Latest news with #pensions
The Guardian
19 hours ago
- Business
- The Guardian
Germany urgently needs to attract migrant workers – it just doesn't want them to feel welcome
Friedrich Merz's government has sent a clear message to anyone thinking about coming to live in Germany: don't. Yet its message to those who want to come to Germany to work is: we need you. This might sound like a contradiction, but it is a revival of the thinking that drove the 'guest worker' programme of the postwar boom years. Between 1955 and 1973, West Germany sought to rebuild its economy by attracting labour, mainly from Turkey but also from Italy, Portugal and Yugoslavia. Yet it did so without giving much consideration to the human needs of the people coming. Repeating that experiment, and the social tensions it created, at this moment would be even worse. The Wirtschaftswunder (economic miracle) fuelled record growth and labour shortages. Now, Germany's economy is in recession, but it desperately needs people to fulfil basic public services. Above all, it needs them to help finance its mounting pensions bill. Given that Germany has also become ground zero for Europe's heightened sensitivity around immigration after the backlash that followed Angela Merkel's open-door policy towards Syrian refugees a decade ago, it's worth paying attention to how Berlin navigates the issue. So far, Merz is providing a masterclass in what not to do. On the one hand, the conservative chancellor is fuelling rightwing narratives that suggest migration is a threat to the country. On the other, he speaks as the voice of German business and pleads for more foreign workers. 'We need skilled immigrants as drivers of progress,' Merz said this month, at a ceremony to honour the contributions of Özlem Türeci and Uğur Şahin – the Turkish immigrants behind Covid vaccine pioneer BioNTech. He added that anti-immigration 'ideologies' were a threat not just to Germany's prosperity 'but even worse, their narrow-mindedness threatens the future of our liberal order'. But his government has sent exactly the kind of signal he claims to decry. Germany has continued with a new policy of rejecting asylum seekers at its borders, despite a court order calling it unlawful and a violation of EU law. The border rejections standoff comes despite a dramatic decline in refugees – up to April 2025, the figures were down by nearly half from the previous year. Another leg of Merz's anti-migration strategy is to put an end to 'turbo naturalisation', which allows newcomers the opportunity to apply for a German passport after as little as three years in select cases. The official justification is that ending fast-track citizenship will eliminate a 'pull factor' and reduce illegal migration. But obtaining citizenship and skirting migration rules have nothing to do with one another. Crossing the border as an irregular migrant can be an act of desperation, and at times opportunism. Getting a German passport requires legal residency at the very least, but also involves various hurdles and a significant amount of paperwork. The fast-track procedure is even more discretionary and reserved for people that exhibit 'exceptional integration efforts', such as speaking German at an advanced level, consistently paying taxes and taking part in the community, for example by volunteering at local charities or sports clubs. Eliminating that route, which only opened in June 2024, will have very little impact. Last year – when a rush to take advantage of the new process might have been expected – only about 7% of people receiving German citizenship had an accelerated application, according to federal statistics agency Destatis. But Merz's moves reinforce the narrative that Germany is being overwhelmed by newcomers. The approach bolsters the far-right AfD – a close second in the polls – which has called for the deportation of thousands of people, including some with migrant backgrounds who hold German citizenship. Controlling entry is legitimate, but such grandstanding policies fuel xenophobic sentiment and don't allay the worries of anxious citizens. Also, the political dividends are limited. Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion While the fevered discussion around migration has kept it as the top issue for Germans, only 38% of people ranked it as one of their three main concerns, which is four percentage points lower than in April, according to an Ipsos survey. Economic concerns such as inflation and poverty/inequality are the other top concerns. The harder-to-face reality is that Germany could use all the help it can get. With older Germans heading into retirement by the millions over the coming decade, the country must welcome a net 400,000 newcomers each year to keep things balanced and shoulder the rising cost of pensions. But this isn't the postwar era, where Germany can sign agreements with poorer countries and expect thousands to arrive. There's global competition for qualified workers, and Germany is at a disadvantage because of its language and its reputation for being unwelcoming. That's a legacy from the mismanaged Gastarbeiter (guest worker) programme, when Germany had neither a plan for how to integrate the people it lured for work, nor the desire to do so. It also reflects a national identity left narrow and underdeveloped due to its Nazi past. The former footballer Mesut Özil, born in 1988 to a Turkish guest-worker family in Germany's Ruhr Valley, never felt fully accepted. Though he played a starring role in Germany's 2014 World Cup win, he said: 'When we win, I'm German; when we lose, I'm a foreigner.' His story shows how acceptance is out of reach for many. And it's not isolated. According to a recent study by the Friedrich Ebert Foundation, between 2015 and 2022, 12 million people migrated to Germany. The study also said that, in the same period, more than 7 million migrants left again. The main reasons were difficulties feeling part of German society. The next blow could be looming. According to a study by Germany's Institute for Employment Research, a quarter of migrants in the country – around 2.6 million people – are considering packing up and leaving. Germany's self-imposed isolation will lead to a slow erosion of the labour force unless it is urgently addressed. Revising the narrative around migration to recast it as part of the solution would be a good starting point. But the political class hardly looks ready. As Markus Söder, the conservative premier of Bavaria, recently told the rightwing media outlet NiUS: 'Of course we need immigration– unfortunately.' Chris Reiter and Will Wilkes are the co-authors of Broken Republik: The Inside Story of Germany's Descent Into Crisis. Both cover Germany from Berlin and Frankfurt, respectively, for Bloomberg News Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.
