These interviews with Torsten Bell are brilliant. Please, please keep them coming. It's often very difficult to cut through the partisan media nonsense to get to the nitty gritty of economic policy and it's ramifications for the public. Interviews like this are invaluable.
there is absolutely no nitty gritty here. INflation is sky high and despite interest rate rises we have barely even dented it. The real elephant in the room is Brexit and our low(est) growth in Europe, spiraling labor costs, shortages. It doesn't even get a mention. If you like to bury your head in the this interview probably sits well with you. If not you should rightly be questioning the shambolic way this country has been run for 10+ years.
@@shazoids You should realise that the interview was about analysing the announced budget, not something else. Raging about past decisions is a completely different programme. The things you mention are precisely the result of economic policy by the way. Inflation doesn't just materalise out of thin air. Nor do low growth, spiraling labour costs or anything else. They're all a result of politics affecting the economy. I'd wager the OP doesn't have a first-hand impact on economic policy. So accusing them that burying their head into this 40 minute interview is the cause of how the country has been run, that's so ridiculous as it borders on a DM headline.
@@andrasszabo1570 it wasn't actually an analysis rather laying out what it was. No critical dissection which you would expect from a more accomplished economist and without context of 13 years of total mismanagement an calling out that this is again a budget for the rich, it doesn't nearly get to the heart of the matter.
He’s a really knowledgeable and intelligent person, but he was also a former policy advisor for Labour. That’s not a criticism of him, but he’s got he’s allegiances
I just feel like every piece of government assistance or policy change doesn't affects me. It is always for a small subset of the UK population. As a 27 year old working full time on median wage with no children, nothing really benefits me. I can't help but feel that the older generation are cash greedy and just work to ensure their financial prosperity.
Nothing benefits you. Nothing benefits min wage. Nothing benefits even the 1%. We are all victims of the state. Here's the problem. I've decided I'm not going to work my arse off. I've stopped working. Now I was lucky. I pulled 200K less 100K in tax last year I worked. So for the last two years the state has lost 200K from that. Then if I tot up the costs the state spends 17K per person per year. 68K a year. They have lost 236K because I've decided I can't be arsed. Why work and be insulted? Look at the comments here. Apparently if you work your arse off, you are scum. I've no doubts lots of people have the same view which is why they are desperate to get me and other back to being ripped off.
I am of the older generation and none of this affects me. As for cash greedy, when I was your age, women were paid a lot less than men; couldn’t get credit without a man’s signature and was expected to give up work for getting married! Consequently, the pension received is based upon a husband’s income. Single women expected very little from pensions. Sick of being referred to as a cash cow! 🤬
@@Bee-rr6vo I apologize if that came across as asking for something to be given to the poor. I was meaning that older politicians seem intensely interested in bringing about policies that entrench wealth of the already wealthy rather than helping everyone else catch up that struggle financially. I have always worked and will always work. I will not retired but work until physically I cannot. Your reference to socialism is rather interesting to me. I would say that we are living in a social experiement of Capitalism that is proving to us that Capitalism is not serving the majority of people. Although absolute socialism is not preferable neither is trickle down economics.
He talked about the childcare changes like its a big thing, but they are delaying the roll out. They know they wont be in power when it comes into effect so they wont have to find the money to pay for it. They are promising something that the Labour government are going to have to figure out how to deliver.
That is true, but as a Scandinavian who has always thought it is an imbecile policy not to have cheap childcare, because of the whole per capita GDP thing, I think you are looking at it from a wrong perspective. In my opinion, rather myopically the British keep looking at these things as a party political thing that is about the next election. Why can't you look at as the Tories having allowed Labour to pursue this policy, given they cannot talk about socialism etc. because they introduced the policy? That is, now you have a national consensus on free childcare since 9 months, as in the policy is trending leftist. In the long-term that is going to have a massive impact on the UK economy, because 2/5ths of UK adult population is outside the labour market and (single) parents have been hampered in their ability to work, which is costing the economy billions annually. That is, overall, Brexit is contradictory to the wishes of Libertarian Brexiteers steering UK policy towards the left, as in further left than Labour policies under Blair.
@Sam Hartford I'm definitely for the policy, I have a 1 year old so it would have saved me a lot of money each month. My issue is that they will claim it as a tory policy and a victory, but they delayed it so much that they will never have to actually back it up. I wish it had come into place now. Its an unnecessary delay.
Am I wrong in thinking that no provision is made for young school age children? What is the point off a parent being able to access child care for under fives if they also have slightly older children in school for only 40 weeks a year, with no additional childcare support for that child before and after school and in holidays?
Anyone ever going to mention that the chancellor and prime minister stand to benefit directly through his pension policies and state the clear conflict of interest
Not only MPs, but anyone on a defined benefit pension scheme with a guaranteed pension at £35,000 and above will gain from the removal of the LTA limit. So not only doctors, but high band nurses, teachers, police officers fire officers and other public sector workers.
@@tomnorton7817 They by and large all are. The problem is that they pay 20% to the DWP, and the DWP redistributes it, instead of investing it. Then when its their 'turn', they will be shafted. Same as current pensioners are shafted. They only get back a fraction of the value they paid in. Negative returns
The problem in the UK is that private pensions are a rip off. Very poor value for money as contributions are swallowed up by costs. Pension companies operating both in Europe and the UK will pay out less money in the UK on similar pension products. Rip off Britain.
@@craigmurgatroyd5633 Are they? What evidence? Now here's what is needed. Pensions contributions free of tax. Sipp charges capped. Now look at charges on the investment side. Vangard has tracker charges of less than 0.1%. The state charges stamp duty at 0.5%. That needs to go. But you are makign a comparison. What is the value when it comes to the state pension? How does that compare against a private pension? I've crunched the numbers. Based on NI contributions and this is for Mr Average retiring last year His fund would be £1,140,686. The state has no assets, so he's down that. He gets a share of the state pension debts, which is £600,000. So he's down over 1.7 million, so far. The income for that fund is £37,276 and that is effectively inflation linked. Reinvest the difference between that and what the state offers, and he's down over 2 million over an average 18.6 year life expectancy at retirement. Now 30% of his income is going on debts caused by the pensions. He could have invested that too. Or add on work place pensions, and see how big the fund gets So what needs to change. Stamp duty to go. Charges to be capped. Contributions collected by the DWP and passed directly onto the fund. ie. A Singapore set up.
But they brought in zero hrs contracts and alot of people on them can not get the hours, and there officially employed even if they don't get any hours so the employed stats look better.
True and they can't afford pensions. This is the worst heist of money from the poor and public services to the wealthy. Take a look at Garys economics channel, explains a lot
Apperantly, they also introduced policies that reward companies for employing as many people as possible, so even those who should theoretically be in a stable job are only getting a few hours a week, so companies can cram in as many people as possible on as few hours as possible
@Edward Westmoreland-Caunter that's why the unemployment figures look so good, but they don't disclose this as a point when stating the figures. The tories have no idea or interest in the average working man, they only are interested in the privately educated rich people and there pockets 🤔
The changes to disability are very understated here, but, are going to be absolutely devastating in practice. They said the system as is was perverse to have people prove what they cannot do, yet they are going to make a "severe disability group" which will essentially have people do just that. Meanwhile, anyone who is not in that group, yet still disabled or even in just ill health, is going to be treated like they are on JSA. The white paper shows "work coaches" can mandate whatever they see fit to any of these people. There have long been many more people in the Support Group for ESA than Westminster wanted - this is the legislation to rebrand them as not ill enough and put them, to all intents and purposes, in the WRAG which is essentially the same as JSA. It is one thing to ask someone to do something difficult. It is another entirely to knowingly demand someone does something they cannot do, or lose the roof over their head and their next meal. There is a reason Hunt included money for suicide support in the budget, It is because he is well aware of the real cost in human terms of he policy he has decided to implement. And before you come at me and call me woke, or lefty etc, Labour are no better. They only seem upset that the Conservatives have beaten them to the punch of claiming credit for this
Refreshing to hear such a reasoned discussion without anyone being denigrated. Torsten is really interesting to listen to, always, and ''Joe'' asks pertinent rather than leading questions. Thanks
Re: Abolishing Pension Tax Cap - Torsten questions if it's the right move and I would agree it's definitely not the right move for the general public. But if we look at it from another perspective perhaps it makes more sense: *Pension Providers and Investment Banks* UK pensions typically get invested into the stock market via investment banks. Since, as Torsten remarks, younger people aren't feeding as much in to pensions, pension managers and investment banks really don't want to also lose out on the highest earners due to premature retirement. A) They haven't planned for this and it could expose them to risk if tons of high-value pensions start to be liquidated. B) They would have less to play with, which makes their jobs much harder in an economic downturn because their balance sheets will already have suffered. It wouldn't surprise me if Sunak* and Hunt have done this partly to shore up the older voters and partly to help their mates in the banking sector.
