WEBVTT 00:00:00.140 --> 00:00:02.640 So look, the state pensions are benefits, and 00:00:02.640 --> 00:00:04.940 for those long -term listeners, I'm not gonna 00:00:04.940 --> 00:00:06.799 get into that argument again if there are too 00:00:06.799 --> 00:00:10.919 many times, but it has, as a universal benefit, 00:00:11.140 --> 00:00:14.160 become increasingly expensive in recent years. 00:00:14.220 --> 00:00:16.460 And the Bank of England governor, Andrew Bailey, 00:00:17.079 --> 00:00:19.620 did a lecture this week at Leicester University 00:00:19.620 --> 00:00:22.839 where he did a pretty staff message about the 00:00:22.839 --> 00:00:25.960 UK economy, and he actually blamed the aging 00:00:25.960 --> 00:00:30.149 population in the UK. for hampering the country's 00:00:30.149 --> 00:00:33.049 struggling growth prospects. ASBG highlighted 00:00:33.049 --> 00:00:36.009 the 15 -year stagnation in productivity that's 00:00:36.009 --> 00:00:38.630 been dragging down standards. What he actually 00:00:38.630 --> 00:00:41.850 said was, the story of growth is, I'm afraid, 00:00:41.990 --> 00:00:45.609 quite clear. It has slowed markedly in the last 00:00:45.609 --> 00:00:49.750 15 years or so, and this has advanced, this has 00:00:49.750 --> 00:00:53.229 affected the advance of living standards. Now, 00:00:53.590 --> 00:00:57.320 he also talked about other strong headwinds against 00:00:57.320 --> 00:01:00.979 the economic growth, including the aging population, 00:01:01.039 --> 00:01:05.019 as I said, plus potential US tariffs. And what 00:01:05.019 --> 00:01:07.620 he did say about the aging population and what 00:01:07.620 --> 00:01:10.439 he describes as a natural end to the increasing 00:01:10.439 --> 00:01:14.859 female workforce participation. Future growth 00:01:14.859 --> 00:01:18.200 can't rely on more workers. And what he said 00:01:18.200 --> 00:01:23.659 is that the reality puts more emphasis on productivity 00:01:23.900 --> 00:01:27.500 and technological change as the drivers of growth 00:01:27.500 --> 00:01:31.400 to come. He stressed that some quite large technical 00:01:31.400 --> 00:01:35.099 advances will be needed to restore pre -financial 00:01:35.099 --> 00:01:38.760 crisis growth rates. So what he was doing is 00:01:38.760 --> 00:01:41.280 highlighting that the age of population presents 00:01:41.280 --> 00:01:43.980 a pretty significant challenge to economic growth 00:01:43.980 --> 00:01:47.359 with fewer female workers entering the labor 00:01:47.359 --> 00:01:51.640 market now because so many women over the past 00:01:51.640 --> 00:01:56.349 20 years have joined the the employment market. 00:01:56.390 --> 00:01:58.689 This has come to pretty much a natural end really. 00:01:59.109 --> 00:02:01.709 So he says that the UK faces structural limitations 00:02:01.709 --> 00:02:05.730 on workforce expansion. It feels sensible. Now 00:02:05.730 --> 00:02:08.770 these economic challenges coincide with... more 00:02:08.770 --> 00:02:11.150 and more pressure on government finances from 00:02:11.150 --> 00:02:13.969 the state pension costs. And you know, they actually 00:02:13.969 --> 00:02:18.530 account for 46 % of the DWP's annual spending, 00:02:18.789 --> 00:02:24.889 46%. So the state's pension bill reached 124 00:02:24.889 --> 00:02:28.590 billion in 2324 and is actually projected to 00:02:28.590 --> 00:02:34.490 rise to 169 billion by the year 2029. This represents 00:02:34.490 --> 00:02:40.689 143 % increase since 2010, just over 7 % every 00:02:40.689 --> 00:02:44.150 single year over two decades. Now Edmund Greaves 00:02:44.150 --> 00:02:50.370 is an editor at