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Yahoo
2 hours ago
- Business
- Yahoo
Government accused of prioritising pensioners over children
A gulf between government spending on pensioners and children has widened by 170pc in the past two decades, new research suggests. Last year, public spending per pensioner was £12,600 higher than it was per child, according to a report by think tank the Intergenerational Foundation. It reveals spending on pensioners has increased by more than half in the past two decades, while the amount of taxpayer cash devoted to children has lagged. Between 2004 and 2024, spending on retirees went up by 55pc in real terms, while children saw an increase of just 20pc during the same period, the report said. Analysis showed taxpayers spent £31,000 per pensioner last year compared with £18,000 per child, while working-age adults cost £14,000. It comes after Rachel Reeves reversed her decision to strip most pensioners of the £200 winter fuel payment following a months-long public outcry. Liz Emerson, chief executive of the International Foundation, said government policy is overly favourable to pensioners because they are a key voting constituency. She said: 'Welcome, though rapid, ageing has expanded the welfare state for the old while support has been largely withdrawn from the young. Add the power of the grey vote, and it is all too tempting for governments to respond to older generations' wants, irrespective of their actual need.' She added this increasingly contrasted with societal difficulties faced by younger people. 'Younger generations face a polycrisis of low government investment, high housing costs, low welfare support, and high taxation. 'The fact that birth rates are falling may well indicate that younger generations do not believe they can provide the economic stability needed to bring up a family.' The research divided government spending on public services like the NHS, state pension, education and social care by the number of children, working-age adults and pensioners in the country. Britain's birthrate recently fell to a record low. The official fertility rate for England and Wales is 1.44 births per woman, significantly less than the 2.1 required to maintain population size. Figures published at the end of last year showed that the number of children born to British mothers had fallen by a quarter in 15 years. It suggests many more women are putting off having children, amid rising cost of living. The increase in state spending on pensioners has been partly driven by the pensions triple lock, which links state pension payments to inflation, wage growth or 2.5pc depending on whatever is highest. Between 2011 and 2025, the state pension for those who reached retirement age before 2016 rose from £102.15 to £169.50 per week, a 66pc increase. Those who hit retirement age after 2016 saw weekly payments go up from £155.65 to £221.20. The report concluded that the triple lock was not 'intergenerationally fair' amid a growing ageing population, referencing Office for Budget Responsibility (OBR) projections that government spending on the state pension will increase from around 4.9pc of GDP last year to 7.9pc by 2074. It added that pension poverty had declined significantly in recent decades, from 28pc in 1995 to 16pc in 2023. Meanwhile, child poverty has remained consistently high with only a marginal decrease from 32pc to 30pc during the same period. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Daily Mirror
a day ago
- Business
- Daily Mirror
Winter Fuel Payments explained and how you can get up to £300
Millions more pensioners will receive the Winter Fuel Payment this year after a major change to the eligibility criteria was announced by Labour today. Winter Fuel Payments used to be awarded to everyone over state pension age - but more than 10 million pensioners lost out on the cash last winter after new rules were introduced that limited who can get them. The update sparked major backlash from MPs and charities, who warned it would leave many older people in poverty at a time when energy bills are still high. Earlier this month, Rachel Reeves said more people would qualify for the payments "this winter" - and now, more details of the changes and who will be eligible have been revealed. What has been announced today? Under the current rules, you only receive the Winter Fuel Payment in England and Wales if you're over state pension age and receiving a means-tested benefit, such as Pension Credit. They used to be universally available to anyone over state pension age, regardless of their income or if they are in receipt of benefits. But now, the Government has announced that Winter Fuel Payments will be available to anyone over state pension age who has an income of, or below, £35,000 a year. Labour says this means approximately nine million pensioners will receive Winter Fuel Payments this year. In Scotland, the Winter Fuel Payment has been replaced with a new Pension Age Winter Heating Payment. What has Rachel Reeves said? This change will cost around £1.25billion in England and Wales and will save around £450million, subject to certification by the Office for Budget Responsibility, compared to the system of universal Winter Fuel Payments. Rachel Reeves said: 'Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government. 'It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest. 'But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.' How much are Winter Fuel Payments worth? Winter Fuel Payments are worth £200 for eligible households, or £300 for eligible households with someone aged over 80. Your eligibility will be based on your age by the end of the qualifying week. The qualifying week changes every year, but for winter 2025/26, the qualifying week will be September 15 to September 21, 2025. How do I claim Winter Fuel Payments? Pensioners who are eligible for the payment should receive it automatically this winter - this means you should not need to apply for it. It will be paid directly into your bank account, normally from November, with most people paid by January. Payments can be paid all the way up until the following March. Winter Fuel Payments are tax-free payment and do not affect any benefits you may receive. If your income is above the threshold, the payment will be automatically recovered via PAYE, or through self-assessment return. You can opt out of receiving the payment, with details to be confirmed. Who isn't eligible for Winter Fuel Payments? For the last round of Winter Fuel Payments, you weren't eligible if you: You also weren't eligible if you lived in a care home for more than 13 weeks, including the qualifying week. Labour has not released any further details on whether this eligibility will still apply for this year.
