18 March 2015 We had the Pensions Revolution last year, now comes the Savings Revolution 95% of savers will pay no tax on their savings – will be popular 5m will be allowed to sell their annuity – that’s great news But cutting Lifetime Allowance for pensions is really bad policy Lifetime limit should only apply to DB, but abolished for DC So there we have it. The last Budget before the General Election. A mix of moves to please…
22 February 2015 Having more over 50s in work is not a threat to younger people’s wages or employment – it is essential for economic progress Studies suggest more older people in employment improves employment and wages for the young In our ageing population, we should welcome higher employment levels for over 50s – if they shift to part-time that may depress average wages but is not a concern long-term Concerns about rising labour force participation by older workers being…
3 December 2014 So what has happened in the Autumn statement? Summary No change to pensions tax relief but extra tax breaks for joint life annuities Levelling the playing field between annuities and drawdown inherited benefits New tax breaks for ISAs – will be inherited tax free between spouses Tax breaks for carers and careworkers Bigger rise in Pension Credit More generous means-testing calculation for pensioners with pension funds Promise of a pilot back-to-work scheme for older people on benefits…
14th August 2014 Unemployment has fallen far less for over 50s than for younger workers as ageism in workplace remains Under the coalition, unemployment for 16-49 year-olds has fallen 19%, but only 5% for over 50s The latest ONS employment figures show that the UK unemployment rate has fallen far faster than previously expected and now stands at 6.4%, the lowest level since Q4 2008. The figures also show that, under the Coalition Government, rising numbers of older people are…
17 March 2014 A Budget wishlist for pensions and savings Exempt savings interest from tax for two years Or allow full ISA allowance in cash Allow small pension funds to be taken as cash Relax restrictions in capped drawdown to allow for ill-health Introduce new incentives to save for long-term care – ISA savings set aside for care could pass on free of inheritance tax if not spent Stop meddling with pension rules What might the Chancellor do to address the…
Brilliant for powerful groups but has caused economic distortions and increased inequalities Each £100,000 mortgage now costs £3300 a year less, saving borrowers about £19,000 since 2008 Savers with £100,000 in Cash ISAs lost £4000pa income and lost total of £18,500 since 2008 What happened 5 years ago? On March 5th 2009, the Bank of England cut interest rates to 0.5% and started creating billions of pounds of new money from thin air (calling this ‘Quantitative Easing’ or QE) which…
8 January 2014 Lost Generation fears are real but premature Baby boomers also went through tough times but went on to thrive We need to be very careful, coming out of a few years of recession and economic turnmoil, not to become too negative when discussing the plight of younger people today. Of course, the level of unemployment among younger people is a cause of great concern, but this is not necessarily a ‘lost generation’, as is so often claimed….
23 December 2013 Boom time for UK economy in 2014 – 5% growth Positive surprises – higher growth, lower inflation, rising earnings, falling unemployment Economic and political cycle brilliantly aligned – by accident or design? My forecasts for UK economy by end-2014: Growth – 5% Inflation – 2% Earnings growth – 3% Unemployment – 7% – a boom with low inflation, rising earnings and falling unemployment Leading indicators show UK set for a pre-election boom: The leading economic indicators have been strong for months now and…
16 December 2013 Economic and political cycle brilliantly aligned – by accident or design? Positive surprises – higher growth, lower inflation, rising earnings, falling unemployment Last week I represented the London School of Economics at an Economics Research Council debate called the Clash of the Titans. http://www.ercouncil.org/clash-of-the-titans-2013/ The event was chaired by Andrew Sentance of PwC, former member of the Bank of England’s Monetary Policy Committee, and saw Kevin Daly of Goldman Sachs – representing Cambridge University, Stephen King of…
5 December 2013 Summary of Autumn Statement measures relating to pensions and savings People will be allowed to buy extra state pension: People will be allowed to buy extra state pension with introduction of Class 3A National Insurance. There are no details yet, but the plan is that those who reach state pension age before the new flat-rate state pension is introduced in April 2016. Existing pensioners as well as those reaching state pension age soon, will be able to…