The pension change is only giving back what the government took away a few years ago. This is people’s earnings which they have saved for retirement, and the government want to tax them on the way in and then on the way out as well. The solution is to get rid of final salary pensions, which are only really received by public sector workers now anyway.
Here's one other tiny silver lining I've noticed, it might slightly deflate the housing market with regards to the lifetime pension allowance. Before the abolishment, you’ll pay an extra tax charge on the excess amount above your lifetime allowance. For example, if your pension pot totals £1,200,000 then the excess is £126,900. This amount is then taxed at either 55 per cent (if you take it as a lump sum) or 25 per cent if you take it any other way (e.g. through drawdown, UFPLS or buying an annuity). So your additional tax bill would be either £69,795 or £31,725. Given that, some people invested in housing as an alternative to such pensions. Given that these pensions aren't subject to inheritance tax, it may well help deflate the housing market and at the same time increase capital investment elsewhere in the economy.
2:13 - The Fed DICTATES and DEFINES what "reserve capital" is, so SVB buys it, and then the Fed jacks up interest rates, instantly devaluing SVB tier 1 capital (in this case, treasury bonds). The idea that buying Govt bonds (literally safer than houses, since Govt NEVER defaults) is a sign of incompetence, is utterly cretinous. 23:55 - public sector workers are down more than 22% compared to 2019. A 5% increase is well below inflation and a total slap in the face. You can't deride public services AND advocate lowering real terms investment. You get what you pay for. 28:10 - The "small boats issue" was completely made up to stir up xenophobic sentiment to win the next election. The Tories have been in control of border crossings for 13 consecutive *ucking years; if it's broken, they broke it. It's a distraction from the cost of living crisis. 28:17 - Inflation could have been solved immediately with energy price controls, another instance of Tory incompetence. 29:30 - Hah, how can you say, with a straight face, that the Tories are the party of low tax, when tax to GDP has scarcely been higher in the last 70 years? It's completely needless, since we saw that the deep fiscal deficits to fund the national COVID measures did not cause price inflation over 2020 and 2021 (0.55% and 2.5%, respectively). This current spate of double digit inflation has NOTHING to do with deficit spending and everything to do with energy prices; energy prices are represented in the cost of ALL goods and services! 29:53 - "that's that they're overseeing (tax burdens) but that's not what they're about" - Pure cognitive dissonance, see point above. 30:07 - The Govt sets interest rates by decree, and if you didn't know, the BoE was nationalised in 1946 under Labour. It is NOT a private bank, and it is not independent, since it must necessarily align monetary policy with the treasury's fiscal policy. There is never a reason for onerous interest rate hikes, and before anyone says:"price inflation", know, that higher credit costs go into ALL goods and services! It is literally price setting, higher. Your average worker does NOT own any Gilts. 30:16 - The banking crisis did NOTHING to the fiscal budget or the national debt. The BoE created central bank reserves to pay for QE, and reserves are NOT money outside of the banking system (private parties will never touch it). It is not “debt”, nor was the fiscal spending used to buy RBS! He’s talking nonsense. Taxes are not used to pay for central bank reserves or for treasuries! He’s either lying or grossly misinformed. 30:20 - The fiscal deficit did increase massively during COVID, but price inflation for 2020 was 0.55% and only 2.5% for 2021. All that fiscal spending did next to NOTHING to price inflation. Again, everyone knows that this current spate of inflation, which BEGAN in 2022, is caused by energy companies’ price gouging. He’s a liar. He can’t be this misinformed. 30:26 - Gilts are NOT paid for by taxes; they use fiscal spending (money printing). Taxes are literally removed from the money supply. The govt did not go around and slap everyone with a 5x tax bill, but deficit spending DID go 5x, with 2.5% inflation. Every debt has a debtor, but with fiscal spending, there is no debtor, and no debtee.
Tories handed our cash to the top 1% again including rich pensioners (who predominantly vote Tory). They made cynical concessions to the poor with childcare and extending the price cap. 30hrs of childcare won't help people get a job, it's short term in the long term the same problems of costs and availability still exist. Especially since there aren't enough workers in childcare to cope with the increase. £2500 price cap doesn't affect the poorest, we can't afford to spend that much on energy. small businesses will suffer greater costs while multinationals will continue to thrive. For the poor, this budget is about as much use as an ashtray on the international space station...
Well said. The problem for these Tories is that these minor concessions for the common man won't even touch the sides thanks to their record 13years of failure. All the while blaming foreigners
Really ? Do you realise that 29% of the personal taxes that are paid to the state are paid by only the 1% of the taxpayers you are complaining about. Another 31% of all personal taxes are paid by the next richest 9% of earners. So 60% of taxes are paid by 10% of the population (as published on the government web sites). So all those complaining about the rich think about your paltry contribution to the state.
Ah but you see they're loosening the rules so that these underpaid childcare providers have the FREEDOM to look after more children. What could go wrong?
Well maybe but public sector workers aren't normally Tory and as they say, 50% of people with these huge pensions are public sector workers. Truth is people will need large pensions in the long run with a population living longer and longer. I'm 30 now and possibly going to live to 100. Inflation adjusted, 1 million for 40 years for spending is ~25k per year, which isn't much considering by then money will be worth about half what it is now.
@@henryphillips3680 You don't understand the pension changes and speak from a lack of knowledge. They have given allowances to millionaires and high earners that used to be capped at £1million and now has no limit, those aren't public sector workers. They have increased the annual pension saving cap from £40,000 to £60,000. Do you know any poor pensioners who have a spare £60k to save every year? Try to read before typing...
Getting rid of the WCA will leave CAPITA and other outside agencies paid for refusing claimants, deciding if a disabled person can work or not. The fact that these agencies refuse over 50% of claimants out of hand will mean truly innocent disabled claimants will be disregarded and end up suffering. The WCA is about work capability and a PIP assessment is about how a disability effects your day to day life (washing, dressing, eating or even going out of the house. In Rhyl, North Wales there are 2 people that work in the Rhyl Benefits Advice Shop all the do is appeal PIP refusals and they win over 95% of the cases. Hell the DWP don't even fight them now because they lose so often. So saying the disability benefits reforms are a good thing is quite a bit wide of the mark. Ask a disabled person refused PIP 6 times but on LCWRA if they agree with allowing Capita and their buddies to make these decisions. I wouldn't care about this BUT I don't know of any other town in UK other than Rhyl that has a benefits advice shop and I've never heard of any other town council other than Rhyl Town Council paying £11,000 per year towards funding an appeals officer. And if I told you because of these 2 people over £1million has been successfully claimed since they began their great work. You really wouldn't believe me but is so desperately true. I suggest you interview these officers so they can explain the shoddy reforms, the work they do and how hard they work. Then maybe a few more Benefits Advice shops may open and maybe more appeals officers may start fighting the fight for the disabled. I look forward to the video
In the past 9 years I have spent almost 50k on childcare costs, so too bloody late for me. Good policy when this eventually is rolled out. Can no one remember Jeremy Corbyn offering this over 4 years ago?
So wholesale energy prices have fallen by 80%, so a simple question, 'why haven't fuel and household energy prices done the same' and don't give me that 'bollocks' about there being a 'delay' in the market, because I call it 'rocket firework' economics. As soon as the wholesale prices start to rise the retail prices go up like a rocket, but when the wholesale prices fall it's like one of those rockets that has a parachute so it goes up really really fast but then comes down really really slowly, and these corrupt and criminal tory bastards are happy to have it that way. We just need to get rid of them to save OUR country.
