The Pensions Triple Lock has to go

[Flammkuchen]

When it was introduced, the aim of the Triple Lock was to increase pensions faster than earnings as the state pension was low. The TL has been very successful: pensioners now have a higher standard of living and more disposable income than working families. A pensioner couple each getting the full state pension receive £20k per year, with any private pension income on top.

This is great for them, but it comes with a trade-off. In order to increase pensions by over 10% a year, there is less money to pay nurses, teachers or doctors. Highly skilled public sector workers have low pay and there is a recruitment crisis.

AIBU to think that now that on average pensioners have higher disposable income than those in work, a policy that aims to increase pensioner income by MORE than average earnings - and so keep increasing the income of pensioner households faster than working households - needs to be rethought? Even just linking the state pension to average earnings would be better.

Yes - but I'm basing this on the pensioners I know well - all sitting on £1million+ in equity and saving and, in addition to their state pensions, receiving generous income from private pensions and investments. No need for them to worry about economising on food or heating this winter, just time to plan their next holiday.

Not every pensioner is that fortunate, I know - but looking at my parents' friends and my friends' parents, most of whom had white collar / professional jobs and bought their own homes in the 1960-70s, they are doing pretty well now.

Interest rates on much smaller amounts though which means mortgages were much more affordable. Also add abundant social housing as a benefit for boomers which is now gone.

the majority of the boomer generation were home owners at retirement. They benefitted from a huge increase in unearned wealth which was not taxed. They also got to retire early despite long life expectancy. So on average they paid for the equivalent of about 4 of 5 years state pension but will get much more.

@SueVineer Can you explain how your proposal to means test State pensions is going to work?
What will you base the assessment of "means" upon?
How often will it be assessed?
How will the reduction be applied to State Pension and how often will it be revised?
According to you this can be done easily and will save lots - so I'd like to hear more about the practicalities.

Not all of the boomers are retired yet.

What a daft thing to say. Op is just suggesting that the state pension should not increase at a higher rate than all other benefits and public sector wages. How is that “discrimination”? How is she making anyone “feel guilty for just existing”?

I'm in a job with final salary scheme and my wage is well below what private sector pays me. My benefit in way if final salary makes up for that.

So piss off with ur lets just drag everyone down attitude.

So will the young on massive mortgages and sky high inflation. No final salary schemes , student debt and possibly never retiring. The generations after the boomers are significantly worse off. Do people not despair that life will be more difficult for the future generations instead of better ?

Many of the younger generation have joined the same occupations but have a much less generous pension due to the reforms. It's really unfair.

I don’t have a particular proposal but means testing of benefits is done with almost every other benefit so I imagine it could be done in the same way. I would aim to reduce it on wealth as well as income like in Australia. If we saved half, that would be an enormous boost to public services. this could actually save the NHS.

I would also merge tax and NI - it’s not fair unearned income is taxed less than eared income.

Many boomers have children and grandchildren so of course they are concerned. It's ridiculous to keep perpetuating this myth of the evil boomers sitting in their castles hoarding all the cash. The world isn't an evil scheme run by all boomers to steal everything - that is just so ridiculously simplistic and nasty.

So you haven't really thought about it at all, you just know you're right.

I do. I’m due to retire relatively soon but I see how difficult things are for my kids generation. Yes I can help my children but what about all those who don’t have wealthy parents? It’s awful for the younger generation- student loans, unaffordable housing, no pensions. I’m not selfish enough to think perpetuating my own wealth at their expense is fair.

About what? I am in favour of means testing pensions as a principle. I have not worked out an extensive proposal as it’s not my job! Why would I do such a thing???

Absolutely this. And can I add that 10k a year is the lowest in Europe which surely is a consideration to keep it going up a decent amount.

And all these people arguing for getting rid of the TL, you are the same people who will one day need to rely on state pension to pay your bills. Are you sure you won't need it? Private pensionds are not exactly a wow investment even.of you can afford to.pay into them.

Why then are you happy for the older generation to take such a large share of state revenue when others are more in need? If boomers don’t want to just keep their own privileges, why are you so opposed to cutting rises in payments made to millionaires?

They should tax on your properties value which is unearned wealth instead of the low council taxes here they do this in the states. The highest council tax is only triple what the poorest pay 3k a year for Band H Vs 1.2k for A. I'm a home owner and I think the USA taxes home ownership more fairly.

Based on the issues around tax credits and universal credit, I'd suggest means testing would be complex, expensive and would result in many anomalies as the first two have. For most of the means tested benefits anyone with significant savings is expected to deplete these prior to receiving any benefits - you don't seem to have considered this at all - for example would you be including private pensions as savings?
You can't just make glib statements as proposals without considering the practicalities, as Liz Truss amply demonstrated.
As for merging Tax and NI to equalise earned and unearned income - you'd be needing to take a look at capital gains for that too - but of course the significantly wealthy dodge all this via offshore trusts and the like so still wouldn't have to pay unlike us little people.

The younger generation are unlikely to get state pensions for a start. And op is arguing for the state pension to be increased with inflation rather than the triple lock. The triple lock has meant the state pension has risen well above inflation for many years. Why should pensioners be the only group in society who benefit like this (particularly when it is so expensive for the taxpayer).

the uK state pension isn’t at all the lowest in Europe particularly when you take into account the low number of years and contributions required.

When it was introduced, the aim of the Triple Lock was to increase pensions faster than earnings as the state pension was low.

It's still extremely low by international standards.

The young won't receive state pension or they will be very very old before they can claim it due to the reforms. They are being taxed to the hilt , high inflation , high house prices , high interest rates , no final salary pension, student debt, the NHS is imploding then we won't even be able to retire anyway. There will probably be no state pension for us and private pensions are shite. Why are working age having to make all the sacrifices when we won't be able to enjoy a retirement?

Nope. What they need to do is improve productivity so that salaries rise as well. And stop deliberately fucking the economy with idiocy like Brexit.

Happy to confirm that offshore trusts are of no effect in avoiding capital gains tax if you are tax resident in the uK.

For the most part the UC credit system does work and overall UC costs less than state pensions despite the much larger number of people eligible.

You are making ridiculously over-simplistic claims and arguments when you freely admit you haven't considered any of the detail.
Just because I think means-testing is unlikely to be possible in any cost-effective or equitable way doesn't mean I am in favour of giving a State Pension to Richard Branson.

Your continual representation of a State Pension as an immense burden is just unsophisticated ageism and is straight out of the Tory playbook of envy of anyone getting any State help, because it sets up a false premise that paying a decent State pension robs us of other services. In fact that is an idealogical choice from a government that chooses not to properly resource the NHS and other areas, and then can blame pensioners.
The majority of people in the country don't vote for the government we actually get - so the idea the boomers have had the political clout to steal all the wealth as part of some long-term evil plan is just nonsense.

It’s really not as per above.

Don't forget that those women who when they left school (at 15) thought they would have been retiring today still have to work another 7 years - and continue paying their NI, taxes etc till then. So they'll have worked (and contributed to the pot) either 3 or 6/7 more years than today's youth (in education till 18, half of who go on for 3 years of degree).