From today's front page:
Millions of people approaching retirement are being hit by a crippling combination of large mortgages and no savings...
Pension experts warn against the widely held approach of using your house as your pension because few people actually want to move out when they get to retirement age. In another blow to those approaching 65, research reveals that even pensioners who have saved have been hit by a 70 per cent collapse in their retirement income in the past ten years.
A report by insurance giant Aviva found that one in four pre-retirees has a mortgage. In a fifth of those cases, it is more than £75,000. The findings destroy the widely held assumption that a mortgage is a 25-year loan which is paid off by your 55th birthday, or sooner. Parents are remortgaging their home to give money to their children to help them on to the property ladder. Others use their house as a 'cash machine', taking out money to put into a business, fund a better lifestyle or pay off debt....
Glorious.
Now, how about using a large chunk of Land Value Tax* receipts to pay for encashable Land-Value-Tax-Credits for pensioners to improve their post-tax incomes? If those who gain from the changeover - because their LVT bill is less than their Council Tax used to be, or whose estates are now no longer liable to Inheritance Tax - feel too terribly guilty about the mythical widow-in-a-mansion being under pressure to downsize (releasing a large chunk of money in the process), then they're free to give her their credits, aren't they?
* Which will replace Council Tax, Stamp Duty, Inheritance Tax, Capital Gains Tax, the TV licence fee, Insurance Premium Tax etc etc once I'm in charge.
Must stop scanning headlines
1 hour ago
5 comments:
Surely it would replace Income Tax, Corporation Tax (which can never collectable after an equitable fashion), and the National Insurance Ponzi Scheme too? But giving tax credits on LVT would undermine a lot of its good in combating the inflationary latency in the housing market: there needs to be an encouragement for them to downsize.
But the sad thing about the Daily Mail is that they will have forgotten by tomorrow what they learnt today. They are the slaves of their own narrative.
JD, in the long run LVT ought to replace those as well, but we've got to start somewhere, and simplification is always good.
PS, the 'LVT credits' will be in cash, i.e. you get a weekly Citizen's Pension of £130 (or whatever) and also another £40 (or whatever) in 'LVT credits'.
So if the household's LVT bill is less than £4,000 (for a couple) or £2,000 (for a single pensioner), it keeps the difference, there's not really anything for them to complain about and no discouragement to down-sizing (and/or no incentive to being a NIMBY).
And the widow-in-a-mansion can either stick where she is and roll up the excess of LVT over credits to be repaid on death; or just trade down.
Of course the other thing is that the ultra-low interest rates needed to maintain high house prices mean much smaller annuities.
This is a transfer of wealth from people with pension savings to the government (who borrow off them cheaper) and homeowners (who enjoy high house prices).
wv. drane - I kid you not!
Pension experts warn against the widely held approach of using your house as your pension because few people actually want to move out when they get to retirement age.
This is news?
S_L, exactly - the ugly truth of Home-Owner-Ism is that the losses outweigh gains and it always gets you in the end.
LR, it's not news to me, but it's news to the Home-Owner-Ists over at the Mail - that's the newsy bit.
Post a Comment