In this world, there are those who have too much Their greed and their wealth, they constantly clutch They crave for more, they never seem to get enough They hoard and they consume, without any rebuff On the other side, there are those who lack The basic needs, they struggle to keep track Of the food, the shelter, the clothes on their back For them, life is a never-ending attack The greedy and the needy, they live side by side One with abundance, the other with no place to hide Their paths may cross, but their worlds collide For one's excess, the other's deprivation is implied The greedy may never know the pain of the needy For them, it's always about the acquisition of the greedy But if only they could see, the other side of the story They might realize that there's more to life than glory The needy need help, they need our empathy They need us to reach out, with love and with charity For in helping others, we find true prosperity And we'll be blessed, with a life full of integrity
Pension reform is important. They need to take it one step further and introduce the compulsory schemes like in Australia and Switzerland. People need to take ownership of this, a state pension is not enough
@Trish Traynor unfortunately, these reforms are for the next generation. For current pensioners, it is a difficult issue which would need cross party agreement.
Australian here; there's a growing critique of our 'super annuation' system. Basically, it's extremely likely that just taxing people scamming the wealth parking super-annuation system would properly pay for people's state pensions. And the financial institutions clipping every dollar. The fees they're taking are extraordinary. Don't make the same mistake.
In 1993 the law changed to cap the amount of surplus a pension could have to 15%. At this point with the imminent retirement of baby boomers, pensions became unsustainable long term. That surplus ended up being converted to profits for shareholders. My company paid nothing into the pension pot for 15 years and when it got to the state that they had to chip in, they opened bought cost pensions for new entrants. Along with reductions to corporation tax, it is easy to see why so much money is with the ultra rich. Now we are being asked to make up the shortfall.
Really good interview, the point at the end about identifying areas of competitive advantage to support (as opposed to supporting everything or supporting nothing) was well-made.
Bit odd that when experts/economists discuss SVB they almost always fail to mention the actual main purpose of it: to provide loans to entrepreneurs which they would use to pay themselves an income without having to draw that from their company and thus would incur income tax... that is how SVB got a lot of their working capital, and it's not surprising that their obvious and well known dubious role in the (local) economy would be an indicator of wider malpractice.
That doesn't sound true. How many account holders where individuals and how many where companies? If they are giving loans to companies, especially entrepreneurial companies, these usually never make a profit, and any salaries they pay their workers will be income taxed.
@@redx11x That is due it all being wrong. Most of the companies where starts up with lots of seed money and no ability to take out a loan. When some VC said they should take the money out of the bank, the bank having invested in bonds when rate where low, lost money selling the bonds as with the rise in interest rate the bond value went down.
The next 50 years are going to be an economic battle between the working age population and the pensioners - the pensioners will need to get their pensions filled whilst the working age who are paying taxes to fill those pension payments shrinks. It will be a battle between tax rises to benefit pensioners and private sector wage increases to beat out tax rises (which they will have a good chance at doing because as labour becomes more scarce, employers lose leverage over employees).
Only thing I disagree with is the comment on roads not being built. Public transport is far more beneficial for the average person and for the young vs the wealthier boomers. HS2 is high profile but suburban rail projects are far more beneficial e.g. Elizabeth line and Thameslink. We need more of that around the country, not just in the south.
This is a very interesting interview. I have a lot of respect for Torsten Bell who is able to put forward explanations in a very clear and concise manner. The part that caught my attention in this video was in respect of pensions. I have a lot to complain about that I shall deal with separately but, having only recently discovered (and horrified by this) that UK pensions are regarded by the government as a benefit and not a pension, I feel the government took a discriminatory short cut in the treatment of pension payments' adjustments for inflation. There needs to be a better way of funding pensions, and in treating them as such and not as a benefit. This subject should not be subject to political manipulation.
The real message from this budget, and many previous budgets, is DO NOT RELY ON THE STATE PENSION. This is why all employers now, by law, offer a pension scheme that employees must join. An extra £500 - 1,000 per month on top of the state pension is easily achievable by adding a few £s per month into a work pension, plus free contributions from your employer, plus compounded growth over 30 - 40 years. The key is to start a pension when you are in your 20s and not in your 50s.
The issue also with the childcare is that there isn't enough staff to assist in childcare so the covering a cost of a employee who doesn't exist doesn't help families. It's free while you wait for someone to become available to look after your children provided you meet the criteria.
It's not really, a million in a fund now sounds a lot, but watch the effect of inflation on that over the coming decades. The principal reason for the change is that a lot of senior doctors, dentists, business owners, administrators, etc pack in when they approach the present threshold, and concerns about the 55% tax penalty begin to arise. So the idea is to keep all these senior specialists working for a few more years, paying into the system and creating value, instead of packing in at the peak of thier abilities. 1 million quid is about a pension of potentially less than £40K in an index-linked annuity, That's a king's ransom to many, but less than some middle-ranking civil servants or politicians.
@@alanhynd7886 that's the tory excuse and you appear to have eaten it hook line and sinker... you could have made much more targeted interventions for those specific job roles and industries if you were worried about retention there, its an obvious wink to potential tory and swing voters for the next GE to remember who gave you that sweet, sweet tax break in the middle of an economic catastrophe... it's an inept policy that will cost the majority taxpayers dearly in the long run.
@@alanhynd7886 Are you joking. There's absolutely no justification for not increasing the limit by e.g. 25% and/or targeting NHS employees only. This is *REDUCING TAX FOR THE MOST WEALTHY* - seriously, there is NO POINT accept as a bung.
@@Patrick-jj5nh Targetted interventions? Yeh, let's guess how that would pan out: those paid out of the public purse should get the threshold removed, whilst those that pay into it do not.
I find it very interesting, that everyone are talking about energy prices goind down a lot, yet my bills are still crazy high. So clearly energy companies are ripping off people and government does nothing.
The childcare issue isn't going to get solved until they actually solve the labour shortages. All well and good offering 30 free hours a week when most providers don't have the capacity because of a lack of staff.
The guy that was in the team that told you not to worry in 2008 is telling you not to worry in 2023. Clearly didn't have to deal with any of the fallout of the shitshow that was 2008...
The pension change is sickening - a huge tax break to the richest retirees when the majority of the country is struggling with cost of living and don't have enough to save anything into pension! As he says, giving them a pension boost is not going to make them work longer, more will likely jack in earlier laughing all the way to the bank!
Anyone on a defined benefit pension scheme with a guaranteed pension at £35,000 and above will gain from the removal of the LTA limit. So not only doctors, but high band nurses, teachers, police officers fire officers and other public sector workers. Why? Because at this guaranteed pension there is a theoretical pension pot to support the pension. This pot is taxable at 55% above the LTA. This LTA removal benefits the middle class, not the ultra rich. The rich do not need pensions as they have other income sources. Do you think Beckham worries about a pension?
@@kevinsyd2012 The LTA is set above £1m currently - the change will benefit only those with a pension pot greater than £1m. This isn't going to include your regular teacher, police officer etc. with over a million quid pension pot! it will be the very richest bracket which will include some high earning doctors, while working people experience fiscal drag, the highest reduction in living standards since the 2nd world war and crippling inflation. David Beckham isn't a UK resident and has net worth of half a billion, not sure what he has to do with anything.
@@ThePIESDA But indeed it does include these public sector workers if they have a guaranteed pension. I am a retired teacher and was hit with a significant tax charge (55%) as my guaranteed £36,500 index linked pension was supported by a fund in excess of the LTA. As I said, this does not impact the rich.
Nothing better than listening to sharp minds in intelligent discussion. Helps me blot out the nightmare of the realities of the bigger picture ( & the last 10mins ).
The pensions change is an absolute joke and a complete mockery of the tax system. The UK government figures show that less than 2% of the population has a pension on or over the base lifetime allowance. A large amount of these have what is called lifetime allowance protections already, which means that their cap is actually higher than the £1,073,100 figure. The fact that they have brought in a policy that only benefits the top 2% of pension havers is utterly ridiculous. This and the change to annual allowance increasing to £60,000 a year will mean that the extremely rich now have another way to essentially avoid inheritance tax, all the while doing absolutely nothing to impact on the vast amount of 30-55 year olds who have little in their pensions currently. If they actually care about doctors working later, they would increase the base wages for doctors, but they don't, they just want another avenue to avoid paying tax.
increasing base wage would not alter the fact that lots of doctors would still be getting tax on pensions of tens of thousands of pounds. this isnt just those above 50yo, but often above 40yo based on annual contributions. it is highly unlikely that base rate pay could be increased enough to make up for a £50k pension tax bill to encourage people to work more. there is a huge staffing issue in medicine, but also in many professions including the legal sector. we need senior (and ultimately well paid) professionals to work as much as possible, and we need tax and pensions systems that encourage them to do so.
