Latest news with #InstituteOfFiscalStudies
The Sun
2 days ago
- Business
- The Sun
Blow to Brit workers as future OAPs face working for longer for a SMALLER state pension
Ryan Sabey, Deputy Political Editor Published: Invalid Date, MILLIONS could be forced to work for longer after minister Liz Kendall announced another review of the state pension age. It is already poised to rise to 67 by 2028 — but experts say it will have to hit 74 within decades if the triple-lock is kept. Welfare Secretary Liz Kendall appeared to pave the way for the state pension age to rise ahead of schedule by launching a review to make sure the system is sustainable. 2 2 She also warned the cost-of-living crisis is stopping people from saving in private pension pots. Ms Kendall said: 'Unless we act, tomorrow's pensioners will be poorer than today's.' Her review, due in 2027, comes after the Office for Budget Responsibility said the triple-lock — which guarantees a state pension rise of at least 2.5 per cent each year — is costing three times more than originally forecast. Ms Kendall said the triple-lock is 'out of scope' for her report. The state pension age will soon rise to 67. The next increase to 68 is due in the mid-2040s, but the Institute of Fiscal Studies says it will have to be increased to 69 by 2049 and then reach 74 by 2069 if the triple lock is kept. Without rises, state pensions could exceed six per cent of GDP. Tory leader Kemi Badenoch blamed Labour for less growth and more unemployment, meaning 'less money to pay' for pensions. An estimated 15 million adults are under-saving for retirement. How to track down lost pensions worth £1,000s How will a higher state pension age affect my retirement? By James Flanders, Chief Consumer Reporter: Raising the state pension age means people will have to wait longer to get their government-funded pension, which can be tough for those who rely on it as their main source of income. It's especially challenging for people in physically demanding jobs or those with little in the way of savings, as they'll need to figure out how to cover the gap between stopping work and qualifying for the state pension. But the good news is that private pensions give you more choice. Right now, you can access private pensions from age 55, although this will increase to 57 in April 2028. If you've been saving into a workplace pension or a personal pension, you could retire earlier than the state pension age, depending on how much you've saved. You can take the money as a lump sum, set up regular payments, or even leave it invested to grow. For those with enough savings, this flexibility means you can plan retirement around what works for you. But if your private pension isn't enough, you might find yourself working longer and waiting for the state pension to kick in. It's a reminder of why starting to save early and keeping an eye on your pension pot is so important for creating options later in life.
Daily Mail
04-07-2025
- Business
- Daily Mail
Raising a big tax is Rachel Reeves' only way of balancing the books to fill fiscal black hole, experts warn
Britain's hard-pressed middle earners face a painful new tax squeeze as the Chancellor scrambles to fill fiscal black hole, experts warned yesterday. Rachel Reeves is on course to break her election promise not to put up taxes including income tax, National Insurance and VAT, Institute of Fiscal Studies director Paul Johnson said. It came as a damning new poll by YouGov showed that three-quarters of Britons believe Ms Reeves will smash Labour 's vow by putting up one of the UK's main taxes. The Chancellor could be facing a black hole of up to £40 billion in the October Budget after Labour was forced into a humiliating U-turn on welfare reform amid economic downgrades. Ms Reeves last night refused to rule out tax rises in the autumn, saying it would be 'irresponsible for a Chancellor to do that'. And, she told the Guardian, despite her tears in the Commons this week, she never entertained the idea of resigning, adding: 'I didn't work that hard to then quit.' The Chancellor has also refused to rule out a raid on pensions amid growing fears that she will target the retirement pots of millions of workers in the autumn. Mr Johnson told the BBC: 'If you are looking at [a] £30 billion [black hole], which is quite plausible, I can't see a way you raise that kind of money without hitting people on middle incomes as they did with the National Insurance last year.' He added that Ms Reeves will have to break her election vow not to put up the main taxes. 'If you are looking at big money it has to be something in income tax, National Insurance and VAT,' he said. 'To raise that kind of money, you are looking at people on middle kinds of income.' Months of speculation over pension tax changes ahead of the Budget could prove highly damaging if – as was the case last year – it leads to a rush of savers withdrawing cash from their retirement pots early to avoid being hit. Mr Johnson said: 'There was all sorts of speculation before the last Budget, in fact tens of thousands of people changed their pension arrangements for fear that there will be a change which there then wasn't. 'We've heard nothing from the Government about what its view is about how pensions should be taxed.' He said changing pension tax relief would 'hit a very large number of teachers and nurses and other people in the public sector who the Government might not want to hurt.' Two former pensions ministers – Sir Steve Webb and Baroness Altmann – previously told the Mail that Ms Reeves should rule out a raid on retirement savings. The Office for Budget Responsibility (OBR) halved its growth forecast for this year in March. This week the watchdog hinted at a further likely downgrade after admitting that previous forecasts had proved too optimistic. Economists have warned that a 0.2 per cent downgrade in the OBR's forecasts would leave the Chancellor with an £18 billion hole to fill. The problem has been made worse by costly U-turns on welfare. Keir Starmer's climbdown on the winter fuel allowance will cost £1.5 billion. The retreat over cuts to the personal independence payment (PIP) could cost as much as £6 billion, and Labour MPs are pushing for the abolition of the two-child benefit cap.