Malfi Money and he said, unlike 00:02:50.370 --> 00:02:53.250 other benefits, the state pension is not means 00:02:53.250 --> 00:02:56.770 tested. This means significant number of pensioners 00:02:56.770 --> 00:02:59.710 in receipt of state pension simply don't need 00:02:59.710 --> 00:03:06.099 it. And you know, He also said former governments 00:03:06.099 --> 00:03:09.699 have taken steps to make the state pension bill 00:03:09.699 --> 00:03:12.319 cheaper and this has included raising the state 00:03:12.319 --> 00:03:15.599 pension age as we all know, equalising the age 00:03:15.599 --> 00:03:18.439 between genders as we all know and other tweaks 00:03:18.439 --> 00:03:23.169 to make the bill more affordable. One thing he 00:03:23.169 --> 00:03:26.050 went on to say, but while income is subject to 00:03:26.050 --> 00:03:29.330 direct taxation, the variety of tax -efficient 00:03:29.330 --> 00:03:32.169 tools available, such as ISA pensions and other 00:03:32.169 --> 00:03:34.909 sources of wealth, means in practice the government 00:03:34.909 --> 00:03:37.930 will struggle to claw back significant amounts 00:03:37.930 --> 00:03:42.490 of state pension given to wealthy retirees. Now 00:03:42.490 --> 00:03:45.909 to date, the UK government has avoided the question 00:03:45.909 --> 00:03:48.689 of means testing. Now the state pension level 00:03:48.689 --> 00:03:51.810 is at This kind of an inflection point really. 00:03:52.169 --> 00:03:55.330 For the first time for the next year, government 00:03:55.330 --> 00:03:58.229 will start to directly claw back a proportioned 00:03:58.229 --> 00:04:00.909 estate pension through the income tax system 00:04:00.909 --> 00:04:04.270 as the annual entitlement tips over the personal 00:04:04.270 --> 00:04:07.750 allowance. And that's true, but it's only just 00:04:07.750 --> 00:04:10.250 over the limit. So it won't bring in a massive 00:04:10.250 --> 00:04:14.590 amount. But it will bring in more and more each 00:04:14.590 --> 00:04:17.269 year if the personal allowances aren't increased. 00:04:18.269 --> 00:04:21.569 He went on to say, This means the poorest pensioners 00:04:21.569 --> 00:04:24.850 with no access to finance advice now face being 00:04:24.850 --> 00:04:28.389 taxed on their state pension income while well 00:04:28.389 --> 00:04:31.069 -off retirees can simply move money around to 00:04:31.069 --> 00:04:36.589 avoid additional tax liabilities. Now, I mean, 00:04:36.649 --> 00:04:39.629 that's a tough read, that really, isn't it? If 00:04:39.629 --> 00:04:44.470 we're in retirement age, but you talk to a group 00:04:44.470 --> 00:04:48.290 of 25, 30 -year -olds and they'll pretty much 00:04:48.290 --> 00:04:53.790 agree with everything he says there. Now, I'm 00:04:53.790 --> 00:04:55.889 reading a lot in the press now and me and Cestan 00:04:55.889 --> 00:04:59.170 is very much back on the agenda of the state 00:04:59.170 --> 00:05:00.709 pension. I mean, Australia has been doing it 00:05:00.709 --> 00:05:03.410 for years and with all this talk of benefits 00:05:03.410 --> 00:05:05.769 cuts and yes, the state pension is a benefit. 00:05:08.449 --> 00:05:11.290 The thing is, a lot of the studies now say that 00:05:11.290 --> 00:05:14.629 we can actually afford to maintain a state pension 00:05:14.629 --> 00:05:18.189 up to 2036. That's the year I get my state pension. 00:05:19.949 --> 00:05:23.110 We've got away with it now because a lot of women 00:05:23.110 --> 00:05:25.009 have been joining the workforce over the last 00:05:25.009 --> 00:05:27.850 20 years, increasing that, but going forward, 00:05:28.410 --> 00:05:30.370 we're not gonna increase the workforce anymore. 