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.

Entitlement, lack of understanding of maths, selfishness, confirmation bias, deliberately divisive media with no nuance.

Findamentally many people swallow whatever nonsense they are told and it's extremely easy given human nature to manipulate people into a "them versus us" mentality. Rather than them bothering to think and realising that it can be simultaneously true that a) UK state pensions are too low; and b) younger people have been totally stitched up.

Not all older people are like this of course, but unfortunately a significant proportion seem to be.

The last thing our Governments want is for people to realise that all of this is largely avoidable, that the situation we find ourselves in it entirely successive Governments' doing, and that they need to fix it rather than accept the population accepting we will all become increasingly poor. It's in their interests that people blame each other. It's incredibly depressing that so many people fall for it so easily.

You seem to have chosen to misunderstand me, mainly by only part quoting what I actually typed! Not really a surprise in this topic.

I have a statement of my national pension, everyone does. It tells me how many years I have paid in full contributions, 43, how many I have yet to pay in order to receive a full state pension, 0, and how many years it will be until I can start to receive it, 10. Because I have worked, full time, for the whole of my adult life, my state pension is funded on the basis of these contributions. That's the contract I had with the government when I started working, last century!

And I wasn't claiming to be special, which is why that part ended with "That's how the Welfare State works."

In Japan, they are already facing the same issue. They call it the 100 year life. People are staying in the work place for longer

Japan has actually implemented some policies & planned for this. We haven't done anything.

@SamphiretheTervosaurReturneth there isn't a contract. You are not paying into your own pot. You are the one misunderstanding...

Your DC face having to pay in high taxes but not getting the NHS increased retired age , or state pension. Something which you will get. They will have paid the same or more but won't receive hardly anything back. How is that fair?

@yoyy - no I agree but it's pretty obvious that the pension age is going to be raised and the TL removed.

The NHS and social care are already stuffed. There is just not the matched funding for the fact people live so long.

The question is really whether you have healthy retirement because being ill or having a chronic condition for those years isn't really accommodated.

This is entirely deliberate.

Why do we have so many politicians who have studied PPE? Politics teaches you your rights and to stand up for them. Philosophy teaches logic and critical thinking. Economics means you understand mortgages, pensions, tax and the wool cannot be pulled over your eyes.

Yet all absent from core subjects at GCSE, not even offered in many schools as an option?

Hmmmmm...

It doesn't take a genius to realise that this knowledge would be more useful to most people than how electrons behave, for example. Yet it isn't taught,

well i'm even more depressed now @AlarmClockMeetWindow

Sorry. It is incredibly depressing.

How depressing accurate

The Triple-Lock comes at a cost and giving higher pensions each year means giving lower pay for nurses, doctors and teachers. Which do you support?

I find it incredibly difficult to believe that someone who wrote the above is an economist

Unless I've missed another post, I am the only person who has stated they are an economist. And the post you have just quoted was not written by me. I think you may have become muddled.

No! I didn't say that my contributions would be the sole source of payment. Funded from not by

And the pot required to pay out £10K/year is about £230,000, according to the calculator I have been using for the last decade or so!

Not for an index-linked one it isn't, not these days. And state pension with triple lock is better than index linked, so would require a higher capital outlay to buy privately on the same terms.

The annuity rates have got better very recently of course due to the rise in interest rates and slower increase in life expectancy (yay?)... but the average rate over the last decade or longer certainly requires a higher capital outlay than you quote for a like-for-like product.

peedoff - some people always pay in more and get less back - its just an accepted way that the tax system works in this country. We have both paid much more into the tax and NI systems than we will ever get back, but that shouldnt mean what pension we do get from the government should be removed or means tested even further.

I feel like saying fuck it, lets privatise nhs, get rid of state pension so everyone has to start a private one themselves and lets see how all these ppl who bash every other group will cope.

So it's fine for the young to never get the state pension , massively increased retirement age and no NHS for the same price ?

I am not. I suspect it's a language thing. I pay in. There is/was a social contract. I have a projection from the government. It is mine, based on me, my work, my contributions. That's what the Welfare State is. If we work we all pay into the government fund. I am fully aware that I don't have a personal pot with the government, not being stupid!

I am also aware that many people throw around very big numbers. But they aren't always comparing like for like. Many apples and pears being used.

However you look at it, the full state pension is not an amount of money that is adequate for many people. Threads like this always seem to throw up many people who want to blame someone for the current parlous state of affairs. That happens with every generation. It's not new and there is never a proposed solution.

I could wish the MN economists would posit something workable...

It's already going that way and the working ages will pay for it. We can't afford to pay for the NHS and state pension forever with the demographic shift.

Starting with what age group?

Cos that's the issue isn't it? To get a solution past all the "It's not fair" objections. A solution that must leave those at retirement or close to it with a liveable pension whilst choosing a cut of point at which age group to make those changes. It will of necessity by a decades long solution... one nobody on threads like this ever outlines.

Which is why compulsory work pensions were introduced. To make some inroads into that.

We need more, obviously, but what?

People are worried about the state pension. Do any of you scrapping about this look in detail at the Government's finances? The unfunded public sector pension schemes (some are funded, most are not) are not even included as liabilities in the Government's accounts as part of its "balance sheet". There is literally no plan of how to meet those liabilities, which far exceed current state pension "promises".

Nobody's worried about that?

Financial education in the UK is a disaster. I wonder how many people ask their MPs, or canvassers for political parties, these questions: what's the plan? I bet most of those posting here never have.

Which is why compulsory work pensions were introduced. To make some inroads into that.

We need more, obviously, but what?

More? People's salaries haven't increased in real terms in the UK on average at all for 15 years. How do you propose that they pay more?

Particularly given that now, salaries are projected to decline in real terms by 5-7% over the next few years which again, is entirely unprecedented in recorded history. While bearing the highest ever tax burden in peacetime and enduring further service cuts.

As I said, the solution is not one group saying "hey, just make <whoever is not me> poorer". It's demanding decent Government that doesn't impoverish its population througj negligence, laziness or self-interest.

All I can add as a 71 year old, who has raised 4 DC's and worked all her life is you try living on the state pension and the small civil service pension that I receive, if DH didn't work still (self employed builder) I don't know how we would survive.
There was no subsided childcare or nursery places when my DC's were small, my entire wages used to go on childcare!
Times are very different now, women with DC's were not encouraged to work, if they knew you had DC's it was unlikely you would progress in your job.
Please stop the pensioner bashing on this thread, even those who are supremely comfortable in their twighlight years often end up spending it on carers, as they don't have the health to enjoy it.