Possible new tax for over-40s to pay for social care

[HACO]

I'm not talking about people who have actually put in the effort and worked their whole life but through personal circumstance not been a top revenue earner with a gucci belt. I'm talking about people who have had the means, but not done so - because let's face it, it seems they're actually the smart ones.

Tell me where's the incentive to "better yourself", make sacrifices and save for retirement if in the end the outcome is the same as if you hadn't bothered?

Why should I not sell my house and spend the money on fast cars, expensive holidays, hookers and coke, and let someone else pick up the bill when I need to go into a nursing home? I'll end up with no house either way, but at least I'll have enjoyed life.



I don't know if it's a new thing, or just my age, but I've noticed more and more recently that living in this country really doesn't reward hard work and success; it just incurs financial penalties and breeds contempt.

You want to spend 3+ years at uni being skint, living on beans on toast while doing 16+ hours a day studying and working 2 jobs just to pay the bills? Go for it - you'll also be paying that back for the majority of your working life.

You want to follow up the above by going into nursing/medicine in general - a career which is critical to society, and usually involves working long, hard, antisocial and stressful hours? Wait.. you actually want to get paid a decent wage? Lol, have a round of applause instead

Well done, you've finally got yourself into a secure financial position to be able to afford your dream car. Here you go, have a nice scratch down the side of it and a knife through your tyres, just to remind you to know your place.

Oh, so instead of wasting your money on expensive foreign holidays every year, a new car every 3 years and the latest gadgets and toys, you've paid off your mortgage earlier and saved a good chunk for retirement? Nice house. We'll have that then.

I actually agree, everything is too complicated here. I hate programs that some people qualify for and others have to pay top dollars for, in addition to them paying higher marginal tax rates.

What I believe would fix the issue is to make every program universal (EVERYONE qualifies regardless of income), then tax that away from people who were too rich to qualify, so increased top marginal tax rates and maybe wealth/property taxes, but more universal programs (UBI, universal social care, universal childcare, etc).

 

[413x]

It's not too many people, it's too many old people compared to young. If you had a smaller population but the same ratio there would still be similar struggles. It's the stupid price of housing that's causing people issues now. Like other people have alluded too, the current crop of OAP generally could start to focus on their retirement during their 40s, now i imagine a lot in their 40s still have at least 10 years left on their mortgage.

There isn't a nice ending to that is there. Too many old people. The fix for that is pleasant.

When I hit 40 ill still have 20 years on my mortgage.
If we get that house price correction now I'll just give up and go on benefits too.
That's the issue with a chevron) correction. That 30-40 homeowner productive demographic will be screwed.

But needs to happen

 

[MikeTheNative]

There isn't a nice ending to that is there. Too many old people. The fix for that is pleasant.

When I hit 40 ill still have 20 years on my mortgage.
If we get that house price correction now I'll just give up and go on benefits too.

That's the unfortunate truth that there's not an answer apart from a lot more taxation or a massive cut to pensions.
If only there was some way of importing workers who would only be here during their 20s-40s. Missing out the years which cost the most money to the government but still paying tax..................................

 

[413x]

That's the unfortunate truth that there's not an answer apart from a lot more taxation or a massive cut to pensions.
If only there was some way of importing workers who would only be here during their 20s-40s. Missing out the years which cost the most money to the government but still paying tax..................................

People think there's a happy ending to everything . Time to wake up.

If it wasn't so nihilistic Im getting to the point where I just hope we suffer for that debacle.

And we will

 

[HACO]

That's the unfortunate truth that there's not an answer apart from a lot more taxation or a massive cut to pensions.
If only there was some way of importing workers who would only be here during their 20s-40s. Missing out the years which cost the most money to the government but still paying tax..................................

We should build robots to replace workers and tax them at 100% And their owners at 90%

 

[Haggisman]

When I hit 40 ill still have 20 years on my mortgage.
If we get that house price correction now I'll just give up and go on benefits too.
That's the issue with a chevron) correction. That 30-40 homeowner productive demographic will be screwed.

This - 40 in a few years, and 15 years left on mortgage. If there's any kind of huge drop, I'll be skipping all the bill and mortgage payments for a few months, maxing out the cash advances on the credit cards, and leaving the country with a suitcase full of €

 

[413x]

This - 40 in a few years, and 15 years left on mortgage. If there's any kind of huge drop, I'll be skipping all the bill and mortgage payments for a few months, maxing out the cash advances on the credit cards, and leaving the country with a suitcase full of €

You are in same /similar position as me . 25 years left at 34. Too late to start again.
Ooooh.I have a lot of credit available on CC.

Maybe just take it all out. All on black.

