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.

Don’t be ridiculous. How could means testing be wrong mathematically? or socially? Morally it’s disgusting imo that millionaires are happy to take money out the treasury (that the government is borrowing) to enrich themselves.

Dear oh dear. People with very high incomes will be taxed on their state pension at 45%. They are among the few funding it for everyone else and will receive net around £5k per year due to tax. There are very few of them so means testing just to take that back from them is not going to pay for itself. Do you have any idea of the costs involved? Government setting up IT systems? They've spent tens of billions on trying to do that for other simpler things then abandoned the project...

Then all the staff to manage it. Deal with queries, process the documents, process changes, process complaints, chase people wrongly paid and recover the money etc etc.

You sound like you have no idea what you are talking about to be honest.

politcally is of course why it hasn’t happened- the current generation of pensioners vote in large numbers and tend to vote Tory.

It's not just about that. It's about the fact that the entire system will lose support if the very people who make it viable(ish) for everyone else don't get anything back for their own contribution. I think that's maybe the long term aim of stirring this up and you're playing right into their hands. Very foolish.

I really despair for the future , no NHS, no generous pensions, insane house prices . A very old retirement age or none for the young and many boomers are still worrying about their freebies The most selfish generation ever.

We haven’t got a fund and the contributions people pay wouldn’t pay for the state pension. That’s the point.

Thanks for the heads up. Did you not notice the part of my post - that you quoted - where I said it's a ponzi scheme?

@Flammkuchen Are you a career politician?

You’re presenting your argument by attaching it to a different emotive issue - nurses’ pay. But there’s no reason at all to imagine that if less money were given to pensioners, more would be give to nurses. You’ve even made that non-existent connection explicit by saying, Do any retired people really think their pension should grow faster than nurses wage? Please do explain.

Why not attach the argument to a different issue - like, for instance, the investment in nuclear submarines, which has really dropped off recently. Then you could ask Do any retired people really think their pension is a better investment than a state-of-the-art marine defence system? Please do explain.

In terms of the outcomes of government allocation of budget, that question makes just as much sense.

I'm not actually anticipating receiving many years pension, if at all, given both my mother, aunt x 2, grandmother, great aunts x 4 (5th one, lasted to 78, 2 others died in early years) and great grandmother, as well as all women on the paternal side died between the ages of 58 and 72....

Eh? If a pensioner is earning over £125,000 a year (required to pay 45% tax) then they will already be required to self assess. Means testing their state pension can be done as part of self assessment and tax payments- it will literally cost nothing in your example.

Re some people paying in but not getting out- that’s how tax works though- those who can afford it pay in and those who need take out. It’s not fair if a particular section of society just vote to line their own pockets at everyone else’s expense

Well I'm a millenial, and a lone parent with a huge mortgage and you've seen my commenf. Not everyone is of this spiteful mindset towards older people. Or so illogical that they can't see they're being encouraged to fight over scraps like rats in a bag rather than looking to their Government and demanding improvements for everyone.

You’re being dishonest by pretending you don’t understand that giving funds to pensioners means they’re not available for other purposes. An increase in pensioners income is more comparable with an increase in nurse’s wages than a “state of the art marine defense system”. Particularly because we don’t have a “state of the art marine defense system”. And defense spending IN TOTAL (army, navy and Air Force) costs less than half the cost of the state pension.

@SueVineer I am a working pensioner I pay FAR more in tax alone now than I did tax and Ni combined when I was working age.

Eh? If a pensioner is earning over £125,000 a year (required to pay 45% tax) then they will already be required to self assess. Means testing their state pension can be done as part of self assessment and tax payments- it will literally cost nothing in your example.

Really? You think self-assessment costs nothing to HMRC? They have to check that the self-assessment is accurate. Cross-check to other data. Deal with queries. Recover underpayments of tax. Etc.

Are you suggesting elderly people - some of whom will be suffering dementia etc - should be paid the pension anyway then have it recovered through self-assessment tax returns if you deem their income too high? The amount of perfectly healthy young people who do not understand this system for child benefit (there's a thread running on this right now even though that absurd system has been in place for 9 years), and you think it would work for the elderly? And for HMRC to suddenly land them with a huge tax bill if they get it wrong, or massive fines if they forget to fill it in?

Laughable.

Some people are beyond daft.

Need to sleep now. Night all.

We can’t have money for everyone. Where would it come from? If we keep giving 100bn a year to wealthy pensioners there will be £100bn less for everyone else.

also as was said the state pension cost is 10% of total government expenditure. It’s not “scraps”. It’s the same as the whole education budget. It’s a very significant amount of money indeed

its nice to think we can all just have everything we want. But it’s not reality

As I said they are already doing self assessment if they have income at the level you propose. So any additional costs would be tiny in comparison to the amount saved.

actually all pensioners who have significant private income should already be doing a self assessment. So cost of means testing really will be extremely small. Yet so much could be saved.

means testing is a splendid idea really- if only we had a government that would do the right thing

We can’t have money for everyone. Where would it come from? If we keep giving 100bn a year to wealthy pensioners there will be £100bn less for everyone else.

Do you actually read what people have posted before asking question they've answered already?

The UK is in a dire state because of poor productivity growth over decades now but particularly in the last 15 years, compared to our competitors. This is what the Government needs to change so that everyone stops getting poorer. It's not rocket science, it's basic economics.

You pay less in tax than a working age person would pay on the same income because you don’t pay ni. Much less. Also you receive at least 10k or so a year in state pension plus other benefits (winter fuel allowance, etc). We should all be paying our way.

As I said they are already doing self assessment if they have income at the level you propose. So any additional costs would be tiny in comparison to the amount saved.

actually all pensioners who have significant private income should already be doing a self assessment. So cost of means testing really will be extremely small. Yet so much could be saved.

means testing is a splendid idea really- if only we had a government that would do the right thing

You're completely delusional. I've explained why you're wrong about the costs involved and what the consequences would be and about fiscal drag and still you post this nonsense. I won't reply to you again as it's clearly a waste of time.

From your posts I doubt you have any understanding of economics basic or otherwise.

again it’s easy to make excuses or distract from why we can’t stop giving large amounts of money to rich old people. Ultimately it’s self interest though.

If you are genuinely interested in productivity, it isn’t boosted by giving yet more money to the elderly. Quite the opposite. Productivity could be boosted by using some of the savings from state pension means testing to invest in technology for example. Bet you’d rather just keep giving the cash to the rich elderly though

And you think that taking money from the wealthy pensioners will go to investing in technology?

You haven’t given any sort of coherent arguments at all about how means testing would cost anything. As I say a pensioner paying 45% tax will already be filing a self assessment. Any additional costs to means test state pension will be negligible.

Where have you explained why?
Your opinion doesn't become factual just because you repeat it a lot.

It’s one place it could go yes. Lots of others too. The health service.

tbh there are a vast number of better uses for taxpayers money than giving it to millionaire pensioners.

That's what I mean. Could. Saying where it could go is no guarantee it would ever happen.

Lol - what she means is she’s called me some names and thrown around some words she doesn’t understand.

That’s not an argument. We vote for government spending plans and the government of the day carries them out (for the most part). Yes governments waste money from time to time but that’s not an argument to give vast sums of money to millionaires.

Where have you explained why? Your opinion doesn't become factual just because you repeat it a lot.

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