To feel mean thinking it's reasonable for the pension triple lock to be broken?

[BendyTrendy]

Tricky one because our state pensions are lower than the rest of the EU, but also the largest area of welfare spending (at about 42% of the welfare budget).

Still, on balance, I think it's reasonable to break the triple lock under the circumstances of both Brexit and Covid recovery.

Can the country justify an 8% rise to the state pension under the circumstances? Is the triple lock on pensions sustainable? I feel mean even asking the questions, but tough choices must be made.

Boris Johnson signals 'triple lock' on pensions could be broken amid estimates of 8% rise

State pension predicted to rise by 8%

Rishi Sunak hints at suspension to pension triple lock

Tough one.

The average pensioner is now better off than the average worker:

amp.theguardian.com/money/2017/feb/13/pensioners-now-20-a-week-better-off-than-working-households

Now I realise that this is the average and that there are a lot of pensioners in real poverty but equally there are a lot of working households in real poverty.

ANYONE who thinks that this current Tory government will use money saved from removing the triple lock to benefit anyone other than themselves and their cronies/donors is deluded.

@Roussette

You get “credits” on benefits and when a stay at home parent

For those of us who are now receiving a pension, that is just not true. That did not apply 30 years ago (the age of my youngest)

Maybe you are now in an enviable position then compared to us now on a state pension

It most certainly did apply 30 years ago.

My eldest has just turned 33 and my DP didn't work at all for 19 years after she was born, and part-time only after that. There's a year of missed contributions for the year she was born (something to do with them only counting full years of credits back then) but apart from that DP has a full contribution history - having never paid a penny of NI in her life. She went from YTS scheme, to part-time job, to SAHM to part-time job.

I'm a company director and my 'salary' (the bit of my earnings that NICs would be paid on) has been under the NI threshold for about 30 years, despite me actually receiving dividends up to the higher rate tax limit and company pension contributions on top of that. I've received full NI credited contributions for every year, despite not paying any NI, and I'll receive a full state pension. This is a quite normal situation for company owner/directors.

So yes, there are various scenarios where one could receive full state pension without having made any NICs.

Unless I’ve mistaken you for another poster (too many pages to go back and check) you’ve said a number of times that working age people have choices when pensioners don’t, that working age people choose to work part time or could make different choices to increase their income. How have I twisted your words? What exactly are you suggesting about universal/tax credits when you make these comments?
It was me but the two statements are not exclusive of each other. I am saying challenging the statement that younger families are not cared about or prioritised. They are.

I am also saying that they are not hard done by. I have no issue at all with tax credits and do think that the new UC rules have it quite right. UC is a necessity. Many families need help and support at a stage of life that makes it difficult to be totally self-sufficient. I do support UC. What I am saying though is that if these families are not happy with what their income, UC or not, and are in a couple, then they do have the option of both working FT. It is an option for many. This does not apply to people who are disabled or disabled children for who childcare is not an option.

It's possible to support initiatives that mainly benefits younger people whilst also believing that they are not worse off than pensioners, as a whole.

The uk isn’t one of the richest. We have crippling debt and are paying more in interest on that national debt than we spend on education. We’re just borrowing to maintain the illusion we’re rich

Every country borrows, even China.
By GDP we are 5th or 6th, by per capita we are around 23rd.

Not too shabby!

On borrowing, with Covid/GFC, this was done through QA, basically from the BoE i.e ourselves.

Interest rates on Govt bonds still extremely low, so the FM still have confidence in the UK economy.

So the point still stands, why try and take money from the poorest in society whilst allowing the rich to avoid tax and become wealthier still?

So the point still stands, why try and take money from the poorest in society whilst allowing the rich to avoid tax and become wealthier still?

The Tories, supported by their media mates, are very good at getting people to support such actions, aren't they?

They'll be telling us the rich should get more and then wealth will "trickle down" tot he poorest next.

The average pensioner is now better off than the average worker
And this is very good news. It shows that they have invested more in their future, and therefore making themselves less reliant on state support. This should be applauded.