Maybe just put it all in bitcoin. And say I lost the wallet address

I was thinking about overpaying my mortgage this year. But in the current environment seems like throwing money away.

 

[HACO]

You are in same /similar position as me . 25 years left at 34. Too late to start again.
Ooooh.I have a lot of credit available on CC.

Maybe just take it all out. All on black.

Maybe just put it all in bitcoin. And say I lost the wallet address

I was thinking about overpaying my mortgage this year. But in the current environment seems like throwing money away.

Refinance the mortgage at current rates (1.5%) for 5 or 7 years fixed. Makes no sense to overpay at these rates.

 

[jaybee]

I'm not talking about people who have actually put in the effort and worked their whole life but through personal circumstance not been a top revenue earner with a gucci belt. I'm talking about people who have had the means, but not done so - because let's face it, it seems they're actually the smart ones.

Tell me where's the incentive to "better yourself", make sacrifices and save for retirement if in the end the outcome is the same as if you hadn't bothered?

Why should I not sell my house and spend the money on fast cars, expensive holidays, hookers and coke, and let someone else pick up the bill when I need to go into a nursing home? I'll end up with no house either way, but at least I'll have enjoyed life.



I don't know if it's a new thing, or just my age, but I've noticed more and more recently that living in this country really doesn't reward hard work and success; it just incurs financial penalties and breeds contempt.

You want to spend 3+ years at uni being skint, living on beans on toast while doing 16+ hours a day studying and working 2 jobs just to pay the bills? Go for it - you'll also be paying that back for the majority of your working life.

You want to follow up the above by going into nursing/medicine in general - a career which is critical to society, and usually involves working long, hard, antisocial and stressful hours? Wait.. you actually want to get paid a decent wage? Lol, have a round of applause instead

Well done, you've finally got yourself into a secure financial position to be able to afford your dream car. Here you go, have a nice scratch down the side of it and a knife through your tyres, just to remind you to know your place.

Oh, so instead of wasting your money on expensive foreign holidays every year, a new car every 3 years and the latest gadgets and toys, you've paid off your mortgage earlier and saved a good chunk for retirement? Nice house. We'll have that then.

It's pretty depressing how broken the UK is. I sometimes think of leaving...but know quite a lot of people that ended up coming back, plus we have a big family here with kids in schools. I'm not far off 40 and only just got on the ladder with 30 years left. I've literally worked my butt off all my life since I left school and took me this long to finally get on the ladder. The newest car (since people like to use this as a means to judge wasting cash) I ever owned was 8 years old, always bought the mid range phones... I run a socket 775 system for crying out loud! I squeezed everywhere we could for the family but still had a good life.. couple of nice holidays and stuff. My pension pot is so laughably small I don't realistically know what I will do in old age. I contribute what I can but it's never been a lot.

It does feel like one thing after another. People have been saying houses are unsustainable and a major correction will one day occur...been saying this since the last crash in 2007 which fairly quickly recovered. Yet here we are still rising in the long term. The whole system is built upon them always rising. We have a housing shortage but people don't want housing built near them, because their house price might go down. You have the buy to let crowd with multiple properties, often empty. It's a complete state. Yet I've bought a house because I'm sick of paying off other people's mortgages. It may amount to nothing in the end yes, but at the end of the day it's a house to live in.

Refinance the mortgage at current rates (1.5%) for 5 or 7 years fixed. Makes no sense to overpay at these rates.

Makes no sense to overpay when the rates are low? I think I get you... Are you saying that there is no incentive to overpay and get the total down to minimize interest since the rates are so low anyway? I thought it generally was always better (regardless of rates) to overpay where possible, since the quicker you get the total down, the less interest you pay in total.

 

[dowie]

Yet another ******* pyramid scheme to keep the greedy, selfish, arrogant boomers in their paid-for houses at the young's expense.

Utterly disgusting bunch of self-serving *****.

I think some of the angry responses like this are a just silly knee jerk reactions because of the party in charge rather than the policy itself.

I mean raising tax to pay for stuff isn't exactly an inherently right wing/conservative idea now, yet it's amusing to see the anger if they dare do something like this.

Sure this one is imperfect (in the very short term) but longer term isn't exactly an unreasonable solution and it is one that has been implemented elsewhere.

Fact is the Tories under a different leader/earlier government proposed the other obvious approach of taxing assets... that was heavily criticised as the "dementia tax" in the press, by the opposition etc...