The Independent
a day ago
- Business
- The Independent
5 pension mistakes you might be making now that will cost you later
Pensions can often be a topic that people don't think about much, or feel the importance to take time to research. Lisa Picardo, chief business officer for PensionBee in the UK – where they help customers to consolidate pensions, contribute and withdraw with ease – says that it is 'never too late to get on top of your pensions'. ' People do engage with their pensions at different points and for different reasons,' Picardo says. 'It's always a great idea to engage with your pension, because taking those proactive steps to consolidate and to engage now typically will lead to better retirement outcomes.' As the idea of pensions often go to the back burner of people's minds, there may be some common and simple mistakes being made that could effect their future. We spoke with pension and finance experts to explain what some of these may be. Losing track of your hard earned pension costs Picardo says people loosing track of their pension costs is 'really big' and 'surprisingly very common.' 'This is not just about forgetting where your money is or even losing it altogether, but it's about missing out on the opportunity to manage these savings effectively and achieve a better retirement outcome,' she says. 'The mistake that people make is that they essentially lose sight of their pensions because most of us are going to accumulate many pension pots over our careers due to the auto enrolment function here in the UK, which means that every time you start a new job, you get a new workplace pension. 'With more and more frequent job switching, people are going to amass a number of pensions over their lifetime. Our research shows that there are around 4.8 million pension pots that are now considered lost in the UK – that is one in 10 people who think they've lost a pot. 'Bringing all your pension pots together is therefore a great solution. It puts you in control of your financial future, helps to reduce the risk of forgotten or lost pots, helps to potentially cut down on fees and overall makes it easier for you to manage your savings.' Not taking advantage of employer contributions 'Under auto enrolment, if you're eligible and don't opt out, your employer contributes to your pension which is essentially free money, along with the tax relief you receive,' Claire Trott, head of advice at St. James's Place says. 'Many employers also offer 'matching,' where they'll increase their contributions if you do. Failing to take advantage of this is like turning down part of your salary, as there's usually no alternative benefit offered in exchange.' Not making the most of your contributions 'It is very easy to put pension saving on the back burner,' Picado says. 'Especially when you are faced with other pressing financial priorities. However, if you delay or don't contribute to your pension, it can significantly impact your pots' growth over time. 'Many people don't contribute enough or don't start early enough and therefore, they don't really have the benefit of compound growth which is sort of like magic. Even small increases can make a world of difference. 'Therefore to solve this, you should do what you can, when you can. Start contributing early. If you can't commit to it fully, do it flexibly. A lot of people take the opportunity when they're doing a tax return once a year to have a look at what additional contributions they could be making.' Trott adds: 'I often suggest when you get a pay rise, consider putting half into your pension, your take home pay still increases, and you're investing in your future.' Claiming higher or additional rate relief 'If you're a higher or additional rate taxpayer contributing to a personal pension, you may be entitled to extra tax relief but you won't receive it automatically,' Trott says. 'You can claim through your Self Assessment tax return or by contacting HMRC directly to adjust your tax code. For regular contributions, one call is often enough. Just remember to flag any one-off payments clearly so HMRC doesn't apply the change to future years in error.' 'What we see when markets are turbulent is a lot of people feel worried about savings and act impulsively,' Picado says. 'They may withdraw funds or switch investments during a downturn, thinking that it will minimise their loss or protect their money. However, this can put you in a position where you actually do more harm than good. 'What happens here is they are crystallising that loss and lose the ability to recover as the markets rebound. Similarly, withdrawing too much once you reach pension access age can be a mistake because you can run out of money in later life. 'Therefore, when you do come to withdraw, you have to make sure that you are future-proofing and not taking too much in one go. If you are in drawdown and there is market volatility, try to ensure that you have some cash reserves or an emergency fund handy so you can draw on that. This can really help to ride out market storms without having to either sell investments or take too much at the worst possible time. 'Pensions are long-term investments and are very much designed to weather the storm over the long term.'
Yahoo
a day ago
- Business
- Yahoo
What does the UK spend on welfare – and how much will it rise?
