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.

@IceCreamAndCandyfloss

A means tested pension sounds more reasonable

Surely that just punishes those that worked hard and saved/bought assets.

Much better to link to contributions, would encourage people to work more when they can to ensure a better retirement.

Means testing is expensive and complex and it can be exclusionary for some people. Having a decent State Pension for all is a good way to have a decent society - although judging by a lot of comments on MN, I am starting to doubt if society gives a shit about older people.

As opposed to pension focus,how about focus on tax dodgers and employers who enjoy the luxury of the state subsiding their wage bill.

For the state pension we should be thinking about, in terms of weekly penspions, what's necessary, what's affordable, and what's fair.

Thinking in terms of annual increases only is daft because it glosses over the question which matters, namely the whether the state pension at its current level is adequate or not.

Problem with discussions on this subject is that the word 'pensioner' conjures up an image of a poor elderly person living in near poverty. In reality that age group is I believe the wealthiest. Yes, those relying solely on a state pension will need that increase, but many others have good pensions and are very comfortably off. For example, my FIL retired at 50 on a large private pension, and at 85 has spent longer retired than he worked. Those of us yet to reach the ever increasing pension age can only dream of such a thing.

The state pension is already low, plus a lot of people, particularly women don’t get the full state pension. Pushing those people further into poverty is wrong, we need to increase taxes for higher earners and greatly improve pension provision in the UK, both state and private.

@Mintjulia

Imagine being in a 76 person residential home and having 19 of the other residents die.

The sad truth is that the average life expectancy in a care home is approx. 24 months and less in a nursing home. So in a normal year it would be expected that around half the residents would die. While the mortality rate was very high for a short period and must have been frightening the overall impact wasn't that huge.

Simonjt is right. There has been a high profile legal battle for women to receive the full pension.

@lazyarse123 - pensions are a benefit. There are other benefits too that are contribution based and available without means testing (JSA for example). However these benefits have generally been cut back because they are expensive. State pensions are not paid out of some pot of money saved up by current pensioners- they are paid out of the treasury and from borrowing by current and future taxpayers.

It’s absolutely unfair that some of the wealthiest people in society are getting an 8% increase in benefits while others are having their income cut back. Each individual pensioner is not wealthy of course but pensions are not means tested and many pensioners are very wealthy indeed (in fact as a whole current pensioners are wealthier than working age households). If any of the previous posters were really concerned with pensioner poverty rather than their own self interest, why not suggest means tested benefits for pensioners?

I will absolutely be a pensioner in a few years but I don’t consider opposing something that I consider grossly unfair as “shooting myself in the foot”. I may benefit financially from a universal state pension with over inflation increases on top of my private pension and investments but I don’t think that’s right. I want fairness for my dds generation too and the ones to come after that.

As for those saying well we should increase everyone’s income- emm finances don’t work like that. There is no unlimited pot of money- we are already spending more than we bring in and borrowing to cover the deficit. Future generations will have to pay that back.

Ultimately this huge increase is way above inflation. It’s way above rises in other benefits (which are in fact being cut) which go to people much more in need. It’s way above increases in public sector wages including NHS. it’s absolutely unfair and completely unaffordable considering we are currently borrowing to fund our level of public spending. The reason for this is to win votes. Totally wrong imo.

@CayrolBaaaskin you can get jsa even if not always paid in but just in another way
Pensions are generally paid into and money should of beeb out aside
I know many pensioners and not many are rich , I think thats a myth that so many are

*A means tested pension sounds more reasonable.

Take away the entitlement from those who don’t need the state benefit and there’s more to go around to those who do need it.*

Sod that. We PAID for that, with decades of national insurance.

There is no unlimited pot of money- we are already spending more than we bring in and borrowing to cover the deficit.
Overly simplistic "economics" of the patronising type favoured by the rich to excuse them always getting richer whatever else happens.

Future generations will have to pay that back.

The ordinary drones may have to - the Rees-Moggs and other trust fund tax-dodgers won't.

@ginghamstarfish

Problem with discussions on this subject is that the word 'pensioner' conjures up an image of a poor elderly person living in near poverty. In reality that age group is I believe the wealthiest. Yes, those relying solely on a state pension will need that increase, but many others have good pensions and are very comfortably off. For example, my FIL retired at 50 on a large private pension, and at 85 has spent longer retired than he worked. Those of us yet to reach the ever increasing pension age can only dream of such a thing.