Yahoo
02-06-2025
- Business
- Yahoo
Britain should ditch ‘distorting' stamp duty, says Reagan's economic tsar
Britain should ditch 'distorting' stamp duty charges that 'lock people in their homes', Arthur Laffer has urged. The economist behind the Laffer curve said property transaction taxes are such a big problem in the national tax system that the UK would be better off with an American-style annual property wealth tax. Mr Laffer, who has served as adviser to both former president Ronald Reagan and president Donald Trump, told The Telegraph that the UK would be better off if homeowners paid annual property taxes as they do in the US instead of stamp duty. He said: 'The [annual] property taxes in Britain are low, but the transaction tax is very high. The US is the reverse. We have property taxes everywhere, which is a wealth tax, and we don't have transaction taxes on houses. 'All property taxes do in Britain is lock people into their homes that they can't get out. It just distorts the whole tax system in Britain, it's just awful. 'It is one of the very biggest problems in Britain's tax system.' Mr Laffer is most famous for conceiving the Laffer Curve, an illustration of the concept that increasing tax rates can eventually lead to lower revenue because the higher taxes trigger so much behavioural change. Stamp duty is widely hated by economists and consumers alike because it makes it increasingly difficult to move home and makes the housing market inefficient – which in turn takes a toll on productivity. In America, by contrast, homeowners do not pay large taxes when they purchase their homes but instead pay an annual tax based on a percentage of their property's value. Mr Laffer said: 'Income tax is a problem in Britain, but these transaction taxes are big stuff too.' Stamp duty is taxed in bands that are not adjusted to account for house price growth, meaning homeowners get dragged into higher tax brackets as house prices rise. Since the tax bands were last adjusted in 2014, the average London house price has climbed by 30pc. Over the same time period, the stamp duty bill on the average home in the capital has surged by 54pc. The Office for Budget Responsibility (OBR) forecast in March that the Treasury's tax take from property transactions will nearly double from £15bn in 2024-25 to £26.5bn in 2029-30. Mr Laffer was an adviser to Donald Trump's 2016 campaign and says he has met with the US president several times since he took office earlier this year. He said he has told the Mr Trump that he should scrap US corporation tax on profits and replace it with a value added tax on sales. Although Mr Laffer is in favour of Mr Trump's tax bill, he said the president should go further with measures to boost the economy. The biggest measure in the bill will be an extension to the tax cuts that Mr Trump introduced in 2017 and are due to expire this year. Mr Laffer said: 'I know they talk about it as being a tax cut. It's not. It's just making Trump's tax cuts permanent. 'If it were not passed, there would be a huge increase in taxes across the board, which would be very detrimental. The bill going through the Senate right now does not create something wonderful but it saves us from a disaster.' Mr Laffer said that America should establish a free trade agreement with the UK, and that Ireland should leave the EU to become part of the trading bloc too. He said: 'One thing I really hope Trump does with Britain is really bring into a free trade relationship with the US. 'You're gonna hate me for this, but I think it should be with Ireland too. I think they should get out of the EU and should become part of the sort of the US/ UK/Ireland group. I think that would be a terrific free trade group.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Epoch Times
15-05-2025
- Business
- Epoch Times
UK Economy Grows at Fastest Quarterly Rate in a Year in Boost for Reeves
The UK economy grew at the fastest rate in a year over the first quarter of 2025, in a boost to Chancellor Rachel Reeves, new official figures show. GDP increased by 0.7 percent between January and March, the Office for National Statistics (ONS) said. This means it came in ahead of economists' expectations of 0.6 percent growth for the quarter. It was also the highest GDP rate since the first quarter of 2024, when the economy jumped by 0.9 percent. Growth was driven by the country's dominant services sector, which was strengthening in the opening months of the year despite some businesses warning that they were grappling with rising costs. Reeves said the figures 'show the strength and potential of the UK economy.' Related Stories 4/25/2025 3/27/2025 'Up against a backdrop of global uncertainty we are making the right choices now in the national interest,' she said. Prime Minister Sir Keir Starmer said the figures showed he was meeting his goal of having the highest growth in the G7 group of advanced economies. 'But I know the Tory cost-of-living crisis isn't over—we will go further and faster to deliver for working people,' Starmer said. Reeves acknowledged that there was 'more to do,' with the latest ONS figures covering the period before tax rises and U.S. President Donald Trump's 'liberation day' tariff announcements. Company national insurance contributions increased from April, which some economists have said will force firms to cut jobs. And the United States has imposed a 10 percent blanket tariff on most UK goods entering the world's biggest economy, which is expected to directly impact exporters and has led to heightened uncertainty affecting businesses and households. The latest figures show that economic growth slowed to 0.2 percent in March, from 0.5 percent in February, as activity among UK factories began to slump. Shadow chancellor Sir Mel Stride pointed out that both the Office for Budget Responsibility and the International Monetary Fund had downgraded short-term growth forecasts on the back of tariff uncertainty. 'Labour inherited the fastest-growing economy in the G7, but their decisions have put that progress at risk,' he said, adding that national insurance hikes—which he branded as 'jobs tax'—were making people worse off. Liz McKeown, ONS director of economic statistics, said: 'The economy grew strongly in the first quarter of the year, largely driven by services, though production also grew significantly, after a period of decline. 'Growth in services was broad based, with wholesale, retail, and computer programming all having a strong quarter as did car leasing and advertising. 'These were only slightly offset by falls in education, telecoms, and legal services.' The services sector jumped by 0.7 percent over the quarter, compared with the last three months of 2024, with administrative and support service activities surging by 3.3 percent. Retail trade increased by 1.4 percent over the quarter, while sports and recreation activities picked up by 5.8 percent in March as warmer weather swept across the UK. Consumer-facing services rose by 0.9 percent in the first quarter, indicating relative strength among households ahead of a swathe of bills rising from April, including energy and water. Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, said the first-quarter data shows 'the economy holding up well heading into the trade war,' which is expected to 'hurt growth in 2025 and 2026.' 'The UK's new trade deal with the U.S. rules out the worst-case scenario for tariffs, at least for now,' he added. 'But we think the radical uncertainty unleashed by the trade war will persist, weighing on investment and consumer confidence.'
