In the 2017 general election, 69 per cent of voters aged 70-plus plumped for the Conservatives. Yet there are two proposals to reward those voters with higher taxes.
The first, apparently from within government, is that 1.3m people working beyond state retirement age should pay national insurance (NI) on their earnings. This would be a 60 per cent tax rise for those paying basic rate tax – that is, 12 per cent NI in addition to 20 per cent income tax.
Could you imagine the uproar if such an increase were proposed for any other group?
The following day an even dafter proposal from The Resolution Foundation suggested that pensioners who own their own homes should pay more in NI, council tax and inheritance tax to fund, among other things, a £10,000 citizen’s inheritance for 25-year-olds.
Could you imagine the uproar if such an increase were proposed for any other group?
This was backed by the head of the CBI – an organisation which appears more ridiculous with every utterance. Among those responsible for this report, as chair of its Intergenerational Commission, is Conservative Lord David Willetts.
There is a delusion among the great and good that those who work beyond retirement age do it for fun. Perhaps for many, this is true.
But among the working and lower middle classes, earning into retirement can be a necessity, such as to repay the mortgage. They do not benefit from the kind of pensions awarded to MPs and civil servants. Taking NI from them would be a wholly unjustified added burden. And why should working pensioners be expected to solve the social care problem and fund handouts to strapping 25-year-olds? Funding social care must be addressed but surely there are better ways.
Research published by Bupa in 2011 estimated the median survival time in a care home was 584 days. The mean figure was 909 days, but this was distorted by some who survive a very long time. One Bupa resident had been in a care home for nearly 24 years. Based on this, most homeowners can self-fund.
If these proposals came out in August I could blame them on the silly season. Prime minister Theresa May is a sensible politician. Surely she will not give them the time of day.
Sensible ways to invest £10k
The Sunday Times has a very useful column called ‘How to invest £10,000’.
I was faced with this conundrum recently when my mother-in-law decided to bestow a sum on behalf of her grandchildren. Note here that she is choosing to give her money to her kin, rather than being forced by government to give it to complete strangers.
Both of my stepsons were extremely touched by this gift and have approached it in a way they would not have had it been a state handout. Steady Eddie number one immediately put his into a fixed rate cash Isa.
Number two began talking about bitcoin with a twinkle in his eye hoping to provoke frothing at the mouth from me. However, he was keen to invest in the stock market, so we set about finding four suitable funds.
After some discussion we settled on two Lindsell Train funds, Global Equity and UK Equity, along with Standard Life UK Smaller Companies and Fundsmith Equity. The money went in weekly over the course of a month, which proved rather fortuitous as the market fell after the first investment. What has surprised me is how engaged he has been. There is nothing quite like having money in the market for creating an interest in investing.
He has been adding his own monthly savings and checking the status of his investment almost daily via the phone app – something which provoked rather too many text messages in the first couple of weeks. Best of all, grandma is very happy that she has encouraged this grandson to start taking his money rather more seriously.
Playing politics over tuition fees
I watched the BBC’s Question Time for the first time in months having become bored with seeing politicians and left-wing ‘comedians’ trotting out the same old views.
MoneySavingExpert’s Martin Lewis turned in a masterly performance, putting politicians in their places. In particular, he castigated them for playing politics over tuition fees, warning their rhetoric is scaring youngsters from attending university.
As I have pointed out many times, these are really a graduate tax, not student fees. That is also how Mr Lewis sees it. What a shame many politicians are too dumb or stubborn to understand.
Tony Hazell writes for the Daily Mail’s Money Mail section