Though Labour have previously proposed a similar sort of thing:

https://forums.overclockers.co.uk/threads/david-blunkett-wants-a-death-tax.18653649/

I don't mean to pick on this poster as I doubt he's the only one but I do find it odd when people appear to hold a general principle when it comes to one party then somehow switch that principle when it comes to another (this is just a quick look at "dementia tax" & the Blunkett thread) - for example on the Labour proposal:

Good. I'd prefer to see inheritance more heavily taxed and redistributed tbh.

Stops the concentration of wealth.

But same poster popped up on a search of the words "Dementia tax":

So, Labour in opposition have achieved:-

Saved winter fuel allowance
No Dementia Tax
No new Grammar Schools
Kept hunting ban
Saved free school meals

Pretty impressive start.

(was just a brief search there are probably others)

Likewise another usually pro-Labour poster opposing the dementia tax:

@Vonhelmet - you were asking how the Dementia Tax is asset stripping the middle class. The answer is that for most people who are not rich, the majority of their wealth is tied up in their home if they own one. You may be "just about managing", but at least you have a property to pass on to your kids.

That was just a quick search and cherry picking a few replies that stood out - if anyone wants to link to a thread where the "dementia tax" was originally discussed it might be interesting.

[virtue signalling]
Also just for transparency - turns out I posted in the Blunkett thread and turned up in the search on "dementia tax"

My take on the Labour proposals:

This is rather basic but the state generates revenue by staking a claim on things like a portion of our income when it is earned and assets when they are transferred. This is used to pay for public services.

Inheritance tax is fine IMO, probably should be extended like this and a crackdown on trusts etc...

Much better to tax assets this way than proposals like the mansion tax.

My take on the Tory proposals:

I guess on the financial side people seem to want others to pay, proposals such as changing the rules for domiciliary care so that the home isn't exempt (as per residential care) would seem to be quite sensible and make things fairer yet generate emotive headlines about a "dementia tax" and people worrying about "their" inheritance.

Something like that inherently rewards/incentivises the situation where family members instead live with and help take care of an elderly relative not to mention encourages people to downsize in retirement freeing up housing resources.

Stop playing football shirt politics guys, get some principles... [/virtue signalling]

Just in general I think taxing assets upon transfer and taking income on an ongoing basis is a good principle, so I'd really be more in favour of the previous Labour proposal though I'm OK with the proposal under May as it was essentially a variation on it and did IIRC have provision for people to stay in their homes/doesn't force them to sell albeit with some portion allocated to the state so not too different to basically an enhancement to inheritance tax anyway. I'm against things like the mansion tax though which taxes assets on an ongoing basis regardless of income.

 

[cheesyboy]

Makes no sense to overpay when the rates are low? I think I get you... Are you saying that there is no incentive to overpay and get the total down to minimize interest since the rates are so low anyway? I thought it generally was always better (regardless of rates) to overpay where possible, since the quicker you get the total down, the less interest you pay in total.

That's Boomer logic.

In the old days, house prices were low and interest rates were high. You could pay your mortgage off super fast by overpaying, because most of your default payment was made up of interest, and the capital balance was low (so overpayments, even fairly modest ones, made a big difference). Now, the bulk of the monthly payment is capital, the mortgage value is massive, and overpayments make little difference.

If you can sustainably overpay by £200 a month, then you'll shave a few years off (and that's nice in itself), but you won't have saved a whole lot of interest, in the scheme of things. Stick it in savings instead.

 

[jaybee]

That's Boomer logic.

In the old days, house prices were low and interest rates were high. You could pay your mortgage off super fast by overpaying, because most of your default payment was made up of interest, and the capital balance was low (so overpayments, even fairly modest ones, made a big difference). Now, the bulk of the monthly payment is capital, the mortgage value is massive, and overpayments make little difference.

If you can sustainably overpay by £200 a month, then you'll shave a few years off (and that's nice in itself), but you won't have saved a whole lot of interest, in the scheme of things. Stick it in savings instead.

Understood. Yeah my main motivation was that I'm on such a long term (had to to make it even doable) of which I do want to try to bring down.

 

[HACO]

Makes no sense to overpay when the rates are low? I think I get you... Are you saying that there is no incentive to overpay and get the total down to minimize interest since the rates are so low anyway? I thought it generally was always better (regardless of rates) to overpay where possible, since the quicker you get the total down, the less interest you pay in total.

You're effectively borrowing at below inflation interest rates, why would you ever want to pay that off? Keep 1 year of payments and invest the rest in anything that pays above 1.5% and you're ahead like bonds or mutual funds. Put it in your ISA or pension.

 

[dowie]

Makes no sense to overpay when the rates are low? I think I get you... Are you saying that there is no incentive to overpay and get the total down to minimize interest since the rates are so low anyway? I thought it generally was always better (regardless of rates) to overpay where possible, since the quicker you get the total down, the less interest you pay in total.