Welfare spending is forecast to rise sharply over the next few years, driven by the UK's ageing population and an increase in the number of people receiving health and disability benefits. Here, the PA news agency looks at the latest figures and projections for social security and welfare expenditure. – How much does the UK spend in total? The Government is forecast to have spent £313.0 billion on welfare in 2024/25, according to the Office for Budget Responsibility (OBR). This is the equivalent of 10.9% of UK GDP (gross domestic product, or the total value of the economy). The OBR forecasts annual spending on welfare to reach £373.4 billion in 2029/30. This is up £60.4 billion on the figure for 2024/25 – an increase of nearly a fifth. Welfare spending as a proportion of GDP is forecast to fall slightly to 10.8%, however. – What takes up the biggest share of the welfare budget? Spending on pensioners. Some £150.7 billion was spent on pensioners in 2024/25, accounting for nearly half (48%) of the total welfare budget. Besides the state pension, this spending also includes pensioner housing benefit, pension credit and the winter fuel payment. Spending on pensioners is forecast to reach £181.8 billion by 2029/30, but this would still be just under half (49%) of the full welfare budget. – How does the rest of the welfare budget break down? The next largest chunk of spending goes on Universal Credit, which made up 28% of the 2024/25 budget (£87.8 billion). It was followed by disability benefits at 13% (£41.4 billion) and child benefit at 4% (£13.3 billion), with other types of spending – including social security in Northern Ireland – accounting for 6% (£19.9 billion). – Is spending set to increase for all types of welfare? No. The child benefit budget is forecast to remain largely flat, at £13.6 billion in 2029/30, compared with £13.3 billion in 2024/25. By contrast, spending on disability benefits is forecast to jump to £56.3 billion by 2029/30, up from £41.4 billion in 2024/25. Spending on Universal Credit will reach £99.0 billion, up from £87.8 billion. – Why is welfare spending rising? The OBR identifies two main drivers of the increase. The first is higher spending on pensioners. This is because of the UK's ageing population and the 'triple lock', which guarantees pensions will rise each year by whichever is highest: the annual rate of inflation, average growth in earnings, or 2.5%. Of the forecast £60.4 billion extra spending on welfare in 2029/30, pensioners are responsible for just over half of the amount, at £31.3 billion (51%). The second factor identified by the OBR as driving an increase in welfare spending is the rise in people eligible for health and disability benefits. Spending on disability benefits, which includes disability living allowance and personal independence payments, accounts for £14.9 billion (25%) of the £60.4 billion extra spending on welfare in 2029/30. – How does spending on health and disability benefits break down by age group? The OBR defines health and disability benefits as covering the following entitlements: the standard allowance and health element spending for Universal Credit claimants; employment and support allowance; incapacity benefit; severe disablement allowance; income support for incapacity; disability living allowance; personal independence payment; attendance allowance; spending on the Universal Credit carer's element; carer's allowance, and income support for carers. Spending on all these benefits was estimated to be £75.7 billion in 2024/25, three-quarters of which (75% or £56.9 billion) went to working-age adults. Just under a fifth (19%, or £14.2 billion) went to pensioners, while 6% (£4.5 billion) went to children. Although the amount spent on health and disability benefits is forecast to rise to £97.9 billion in 2029/30, the proportions are expected to remain broadly the same: 74% on working-age adults (£72.3 billion), 19% on pensioners (£18.3 billion) and 7% on children (£7.0 billion). – How does welfare spending compare with other government departments? In 2023/24, actual spending on health and disability benefits was £66.3 billion. This was more than than the total departmental expenditure on defence (£57.6 billion) or transport (£32.6 billion), but well below the figure for education (£127.0 billion) and overall health and social care spending (£196.7 billion), according to the latest Treasury data. Total expenditure by the Department for Work & Pensions stood at £275.1 billion in 2023/24, up from £239.1 billion in 2022/23 and the highest figure among all government departments.
The Independent
a day ago
- Business
- The Independent
What does the UK spend on welfare – and how much will it rise?