The article states:
The main driver of pensioner income growth has been the arrival of successive new waves of pensioners, who are more likely to work, own their home and have generous private pension wealth than any previous generation,” he said
So this better income comes down to the fact that many pensioners are still working, earning and contributing taxes, own their home so are not reliant on housing benefits, and have private pensions that again, many will be paying tax on.

Let's hope this trend continues.

Dunno, ask me in 8 years when it will likely be the only income I might have; at least I qualify for the full deal plus a bit of 2nd already plus a few years.

Obvs I'm looking for new jobs (aged 59) and ways to enhance any state pension I might receive. My mortgage is timed to end when I'm 67 (retirement age) so paying that off early is a priority.

Whilst I understand the triple lock as being a really good thing that prevents many pensioners from moving into absolute poverty (as was the case just a few decades ago), there is a substantial strata of current pensioners who regard their state pension as 'pocket money'.

If there was a way of differentiating the 'in need' pensioners from the 'pocket money' pensioners from the universal application of the 3rd lock, that might be useful.

Maybe an 'Entrance Key' to the 3rd Lock? Criteria being no other income from Occupational Pensions, dividends, property, etc.

This concept could apply on 4 Levels of State Pension:

No lock - those with Very Large Retirement Incomes - Basic Full Rate

1st and Second Locks: Those with other Retirement Incomes

3rd Lock: Those reliant on State Pension Income and maybe plus £2,500 per year additional retirement income.

Only those that meet the triple lock criteria can benefit from Fuel Payments, TV Licence waivers (from state retirement age) free NHS and any other benefits such as Pension Credits.

Should be an Economist me....

Home Responsibilities Protection - brought in in 1978. www.gov.uk/home-responsibilities-protection-hrp

BTW the UK does not spend more on debt repayment than education, debt repayment is 2% of GDP and that will fall, educational spending is over 100m 5% of GDP (approx)

@1dayatatime

The average pensioner is now better off than the average worker:

amp.theguardian.com/money/2017/feb/13/pensioners-now-20-a-week-better-off-than-working-households

Now I realise that this is the average and that there are a lot of pensioners in real poverty but equally there are a lot of working households in real poverty.

I haven't read the full thread because I have no stomach for the vile ageism that has no doubt been spewed.

If the average pensioner is better off than the average worker, then we need to be making sure working people are paid a fair wage and are not being screwed over rather than set off on yet another race to the bottom.

@TheHateIsNotGood

Problem is people have paid in, on the basis they would get some sort of SP, so its difficult to then say No you can't have that now.

However, things like winter fuel etc should be means tested, say based on tax you pay.

Maybe the real problem is we live in such a low wage low skilled economy?

The uk isn’t one of the richest. We have crippling debt and are paying more in interest on that national debt than we spend on education. We’re just borrowing to maintain the illusion we’re rich.

Debt, like money and religion, is a human invention.

I reckpn the administrative burden of that system would wipe out any savings TheHateIsNotGood!

Whilst I understand the triple lock as being a really good thing that prevents many pensioners from moving into absolute poverty (as was the case just a few decades ago), there is a substantial strata of current pensioners who regard their state pension as 'pocket money'
I don't think they regard it as pocket money but as a return on investment. It's hard to think that each month, probably £300 of my taxes go directly on pensions, but when my time comes, I'll be told that I don't deserve to receive anything whilst those who didn't pay much into it at all will get it in full.

foxandbee

Absolutely right. It's astonishing how easily some people find it to want to screw over some of the most vulnerable in society - and they'll still believe themselves 'caring and compassionate'.

@foxandbee

I reckpn the administrative burden of that system would wipe out any savings TheHateIsNotGood!

And yet they did it for child benefit..? No axe to grind by the way, as I probably won’t ever earn £50k.

Do people also need to be reminded that those pensioners in receipt of income from other sources, such as private pensions, do pay tax on their income - so they don't receive the state pension 'in full'?

