I'm going to write more on the UK welfare problem later this week, but amid all the talk about the removal of universal benefits from well-off pensioners and so on, I want to point you briefly towards an article in the Sunday Telegraph this week.
It tells the story of a nice-sounding lady called Christine Armstrong. Armstrong is 66. She has just completed a BA in English at Oxford and is now doing a Master's degree. She loves it. The "beauty of doing a degree in your 60s", she says, " is that you really want to do it." So, all the reading, which might be a chore for the young is a "great pleasure."
Your first thought, I dare say, will be that you are impressed. You will think it makes sense for the retired to keep themselves active of mind and body and you will know that those with a goal of some kind tend to live longer and be healthier than those who do not. But what if I told you that you are paying for Armstrong to keep herself busy?
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Under the new student loans system (I think of it as more of a progressive tax see my blog on it here but we'll call it a loan because everyone else does), no one on an income of under £21,000 has to pay back their student loans to the taxpayer.Armstrong has taken out a student loan to cover her tuition fees (the maximum is £9,000 a year).
She has also received a maintenance grant (£3,354 if your household income is under £25,000). Armstrong's pension income is under £21,000. The result? Her loans aren't actually loans. They are gifts from us to her. And rather large gifts too if she has taken the maximum every year, she is costing us over £12,000 a year. I'd love to live in an economy where this kind of thing was OK. Sadly we don't. We just can't afford this stuff.
You can read the original article here:'I'll never have to repay my student loan'.
-
Barclays warns of significant rise in social media investment scamsInvestment scam victims are losing an average £14k, with 61% of those falling for one over social media. Here's how to spot one and keep your money safe
-
Over a thousand savings accounts now offer inflation-busting rates – how long will they stick around?The rate of UK inflation slowed again in March, boosting the opportunity for savers to earn real returns on cash in the bank. But you will need to act fast to secure the best deals.
-
Beating inflation takes more luck than skill – but are we about to get lucky?Opinion The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank of England may be about to get lucky.
-
Rishi Sunak can’t fix all our problems – so why try?Opinion Rishi Sunak’s Spring Statement is an attempt to plaster over problems the chancellor can’t fix. So should he even bother trying, asks Merryn Somerset Webb?
-
Young people are becoming a scarce resource – we should value them more highlyOpinion In the last two years adults have been bizarrely unkind to children and young people. That doesn’t bode well for the future, says Merryn Somerset Webb.
-
Ask for a pay rise – everyone else isOpinion As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why you should do that too.
-
Why central banks should stick to controlling inflationOpinion The world’s central bankers are stepping out of their traditional roles and becoming much more political. That’s a mistake, says Merryn Somerset Webb.
-
How St Ives became St Tropez as the recovery drives prices sky highOpinion Merryn Somerset Webb finds herself at the epicentre of Britain’s V-shaped recovery as pent-up demand flows straight into Cornwall’s restaurants and beaches.
-
The real problem of Universal Basic Income (UBI)Merryn's Blog April employment numbers showed 75 per cent fewer people in the US returned to employment compared to expectations. Merryn Somerset-Webb explains how excessive government support is causing a shortage of labour.
-
Why an ageing population is not necessarily the disaster many people think it isOpinion We’ve got used to the idea that an ageing population is a bad thing. But that’s not necessarily true, says Merryn Somerset Webb.