Welfare spending is forecast to rise sharply over the next few years, driven by the UK's ageing population and an increase in the number of people receiving health and disability benefits. Here, the PA news agency looks at the latest figures and projections for social security and welfare expenditure. – How much does the UK spend in total? The Government is forecast to have spent £313.0 billion on welfare in 2024/25, according to the Office for Budget Responsibility (OBR). This is the equivalent of 10.9% of UK GDP (gross domestic product, or the total value of the economy). The OBR forecasts annual spending on welfare to reach £373.4 billion in 2029/30. This is up £60.4 billion on the figure for 2024/25 – an increase of nearly a fifth. Welfare spending as a proportion of GDP is forecast to fall slightly to 10.8%, however. – What takes up the biggest share of the welfare budget? Spending on pensioners. Some £150.7 billion was spent on pensioners in 2024/25, accounting for nearly half (48%) of the total welfare budget. Besides the state pension, this spending also includes pensioner housing benefit, pension credit and the winter fuel payment. Spending on pensioners is forecast to reach £181.8 billion by 2029/30, but this would still be just under half (49%) of the full welfare budget. – How does the rest of the welfare budget break down? The next largest chunk of spending goes on Universal Credit, which made up 28% of the 2024/25 budget (£87.8 billion). It was followed by disability benefits at 13% (£41.4 billion) and child benefit at 4% (£13.3 billion), with other types of spending – including social security in Northern Ireland – accounting for 6% (£19.9 billion). – Is spending set to increase for all types of welfare? No. The child benefit budget is forecast to remain largely flat, at £13.6 billion in 2029/30, compared with £13.3 billion in 2024/25. By contrast, spending on disability benefits is forecast to jump to £56.3 billion by 2029/30, up from £41.4 billion in 2024/25. Spending on Universal Credit will reach £99.0 billion, up from £87.8 billion. – Why is welfare spending rising? The OBR identifies two main drivers of the increase. The first is higher spending on pensioners. This is because of the UK's ageing population and the 'triple lock', which guarantees pensions will rise each year by whichever is highest: the annual rate of inflation, average growth in earnings, or 2.5%. Of the forecast £60.4 billion extra spending on welfare in 2029/30, pensioners are responsible for just over half of the amount, at £31.3 billion (51%). The second factor identified by the OBR as driving an increase in welfare spending is the rise in people eligible for health and disability benefits. Spending on disability benefits, which includes disability living allowance and personal independence payments, accounts for £14.9 billion (25%) of the £60.4 billion extra spending on welfare in 2029/30. – How does spending on health and disability benefits break down by age group? The OBR defines health and disability benefits as covering the following entitlements: the standard allowance and health element spending for Universal Credit claimants; employment and support allowance; incapacity benefit; severe disablement allowance; income support for incapacity; disability living allowance; personal independence payment; attendance allowance; spending on the Universal Credit carer's element; carer's allowance, and income support for carers. Spending on all these benefits was estimated to be £75.7 billion in 2024/25, three-quarters of which (75% or £56.9 billion) went to working-age adults. Just under a fifth (19%, or £14.2 billion) went to pensioners, while 6% (£4.5 billion) went to children. Although the amount spent on health and disability benefits is forecast to rise to £97.9 billion in 2029/30, the proportions are expected to remain broadly the same: 74% on working-age adults (£72.3 billion), 19% on pensioners (£18.3 billion) and 7% on children (£7.0 billion). – How does welfare spending compare with other government departments? In 2023/24, actual spending on health and disability benefits was £66.3 billion. This was more than than the total departmental expenditure on defence (£57.6 billion) or transport (£32.6 billion), but well below the figure for education (£127.0 billion) and overall health and social care spending (£196.7 billion), according to the latest Treasury data. Total expenditure by the Department for Work & Pensions stood at £275.1 billion in 2023/24, up from £239.1 billion in 2022/23 and the highest figure among all government departments.
Yahoo
2 days ago
- Business
- Yahoo
Climate group raises concerns about oil and gas representation on pension fund boards
TORONTO — A climate advocacy group says oil and gas representation on the boards of Canada's big public pensions raise concerns about conflicts of interest. Shift Action says in a new report that as of June 1, the boards of five of Canada's largest public sector funds had members who are also involved with fossil fuel companies. It says CPP Investments, Canada's largest pension fund, has the second-highest representation with three in ten members of its board having ties to the industry. The fund, which recently dropped its commitment to reach net-zero financed emissions by 2050, did not immediately respond to a request for comment. Other funds the group found with cross-appointments include the Ontario Teachers' Pension Plan, Public Sector Pension Investment Board, Alberta Investment Management Corp. and Ontario Municipal Employees Retirement System. Shift says that pension funds have a legal responsibility to act in the long-term best interest of beneficiaries, and that the interests of fossil fuel companies could compete with efforts to manage climate-related risks and reducing emissions. "It's easy to see how fossil fuel company directors could potentially find themselves with real or perceived conflicts, and how such conflicts, if not addressed, could undermine prudent pension governance," said Shift executive director Adam Scott in a statement. The group says that in total, nine current board members across the funds sit on the boards or executive teams of 12 oil and gas companies, or investment firms focused on the industry. It notes, however, that the number of boards with fossil fuel representation has gone down from seven to five since its last report in 2022. It says the boards of Healthcare of Ontario Pension Plan, Investment Management Corporation of Ontario and CDPQ no longer have fossil fuel representation. This report by The Canadian Press was first published June 26, 2025. The Canadian Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