Well yes you will pay less interest in total (on the mortgage) but if you're earning more elswhere then that's a bit moot.

If interest rates are super low and you can earn more from savings/investments then its a bit of a no brainer to not pay overpay the mortgage.

 

[SpeedFreak]

I think a system that is relying on inheritance as a means to support younger generations is removing self determination for those coming through the system. Frankly, asset taxes would solve a lot of the problems.

My mum was not well off by any means, but as a single parent and with help to buy, she bought her home whilst doing a degree with three children. She then upgraded and paid off her mortgage at 55.

The world has definitely changed. I do long hours for a good salary, probably in the top few % of earners, but when I look at houses I can't realistically look at the top 15% of properties. First world problems I know, but it highlights the problem with the current distribution of assets (on average of course).

 

[Deleted member 66701]

I don't mean to pick on this poster as I doubt he's the only one but I do find it odd when people appear to hold a general principle when it comes to one party then somehow switch that principle when it comes to another (this is just a quick look at "dementia tax" & the Blunkett thread) - for example on the Labour proposal:

↑
Good. I'd prefer to see inheritance more heavily taxed and redistributed tbh.

Stops the concentration of wealth.

But same poster popped up on a search of the words "Dementia tax":

↑
So, Labour in opposition have achieved:-

Saved winter fuel allowance
No Dementia Tax
No new Grammar Schools
Kept hunting ban
Saved free school meals

Pretty impressive start.

In the last quote where do I say I support or don't support the dementia tax? I was simply pointing out Labours impressive record of defeating the government - I don't say whether I would have been happy or not for the government measures to go through.

 

[Uther]

I'm not talking about people who have actually put in the effort and worked their whole life but through personal circumstance not been a top revenue earner with a gucci belt. I'm talking about people who have had the means, but not done so - because let's face it, it seems they're actually the smart ones.

Tell me where's the incentive to "better yourself", make sacrifices and save for retirement if in the end the outcome is the same as if you hadn't bothered?

Why should I not sell my house and spend the money on fast cars, expensive holidays, hookers and coke, and let someone else pick up the bill when I need to go into a nursing home? I'll end up with no house either way, but at least I'll have enjoyed life.



I don't know if it's a new thing, or just my age, but I've noticed more and more recently that living in this country really doesn't reward hard work and success; it just incurs financial penalties and breeds contempt.

You want to spend 3+ years at uni being skint, living on beans on toast while doing 16+ hours a day studying and working 2 jobs just to pay the bills? Go for it - you'll also be paying that back for the majority of your working life.

You want to follow up the above by going into nursing/medicine in general - a career which is critical to society, and usually involves working long, hard, antisocial and stressful hours? Wait.. you actually want to get paid a decent wage? Lol, have a round of applause instead

Well done, you've finally got yourself into a secure financial position to be able to afford your dream car. Here you go, have a nice scratch down the side of it and a knife through your tyres, just to remind you to know your place.

Oh, so instead of wasting your money on expensive foreign holidays every year, a new car every 3 years and the latest gadgets and toys, you've paid off your mortgage earlier and saved a good chunk for retirement? Nice house. We'll have that then.

As I basically said earlier, it makes you wonder what the point is.

 

[dowie]

In the last quote where do I say I support or don't support the dementia tax . I was simply pointing out Labours impressive record of defeating the government - I don't say whether I would have been happy or not for the government measures to go through.

Fair enough, point taken. Though it does seem a bit odd to chalk it up as an achievement if you’re in favour of it - I’m not sure why it should be seen as a positive - opposition should be constructive not just reactionary.

I suspect there are plenty of other posters who were both anti the “dementia tax” and who’d be happy to criticise this too.

 

[muon]

Don't really get why this would be over 40s, why not just apply it across the board? Why 40 and not an older or younger threshold?

It's a bit of a double-whammy, people my age were the first generation to go to uni when grants were abolished and fees introduced, and now 22 years later they line up another tax to shaft people born early 80s again.

Why? Because young people already pay 9% extra "tax" on student loans. Also compare your loan size with people graduating now, I would suggest you had things good. They also pay higher interest rates whilst your's has been rock bottom since 2010.

I consider myself lucky to be in the pre £9,000 fee generation.

 

[Puzzled]

Why? Because young people already pay 9% extra "tax" on student loans. Also compare your loan size with people graduating now, I would suggest you had things good. They also pay higher interest rates whilst your's has been rock bottom since 2010.

To all you over 40's moaning about boomers, this is your future The generation below is already poised to blame everything on you and how easy you had it.