@TheHateIsNotGood

Dunno, ask me in 8 years when it will likely be the only income I might have; at least I qualify for the full deal plus a bit of 2nd already plus a few years.

Obvs I'm looking for new jobs (aged 59) and ways to enhance any state pension I might receive. My mortgage is timed to end when I'm 67 (retirement age) so paying that off early is a priority.

Whilst I understand the triple lock as being a really good thing that prevents many pensioners from moving into absolute poverty (as was the case just a few decades ago), there is a substantial strata of current pensioners who regard their state pension as 'pocket money'.

If there was a way of differentiating the 'in need' pensioners from the 'pocket money' pensioners from the universal application of the 3rd lock, that might be useful.

Maybe an 'Entrance Key' to the 3rd Lock? Criteria being no other income from Occupational Pensions, dividends, property, etc.

This concept could apply on 4 Levels of State Pension:

No lock - those with Very Large Retirement Incomes - Basic Full Rate

1st and Second Locks: Those with other Retirement Incomes

3rd Lock: Those reliant on State Pension Income and maybe plus £2,500 per year additional retirement income.

Only those that meet the triple lock criteria can benefit from Fuel Payments, TV Licence waivers (from state retirement age) free NHS and any other benefits such as Pension Credits.

Should be an Economist me....

Yes, how about they use the same criteria that they screwed over the 3 million excluded self employed,I.e if over half their total income was from sources other than state pension, they don’t get the 8%, if their state pension is more than half their income, they get the 8%. If it was “fair” for the self employed, it’s fair for pensioners.

It’s unhelpful to label older people as vulnerable. Many are indeed vulnerable, both in terms of health and poverty which are interlinked. I’m pro means testing so that older people (and younger) in poverty get more. If we can means test child benefit, we can means test other state benefits.
For balance, not all families with single earners are exactly vulnerable and struggling either. Many families have one high earner and therefore, choose for a parent to be a SAHP.

@VickyEadieofThigh

Do people also need to be reminded that those pensioners in receipt of income from other sources, such as private pensions, do pay tax on their income - so they don't receive the state pension 'in full'?

They do receive state pension in full, tax is deducted from their other occupational pensions. Anyway, they don’t pay NIC unlike workers who also have other deductions, such as student loans, not to mention costs of working such as commuting etc.

@VickyEadieofThigh

Do people also need to be reminded that those pensioners in receipt of income from other sources, such as private pensions, do pay tax on their income - so they don't receive the state pension 'in full'?

Most people pay tax and contribute to the economy in some way, shape or form. Low and ‘normal’ earners are out there paying rent, buying food from supermarkets and other shops and contributing to the economy. It’s the rich who are tying their money up in savings and investments that don’t massively benefit society as a whole.

agree jas which is why I suggested a Basic Full Pension as the 'no lock' starting point, so those that have contributed get their paid in wack back.

Then apply a graduated scale of enhancements to the Basic Full Rate from 1st to 3rd Lock dependent on other Retirement Income.

Means-testing: has been a cultural sticking point since 'benefits' were created. I think the current cohort of pensioners and soon to be pensioners are more accepting of this as a necessary mechanism to fairly distribute public funds.

Pension Credits or similar still needs to exist to meet the needs of those pensioners that don't qualify for the Full Basic Pension.

If we can means test child benefit, we can means test other state benefits
And then what? Everyone stops investing in anything because they are guaranteed to lose it all anyway.

Let's see. Work the minimum hours that guarantees you get topped up by benefits. Don't pay into a private pension because if you do, you'll get nothing more, and you'll end up probably getting almost as much from the state pension anyway.

Who in their right mind is going to go work longer hours, reduce their monthly disposable income just so that money can go to support those who don't? There has to be an incentive to invest so that there is some money to share. Encouraging people to be receiver than giver wil end up with nothing to be shared anyway.

Low and ‘normal’ earners are out there paying rent, buying food from supermarkets and other shops and contributing to the economy
And taking more than they are paying in. Do you think they pay more in tax from buying food than they take in tax credits, CB, HB?