And he will have been continuing to pay income tax in that case, so in sense he has been means tested.

@SimonJT

The state pension is already low, plus a lot of people, particularly women don’t get the full state pension. Pushing those people further into poverty is wrong, we need to increase taxes for higher earners and greatly improve pension provision in the UK, both state and private.

Exactly - once Rees-Mogg, Amazon et al start coughing up we can look at the other end of the scale, not now.

I don't agree with the state pension being means tested. They can tax everyone in the higher tax brackets more then the better off pensioners will pay more tax. Means testing will mean people hiding savings or putting them in somebody elses's name. Nobody could live of the basic state pension alone in any case.

If you think means testing will make people hide savings & commit fraud what do you think taxing higher earners will do?

I think they should pause the triple lock this yr & reinstate.

Why do people act like pensions are a homogenous group? Some are wealthy, some were higher rate tax payers pre retirement, some were on benefits & worked p/t before retirement etc.

How many pensioners died due to covid, now are in private care thus creating employment. You can bet someone in Whitehall has done that sum

@pantsdants

If you think means testing will make people hide savings & commit fraud what do you think taxing higher earners will do?

Whatever the tax rate, the wealthy do that, its basic human greed.

But if governments wanted to, they could crack down on tax avoidance/evasion, its just that they don't want too - look at Russian/Chinese money in the London property market (and other areas)

Sunak is a multimillionaire, his in laws even richer, why would he do anything to make these sorts of people pay more tax?

@Boarderingmadness most people won't vote for more tax though. People who earn over 50k already pay 40% & freezing of the bands for 5 yrs is income tax rises by stealth.

Increasing BTL taxes, IHT, CG etc are a way of targeting the wealthy but your average person won't vote for that because it either impacts them or they aspire such that it will.

look at Russian/Chinese money in the London property market (and other areas)

And again people like property prices going up. God knows why as it just makes it more difficulty to climb the ladder & for their dc but it makes people feel rich. Hence all the gov props.

[quote pantsdants]@Boarderingmadness most people won't vote for more tax though. People who earn over 50k already pay 40% & freezing of the bands for 5 yrs is income tax rises by stealth.

Increasing BTL taxes, IHT, CG etc are a way of targeting the wealthy but your average person won't vote for that because it either impacts them or they aspire such that it will. [/quote]
Exactly, and people take evasive action to avoid higher tax rates. There were loads of threads on MN and other fora from people putting money into pensions or reducing their hours or refusing promotions to avoid breaching the £50k limit and having to repay some/all of their child benefit on top of paying higher rate tax on the surplus - it's one of those points where there's a very high marginal tax rate on every extra pound you earn.

Same with senior/experiences GPs and dentists, who typically earn over £100k, who reduced their shifts to avoid the whopping penal 62% marginal tax rate on their income between £100-£125k. Not only did that mean less tax revenue, it's also contributed to the shortage of GPs and dentists.

Before they start thinking about higher taxes, they need to reform the entire tax system to avoid these "pinch points" where it's often simply not worth working more as so much is deducted from the payslip.

Same, of course, happens at the benefits thresholds at lower earning levels, but they're better known about. There should be none of that either.

We need a smooth line graph of loss of benefits/increased taxes as income levels rise, not the peaks & troughs of the mountain range graph we have at the moment.

People who stop working to avoid repaying a pittance in CB clearly don't want the money.

I used to be in this bracket and carried on working because if you stop, you take home less, regardless of CB and extra tax.

What you fail to appreciate is that for many extremely wealthy people, their marginal rate of tax is below 20%.

Shortages of GPs is because we have failed to increase training places to meet demand, pure and simple, made worse by Brexit/Covid where EU GPs have gone home.

We didn't have such shortages when we had had far higher tax rates in the 50s 60s and 70s did we?

I think we should raise taxes instead.

And look for avenues other than basic rate income tax or Vat (vat is the last thing that should go up now imo).

Higher rate tax, inheritance tax, corporation tax (or whatever it’s called), capital gains should all be looked at.

I don't think higher income taxes are the way to go.

What you fail to appreciate is that for many extremely wealthy people, their marginal rate of tax is below 20%.

And why is that?