“Old age” becomes a major cost for UK taxpayers

UK tax Mar12.pngTaxes, like death, are inevitable. But very few people have much idea of how their money is spent.

Thus the blog applauds the UK government’s decision this week to send every taxpayer a ‘receipt’ showing the key spending areas (chapter 5, for those who wish to see the detail).

The chart above shows a sample developed by The Guardian :

• It is based on someone with average earnings of £25.2k (€33.4k, $40k)
• It itemises the use made of the £5702.12 tax they will pay in 2011-12

Of course, no one example covers all taxpayers. Nor will the UK position be the same for other countries. But the table is the best guide we have.

It shows that the 2nd largest single area of expenditure is in fact “old age”, mainly state pension payments. Their cost has already risen 35% since 2006/7, according to the government.

The table highlights the core argument of our ‘Boom, Gloom and the New Normal’ ebook. The ageing of the Western BabyBoomers is causing major changes in spending and demand patterns.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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