My dad with a cushty Ministry of Defense pension is over the moon.. He's retired, so there is zero chance he'll be back in work. He spent about a fortnight, creating spreadsheets and speaking to mortgage advisors about what to do.. Now he doesn't have to do anything.
Please show Torsten Bell's predictions versus what happened - what is his accuracy rate? Please consider getting Gary Stevenson on who has a very high success rate and was Citibank's highest paid trader because he is so accurate. His RUclips channel is Gary's Economics.
"The US & EU are much bigger economies than ours"..... obvious & true, but not to some. They are still dreaming for sunlit uplands & being world beating. That was & is the majority of our specific economic problems.
Cynical appeal to the over-65 base...Hopefully some of these older people have ethics and are prepared to consider their grandkids rather than taking another cruise..
If i was a healthy 55 year old with a big pension i would not spend those years working i would spend those years enjoying myself with my family,like most are now
Also on the retirement issue, part of what is stopping a group of younger people earning higher is accesses to better paid jobs. If older generations stay in the jobs longer if people can’t move upwards
Tax break for the top one percent , we should be doing what the French are doing, the Tories are ripping the piss out of the working and middle classes
Isn't pension relief regressive anyway? The lowest earners can't afford to save up for a pension, many people live paycheck to paycheck, whilst the highest earners are going to avoid tax on an annual £60,000 now. The former will not see any significant tax relief, whilst the latter will annually have tens of thousands of pounds diverted from the public purse to their pension pot instead, albeit money they can't touch till later in life. To clarify that £60,000 annual contribution allowance does taper off if you earn more £260,000, so a millionaire only gets £4000 pension relief at most. But still, that's a lot of well off people getting taken care of without any consideration for the lowest paid.
To help low earners save into a pension is very easy. The government should promise to match like for like pension contributions above the current level. Atm employee pays 4/5% and amd employer 3%, I think tax man pays a 1% but if the employee upped their contribution by 3% the government can match this so it would be 14% saved, the aussies save 15% of their salary. I dint think the policy would cost alot provided it was specifically targeted at earners under the average/ mean wage, not all can or will but the ones who do should get a benefit to do so
I wouldn't exactly call people paying £60,000 into their pension per year 'rich', well off yes, but certainly not rich. Also amassing £1m into a pension is easy done with modest contributions from the age one starts work. For example, if you paid in £250 a month and your employer matched it from age 21 until retirement at 68 you will have hit over £1m with modest 4% growth in equities. Not exactly rich now is it??
@@sl0w_racer the Office for National Statistics says the top 2% of the pensioners have >1m (2016 - 2018 numbers). Not quite the top 1%. So you wouldn’t call the top 2% rich?
@@oystercatcher943 No I wouldn't. The reason the numbers are so low 2% as you quoted is just because people do not save enough and/or don't start earliest enough, if they did then the number would be way bigger than 2% My pension fund will be apprx worth £4m-£5m when I retire, now that is a pretty good sum of cash with big yields but £1m not at all, sounds a lot but it's not over 30/40 yrs
I don't know if I should be taking my money out of the bank and putting under my mattress? I'm 58 and have a bit to go before retirement, but already suffering anxiety over poverty later.
If we had Maths lessons in schools that focused on tax and savings we would have more younger people prioritising pensions. We need students to understand the effect time has on pension contributions (compound interest)
Educate the masses but then how does the government get a population (of slaves) to work for the rest of their lives and keep society going collecting trash, running shops, etc...?
People have always prioritised short term smaller gains over long term larger gains. Young people do learn about compound interest but saving is not prioritised when they have other demands on their income.
A poor discussion on the pension cap. It's not a questoin of "saving £1m in my pension", it's the gradual increase in pension value over many decades of employer/employee contributions plus compounded growth. Those DB schemes that guarantee a salary of around £30,000 per year index linked will have a theoretical pot in excess of £1m. Choose your words carefully as you are spreading misinformation on the abololition of the pension cap.
It should be good to note that in the budget there are multiple "Policy announcements" made that aren't actually funded, for example the 2+ years of free childcare is a scheme completely unfunded. This government is genuinely stating policies that aren't being funded because they expect no one to actually look at the budget. That's how stupid and worthless they think people are.
The headline 'Rich pensioners being given £40,000' is a bit of a fib. In reality they're not being 'given anything, they're just being allowed to keep up to £40,000 of their own money.
Why don't people in the UK look for the "benchmarks" or best practices in other countries & offer these as potential solutions for this country? I'm sure the childcare policy is already happening in Scandinavia for example. The notion that groups or individuals have to seek credit for their "original" ideas is juvenile. Party politics is holding this country back.
Pensions can be IHT free but the money in them is taxed as income in the hands of the inheriting parties when they draw it. This avoids double taxing pensions compared to other assets in an estate.
I have seen many comments from the public on various media stating that this budget is spending money for the NEXT Government (childcare), but none of the economists or reporters have mentioned it! It is very easy to commit to spending money when you will not be in power to pay for it! Clever tactics! Place a great thing in the budget and get the praise....but not be prepared to fund it!
Under the last Labour manifesto the growth plan was to set up regional banks to invest in those areas with 4 people in charge (a civil servant, a business person, a trade unionist and a local government official). That was ripped off by the Johnson government under the slogan levelling up but the funds were centrally controlled and have been a complete disaster.
Why can’t we have sensible conversations like this with actual politicians?? Being a 39 year old single income family, with a 5 and 3 year old, it’s nothing but bad news
Pensions are only deferred wages, when you get a pension that is over the 'free allowance' you are taxed on it as an income, so doesn't matter how much you put away tax free, you still end up paying tax on it when you get it back.
@hawklord100: all income is taxable, regardless of where it comes from. Pension income, including the State pension, is income so is taxable. This is why the super rich do not bother with pensoins. This pension change helps the middle class, not the wealthy.
Am I to Expect NatWest busting soon? Or other UK Banks? After the Mini Budget from the last year, the LIBOR rates changed quite significantly! You said that it was the UK subsidiary who dragged this US bank down!
These interviews with Torsten Bell are brilliant. Please, please keep them coming.
It's often very difficult to cut through the partisan media nonsense to get to the nitty gritty of economic policy and it's ramifications for the public. Interviews like this are invaluable.
there is absolutely no nitty gritty here. INflation is sky high and despite interest rate rises we have barely even dented it. The real elephant in the room is Brexit and our low(est) growth in Europe, spiraling labor costs, shortages. It doesn't even get a mention. If you like to bury your head in the this interview probably sits well with you. If not you should rightly be questioning the shambolic way this country has been run for 10+ years.
@@shazoids You should realise that the interview was about analysing the announced budget, not something else. Raging about past decisions is a completely different programme.
The things you mention are precisely the result of economic policy by the way. Inflation doesn't just materalise out of thin air. Nor do low growth, spiraling labour costs or anything else. They're all a result of politics affecting the economy.
I'd wager the OP doesn't have a first-hand impact on economic policy. So accusing them that burying their head into this 40 minute interview is the cause of how the country has been run, that's so ridiculous as it borders on a DM headline.
@@andrasszabo1570 it wasn't actually an analysis rather laying out what it was. No critical dissection which you would expect from a more accomplished economist and without context of 13 years of total mismanagement an calling out that this is again a budget for the rich, it doesn't nearly get to the heart of the matter.
No, thesei nterviews are full of misinformation. Be careful to take everything they say with a pinch of salt.
He’s a really knowledgeable and intelligent person, but he was also a former policy advisor for Labour. That’s not a criticism of him, but he’s got he’s allegiances
I just feel like every piece of government assistance or policy change doesn't affects me. It is always for a small subset of the UK population. As a 27 year old working full time on median wage with no children, nothing really benefits me. I can't help but feel that the older generation are cash greedy and just work to ensure their financial prosperity.
57 and sick and it actually punishes me. Believe me it's not just you ✌
Nothing benefits you. Nothing benefits min wage. Nothing benefits even the 1%. We are all victims of the state.
Here's the problem. I've decided I'm not going to work my arse off. I've stopped working. Now I was lucky. I pulled 200K less 100K in tax last year I worked. So for the last two years the state has lost 200K from that. Then if I tot up the costs the state spends 17K per person per year. 68K a year. They have lost 236K because I've decided I can't be arsed.
Why work and be insulted? Look at the comments here. Apparently if you work your arse off, you are scum.
I've no doubts lots of people have the same view which is why they are desperate to get me and other back to being ripped off.
