Want a fright?

If you want to know why the budget deficit needs to be addressed aggressively, read this from the BIS . Don’t let people like Ed Balls deceive you into thinking a little more borrowing won’t matter. The numbers are a bit out of date, but you get the idea. The graph 4 on page 10 is sobering.


9 thoughts on “Want a fright?”

  1. Looks like the population should work until it drops dead then…

    You chose a nifty time to get out of the Rat-race Robin!

    Good article. I wonder which of the red-tops will pick it up?

  2. A very frightening prospect. I retired a few years ago and am due to receive my “pocket money” from the state next year. It seemed very much to be saying that raising the retirement age was the better option which will be depressing for those still working.
    As you say, it’s a rather complicated subject for the redtops. Indeed, few papers picked up on the potential reduction in Gift Aid Relief when the standard rate of income tax changed a few years ago. There was then an outcry and transitional relief was introduced for a few years.

    1. The reduction in Gift Aid Relief undermines the “Big Society” initiative somewhat. I am afraid that working longer is going to be a necessity for many. I have yet to see a government policy that will make this easier. What about a transition to part time working for the over 65s? I feel very lucky to have been able to build up enough pension over my working life to be reasonably comfortable. I won’t be living like a king, but living sensibly I should be OK. However, even I’m looking for some part time work to hedge myself.

      1. I’m not convinced this Big Society thing will happen. Many folk already do charity work and such like voluntarily. I’m not sure they will like pressure being applied……….
        I retired nearly four years ago on a final salary pension at 60 and will receive my state pension next year. That, plus the odd few weeks of consultancy-type work, will keep the wolf from the door.

      2. I think you are right. There is a danger that the Big Society idea will backfire, even though the underlying sentiments are admirable. Increasingly it is seen as a cover for cuts in expenditure.

  3. Part time work when over 65? That makes me feel a little sad and depressed about what will be coming in my old age! I am a part timer now due to ill health and it has done me the world of good. Four days work followed by a 3 day weekend is a perfect work life balance. Rubbish for the bank balance though!

    In these uncertain economic times would it not make sense to reduce hours rather than cutting jobs?

    1. These are based on OECD figures before the current government’s fiscal consolidation plans. The OECD is also quite pessimistic about the cost of aging presumably because of the cost of the NHS. The UK also has the highest structural budget deficit (see page 3 of the BIS report) thanks to Gordon’s imprudence. My own view is that the chart is a bit pessimistic, but not ridiculous. It shows that there is no room for error and that the fiscal consolidation plans are vital, which is what Mervyn King has been talking about for the last year, and recently criticised by Ed Balls for doing so (what a hypocrite!).

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