Thursday, May 25, 2006
Death And Taxes
The problem with death is that it's getting much less inevitable. The golden superannuated third age is all very well, but it's damnably expensive and we taxpayers' can't afford it. Have we been rescued by today's Pensions Whitepaper?
If the numbers are to be taken at face value- always a big IF where Gordo's involved- then the proposed package takes overall state pensions spending up by about 1.5% of GDP by 2050. That's in line with the projections in the Turner Report (see previous blog), and doesn't feel too bad in the circs.
But as has been widely reported, it's not enough to sweep away the nightmare of Gordo's pensions means testing, with a third of pensioners still on means tested benefits in 2050. And as the demographics move inexorably towards greyer votes, the pressure will remain for yet more taxpayers' money to be spent on pensions. Taking a thirty year view, we taxpayers remain in serious danger.
So forget retirement at 68: from a taxpayer's perspective, we should be pressing for an increase in the state pension age to 70. As we estimated previously, that would save another 1.5% of GDP. Which would be just about enough to abolish pensioner means testing.
Much better for taxpayers, although from a personal standpoint you might want to start reviewing your B&Q job options now.
Pic shows superannuated Pensions Secretary Andrew Smith starting at the Reading store.
Posted by Mike D at 5:57 pm