Government 'can't afford' state pension's 'current and future' rates
Chancellor Rachel Reeves is under pressure to roll out changes to the State Pension. The Department for Work and Pensions (DWP) could uprate the State Pension by as much as £460 next year, amid the ongoing Cost of Living crisis.
But Labour Party Chancellor Ms Reeves has been warned her tax raid on the wealthy could leave the UK worse off. The National Insurance fund used to pay for pensions could be depleted within two decade, figures suggest.
Jasmine Birtles, money expert and founder of MoneyMagpie, spoke to Andrew Eborn of Octopus TV, and explained that the richest people (one per cent) are paying 30 per cent of tax in the UK but if they leave due to an increase of taxes, there will be massive knock-on effects.
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Birtles questioned: "Who counts as ordinary working people? I work and I earn but I don't want to be saddled with a huge tax bill - what am I working for if the Government take half my money?" Birtles said: "I agree with pensioners having money but honestly as a nation - and most western countries - we cannot afford the current and future state pension bill. It costs us around £120bn - they put it up around eight percent last year so it's a huge amount of money.
"The population have trusted the Government to manage the public purse in the right way but I haven't trusted them for a few years now and I certainly don't trust them now. Why should they punish or over tax the rich because they will go and give money to the public sector - that will be a waste. The more tax you pay, the more you wonder where it is going."
Damon Hopkins, head of DC and workplace savings at Broadstone, warned: "While it would be a significant political risk to endanger the triple lock now, its current format could be increasingly challenging for the Treasury to sustain."
Joshua Gerstler, chartered financial planner at The Orchard Practice, added: "I can see the State Pension becoming a means tested benefit in the future. It is more important than ever to be making your own provision for retirement as you cannot rely on the State Pension being around forever."