demands on welfare

  • Migration
  • Asylum Seekers
  • Jobless

Migration

Nearly every country in the world encourages the 'right kind' of migration and prohibits foreign nationals with nothing to offer. Potentially they contribute little to the country and are regarded as a drain on the available resources.

Nevertheless, the EU has an 'open door' policy that allows free movement of national between countries. However, the disadvantage of this approach is that it ignores the disparity between average salaries in the different countries. The result of this disparity is a massive population polarisation to regions that offer the best opportunities, or best welfare benefits

Therefore the question has to be - 'what attracts such large numbers of foreign nationals to the UK' ? Could it be the welfare system as a whole and more specifically benefit hand-outs on arrival and free access to institutions such as the NHS ?

Asylum Seekers

Surely the underlying concept behind asylum is that those in fear of their lives are given shelter in the first 'safe haven' country they encounter?

Any other approach, such a choosing a country in which to apply for asylum, results in a lifestyle choice, which arguably, cannot be the ethos behind the process of asylum

With this in mind why does the UK become the country of choice for many asylum seekers, once again is it because of the benefits system and what can be extracted from the State?

Jobless

A lot of this area revolves around a perceived 'quality of life' and not attaching any stigma to those unfortunate enough to be without employment

However, it has never really been explained to the public at large why luxuries such as Sky television, top of the range mobile phones (iPhones) etc. form part of a basic lifestyle; especially if funded by the taxpayer

Also what about other areas such as smoking and alcohol? Bearing in mind that the State recognises the harmful effects of smoking and subsequent pressure on the NHS, it does seem rather incongrous that the taxpayer is funding these past times instead of encouraging people to stop smoking; especially with the prohibitive costs involved

Possible Partial Solution

Clearly the aspect that makes the UK attractive to foreign nationals is the Welfare System and all it's components

Therefore why not render it unattractive to those entering the country until they have been here 5 years.

By unnatractive is meant - ineligible for any State Welfare whatsoever for the initial period of 5 years and then potentially limited to what has been paid into the system by way of National Insurance, Tax etc.

Tags: | Categories: UK Government

This is always going to be a difficult subject because no-one wants those in real need to be left destitute.

Nevertheless it is interesting how the extrapolated figures pan out when compared to equivalent salaries. Furthermore, it does beg the question of why anyone should go to work if their prospective salary is less than £34,000 per annum

There are two ways to measure Poverty; either Before or After Housing Costs and most experts come down in favour of After (AHC) because it is not biased by property prices (higher rents) relative to the area where people live (i.e. London .v. Northumberland)

Here is a link to a Minimum Income Calculator

According to Child Poverty Action Group (CPAG) - UK Poverty Line the defintion of poverty level goes something like this

'.. At CPAG, we consider a better measure to be the income a household has left AHC (after housing costs), as this more realistically reflects the amount of money families and individuals have at their disposal. All the figures we use are AHC unless otherwise stated ..'

Taking the CPAG example of a couple with:

  • One child under 14, one child over 14 = £346 per/wk or £17,992 per/annum

The abbreviation AHC (after housing costs) is used a lot in determining levels of poverty, however, it is difficult to find a definative explanation as to what is included in this category as 'housing costs'.

Nevertheless 'housing costs' are deemed to include - rent/mortgage interest payments, structural insurance premiums, water charges, ground rent and service charges

Therefore in order to determine the equivalent value of the Poverty Level to a family in work and paying tax these figures need to be grossed back up to arrive at an equivalent salary/wage

Description Weekly Amount Annual Amount
Poverty Level as above 346.00 17,992.00
AHC Details (Estimated)
   
Rent 115.00 6,000.00
Council Tax 24.00 1,248.00
Water Rates 5.00 260.00
Structural Insurance 2.00 104.00
Total Net of Income Tax/NI 492.00 25,604.00

 

Tax Calculations Weekly Amount Annual Amount
Gross Pay 653.85 34,000.00
Tax Free Allowance 155.87 8,105.00
Total Taxable 497.98 25,895.00
Tax Due 99.60 5,179.00
National Insurance 60.94 3,168.96
Total Deductions 160.54 8,347.96
Net Earnings 493.31 25,652.04

Therefore in order for a salaried wage earner to match the CPAG recommended net amount of £17,992.00 per annum they would need to be earning approximately £34,000.00 per annum

Otherwise it is simply not worth going out to work because (apart from self asteem) you will be worse off than doing nothing!

