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.

This is all looking pretty poor for accessing the actual pension anyway. A swift check shows that the age of access is going to go up. That is a lot easier to handle than cutting it another way

What benefits? Pensions are not a benefit. There's a means tested Pension Credit, separate from a pension.

The idea of means testing a pension would require a lot of people to totally re evaluate the Welfare State, to look at whether it is 'fair and equitable' for some to get less even if they had paid in the same or more contributions.

There WILL have to be changes. But all this blame game rubbish isn't going to supply a workable solution. Especially as we already know what happened when Gordon Brown decided to pay more money to the poorest pensioners, personal pension savings collapsed. People reckoned it wasn't worth saving a they would lose out on state pension and various benefits when retired.

Mind you that wasn't his only disastrous decision about pensions

www.ftadviser.com/2014/05/07/opinion/tony-hazell/savers-could-have-lost-bn-in-brown-s-pensions-raid-WTQAjLW5DSRp9HUxwNZN7K/article.html

He really did have form for shite financial decisions.. selling gold reserves at rock bottom prices springs to mind

We need something to change. But it isn't simple, as the lack of any suggestions here, across SM, MSM, show!

It's not and should not be pensions vs education

A larger proportion of Pensioners however vote and otherwise engage in the political system which can affect things

I am old enough to remember Gordon Brown and not stupid enough to let one politicians idea dictate my retirement. Is he still in power?

No. I am still making plans for my retirement independently of the state pension, as should everyone in employment.

What does this mean? You think state pension payments should be halted for all except those who were too ill to work during their working-age lives?

We need something to change. But it isn't simple, as the lack of any suggestions here, across SM, MSM, show!

I've made lots of suggestions in this thread. Do you support them?

Not stupid enough? Making independent plans for retirement? Do you mean you have enough disposable income not to rely upon state pension? Good for you! Not everybody is in that position. Just as many previous and current pensioners were not!

Is he still in power? Don't be stupid. But the country as a whole is still missing the revenues and reserves he seems to have wasted. And he is only one PM, a single example of why this is not a simple problem to solve.

I'd have to go back and re-read you... hold that thought.

This is neccessary and it's undeniable that a household basis for all taxation etc would be create a huge benefit to the UK in terms of reducing poverty, increasing productivity and improving society.

And also - crucially - massively reduce reliance on welfare and costs to state services.

someone asked me what was fair….. not that it’s any of your fucking business

😂 Well if your going to post shite, people will comment on it.

I went back a few pages

Opt out. No! Because the poorest would be the most disadvantaged as those with the least disposable income would opt out, more now, none later.

Adjusting tax allowances? That hasn’t gone well so far has it? Nor has all the WTC stuff. It just seems to create further layers of ‘unfairness’ and red tape. It would take individual means testing to make that work properly!

Household based taxation? I can’t even begin to work through that. We would need to have a 100% self assessment system for tax returns. Isn’t that pretty much what the US does? And we do have a form of that? Couples choosing to maintain separate households even after having kids, because they get something more via the welfare system.

I see you mean the French system of progressive taxation. All that red tape, especially around their health system, ever increasing, iirc. So alongside changing how we are taxed, how pensions are worked out we would also need to change how the NHS is funded. The system being what it is, interconnected.

As I said, the changes required are huge and complex. And I don't see how that would do, as your last post says, massively reduce reliance on welfare and costs to state services. It would just shift who pays those bills - to the individual who owould require health insurance and fees paid being claimed back. So you are talking about a root and branch reshaping of the Welfare State,

Which brings us back to what age group would this start with and how would the inevitable 2-tier system work?

WTC? None of my posts were about that?!

No, it would not require self-assessment to tax on a household basis. It could be done in a spreadsheet FFS it's so simple. Since that was their preferrred method for dealing with confidential Covid data. 🤣

This really isn't complex. Most of the pbvious improvements required are, well, obvious. Self-evident:

Fully funded childcare from the end of maternity leave (international data shows this more than pays for itself).

Taxing on a household basis as set out above to immediately relieve poverty for much of society and therefore improve productivity, health outcomes, GDP per capita, reduce reliance on public services/ welfare, etc.

Higher education free but fewer university places (reverse the Tony Blair effect). Then employers could not demand degrees for jobs where they are not required because there would not be sufficient graduates to fill them. Meanwhile, huge investment in technical courses and proper apprenticeships like in Germany, for example.

Support for small and medium sized businesses with much greater tax breaks, particularly for investment in technology.

Large tax breaks even for big corporates for projects resulting in technological improvements/ productivity gains. Offset by a higher general tax rate on large businesses: will not negatively affect those who are investing properly in staff, CPD and technological improvement.