BBC News
02-07-2025
- Business
- BBC News
BBC Verify Live: Cost of benefits U-turn, and new Gaza evacuation order
Update: Date: 10:32 BST Title: Could the welfare reform plan end up costing the government money? Content: Tom EdgingtonBBC Verify senior journalist Economists have suggested the government's latest concession on its welfare reforms - notably that proposed changes to personal independence payments (Pip) will be delayed - will now result in no 'net savings' by 2030. Paul Johnson, director of the Institute of Fiscal Studies (IFS), says, external the reforms 'could even end up costing a few tens of millions'. How is this possible? Under the government's original plans, the reform package was expected to save around £5bn a year by 2030. This projected figure has been whittled down after a series of concessions to Labour MPs. The tightening of Pip rules was expected to save £2.6bn by 2030, according to the IFS's Tom Waters. But this change is now subject to a government review - which means ministers are left with just a projected £1.7bn saving from cutting the health element of universal credit. However, the government has also promised to raise basic universal credit, at a cost of £1.8bn, Waters adds. This potentially leaves the government with a bill of £100m in 2029-30. Update: Date: 10:06 BST Title: IDF issues new evacuation order for Khan Younis Content: Joshua Cheetham and Paul BrownBBC Verify The Israeli military has issued evacuation orders for three areas of Khan Younis, southern Gaza, with people there being told to go 'immediately northwards to the known shelters in Deir al-Balah'. The Israel Defense Forces has not provided any immediate details about these shelters. Two of these areas in Khan Younis have appeared in previous evacuation orders, while a third is new. There have been reports of an overnight raid in the Zeitoun neighbourhood of Gaza City, which we're investigating. The Israel Defense Forces' Arabic spokesman posted this map identifying the latest evacuation zones in Khan Younis Update: Date: 09:53 BST Title: What's the impact of the welfare U-turn on the government's finances? Content: Tom EdgingtonBBC Verify senior journalist The government's last-minute concession yesterday over its plan to change the personal independence payment disability benefit leaves it facing questions about the impact of this - and other welfare reform concessions - on the public finances. The government's original welfare plan was expected to save about £5bn a year from 2030. That estimate was halved when it announced initial concessions last week in an attempt to stave off a growing rebellion by Labour MPs. Having now made further concessions, economists say the government could end up with no "net savings" by 2030. This is significant because the government has a rule which says it cannot borrow money to fund day-to-day spending - to effectively balance the books. And the amount of leeway Chancellor Rachel Reeves had initially budgeted for against her borrowing rule was just £9.9bn by 2030. Helen Miller, deputy director of the Institute for Fiscal Studies, said the welfare concessions have effectively halved the chancellor's "margin of error" against her main fiscal rule - raising the possibility of tax rises in the autumn. Update: Date: 09:42 BST Title: Wednesday on BBC Verify Live Content: Rob CorpBBC Verify Live editor Good morning. On the live page today we're going to be sharing BBC Verify's work on a range of stories - taking in the impact on the UK's public finances of the government's last-minute changes to its welfare reform plans in the face of a significant potential rebellion by its own MPs. Elsewhere, we're keeping a close eye on what's happening in Gaza. The Israeli military has warned residents in parts of Khan Younis to 'head north' - we'll assess which areas are affected. And with renewed talk of a ceasefire in the long-running war between Israel and Hamas we'll share what we know about the hostages still being held in Gaza and any strikes that happen in the meantime. As well as those we'll be across Prime Minister's Questions in the House of Commons from noon ready to fact-check any claims made by MPs during the session. We start today with our first look at the consequences of yesterday's welfare U-turn.