Tags: | Categories: UK Government

Nick Boles (Planning Minister) seems to have let the cat out of the bag about migrants accounting for almost half of the housing demand in the UK

But then we all knew there was a clear link anyway, despite denials by previous Governments and any reasoned debate being shut down by the PC brigade with accusations of racism whenever the argument went against them

Is this more about a flawed immigration policy over the past 10-20 years rather than flagging house building? An immigration policy which everyone now acknowledges was wrong; although, rather late in the day after any potential damage has been done

The solution being put forward is to develop large swathes of the English countryside (further 2-3%) in order to redress the balance.

Mr Boles mantra seems to be '.. everyone has a right to live somewhere that is not just affordable but that is beautiful and has some green space nearby ..' and that this is a '.. basic moral right, like healthcare and education ..'

Get real Mr Boles! This is another crackpot idea from a transitory politician who does not have to live with the long term results of his policies. The countryside is a finite resource and one cannot keep eroding it every time there is a problem in another area that politicians do not really wish to address, because eventually it will be exhausted - and then what? Or do you really care because by that time you will have made your mark and be long gone ...!

Quite apart from the fact that one is potentially removing productive land out of growing crops. Taking this approach to it's logical conclusion it results in housing at the expense of food - not an advised policy. Or does Mr Boles intend to rely upon food imports to compensate for any shortfall; so that the country can be held to ransom in the future?

But the problem is this approach may be a solution to todays issues, however, without a radical change in the immigration policy the problems will simply recur again in 10 or 20 years time. At the end of the day there is not enough green space to be concreted over every time politicians try for 'quick fixes' rather than addressing the underlying problems. The country really needs sustainable well though out solutions and NOT quick fixes to these issues which take the easy way out!

Furthermore, nothing has been said to address the huge inflow of foreign nationals under the EU 'open door' policy or chucking out those who are here illegally and have overstayed their welcome; other than to offer yet another amnesty because they cannot be found and our border controls are either hopeless or massively under resourced

Every aspect (housing, food, population etc.) forms part of the equation and must operate in harmony, otherwise the whole thing is out of balance and one ends up sacrificing one aspect to satisfy the demands of another. This is what politicians simply fail to grasp and is also in part why the UK & rest of the world is such chaos at the present time.

Tags: | Categories: UK Government

Being flooded is a simply appalling experience in the first place and is inevitably made far worse by a loss of insurance cover.

However, insurance is a risk business and premiums are affected by the underlying assessment of risk and probability of a payout. Insurance premiums are a commercial decision based upon the likelihood of events occurring and are weighted accordingly

Therefore if one lives in the middle of a flood plain then the risk of flooding is infinitely greater than living half way up a mountain - those are the facts of life and premiums should reflect this position. Furthermore, nobody forced property owners to buy in these areas, it was their choice and if it was an ill advised decision why does everyone else have to bail them out?

Unfortunately people make bad decisions or simply get caught out by events, but is it really the responsibility of the Government (taxpayer) to bail them out for bad judgement or unforeseen situations?

There are far greater injustices in the country that Governments need to address (i.e. failing to properly regulate, Equitable Life etc.); so why does underwriting flood risk insurance premiums take pole position? Unless of course it is a PR exercise by a posturing Prime Minister

Alternatively, what are the boundaries of Government interference with insurance - do we propose to

  • Assist young drivers with huge insurance premiums? After all they may never have had an accident are being penalised purely on their circumstances of age and sex.
  • Help old age pensioners obtain realistic insurance premiums
  • and so on .... the list is endless but a line needs to be drawn otherwise the whole matter becomes absurd

Clearly these are not a viable suggestions but in the same vein, why is underwriting property flood insurance deemed acceptable? Therefore, should the UK turn into a nanny state whereby every decision by an individual becomes underwritten by the the Government, as an electioneering policy?