I am of the older generation and none of this affects me. As for cash greedy, when I was your age, women were paid a lot less than men; couldn’t get credit without a man’s signature and was expected to give up work for getting married! Consequently, the pension received is based upon a husband’s income. Single women expected very little from pensions. Sick of being referred to as a cash cow! 🤬
This government doesn’t care about young people, because their voters are old and that’s why they try to please them
@@Bee-rr6vo I apologize if that came across as asking for something to be given to the poor. I was meaning that older politicians seem intensely interested in bringing about policies that entrench wealth of the already wealthy rather than helping everyone else catch up that struggle financially.
I have always worked and will always work. I will not retired but work until physically I cannot.
Your reference to socialism is rather interesting to me. I would say that we are living in a social experiement of Capitalism that is proving to us that Capitalism is not serving the majority of people. Although absolute socialism is not preferable neither is trickle down economics.
He talked about the childcare changes like its a big thing, but they are delaying the roll out. They know they wont be in power when it comes into effect so they wont have to find the money to pay for it. They are promising something that the Labour government are going to have to figure out how to deliver.
Also, completely robbed it from last labour manifesto
That is true, but as a Scandinavian who has always thought it is an imbecile policy not to have cheap childcare, because of the whole per capita GDP thing, I think you are looking at it from a wrong perspective.
In my opinion, rather myopically the British keep looking at these things as a party political thing that is about the next election. Why can't you look at as the Tories having allowed Labour to pursue this policy, given they cannot talk about socialism etc. because they introduced the policy? That is, now you have a national consensus on free childcare since 9 months, as in the policy is trending leftist. In the long-term that is going to have a massive impact on the UK economy, because 2/5ths of UK adult population is outside the labour market and (single) parents have been hampered in their ability to work, which is costing the economy billions annually.
That is, overall, Brexit is contradictory to the wishes of Libertarian Brexiteers steering UK policy towards the left, as in further left than Labour policies under Blair.
@Sam Hartford I'm definitely for the policy, I have a 1 year old so it would have saved me a lot of money each month. My issue is that they will claim it as a tory policy and a victory, but they delayed it so much that they will never have to actually back it up. I wish it had come into place now. Its an unnecessary delay.
Am I wrong in thinking that no provision is made for young school age children?
What is the point off a parent being able to access child care for under fives if they also have slightly older children in school for only 40 weeks a year, with no additional childcare support for that child before and after school and in holidays?
@left_blank because free child care means more people going back to work, which in turn means more tax. It's not difficult.
Anyone ever going to mention that the chancellor and prime minister stand to benefit directly through his pension policies and state the clear conflict of interest
The chancellor and prime minister of His Majesties Government?
Not only MPs, but anyone on a defined benefit pension scheme with a guaranteed pension at £35,000 and above will gain from the removal of the LTA limit. So not only doctors, but high band nurses, teachers, police officers fire officers and other public sector workers.
@@Fouraday No, the chancellor of Germany and the prime minister of Finland, obviously!
Mathematically gifted Acaster, spot on. Another fab interview from PJ!
... and he definitely knows who JA is, acting coy!
More a Steven Merchant
@@jjaaajlex3076 naaa, he also kinda talks like James
The pension changes probably never relevant to the young due to the “never going to have a pension problem”. Scary stuff for anyone under 40.
I took that to mean not enough young people are saving into their private pensions?
@@tomnorton7817 They by and large all are. The problem is that they pay 20% to the DWP, and the DWP redistributes it, instead of investing it.
Then when its their 'turn', they will be shafted. Same as current pensioners are shafted. They only get back a fraction of the value they paid in. Negative returns
The problem in the UK is that private pensions are a rip off. Very poor value for money as contributions are swallowed up by costs. Pension companies operating both in Europe and the UK will pay out less money in the UK on similar pension products. Rip off Britain.
@@craigmurgatroyd5633 i had to opt out of the pension conts as i need the money now and the way we are going i doubt ill ever make it to retirement!
@@craigmurgatroyd5633 Are they? What evidence?
Now here's what is needed. Pensions contributions free of tax. Sipp charges capped.
Now look at charges on the investment side. Vangard has tracker charges of less than 0.1%.
The state charges stamp duty at 0.5%. That needs to go.
But you are makign a comparison. What is the value when it comes to the state pension? How does that compare against a private pension?
I've crunched the numbers. Based on NI contributions and this is for Mr Average retiring last year
His fund would be £1,140,686.
The state has no assets, so he's down that. He gets a share of the state pension debts, which is £600,000. So he's down over 1.7 million, so far.
The income for that fund is £37,276 and that is effectively inflation linked.
Reinvest the difference between that and what the state offers, and he's down over 2 million over an average 18.6 year life expectancy at retirement.
Now 30% of his income is going on debts caused by the pensions. He could have invested that too.
Or add on work place pensions, and see how big the fund gets
So what needs to change.
Stamp duty to go.
Charges to be capped.
Contributions collected by the DWP and passed directly onto the fund.
ie. A Singapore set up.
Support for child care is a labour policy. And not coming in under this budget, so just a bit of politicing BS.
Please keep inviting Torsten over. Great and plain analysis to the budget.
But they brought in zero hrs contracts and alot of people on them can not get the hours, and there officially employed even if they don't get any hours so the employed stats look better.
True and they can't afford pensions. This is the worst heist of money from the poor and public services to the wealthy. Take a look at Garys economics channel, explains a lot
Apperantly, they also introduced policies that reward companies for employing as many people as possible, so even those who should theoretically be in a stable job are only getting a few hours a week, so companies can cram in as many people as possible on as few hours as possible
@Edward Westmoreland-Caunter that's why the unemployment figures look so good, but they don't disclose this as a point when stating the figures.
The tories have no idea or interest in the average working man, they only are interested in the privately educated rich people and there pockets 🤔
Always great hearing from Torsten Bell. Please make it a regular thing.
The changes to disability are very understated here, but, are going to be absolutely devastating in practice.
They said the system as is was perverse to have people prove what they cannot do, yet they are going to make a "severe disability group" which will essentially have people do just that.
Meanwhile, anyone who is not in that group, yet still disabled or even in just ill health, is going to be treated like they are on JSA. The white paper shows "work coaches" can mandate whatever they see fit to any of these people. There have long been many more people in the Support Group for ESA than Westminster wanted - this is the legislation to rebrand them as not ill enough and put them, to all intents and purposes, in the WRAG which is essentially the same as JSA.
It is one thing to ask someone to do something difficult. It is another entirely to knowingly demand someone does something they cannot do, or lose the roof over their head and their next meal. There is a reason Hunt included money for suicide support in the budget, It is because he is well aware of the real cost in human terms of he policy he has decided to implement.
And before you come at me and call me woke, or lefty etc, Labour are no better. They only seem upset that the Conservatives have beaten them to the punch of claiming credit for this
In fairness out of every 3 people I know claiming disability, 2 are faking symptoms for the dole.
Love these! More economic analysis on PJ please!
would love to see Torsten in Gov
Refreshing to hear such a reasoned discussion without anyone being denigrated. Torsten is really interesting to listen to, always, and ''Joe'' asks pertinent rather than leading questions. Thanks
Re: Abolishing Pension Tax Cap - Torsten questions if it's the right move and I would agree it's definitely not the right move for the general public. But if we look at it from another perspective perhaps it makes more sense:
*Pension Providers and Investment Banks* UK pensions typically get invested into the stock market via investment banks. Since, as Torsten remarks, younger people aren't feeding as much in to pensions, pension managers and investment banks really don't want to also lose out on the highest earners due to premature retirement. A) They haven't planned for this and it could expose them to risk if tons of high-value pensions start to be liquidated. B) They would have less to play with, which makes their jobs much harder in an economic downturn because their balance sheets will already have suffered.
It wouldn't surprise me if Sunak* and Hunt have done this partly to shore up the older voters and partly to help their mates in the banking sector.
This interview was fantastic. Please have more with Torsten!
Oli Dugmore filling the public square with well presented high quality information we can all use to help maintain a grip on our sanity.
This is the best interview I've seen on the budget, well done lads 👏👏
This guy is awesome. You should have him on every week!
The pension change is only giving back what the government took away a few years ago.
This is people’s earnings which they have saved for retirement, and the government want to tax them on the way in and then on the way out as well.
The solution is to get rid of final salary pensions, which are only really received by public sector workers now anyway.
This guy is great. Please keep getting him on.
