Latest news with #wealthyareas
Daily Mail
07-08-2025
- Business
- Daily Mail
Wealthier areas set to pay more council tax under new plans: Will you be affected?
Wealthy areas with lower-than-average council tax rates will have to pay more under new government plans, a leading think tank has warned. Deputy Prime Minister Angela Rayner is mulling an overhaul of the council tax system to allocate more money to deprived areas. It will mean households in wealthy areas, including London and the home counties, will be hit with huge council tax increases, according to the Institute of Fiscal Studies (IFS). How will your area be affected and are there more council tax rises on the horizon? Why could some households pay more council tax? Angela Rayner is consulting on reforms about how funding is allocated between local authorities in England and how much councils can raise via council tax. The IFS report suggests the changes will see around a quarter of councils lose money in real terms, and there will be 'winners and losers' as ministers try to address different levels of funding across the country. However, this means that cuts in funding in wealthy areas that have managed to keep council tax bills low will have less money to spend, even if they increase prices by the maximum amount. The IFS says these councils should be able to make it up by increasing their rates beyond the current cap. IFS senior economist Kate Ogden said: 'The Government should consider giving highly affected councils, which currently have low council tax rates greater flexibility to bring their council tax bills up to more typical levels to offset funding losses.' The Government proposes a 'notional' tax rate which will be equal to the average council tax across all councils to help equalise the amount local authorities can raise. One area of consideration is offsetting central government grants against what local authorities could raise from council tax. The IFS says it shows 'just how large the funding changes some councils are set to see are'. Which areas could be affected? The IFS says the biggest losers will be inner London boroughs, particularly in Sir Keir Starmer's constituency Camden, Westminster and Kensington and Wandsworth, which has one of the lowest council tax bills. A Band H property - worth over £320,000 - in Westminster pays £2,034 a year in council tax. A house in the same band in Bishop Auckland, Durham, pays £4,279. Areas that have kept rates low and 'done well out of business rates retention' will also be hit, according to the IFS, which also singled out Cherwell, Mid-Suffolk and North West Leicestershire. How much could council tax increase by? Some households have already suffered significant council tax increases this year, after the Government gave the green light to increase rates by as much as 9 per cent. The IFS report suggests some councils could hike rates higher than the 4.99 per cent maximum rate that can be imposed without the need for local referendum or applying to ministers for permission to raise rates. It says that the average tax rate proposed by the government would increase in line with Office for Budget Responsibility (OBR) forecasts, and the actual council tax rate charged by local authorities would increase in line with the cap. What could it mean for your local council? The new reforms are expected to help lower-income households but it is likely to have a knock-on effect on local services, such as adult social care and bin collections. If the reforms were introduced this year, inner London councils would suffer budget cuts of 19 per cent, while the north and Midlands would have increases of up to 6 per cent. There is no word on how the government will decide which areas are wealthy and which are deprived. It is likely to face backlash on how it is measured, too. Some London boroughs like Islington and Kensington and Chelsea are generally considered wealthy, but pockets are among the most deprived in the country. Will there be more council tax rises next year? The IFS predicts Rayner's reforms will be staggered over three years so these proposals are unlikely to start immediately. Local authorities will still need to make up funding shortfalls and therefore it is very likely that they will need to hike rates again next April. It means households could pay up to 4.99 per cent more than they are currently, but increasing numbers of near-bankrupt councils could apply to the government to hike as much as 9 per cent.