Finally assuming that the Government does go ahead with mutualising 'at risk' flood insurance properties - is there a 'quid pro quo' whereby the taxpayer gets a percentage of the properties eventual sale price for helping to maintain the property value in the first place?

Nevertheless, the fundamental question in all this is why have the planners allowed properties to be built in entirely unsuitable places. The picture below shows Tewkesbury Cathedral in the 2007 flooding - notice how it sits on an island surrounded by water

Why do planning offices never take account of history or the location of historic buildings which invariably identify safe ground opposed to potential flood plains - have we learn't nothing since medieval times?

Tags: | Categories: UK Government

Sunday 04 November 2012

The Treasury told Financial Mail:

‘The changes to income drawdown policies have given individuals more choice over the use of their pension savings to provide a retirement income.

‘Before the Government made these changes, those over 75 were effectively compelled to use their pension fund to buy an annuity. Since the risk of funds being depleted increases significantly at higher ages, we have had to strike a balance between generosity on capped drawdown and ensuring that people do not exhaust their pension funds prematurely.

‘The Government recognises gilt yields are currently low, and we have sought to provide some protection to individuals receiving drawdown pensions who are facing their drawdown pension review.

‘If the 15-year UK gilt yield should drop below two per cent, the scheme administrator will calculate the basic amount for drawdown purposes using the gilt yield figure of two per cent.’

Hang on - '.. The Government recognises gilt yields are currently low ..'

Of course they should, after all they were instrumental in the 'lowering' process and Gilt yields are a direct result of Government/BOE monetary policy, so between these two bodies they have engineered the situation of artificially low interest rates in the first place.

Futhermore the BOE is actually profiting on their own account from this misery they have inflicted on others

Unfortunately the Governments 'holier than thou' attitude is simply dishonest - although, goodness knows why are we surprised?

Perhaps someone in Government could explain how a sensible retirement income can be achieved when '.. The changes to income drawdown policies have given individuals more choice over the use of their pension savings to provide a retirement income ..' means pensioners drawdown income has been slashed (up to 40% down) by badly thought out GAD process & BOE artificial interest rates

Come on Mr Osborne / Mr Cameron and

STOP IGNORING THOSE REPRESENTING PENSIONERS

You have made serious errors in this matter. Therefore you need to sort out the situation urgently and not just ignore the hardship you have imposed on those who do not have the power to stand up to you

All you are doing is behaving like privileged thugs and mugging old age pensioners

Tags: | Categories: UK Government

We are now witnessing yet another complete howler from a totally disfunctional Conservative Government hell bent on daft policies of 'form over substance'

This subject was originally mentioned in May 2012 - SIPP Pension Income Scandal and is now finally gaining momentum once eveyone realised what a crass approach the UK Government has taken over the matter

Not content with mutualising everyone elses problems over the entire UK population (i.e. flooding, negative equity, interest rate cuts, quantative easing ... and so on the list is endless) they now propose to finacially cripple pensioners and those who have saved by making their own pension provisions and saying they cannot have access to their own savings

The fact that the Government is being lobbied by Sage, AJ Bell, members of the public and others over their wholely inequitable seems to fall on deaf ears and so far the Conservative Government has refused to budge on the issue

As we have said before this is completely unfair treatment of those who have made their own pension provisions and coming from a collection of politicians who do 'very nicely' themselves on the pension front is an absolute disgrace

Quote

'.. A combination of drawdown rules introduced from April 2011 and continued reliance of 15 year gilt yields as a means of calculating maximum drawdown income has created an imbalance ...'

and let us not forget that 15 year gilt yields have been artificially fixed by the Government anyway

Frankly Mr Cameron needs to stop playing telephone footsie with Rebecca Brooks and start engaging with the real issues - a career of PR and spin just will not pass muster any longer

Could we suggest that all politicans take and immediate cut in their own salaries equivalent to that imposed on pensionser by artificial interest rates, QE and a reduction in GAD rates. Hitting these politicians in the same manner as they have targeted pensioners would drive home the message, especially if it had an impact on their pockets

References

Time to save those hit by unfair pensions drawdown rules

Fury over another pension scandal

Slashed our income by HALF': Drawdown limits cause misery for thousands AND forcing pensioners to sell their homes

