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.

Yeah, didn’t happen I’m afraid

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

I am an economist by profession.

Good night.

READ THE POSTS

Yeah, didn’t happen I’m afraid

Clearly.

I’m saying they’re both false equivalents. The OP’s presentation is precisely the same con as Cumming’s Brexit bus.

We should all be paying our way.

Indeed. And the elderly have. That was the deal.

i mean, you might think it’s rather rude of them to insist on breathing for so long, but - ironically - recruiting more nurses and paying them better is likely to encourage that grey impertinence, isn’t it?

I wasn't offering it as an argument to do this, just not convinced there has ever been any evidence at all of this happening, mostly because tax revenue is not hypothecated.

I like the escalation of this thread: pensioners>boomers>wealthy>millionaires

@SueVineer I have been paying my way for 52 years thus far actually, how long have you been paying YOUR way

the majority of the boomer generation were home owners at retirement.

What are you talking about? A huge chunk of Boomers are still working and unable to access a pension for another 5-10 years.

DH worked from 16-65 for his pension, and I worked from 16-66 for my state pension. Yes, we also have private pensions which we paid in, and yes, we are financially comfortable.

We pay our full HA rent. We also pay tax etc.

I know today's younger workers are often struggling, but I wish they'd realise that this isn't the first recession/cost of living crisis!

Today's pensioners did the previous ones, and we often struggled then. But we survived.

Recessions come and go - and it's pointless that one group gets bitter about what another group is getting.

That's what governments love, because it shifts the blame from them.🙄

And,..I wasn't a Brexiteer, and I've never voted Tory. 😚

I do wish people would stop talking about state pensions as £10k a year for all. Unlikely unless they retired in the last six years! State pension claimants since 2016 have a significantly higher state pension than older pensioners.

If we'd decided just to work 16 hours when our DC were small, there were no top ups like UC or tax credits. Housing was cheap in comparison to today, but I don't know anyone with no indoor toilet nowadays. Few of us over 70s inherited anything, our parents mainly rented.

Pensioners since 2016 also have significantly lower occupational pensions - because the closures of final salary schemes had really begun to kick in by then

Some survived (notably in the public sector where, during the years in question salaries were much lower than in the private one)

I think there are some voices which are seeking to divide society by stirring up inter-generational strife. The level of misrepresentation, by only stating part of the picture to create a misleading idea of the pensioner population as a whole, isn't a good or helpful thing

I agree with this.

This has been a very interesting and actually educational thread. I have learned from it I would be a better off boomer if we didn't have private pensions that we paid into, sadly its not a gift we got because they liked the cut of our jib. All we get from you wonderful, generous, warm hearted younguns is our state pension and our £200 heating allowance which we didn't ask for and donate. We own our own house so have to pay our own bills and maintenance, we have never lived in social housing so no RTB bargain for us. Oh and we pay income tax, but sadly not at 45%. We aren't selfish, we help our family as much as we are able, donate to food banks and support other charities. Oh and I am a WASPI too, not that I expect any sympathy for that here.

Iwantmyoldnameback Yes, this thread has been educational for me in a similar way. I paid into the NHS private pension scheme and bought a modest house. I would be just as well off day to day if I hadn’t bothered. The only difference is that if I don’t have to go into a nursing home I can leave my house to my children. If I need care I could have got it free but I will have to pay. If some of the ideas suggested on this thread were implemented there would be even less incentive for anyone to pay into a private pension.

I see this has all been derailed.

The Q is should the state pension continue to rise faster than the wages of working people which (i) reduces the money government has to spend on public services and (ii) continually improves the standard of living of pensioners relative to the overall population. Or should pensions just increase with either average earnings or inflation which would keep pensions increasing, but not result in pensioners getting continually better off than everyone else.

Asking this question is not an attack on pensioners. It is not saying let’s abolish the state pension or means test it. It does not say that people don’t deserve a pension or that there aren’t some pensioners in poverty.

It is saying that the government has a limited budget and that there are trade-offs and that just perhaps increasing pensions by a couple of percent less, so that nurses and teachers can get a couple of percent more would be a better use of the money.