Here's one other tiny silver lining I've noticed, it might slightly deflate the housing market with regards to the lifetime pension allowance.
Before the abolishment, you’ll pay an extra tax charge on the excess amount above your lifetime allowance. For example, if your pension pot totals £1,200,000 then the excess is £126,900. This amount is then taxed at either 55 per cent (if you take it as a lump sum) or 25 per cent if you take it any other way (e.g. through drawdown, UFPLS or buying an annuity). So your additional tax bill would be either £69,795 or £31,725.
Given that, some people invested in housing as an alternative to such pensions. Given that these pensions aren't subject to inheritance tax, it may well help deflate the housing market and at the same time increase capital investment elsewhere in the economy.
2:13 - The Fed DICTATES and DEFINES what "reserve capital" is, so SVB buys it, and then the Fed jacks up interest rates, instantly devaluing SVB tier 1 capital (in this case, treasury bonds). The idea that buying Govt bonds (literally safer than houses, since Govt NEVER defaults) is a sign of incompetence, is utterly cretinous.
23:55 - public sector workers are down more than 22% compared to 2019. A 5% increase is well below inflation and a total slap in the face. You can't deride public services AND advocate lowering real terms investment. You get what you pay for.
28:10 - The "small boats issue" was completely made up to stir up xenophobic sentiment to win the next election. The Tories have been in control of border crossings for 13 consecutive *ucking years; if it's broken, they broke it. It's a distraction from the cost of living crisis.
28:17 - Inflation could have been solved immediately with energy price controls, another instance of Tory incompetence.
29:30 - Hah, how can you say, with a straight face, that the Tories are the party of low tax, when tax to GDP has scarcely been higher in the last 70 years? It's completely needless, since we saw that the deep fiscal deficits to fund the national COVID measures did not cause price inflation over 2020 and 2021 (0.55% and 2.5%, respectively). This current spate of double digit inflation has NOTHING to do with deficit spending and everything to do with energy prices; energy prices are represented in the cost of ALL goods and services!
29:53 - "that's that they're overseeing (tax burdens) but that's not what they're about" - Pure cognitive dissonance, see point above.
30:07 - The Govt sets interest rates by decree, and if you didn't know, the BoE was nationalised in 1946 under Labour. It is NOT a private bank, and it is not independent, since it must necessarily align monetary policy with the treasury's fiscal policy. There is never a reason for onerous interest rate hikes, and before anyone says:"price inflation", know, that higher credit costs go into ALL goods and services! It is literally price setting, higher. Your average worker does NOT own any Gilts.
30:16 - The banking crisis did NOTHING to the fiscal budget or the national debt. The BoE created central bank reserves to pay for QE, and reserves are NOT money outside of the banking system (private parties will never touch it). It is not “debt”, nor was the fiscal spending used to buy RBS! He’s talking nonsense. Taxes are not used to pay for central bank reserves or for treasuries! He’s either lying or grossly misinformed.
30:20 - The fiscal deficit did increase massively during COVID, but price inflation for 2020 was 0.55% and only 2.5% for 2021. All that fiscal spending did next to NOTHING to price inflation. Again, everyone knows that this current spate of inflation, which BEGAN in 2022, is caused by energy companies’ price gouging. He’s a liar. He can’t be this misinformed.
30:26 - Gilts are NOT paid for by taxes; they use fiscal spending (money printing). Taxes are literally removed from the money supply. The govt did not go around and slap everyone with a 5x tax bill, but deficit spending DID go 5x, with 2.5% inflation. Every debt has a debtor, but with fiscal spending, there is no debtor, and no debtee.
Tories handed our cash to the top 1% again including rich pensioners (who predominantly vote Tory). They made cynical concessions to the poor with childcare and extending the price cap. 30hrs of childcare won't help people get a job, it's short term in the long term the same problems of costs and availability still exist. Especially since there aren't enough workers in childcare to cope with the increase. £2500 price cap doesn't affect the poorest, we can't afford to spend that much on energy. small businesses will suffer greater costs while multinationals will continue to thrive. For the poor, this budget is about as much use as an ashtray on the international space station...
Well said. The problem for these Tories is that these minor concessions for the common man won't even touch the sides thanks to their record 13years of failure. All the while blaming foreigners
Really ? Do you realise that 29% of the personal taxes that are paid to the state are paid by only the 1% of the taxpayers you are complaining about. Another 31% of all personal taxes are paid by the next richest 9% of earners. So 60% of taxes are paid by 10% of the population (as published on the government web sites). So all those complaining about the rich think about your paltry contribution to the state.
Ah but you see they're loosening the rules so that these underpaid childcare providers have the FREEDOM to look after more children. What could go wrong?
Well maybe but public sector workers aren't normally Tory and as they say, 50% of people with these huge pensions are public sector workers. Truth is people will need large pensions in the long run with a population living longer and longer. I'm 30 now and possibly going to live to 100. Inflation adjusted, 1 million for 40 years for spending is ~25k per year, which isn't much considering by then money will be worth about half what it is now.
@@henryphillips3680 You don't understand the pension changes and speak from a lack of knowledge. They have given allowances to millionaires and high earners that used to be capped at £1million and now has no limit, those aren't public sector workers. They have increased the annual pension saving cap from £40,000 to £60,000. Do you know any poor pensioners who have a spare £60k to save every year?
Try to read before typing...
Getting rid of the WCA will leave CAPITA and other outside agencies paid for refusing claimants, deciding if a disabled person can work or not. The fact that these agencies refuse over 50% of claimants out of hand will mean truly innocent disabled claimants will be disregarded and end up suffering. The WCA is about work capability and a PIP assessment is about how a disability effects your day to day life (washing, dressing, eating or even going out of the house.
In Rhyl, North Wales there are 2 people that work in the Rhyl Benefits Advice Shop all the do is appeal PIP refusals and they win over 95% of the cases. Hell the DWP don't even fight them now because they lose so often. So saying the disability benefits reforms are a good thing is quite a bit wide of the mark. Ask a disabled person refused PIP 6 times but on LCWRA if they agree with allowing Capita and their buddies to make these decisions.
I wouldn't care about this BUT I don't know of any other town in UK other than Rhyl that has a benefits advice shop and I've never heard of any other town council other than Rhyl Town Council paying £11,000 per year towards funding an appeals officer. And if I told you because of these 2 people over £1million has been successfully claimed since they began their great work. You really wouldn't believe me but is so desperately true.
I suggest you interview these officers so they can explain the shoddy reforms, the work they do and how hard they work. Then maybe a few more Benefits Advice shops may open and maybe more appeals officers may start fighting the fight for the disabled. I look forward to the video
these sessions are great!
The "doctor doom" guy is called Nouriel Roubini, really worth listening to, i dont think that nickname does him justice
In the past 9 years I have spent almost 50k on childcare costs, so too bloody late for me. Good policy when this eventually is rolled out. Can no one remember Jeremy Corbyn offering this over 4 years ago?
Get on Gary Stevenson! 👍🏻
So wholesale energy prices have fallen by 80%, so a simple question, 'why haven't fuel and household energy prices done the same' and don't give me that 'bollocks' about there being a 'delay' in the market, because I call it 'rocket firework' economics. As soon as the wholesale prices start to rise the retail prices go up like a rocket, but when the wholesale prices fall it's like one of those rockets that has a parachute so it goes up really really fast but then comes down really really slowly, and these corrupt and criminal tory bastards are happy to have it that way.
We just need to get rid of them to save OUR country.
great video
In this world, there are those who have too much
Their greed and their wealth, they constantly clutch
They crave for more, they never seem to get enough
They hoard and they consume, without any rebuff
On the other side, there are those who lack
The basic needs, they struggle to keep track
Of the food, the shelter, the clothes on their back
For them, life is a never-ending attack
The greedy and the needy, they live side by side
One with abundance, the other with no place to hide
Their paths may cross, but their worlds collide
For one's excess, the other's deprivation is implied
The greedy may never know the pain of the needy
For them, it's always about the acquisition of the greedy
But if only they could see, the other side of the story
They might realize that there's more to life than glory
The needy need help, they need our empathy
They need us to reach out, with love and with charity
For in helping others, we find true prosperity
And we'll be blessed, with a life full of integrity
Pension reform is important. They need to take it one step further and introduce the compulsory schemes like in Australia and Switzerland. People need to take ownership of this, a state pension is not enough
I rent from the council, my pension goes to them in rent so I wish I didn't have another small pension that makes up my income!