Tags: | Categories: UK Government

It almost seems as though the politicians had an acceptable idea but suddenly realised what they are saying. The effect on them personally would be unpalatable and they have suddenly decided to backtrack by 'rubbishing' their own idea

Well chaps we have a good idea about raising more revenue - but oops.. we are going to be in the firing line. Unfortunately we have already gone live with the message so now we need to discredit it to get ourselves off the hook

What on earth is the flaw in removing the cap on domestic rates and charging everyone irrespective of location or property the same fixed annual percent on the value of their house? The value of their house would be determined by the last recorded purchase price on Land Registry; which means there can be no argument about value

There are many benefits from such an approach:

  • Asset rich/cash poor people who have had their house for many years would only be charged on the original purchase price of the property 10-20 years ago
  • Equitable - everyone would be treated in the same manner and pay the same proportion of their property value. No free-ride for high value properties
  • Simple to collect with no challenges to valuations - after all you bought it at the price recorded in Land Registry
  • Easy to change the rate percent universally
  • With some 'Tax Avoidance' schemes (or IHT wheezes) the only tangible asset is the persons residence and to collect tax (rates) in this manner each year would be one way of mitigating the eventual avoidance

Of course the downside is that those with expensive properties would suffer an additional burden but surely that is recognised one as of the attributes of purchasing this type of property

There we have it! - the only hurdle to charging the same percent all round for rates is the will of the politicians; after all none of us would want them to be out of pocket

Tags: | Categories: UK Government

08 October 2012

Child Poverty Action Group's Chief Executive, Alison Garnham - CPAG Press Release

'.. With this abhorrent proposal, the Chancellor is saying that some children will be marked out from birth as second class citizens with their lives worth less than others ..'

'.. The Chancellor is utterly wrong to claim that families out of work are better off having more children. If a family without work has another child, the shortfall relative to a family’s minimum need increases and parents must make even more sacrifices to meet their children’s needs. But working families do better because on top of wages they can get in-work benefits like tax credits and housing benefit ..'

This is an inherently flawed Press Release ..... all it does is ignore the obvious in favour of providing emotive language and more unlimited financial support. At what point do the families concerned try to help themselves with fewer children and endeavouring to avoid generational benefit dependency?

Lets address the statement '.. some children will be marked out from birth as second class citizens with their lives worth less than others ..' The only difference here is that other sectors of the community decide not to have further children in the first place (because they may not be able to support them) rather that producing children and then holding the community to ransom with comments such as this one from CPAG.

The important missing word here is 'choice' and with this in mind why do some of those on benefits produce more children that other sectors of the community? If this is not the case then the CPAG comments have no basis because there would be nothing to defend!

JRF (Joseph Rowntree) Foundation - Child Poverty In Large Families (3/4 or more children) recognises the greater incidence of poverty in larger families but rather than addressing the root cause tries to ameliorate the situation by concentrating on the tax situation instead of encouraging smaller families for those on benefits.

The real question is surely - why are these organisation refusing to address the difficult issues?

'.. However, in 2004/5, 50 per cent of children in 4+-child families were poor compared with only 23 per cent in one-child families ..'

'.. Helping large families at the expense of small families may lead to an increase in child poverty overall, because of the relative numbers of children in the different-sized families ..'

Furthermore, there does not seem to be anything about 'social responsibility' or the 'affordability' of having families larger than ones income can sustain; which the rest of the community must take into account.

Having looked at CPAG's web site and accompanying information there do not seem to be any suggested solutions put forward by CPAG themselves on how to address these difficult issues; other than demanding a infinite amount of resources to be channelled into the problem.

Is the solution really simply a financial one? What about encouraging smaller families or is 'restraint' a dirty word that none of these organisations wishes to address?

Tags: | Categories: UK Government

The latest example of this are members of the police force (Chief Constable Sir Norman Bettison - Hillsborough)

Probably more important is whether retirement heads off any further investigation and why are they permitted to retire early on 'gold-plated' pensions?

If there is a case to answer and it is proven then they should be stripped of their pension - after all the state should not really be in the game of rewarding failure or wrong doing with taxpayers money

Therefore can someone please explain why these individuals are permitted to retire rather than face due process and if found guilty thrown out

Tags: | Categories: UK Government