00:05:30.829 --> 00:05:32.110 And those who were in the comments are gonna 00:05:32.110 --> 00:05:34.629 say, well, you know, it's all about my immigration. 00:05:35.189 --> 00:05:37.110 Well, actually, if you look at the studies, we're 00:05:37.110 --> 00:05:40.209 talking about 150 million here. Some studies 00:05:40.209 --> 00:05:42.350 say they actually contribute to the economy. 00:05:42.879 --> 00:05:46.560 On average, they say it's about two billion a 00:05:46.560 --> 00:05:51.000 year, two billion against 150 billion. Fixing 00:05:51.000 --> 00:05:53.779 migration is not gonna help here with this, guys. 00:05:54.899 --> 00:05:58.500 So real worry for any of us who are approaching 00:05:58.500 --> 00:06:01.819 state pension age. What I would say, and this 00:06:01.819 --> 00:06:05.579 is my view, and that's all I can give you, is 00:06:05.579 --> 00:06:09.209 that if you're all 60 plus already. I don't think 00:06:09.209 --> 00:06:11.870 this will affect you. I think the time it would 00:06:11.870 --> 00:06:16.910 take to get this embedded through law and into 00:06:16.910 --> 00:06:21.350 practice, I think if you're over 60 already, 00:06:21.589 --> 00:06:23.730 there's a good chance mean testers that are gonna 00:06:23.730 --> 00:06:28.329 affect you. I'm 55. I've got 11, 12 years before 00:06:28.329 --> 00:06:31.209 I start drawing my pension and that's a lot of 00:06:31.209 --> 00:06:33.649 time really for different governments to come 00:06:33.649 --> 00:06:38.660 in and make changes for the climate. a political 00:06:38.660 --> 00:06:41.959 climate to change and turn against the elder 00:06:41.959 --> 00:06:44.860 generation as, if you look in the comments in 00:06:44.860 --> 00:06:47.199 a lot of my recent videos, you'll see a lot of 00:06:47.199 --> 00:06:51.339 younger people blaming us as kind of elders for 00:06:51.339 --> 00:06:53.620 stealing them of their future and all that kind 00:06:53.620 --> 00:06:55.620 of stuff. I don't believe any of that, by the 00:06:55.620 --> 00:07:01.420 way. But I think for me, we're at the top of 00:07:01.420 --> 00:07:05.040 this inflection point being in 12 years time. 00:07:05.439 --> 00:07:09.259 I think there's a chance I will be impacted by 00:07:09.259 --> 00:07:13.639 me incessant of my pension. Now, I don't think 00:07:13.639 --> 00:07:17.240 I'll lose all my state pension because I think 00:07:17.240 --> 00:07:20.240 it will be tiered, but I do think it's a reality 00:07:20.240 --> 00:07:26.279 that, you know, and I am kind of bracing myself 00:07:26.279 --> 00:07:28.800 for not having as much in my budget when I hit 00:07:28.800 --> 00:07:33.540 67 as I expected, because I do have some private 00:07:33.540 --> 00:07:38.129 pensions. So hate to be bringing this up again. 00:07:38.250 --> 00:07:40.149 It does seem to raise its head again, but it 00:07:40.149 --> 00:07:42.110 does seem to be all over the press this week. 00:07:42.589 --> 00:07:45.589 If you've heard anything different or got some 00:07:45.589 --> 00:07:47.550 observations about it, please leave them in the 00:07:47.550 --> 00:07:50.370 comments and I'll see you in the next one. But 00:07:50.370 --> 00:07:53.089 don't worry guys, if you are approaching state 00:07:53.089 --> 00:07:56.269 pension age, I don't think this is a worry for 00:07:56.269 --> 00:07:59.100 you. It's for those of us. who are kind of in 00:07:59.100 --> 00:08:02.759 our mid fifties who I think potentially could 00:08:02.759 --> 00:08:06.459 be impacted by that. And that's only based on 00:08:06.459 --> 00:08:08.980 what I'm reading. Cheers then.