Telegraph
03-07-2025
- Business
- Telegraph
The retirees being short-changed £210k on their state pension
The state pension is designed to act as the financial bedrock of retirement – and a safety net for the poorest in society. Yet the vast discrepancy in life expectancy across Britain means it is often the wealthiest who reap the greatest returns. Telegraph analysis has revealed that retirees living in well-off areas receive over £210,000 more in state pension payments over their lifetimes than those in the most deprived areas. Residents of Hart in Hampshire have the highest life expectancy of any local authority in England, Wales or Northern Ireland – just shy of 85 years. This means the average pensioner in Hart will draw their state pension from the age of 66 for 19 years, racking up payments totalling £375,610. Wealthy areas in London and the home counties including Kensington & Chelsea, Horsham, South Cambridgeshire, Uttlesford and South Oxfordshire follow close behind with a life expectancy of 84 years, long enough to accumulate £347,978 in state pension payments. By contrast, life expectancy in Blackpool is the lowest of any local authority, at a little over 76 years – a full nine years less than in Hart. The average resident in Blackpool draws their state pension for just 10 years for a total of £165,720 – £209,890 less than residents in Hart. Life expectancy is only slightly higher – at 77 – in Middlesborough, Hull, Manchester, Liverpool and Blaenau Gwent in South Wales, which would mean total lifetime payments of £185,151. The calculations assume that residents receive the new 'full' state pension of £11,973 a year, which pensioners are entitled to after making 35 years of National Insurance contributions (NICs) – and that payments rise by 4.5pc every year. The state pension 'triple lock' ensures that state pension payments rise annually by the highest of inflation, wage growth or 2.5pc. The analysis reflects the severity of wealth and health inequality across the country – and how changes in the state pension age have a greater impact on poorer retirees. Workers are eligible to draw their state pension once they reach the age of 66, and they continue to receive payments every week until they die. The state pension age is due to rise to 67 by the end of 2028, and then to 68 between 2044 and 2046. However, an ageing population means Britain's state pension bill is ballooning, with spending forecast to hit £145.6bn in 2025-26. The Institute for Fiscal Studies (IFS) warned this week that Britons face working until they are 74 unless the Government scraps the costly triple lock. Raising the state pension age by one year will have roughly the same cost in terms of lost income wherever you live and whatever your life expectancy. But this amount represents a larger proportion of lifetime state pension income for someone with a shorter life expectancy. Caroline Abrahams, director of the charity Age UK, said: 'The state pension provides a crucial income to millions of pensioners in all corners of the UK. 'If we're to make sure that all pensioners can pay their bills and enjoy a decent standard of living, we need to make sure that the system works. 'It's clear from these statistics that raising the state pension age will particularly penalise those on lower incomes, who are more likely to live in deprived areas.' The question is whether people who are likely to die earlier should get to retire earlier. In some countries, the state pension age varies depending on a retiree's working history. In France, for example, someone who started work rather than going into higher education might be able to access a state pension sooner, as would someone whose profession was considered arduous, such as miners, soldiers and police officers. But the British system was not set up in this way, meaning any attempt to tailor the state pension age according to postcode, profession or life expectancy would be 'fraught with challenges', according to Steve Webb, a former pensions minister, now partner at consultancy LCP. He said: 'For example, there would be 'boundary issues' where people living on two sides of the same street could have different state pension ages. 'There would also be issues about people whose life was spent in a prosperous area, but claiming state pension from an address in a deprived area in order to access an earlier pension. 'Similarly, any attempt to have lower state pension ages for those who had more physically demanding jobs are undermined by the lack of data on the jobs people have done over their lifetime.' Complicating the debate is the fact that pensioners who live longer are more likely to have paid more into the system during their working lives. People with longer lifespans tend to be wealthier, and wealthier people are more likely to have earned more and made larger National Insurance payments as a result. Jason Hollands, of wealth management firm Evelyn Partners, said: 'Having a single country-wide state pension age, will inevitably mean that the average retiree in one part of the country may end up receiving more total state pension income than another elsewhere. 'But given the broad link between levels of affluence and life expectancy, it's also possible that they will have claimed fewer benefits during their working lives and paid higher taxes too.' Mr Webb added: 'There is no doubt that there are huge differences in the total amount of state pension people in different parts of the country can expect to draw over the course of their lifetime. 'However, people in more prosperous areas are likely to have paid in larger amounts over the course of their working life.'
Wall Street Journal
03-06-2025
- Business
- Wall Street Journal
Why Democrats Are Losing Minority Voters
Liberals seldom turn to this column for political advice. They do, however, seem to trust the New York Times, so maybe they caught the Gray Lady's recent analysis of why the Democratic Party is in the demographic dumps. Leftists such as Bernie Sanders and Alexandria Ocasio-Cortez denounce Republicans as 'oligarchs,' yet millions of blue-collar voters flocking to the GOP remain unpersuaded. Liberals are in denial about these trends, but the reality, according to the Times, is that 'Republicans are overwhelmingly making gains in working-class counties,' while 'Democrats are improving almost exclusively in wealthier areas.'