And no, this does not make me a politician. Economics is all about incentives and trade-offs and increasing pensions by 10% means nurses pay increasing by less.

There's no debate about it that is considered acceptable, it's all seen as an "attack" on pensioners which is ridiculous.

I have no idea why people above pension age still working don't pay NI? And the answer isn't they have "already paid their way".

Why must I adress your statistic when I didnt comment on it?

I merely said that pensioners who went to uni got it free unlike youngsters saddled with debt today which is true.

However that statistic is also irrelevant when its accepted that many professions didnt require degrees as they do today. So many pensioners didnt go because they didnt need to.

Either way they had it easier than the current generation.

I don't think it was meant that way by the OP but pensioners become defensive when we get stories of all the opportunities of free university places we had (we didn't) all the 80 pluses who have been retired for 30 years (not with state pension they haven't), all the millionaire pensioners (many of whom live in perfectly ordinary homes in expensive areas so are asset rich). To be honest the large private pensions tend to be the older than boomer retirees but I expect that is the boomers fault too.

I agree that the thread has been derailed and that the original question was reasonable . It has not been derailed only by those seeing it as an attack on pensioners but also by people expressing resentment at pensioners and suggesting the state pension should be means tested etc.

There is absolutely no sensible argument for means testing pensions

Moving the age out when life expectancy isn't increasing is doing this by stealth. And politicians are discussing means testing it because it's not sustainable.

"The number of people aged 85 and over is projected to double to 3.1 million by 2045, while the number of working-age people is expected to start declining after 2045. This means that the old-age dependency ratio — the population aged 65 and over as a percentage of the working-age population (aged 16 to 64) — is set to increase from about 30 per cent today to more than 50 per cent by the mid 2060s, according to the Office for Budget Responsibility (OBR)."

I don't think it was meant that way by the OP but pensioners become defensive when we get stories of all the opportunities of free university places we had (we didn't) all the 80 pluses who have been retired for 30 years (not with state pension they haven't), all the millionaire pensioners (many of whom live in perfectly ordinary homes in expensive areas so are asset rich). To be honest the large private pensions tend to be the older than boomer retirees but I expect that is the boomers fault too.

I really don't want to get into a back & forth argument but it is a statistical fact that the boomers are better off, this doesn't mean none of them didn't work hard or they are all rich.
Why would they have needed to go to university? If wasn't a requirement for many jobs unlike now. Being asset rich is preferable to being non asset rich & it's also been to the detriment of the economy that the only growth is in house prices. Private pensions did tend to be more generous & those schemes have changed for newer entrants.

@poetryandwine the free university place is an absolute red herring on the basis that you could become a teacher after doing a two-year college course in the boomer generation. Nowadays, they need a university degree to work in bloody Tesco’s.

If the pension rate really was adequate then no there would be no need ...it's the assumption that it is adequate for all, that every pensioner has a private pension, savings and lives a comfortable or better life that is the issue. I know many who do not have luxuries, who have to shop in the reduced isles and are effectively just existing. Yes as in all age groups some do have money....just like some 20 and 30 year olds do but it's not the majority, and those struggling will now grow. In 1994 pensioner poverty was for females 30% men lower, if fell to around 14% in 2014 and is now back up to around 20% and is predicted to continue to rise. Add to this fuel poverty which has risen to 3 out of 10 pensioners homes already and the price increases haven't really hit....people who can no longer move around as well as young people so need it warmer.

I don't agree with removing the TL.

However I do think the whole system needs an overhaul.

There's all ways talk of taxing those with the broadest shoulders during working age to fund services.
Some sort of system of means testing pensions should also be used.

Because it stands to reason those who can pay more tax will have paid more private pension, have more savings etc.

Some system like UC for pensions - for example the cut per £ over a basic amount (but something better than UC which is needed anyway) would help ensure people aren't left without but we aren't providing a standard state pension to those who don't require it.

I'm not suggesting it's easy but I do think the way we run our economy in the UK is generally quite poor.

My DH have retired early to mid 50’s. We’re living off pensions we contributed to and are still paying more tax per year than a lot of the work force do. We’ve done our skint child raising years and are now enjoying the next place of life. I have 15 years until I claim a state pension.