Daily Mail
23-06-2025
- Business
- Daily Mail
Strategy without substance: Labour must do more to stop the City exodus, says ALEX BRUMMER
Now we have a full house: Labour's spending review, the infrastructure plan and the long-awaited industrial strategy. Anyone seeking to reconcile the bucketful of numbers, different timings of implementation and the exact sum of money involved will, to quote departing Institute of Fiscal Studies chief Paul Johnson, be baffled. This is not to say that there is not good stuff in the industrial strategy. The decision to relieve a bunch of manufacturing business, some 7,000 firms, of intrusive green levies represents a significant change of direction which should improve the competitiveness of the motor, aerospace and chemical industries. But it does not do much help for retail and hospitality, which face not just escalating fuel costs but the consequences of the employers' National Insurance increase and ramped-up business rates. Whitehall is a whizz at coming up with an alphabet soup of new names such as the 'British Industrial Competitiveness Scheme' and a 'Connections Accelerator Service'. Hot air: Whitehall is a whizz at coming with an alphabet soup of new names such as the British Industrial Competitiveness Scheme and a Connections Accelerator Service These will sit alongside the other good stuff already unveiled, such as Great British Energy and the National Wealth Fund. How this hangs together is confusing. The focus on eight sectors where the UK excels – advanced manufacturing, clean energy, creative industries, defence, digital tech, financial services, life sciences, and professional and business services – clearly has merit. Much of it is hot air. There is no recognition that great swathes of tech leave these shores daily. Only yesterday, precision instrument maker Spectris fell into the hands of private equity plunderer Advent. The creative industries are under threat from AI because Sir Keir Starmer favours American big tech over home-grown talent. The decision to refuse assistance to AstraZeneca vaccine production in the UK encouraged our biggest pharma concern to invest overseas. UK fintech creation Wise and Revolut plan New York listings. And the 2.5 per cent of GDP promised for defence spending is half the NATO target of 5 per cent. Practical steps such as judicious use of the National Security & Investment Act, to end the madness of foreign and private equity bids, would be a good start to a refreshed approach. Health boost In the end, after a revolt from UK long investors, the ridiculous board of NHS and medical property landlord Assura opted for an effective merger with PHP. That may require fewer goodies for executives and the jobs grief which comes with mergers. It must, however, be in the best interest of stakeholders. Those at Assura who felt a cash deal with KKR was the better option were delusional. A search of the British Medical Journal archive provides clear guidance on the impact of private equity ownership in this space. It results in extra cost to patients and payers, secondary effects on health outcomes and 'mixed to harmful impacts on quality'. A KKR deal would also have meant signing away the benefits of a 3 per cent rise in Labour's investment in the NHS to grasping financiers. All the indications are that many reforms to the NHS would focus on community and primary care, enhancing the value of companies investing in clinics and practices. KKR's last offer was 'final', precluding a return with a higher bid. One trusts KKR won't be back for the whole caboodle in six months. Cherry picking Spectris is the latest advanced UK engineer to take the private equity shilling, choosing private equity giant Advent ahead of KKR. The price of £4.4billion paid may look generous but not when one considers the discount to the New York stock market for the best of British engineering. No one in the Government should be complacent. It weakens the London markets. Advent's purchase of Cobham in 2019 and the dismantling of an aviation pioneer was a disgrace. Its key flight refuelling technology was sold to a US rival. The enormous value of Cobham's innovative tech was demonstrated in the epic 18-hour flight of B2 stealth bombers to Iran and back at the weekend. What happened to 'securonomics'?
CBC
14-05-2025
- Business
- CBC
Canadians need to see government's finances soon: Kevin Page
'It's not sustainable' for the finance minister to put off outlining the government's fiscal position to the fall, former parliamentary budget officer Kevin Page, who now heads the Institute of Fiscal Studies and Democracy at the University of Ottawa, tells Power & Politics.