@Trish Traynor unfortunately, these reforms are for the next generation. For current pensioners, it is a difficult issue which would need cross party agreement.
Different government's have been dipping into the pension funds for decade be a good start if they payed them back plus interests .
Australian here; there's a growing critique of our 'super annuation' system. Basically, it's extremely likely that just taxing people scamming the wealth parking super-annuation system would properly pay for people's state pensions. And the financial institutions clipping every dollar. The fees they're taking are extraordinary. Don't make the same mistake.
In 1993 the law changed to cap the amount of surplus a pension could have to 15%.
At this point with the imminent retirement of baby boomers, pensions became unsustainable long term.
That surplus ended up being converted to profits for shareholders.
My company paid nothing into the pension pot for 15 years and when it got to the state that they had to chip in, they opened bought cost pensions for new entrants.
Along with reductions to corporation tax, it is easy to see why so much money is with the ultra rich.
Now we are being asked to make up the shortfall.
Really good interview, the point at the end about identifying areas of competitive advantage to support (as opposed to supporting everything or supporting nothing) was well-made.
Up the volume if possible please :)
These interviews are great. Will they ever be available as a straight podcast?
Really enjoyed the interview. Thank you for doing this video.
Bit odd that when experts/economists discuss SVB they almost always fail to mention the actual main purpose of it: to provide loans to entrepreneurs which they would use to pay themselves an income without having to draw that from their company and thus would incur income tax... that is how SVB got a lot of their working capital, and it's not surprising that their obvious and well known dubious role in the (local) economy would be an indicator of wider malpractice.
That doesn't sound true. How many account holders where individuals and how many where companies? If they are giving loans to companies, especially entrepreneurial companies, these usually never make a profit, and any salaries they pay their workers will be income taxed.
@@redx11x That is due it all being wrong. Most of the companies where starts up with lots of seed money and no ability to take out a loan. When some VC said they should take the money out of the bank, the bank having invested in bonds when rate where low, lost money selling the bonds as with the rise in interest rate the bond value went down.
@@MyHogs mate, read English. Your point is irrelevant to the point he is making.
🏆 Best interview on UK Spring Budget 2023 🍻
I'm fully convinced that This oncoming economic will cause a collapse of society
The next 50 years are going to be an economic battle between the working age population and the pensioners - the pensioners will need to get their pensions filled whilst the working age who are paying taxes to fill those pension payments shrinks. It will be a battle between tax rises to benefit pensioners and private sector wage increases to beat out tax rises (which they will have a good chance at doing because as labour becomes more scarce, employers lose leverage over employees).
30 pence is not something we should be happy with.
I love this guy...truly, breath of fresh air for us plebeians.
Only thing I disagree with is the comment on roads not being built. Public transport is far more beneficial for the average person and for the young vs the wealthier boomers. HS2 is high profile but suburban rail projects are far more beneficial e.g. Elizabeth line and Thameslink. We need more of that around the country, not just in the south.
Great to listen to the clarity from Torsten
This is a very interesting interview. I have a lot of respect for Torsten Bell who is able to put forward explanations in a very clear and concise manner. The part that caught my attention in this video was in respect of pensions. I have a lot to complain about that I shall deal with separately but, having only recently discovered (and horrified by this) that UK pensions are regarded by the government as a benefit and not a pension, I feel the government took a discriminatory short cut in the treatment of pension payments' adjustments for inflation. There needs to be a better way of funding pensions, and in treating them as such and not as a benefit. This subject should not be subject to political manipulation.
great interview
This is a gold standard economics interview!
The real message from this budget, and many previous budgets, is DO NOT RELY ON THE STATE PENSION. This is why all employers now, by law, offer a pension scheme that employees must join. An extra £500 - 1,000 per month on top of the state pension is easily achievable by adding a few £s per month into a work pension, plus free contributions from your employer, plus compounded growth over 30 - 40 years. The key is to start a pension when you are in your 20s and not in your 50s.
Yet again perfectly explained! Great channel great guest! Thanks all
The issue also with the childcare is that there isn't enough staff to assist in childcare so the covering a cost of a employee who doesn't exist doesn't help families. It's free while you wait for someone to become available to look after your children provided you meet the criteria.
That economist was fascinating. I've seen him on C4 news I think, really nice guy.
That pension idea was just bat shit crazy.
It's not really, a million in a fund now sounds a lot, but watch the effect of inflation on that over the coming decades. The principal reason for the change is that a lot of senior doctors, dentists, business owners, administrators, etc pack in when they approach the present threshold, and concerns about the 55% tax penalty begin to arise. So the idea is to keep all these senior specialists working for a few more years, paying into the system and creating value, instead of packing in at the peak of thier abilities. 1 million quid is about a pension of potentially less than £40K in an index-linked annuity, That's a king's ransom to many, but less than some middle-ranking civil servants or politicians.
@@alanhynd7886 that's the tory excuse and you appear to have eaten it hook line and sinker... you could have made much more targeted interventions for those specific job roles and industries if you were worried about retention there, its an obvious wink to potential tory and swing voters for the next GE to remember who gave you that sweet, sweet tax break in the middle of an economic catastrophe... it's an inept policy that will cost the majority taxpayers dearly in the long run.
@@alanhynd7886 Are you joking. There's absolutely no justification for not increasing the limit by e.g. 25% and/or targeting NHS employees only. This is *REDUCING TAX FOR THE MOST WEALTHY* - seriously, there is NO POINT accept as a bung.
@@Patrick-jj5nh Targetted interventions? Yeh, let's guess how that would pan out: those paid out of the public purse should get the threshold removed, whilst those that pay into it do not.
But entirely in character. Pity the poor,broke fools (like me) who will be paying for it
I find it very interesting, that everyone are talking about energy prices goind down a lot, yet my bills are still crazy high. So clearly energy companies are ripping off people and government does nothing.
I love this guy 🤩
I wish economists wouldn't talk about structural economic trends as if they are out of control of the players!
The childcare issue isn't going to get solved until they actually solve the labour shortages. All well and good offering 30 free hours a week when most providers don't have the capacity because of a lack of staff.
The guy that was in the team that told you not to worry in 2008 is telling you not to worry in 2023. Clearly didn't have to deal with any of the fallout of the shitshow that was 2008...
The focus with childcare is primarily on traditional two parent families and ignores to lack of childcare places, plus when you get to three tough
The pension change is sickening - a huge tax break to the richest retirees when the majority of the country is struggling with cost of living and don't have enough to save anything into pension! As he says, giving them a pension boost is not going to make them work longer, more will likely jack in earlier laughing all the way to the bank!
It's not a tax break. You still get taxed on it you numpty.
Or do you think that 64% taxation on pensioners is a good idea?
Anyone on a defined benefit pension scheme with a guaranteed pension at £35,000 and above will gain from the removal of the LTA limit. So not only doctors, but high band nurses, teachers, police officers fire officers and other public sector workers. Why? Because at this guaranteed pension there is a theoretical pension pot to support the pension. This pot is taxable at 55% above the LTA. This LTA removal benefits the middle class, not the ultra rich. The rich do not need pensions as they have other income sources. Do you think Beckham worries about a pension?
@@kevinsyd2012 The LTA is set above £1m currently - the change will benefit only those with a pension pot greater than £1m. This isn't going to include your regular teacher, police officer etc. with over a million quid pension pot! it will be the very richest bracket which will include some high earning doctors, while working people experience fiscal drag, the highest reduction in living standards since the 2nd world war and crippling inflation. David Beckham isn't a UK resident and has net worth of half a billion, not sure what he has to do with anything.
@@ThePIESDA But indeed it does include these public sector workers if they have a guaranteed pension. I am a retired teacher and was hit with a significant tax charge (55%) as my guaranteed £36,500 index linked pension was supported by a fund in excess of the LTA. As I said, this does not impact the rich.
@@kevinsyd2012 if you have a DB scheme pension worth over £1.1m then most people would consider that person rich.
Get Gary's Economics on here!
Nothing better than listening to sharp minds in intelligent discussion. Helps me blot out the nightmare of the realities of the bigger picture ( & the last 10mins ).
The pensions change is an absolute joke and a complete mockery of the tax system. The UK government figures show that less than 2% of the population has a pension on or over the base lifetime allowance. A large amount of these have what is called lifetime allowance protections already, which means that their cap is actually higher than the £1,073,100 figure.