The Herald Scotland
15-05-2025
- Business
- The Herald Scotland
UK economy grows at fastest quarterly rate in a year in boost for Reeves
This means it came in ahead of economists' expectations of 0.6% growth for the quarter. Today's growth figures show the strength and potential of the UK economy. Against a backdrop of global uncertainty we are making the right choices in the national interest. But there is more to do, we will go further and faster to make working people better off. — Rachel Reeves (@RachelReevesMP) May 15, 2025 It was also the highest GDP rate since the first quarter of 2024, when the economy jumped by 0.9%. Growth was driven by the country's dominant services sector, which was strengthening in the opening months of the year despite some businesses warning that they were grappling with rising costs. Ms Reeves said the figures 'show the strength and potential of the UK economy'. 'Up against a backdrop of global uncertainty we are making the right choices now in the national interest,' she said. GDP grew 0.7% in Quarter 1 (Jan to Mar) 2025. Services (+0.7%) and production (+1.1%) both grew, while construction (0.0%) was flat. Read the full article ➡️ — Office for National Statistics (ONS) (@ONS) May 15, 2025 Prime Minister Sir Keir Starmer said the figures showed he was meeting his goal of having the highest growth in the G7 group of advanced economies. 'But I know the Tory cost-of-living crisis isn't over – we will go further and faster to deliver for working people,' Sir Keir said. Ms Reeves acknowledged that there was 'more to do', with the latest ONS figures covering the period before tax rises and US President Donald Trump's 'liberation day' tariff announcements. Company national insurance contributions increased from April, which some economists have said will force firms to cut jobs. And the US has imposed a 10% blanket tariff on most UK goods entering the world's biggest economy, which is expected to directly impact exporters and has led to heightened uncertainty affecting businesses and households. The UK now has the fastest growth in the G7 – our Plan for Change in action. We've had four interest rate cuts since July and wages are rising faster than prices. But I know the Tory cost of living crisis isn't over – we will go further and faster to deliver for working people. — Keir Starmer (@Keir_Starmer) May 15, 2025 The latest figures show that economic growth slowed to 0.2% in March, from 0.5% in February, as activity among UK factories began to slump. Shadow chancellor Sir Mel Stride pointed out that both the Office for Budget Responsibility and the International Monetary Fund had downgraded short-term growth forecasts on the back of tariff uncertainty. 'Labour inherited the fastest-growing economy in the G7, but their decisions have put that progress at risk,' he said, adding that national insurance hikes – which he branded as 'jobs tax' – were making people worse off. Liz McKeown, ONS director of economic statistics, said: 'The economy grew strongly in the first quarter of the year, largely driven by services, though production also grew significantly, after a period of decline. 'Growth in services was broad based, with wholesale, retail and computer programming all having a strong quarter as did car leasing and advertising. 'These were only slightly offset by falls in education, telecoms and legal services.' Prime Minister Sir Keir Starmer and US President Donald Trump unveiled a new UK-US trade agreement this month (Carl Court/PA) The services sector jumped by 0.7% over the quarter, compared with the last three months of 2024, with administrative and support service activities surging by 3.3%. Retail trade increased by 1.4% over the quarter, while sports and recreation activities picked up by 5.8% in March as warmer weather swept across the UK. Consumer-facing services rose by 0.9% in the first quarter, indicating relative strength among households ahead of a swathe of bills rising from April, including energy and water. Elliott Jordan-Doak, senior UK economist for Pantheon Macroeconomics, said the first-quarter data shows 'the economy holding up well heading into the trade war', which is expected to 'hurt growth in 2025 and 2026'. 'The UK's new trade deal with the US rules out the worst-case scenario for tariffs, at least for now,' he added. 'But we think the radical uncertainty unleashed by the trade war will persist, weighing on investment and consumer confidence.'
