Pensions to rise with inflation - but what about working people???

[doris9034]

BBC Website: "Liz Truss and Chancellor Jeremy Hunt jointly agreed to guarantee that the state pension rises with inflation next year - thereby maintaining the "triple lock" - ahead of PMQs this morning, Downing Street says.
In a huddle with reporters after PMQs, the prime minister's official spokesman said the decision reflected the "unique position" of pensioners who are "unable to increase their earnings through work"

But I - and millions of others - are also unable to "increase our earnings through work" because we are in the middle income bracket, our employers do not have the capacity to raise our earnings in line with inflation and we don't qualify for any state related benefits.

So, whilst I 100% don't begrudge the helping of pensioners (many of whom are probably among the better off anyway), I can't help but feeling a bit annoyed that it always seems to be the ordinary working person / family that never gets any respite from the ever increasing cost of living.

Pensioners have choices too. They can downsize their properties or sell assets rather than taking them to the grave for their children. What you say is all based on the false assumption that income is a valid subject of "choice" whereas wealth isn't, it's a fixed quantity that therefore lies outside the bounds of discussion.

@1dayatatime the Guardian article you quote is from February 2017 - five years out of date -- pre-Covid, pre-Ukraine... in fact before everything that has altered the landscape so dramatically.

I see society is working as intended and that is pitting different groups against each other.

The costs of means testing is prohibitive, it’s far better for a few rich pensioners to receive winter fuel allowance than test them all, it would cost more overall.

What exactly has impacted pensioner incomes more than any other demographic?

Either update pensions in line with inflation OR spend the money on pensioner benefits.... and/or greater healthcare costs as folk struggle to keep warm or eat well.

To me, trying to save money on pensions whilst point blank refusing to have a windfall tax or a wealth tax on the super wealthy is morally wrong.

Nothing. Which is why all benefits should rise with inflation.

I entirely agree. As should wages.

Most wages are outside government control, though. No government can force employers to increase wages.

Tax brackets have also not moved with inflation. Nor has minimum wage. Maybe government doesn't have absolute control but they are certainly able to influence

All benefits should be increased by the same %, whatever yardstick is preferred.

I think inflation does fall harder on the very oldest pensioners who, generalising shamelessly, tend to be women -- some in frail health and with little to offer an employer, who won't be offered a few hours work to top up so they can have the heating on. And the really disabled have similar physical limitations, but may have more current work skills to offer.

State pension should be means tested. If you have assets of over £50k excluding your home or pension fund you don’t get it. You should be allowed to give away assets to get under this level. That would encourage dispersal and circulation of wealth too.

Minimum wage for over 23s went up by more than double the increase in pensions/benefits this year. (6.68 compared to 3.1) the apprentice rate went up by over 11%. I haven't worked out all the rates but NMW has definitely done better than pension/benefits this year.

Tax brackets haven't changed but the threshold for NI has increased by a significant amount.

@ancientgran do you know what the apprentice rate was? I’ll tell you. £4.81 per hour.

Now consider pensioners have had a whole lifetime, in much more prosperous years, to amass wealth and assets, whereas apprentices are just starting out in life (usually) and need to save monstrous deposits or rent extortionate flats and struggle in the current climate.

Sorry IS. IT WENT UP TO £4.81 PER HOUR.

So a full time apprentice is on half the wage of the average person in 1995. Give me a break, ancientgran.

I was replying to a post that stated minimum wage hadn't increased with inflation. My point is for apprentices it went up more and in general it went up more than pensions or benefits.

Apprentices weren't well paid in the past and going back to the 60s, when I knew people doing apprenticeships, they certainly wouldn't be expecting to rent flats, if they weren't living at home they were in a room in a shared house.

That's a fair point - since 2017 (post Covid and furloughs) and post Ukraine inflation has risen much faster so that increases in state pensions will have further outstripped increases in average wages. So that the differential between average pension income after housing costs will now be much greater than average wages after housing costs than the £20 quoted in 2017.

But seriously, wages and tax brackets have lagged behind inflation for years. Decades even. One uplift isn't enough.

Quite

Do you get what minimum means?

A full time apprentice spends a minimum of 20% of their normal weekly hours training but get paid for them. An apprentice aged 19 will only get the minimum for the first year and then goes onto NMW for their age.

Compare it to what lots of students are getting as loans and it isn't a bad deal which is probably why degree apprenticeships are so competitive, but obviously it isn't for everyone.

Whilst I agree that this is inevitably what will happen with an ageing population and the cost to the taxpayer of funding the state pensions continually increasing, no political party is ever going to get elected if they propose means testing the state pension.

Plus it would disincentive people from paying into a private pension or to game their assets / wealth prior to reaching the state pension age ( transfer to children etc).

I don't disagree with you in principle but I can't see it working in practice.
What could be done in the meant is to means test or at least make taxable the winter fuel allowance.

Tax is complicated, think of the fuss now about the top rate of tax being 45% when in the 60s it was 90%. So it isn't just one thing, brackets, percentage, NI.

One uplift isn't enough but it isn't true to say minimum pay hasn't gone up with inflation without adding that in some brackets it has exceeded inflation this year, it has in some previous years as well.

I literally cannot engage with you ancient gran because you seem so, so far detached from reality on how much anything costs now compared to ‘in the 60s’.

That was a rate paid by a tiny number of people in the 60s.

Millions pay the higher rate now.

But we are heading back toward higher taxes for the wealthy and not before time, we simply cannot raise the monies needed from the average wage earner anymore.
Economists now believe we will have WFT's on Banks as well as Energy companies.

I entirely agree. As should wages.

How is this going to work in Small and Medium Enterprises? DH is self employed. His clients were hard hit by Covid, because some of them, also self employed, fell through the gaps of government support schemes. They had no income for months. If DH put his fees up, clients would go somewhere else, low balling.

DH has taken exactly the same amount every month from his business for 12 years. He has not given himself so much as a 1p increase per month. When Covid started, he drew less to reflect the fact, he was saving on train fares, by working at home, although he still had to pay the overheads on his office.

Yet you are suggesting, that while his income has fallen by half, because clients have retired rather than struggle on; all fixed overheads have gone up; he magically has the means to give the staff he uses, a pay increase for inflation? Where you think small businesses can get the money from?

If shops’ overheads have gone up massively (like energy), do you think they can increase prices to recoup that and inflation pay rises for staff - no, they will lose customers, because customers are cutting back.

Many small shops and restaurants on our high street have closed since Covid; and one told us before Covid, their rent was £35,000 Pa. We couldn’t understand how they could afford that and make a profit then, never mind now?