The fact that they have brought in a policy that only benefits the top 2% of pension havers is utterly ridiculous. This and the change to annual allowance increasing to £60,000 a year will mean that the extremely rich now have another way to essentially avoid inheritance tax, all the while doing absolutely nothing to impact on the vast amount of 30-55 year olds who have little in their pensions currently.
If they actually care about doctors working later, they would increase the base wages for doctors, but they don't, they just want another avenue to avoid paying tax.
increasing base wage would not alter the fact that lots of doctors would still be getting tax on pensions of tens of thousands of pounds. this isnt just those above 50yo, but often above 40yo based on annual contributions. it is highly unlikely that base rate pay could be increased enough to make up for a £50k pension tax bill to encourage people to work more.
there is a huge staffing issue in medicine, but also in many professions including the legal sector. we need senior (and ultimately well paid) professionals to work as much as possible, and we need tax and pensions systems that encourage them to do so.
My dad with a cushty Ministry of Defense pension is over the moon.. He's retired, so there is zero chance he'll be back in work.
He spent about a fortnight, creating spreadsheets and speaking to mortgage advisors about what to do.. Now he doesn't have to do anything.
Please show Torsten Bell's predictions versus what happened - what is his accuracy rate?
Please consider getting Gary Stevenson on who has a very high success rate and was Citibank's highest paid trader because he is so accurate. His RUclips channel is Gary's Economics.
Terrific summary. Thanks for putting this out.
"The US & EU are much bigger economies than ours"..... obvious & true, but not to some. They are still dreaming for sunlit uplands & being world beating. That was & is the majority of our specific economic problems.
But we had austerity and other crappy Tory policies BEFORE Brexit so the problems are much deeper than that
@@skyblazeeterno- BREXIT has made those issues unnecessarily worse. A LOT worse.
You get that, right?
Right?
Torsten Bell should be running this country........
Cynical appeal to the over-65 base...Hopefully some of these older people have ethics and are prepared to consider their grandkids rather than taking another cruise..
Well going by mymy family I'd say no...... These ppl voted brexit and tory already. Mine even said, it doesn't affect them
Not a chance, they are the entitled generation.
Over 65s don't care unless itimpacts them
If i was a healthy 55 year old with a big pension i would not spend those years working i would spend those years enjoying myself with my family,like most are now
People are living longer and there's a larger population that's living longer. Something has to give.
Policy has re-enforced the problems rather than solving it. It's frustrating.
Also on the retirement issue, part of what is stopping a group of younger people earning higher is accesses to better paid jobs. If older generations stay in the jobs longer if people can’t move upwards
Tax break for the top one percent , we should be doing what the French are doing, the Tories are ripping the piss out of the working and middle classes
Fab interview 🎉
Isn't pension relief regressive anyway? The lowest earners can't afford to save up for a pension, many people live paycheck to paycheck, whilst the highest earners are going to avoid tax on an annual £60,000 now.
The former will not see any significant tax relief, whilst the latter will annually have tens of thousands of pounds diverted from the public purse to their pension pot instead, albeit money they can't touch till later in life.
To clarify that £60,000 annual contribution allowance does taper off if you earn more £260,000, so a millionaire only gets £4000 pension relief at most. But still, that's a lot of well off people getting taken care of without any consideration for the lowest paid.
If you want people to save for a pension
Pay low earners a proper wage.
To help low earners save into a pension is very easy. The government should promise to match like for like pension contributions above the current level. Atm employee pays 4/5% and amd employer 3%, I think tax man pays a 1% but if the employee upped their contribution by 3% the government can match this so it would be 14% saved, the aussies save 15% of their salary. I dint think the policy would cost alot provided it was specifically targeted at earners under the average/ mean wage, not all can or will but the ones who do should get a benefit to do so
Its sounds like Hunt may have got away with doing what Truss tried (i.e. giving away loads of cash to rich people)
yup this is exactly what the budget was. Rebranding works and people lap it up
I wouldn't exactly call people paying £60,000 into their pension per year 'rich', well off yes, but certainly not rich. Also amassing £1m into a pension is easy done with modest contributions from the age one starts work. For example, if you paid in £250 a month and your employer matched it from age 21 until retirement at 68 you will have hit over £1m with modest 4% growth in equities. Not exactly rich now is it??
@@sl0w_racer the Office for National Statistics says the top 2% of the pensioners have >1m (2016 - 2018 numbers). Not quite the top 1%. So you wouldn’t call the top 2% rich?
@@oystercatcher943 No I wouldn't. The reason the numbers are so low 2% as you quoted is just because people do not save enough and/or don't start earliest enough, if they did then the number would be way bigger than 2%
My pension fund will be apprx worth £4m-£5m when I retire, now that is a pretty good sum of cash with big yields but £1m not at all, sounds a lot but it's not over 30/40 yrs
I don't know if I should be taking my money out of the bank and putting under my mattress? I'm 58 and have a bit to go before retirement, but already suffering anxiety over poverty later.
If we had Maths lessons in schools that focused on tax and savings we would have more younger people prioritising pensions.
We need students to understand the effect time has on pension contributions (compound interest)
Educate the masses but then how does the government get a population (of slaves) to work for the rest of their lives and keep society going collecting trash, running shops, etc...?
People have always prioritised short term smaller gains over long term larger gains. Young people do learn about compound interest but saving is not prioritised when they have other demands on their income.
A poor discussion on the pension cap. It's not a questoin of "saving £1m in my pension", it's the gradual increase in pension value over many decades of employer/employee contributions plus compounded growth. Those DB schemes that guarantee a salary of around £30,000 per year index linked will have a theoretical pot in excess of £1m. Choose your words carefully as you are spreading misinformation on the abololition of the pension cap.
Audio has a high pitched drone. Jarring in the ears, but great content as ever
08:52 very tempted to use this more to move discussions along 😅
Excellent video! 😊. Very informative and perfect balance of weeds / bigger picture
It should be good to note that in the budget there are multiple "Policy announcements" made that aren't actually funded, for example the 2+ years of free childcare is a scheme completely unfunded. This government is genuinely stating policies that aren't being funded because they expect no one to actually look at the budget. That's how stupid and worthless they think people are.
Very interesting and clear
this is why I always get frustrated when people say think of the pensioners. Think of the poor pensioners, yes. Most of them aren't.
The headline 'Rich pensioners being given £40,000' is a bit of a fib. In reality they're not being 'given anything, they're just being allowed to keep up to £40,000 of their own money.
And so they should. Why should thick ,lazy non workers be taking all the time.
Why don't people in the UK look for the "benchmarks" or best practices in other countries & offer these as potential solutions for this country? I'm sure the childcare policy is already happening in Scandinavia for example. The notion that groups or individuals have to seek credit for their "original" ideas is juvenile. Party politics is holding this country back.
Pensions can be IHT free but the money in them is taxed as income in the hands of the inheriting parties when they draw it. This avoids double taxing pensions compared to other assets in an estate.
Didn’t know James Acaster knew so much about economics!
I have seen many comments from the public on various media stating that this budget is spending money for the NEXT Government (childcare), but none of the economists or reporters have mentioned it! It is very easy to commit to spending money when you will not be in power to pay for it! Clever tactics! Place a great thing in the budget and get the praise....but not be prepared to fund it!
@left_blank Who, indeed?
Torsten is excellent.
Under the last Labour manifesto the growth plan was to set up regional banks to invest in those areas with 4 people in charge (a civil servant, a business person, a trade unionist and a local government official). That was ripped off by the Johnson government under the slogan levelling up but the funds were centrally controlled and have been a complete disaster.
Torsten Bell is great.
Why can’t we have sensible conversations like this with actual politicians??
Being a 39 year old single income family, with a 5 and 3 year old, it’s nothing but bad news
Not taking is not the same as giving
Pensions are only deferred wages, when you get a pension that is over the 'free allowance' you are taxed on it as an income, so doesn't matter how much you put away tax free, you still end up paying tax on it when you get it back.
@hawklord100: all income is taxable, regardless of where it comes from. Pension income, including the State pension, is income so is taxable. This is why the super rich do not bother with pensoins. This pension change helps the middle class, not the wealthy.
Am I to Expect NatWest busting soon? Or other UK Banks? After the Mini Budget from the last year, the LIBOR rates changed quite significantly!
You said that it was the UK subsidiary who dragged this US bank down!
lmao mathematically gifted James Acaster - that's a compliment.