Rejoin the single market immediately.

Change corporate structures so that more follow a Danish type model of co-operatives. Proven to be very effective for improving productivity and profits. Also German style system for employee board representation: results in better management, better long-term company outcomes and higher salaries for employees versus dividends for shareholders. Fewer strikes also…

Address the huge disparity between public sector and private sector pension schemes particularly in terms of the lifetime allowance calculation which is completely scewed at present.

Big investment into green energy and associated high tech jobs.

Massive investment into primary education with a particular focus on technology.

Cut back huge waste of spending on duplication of everything we used to do collectively with the EU and have now had to replicate internally (finance regs, vetinary regs, medicine approval… endless list I won’t type out).

Take the difficult decisions on long-term energy and food security that require upfront investment but are essential and will also upskill the population to fill the required roles. This should have been done when the Government could borrow at a negative real interest rate but hey ho!

I could go on. All eminently doable, fairly (in relative terms for Government) easy to implement. We don’t have to reinvent the wheel, we simply need to look around at what has been proved to work in multiple other countries and learn from it. To stop being so arrogant that our system is better. Objectively, plainly, it is not. It can be changed. The question is not what to do as it’s obvious. The question is why nobody who is complaining about the status quo is pressuring the Government to do the things that will improve things for us now and for future generations.

It’s convenient for the Government to get you to focus on the relatively petty issues that currently divide people and squabble. What they absolutely do not want is for you to look at the big picture and question why they have not done and are not doing the above, that would benefit everyone.

You do understand that I am reading your posts and adding my own questions and thoughts?

Or am I not allowed to make any additions?

So simple? OK.. so answer thebasic question. Here in the UK how would you start those all encompassing changes?

I've just answered that question.

It’s convenient for the Government to get you to focus on the relatively petty issues that currently divide people and squabble.

Except I am not divided or squabbling. I am looking for the end of the procedure in your simple process. Where to start.... and how to accommodate the inevitable 2-tier system that would have to exist until your sweeping changes were complete, for all people of all ages.

What two tier system?

You seem to have missed that we cross posted!

And you haven't answered anything.

Step 1 = ???

Managing people who are retired, not earning, reliant on the state pension?

@AlarmClockMeetWindow - I agree with what you say but in my lifetime I have seen such progressive thinking gain traction once, maybe twice.

Britain is a small c conservative country. It is both cheap and in progressive and as it has aged as a population it has got even cheaper and less progressive. The fact we spend more on pensions than education tells me we have lost a proper vision of the future.

Yes. That's the problem. And only when/ if the general population wakes up to the fact that these are not unsolvable problems, that the Governments we have are choosing to make life here worse and worse when they have other options, and actually pressure their political representatives to do these things instead of attacking each other, will things improve.

I won't hold my breath.

Well, people over a specific age wouldn't be able to join in with any of your sweeping changes, would they? Because their life plan, their financial structure is complete, set in stone. They cannot add to it, change it, move it etc. Because they are locked into whatever it is they spent their lives purchasing - via taxation or personal schemes.

You have to manage them whilst working things out for the younger generations - which ALL of your mooted changes focus on!

And you haven't answered anything.

I give up. I think my response was pretty comprehensive.

You gave a nice long list of things, many of which most people would say were desirable.

That isn't the same as setting out a procedure on how we get from where we are now to the end of your list!

Well, people over a specific age wouldn't be able to join in with any of your sweeping changes, would they? Because their life plan, their financial structure is complete, set in stone. They cannot add to it, change it, move it etc. Because they are locked into whatever it is they spent their lives purchasing - via taxation or personal schemes.

You have to manage them whilst working things out for the younger generations - which ALL of your mooted changes focus on!

Ah, I see. So you didn't go back and read my posts? Where I said UK pensions are too low hence the triple lock is reasonable. Not in perpetuity obviously but it's a mechanism that needs to be in place until our pensions are raised to be at a reasonable international standard.

That I said that it's unacceptable for changes to be made to pensions when people are in mid-working life because pension planning is a decades long exercise.

That I said it was mathematically, socially, politically and morally wrong to even consider means testing disability benefits or state pensions.

Is it so difficult to understand that one can hold these views, and simultaneously believe we should ALSO be making policies for the future (which over the long term will more than pay for themselves) to modernise our economic system, future proof it, and give those generations that follow yours also a chance of a decent life? Why can't you accept that SOME policies need to be directed at improving things for younger people and future generations, too?

Bloody hell. What a depressing thread this has turned out to be.