Pensions… again

[GoodnightAdeline]

https://amp.theguardian.com/money/2024/apr/08/uk-state-pensions-benefits-changes-april-triple-lock-rise

Another pension increase we can’t afford when working people are grappling with the cost of the country.

What will be the endgame in all this? Where will we be in 20 years?

We should definitely ditch NI and increase tax rates across all bands to compensate for this. And ensure all other income is taxed at the same rate as the current income tax bands.

@milveycrohn I'm not sure why your post was addressed to me. I'm in agreement with you, and don't think that pensions are high enough. My comment was in response to one saying that pensions should be tapered so that anyone with an occupational pension would get a pension reduced according to their income from that. IMO that would be grossly unfair, and as bad as the embezzlers.

Yes you can actually, but depending on the circumstances you may be restricted to the amount you can contribute.

I think that makes sense, but if the rate of tax is going to increase, so should the personal allowance, or the poorest will be squeezed even further.

Ah, ok. I don't pretend to be an expert 😀.

It's not as simple as continuing to pay NI though, is it?

you cease NI contributions at your state pension age, so in terms of SP I see what you mean. For a personal pension you can be subject to the money purchase annual allowance if you access a pension flexibly which limits you to an annual contribution of £10k. But for all intents and purposes, yes it’s generally unusual to be drawing and contributing at the same time other than for tax planning.

If they hurry up and die and then leave all their money to their children, then its obviously the socially responsible thing to do. 🤣

In other news when the OP reaches pension age it'll be fun trying to explain that the reason she won't get a pension is because she and her ilk made comments like the ones on this thread that pensioners are wealthy, should be made to suffer for voting Tory ( ok everyone voting Tory should be made to suffer regardless of age) and cos children 🤷‍♀️

No we are skint due to policy decisions like austerity that choked off growth at the same time as public services were being destroyed for idealogical reasons.

And all the tax dodgers and people with their fingers in the till of course

The triple lock should be maintained, but amended.

The current method increases pensions too far above inflation and average earnings due to the way it is used. The two biggest problems are that wages operate on a cycle greater than one year (eg. inflation might be 3% in two consecutive years but wages go up 2% then 4%), and the 2.5% increase when inflation and wage increases are low is too high.

Take the real figures for the years ending April 2019 to April 2022.
Average Earnings in these years changed by +2.2%, +2.6%, +3.9%, -1.0%
The corresponding CPI changes were +3.0%, +2.4%, +1.7%, +0.5%
Over the 4 years earnings went up by 7.9% and inflation by 7.8%, but pensions went up by 12.5% due to the triple lock giving increases of +3.0%, +2.6%, +3.9%, +2.5%. This built in bias for pensions makes the current triple lock unaffordable in the long term.

The solution would be to average the increases in earnings over the last 3 years rather than take the single year figures, and to reduce the 2.5% minimum increase to 1.5%. This would have made the triple lock increases +3.0%, +2.4%, +2.9% and +1.5% which would give an increase of 10.2% over the 4 years - still much better than wages or inflation, but vastly more affordable.

I live rurally and often there are only 3

It's not just us though, look around Europe and the housing problems are the same.
The Spanish are complaining that the price of housing is beyond the reach of the young.

There is condemnation on this thread about ageism but my inlaws are from a European country and think it is disgusting the way we treat our older people putting them in care homes instead of the extended family looking after them.

I think the next few years are going to be telling, people say the Tories and Labour are virtually the same party ideas wise, I think this is because they both know the days of spending as before are over.

Anyone want an ambulance? Good luck..

@LiquoriceAllsort2 Yes Europe has its problems, v touristy areas have housing issues i agree.

But the problems in the UK are worse, be it kids in poverty, homelessness, economic inactivity rates, productivity, healthcare waiting lists, roads....... all worse in the UK.

Didn't a recent economic report find that the average UK worker/family is £10,000 a year worse off than in France or Germany?

Austerity and then Brexit has hit us particularly hard and where has ALL those billions saved gone?

We also get shafted, Tesco just announced record profits..... yet food inflation is all the fault of Covid and those Russians - why is the things we need always go up, yet stuff we don't increase at far lower rates... if production costs have gone up, then they go up for everything.

Same with energy prices and company profits, both supply and production.

Well said. I think we also need to question why the mental health of the nation is so poor overall and why so many people are out of employment for health reasons and needing to claim disability benefits. To clarify, I’m not blaming individuals or saying it shouldn’t be the case but wondering why. Why is adolescent mental health so poor too?

I feel our biggest problem is we have no way of having a government in this country that can grasp the problem and change anything.

A PP had mentioned about Mr Hunt putting the annual pension contribution limit to £60k and that it was wrong and it was only helping the rich.. A close friend of mine is a consultant who used to work 5/6 days a week, he was maxing out his ISA and the £40k pension limit and worked out he was working for the tax man.

Now he has reduced his working week to 3 days as he says he is not working for free. There is a good worker the NHS needs but now he is off doing hobbies on his days off so is not going back working a full week.

Everything has a consequence to what they change and it is a big problem the NHS can't afford to have

The deficit is Billions a year so it is no good tinkering with a billion here or there.

There is condemnation on this thread about ageism but my inlaws are from a European country and think it is disgusting the way we treat our older people putting them in care homes instead of the extended family looking after them

And by extended family Im sure you dont mean just the women? Right? RIGHT?

No not at all, the elderly are looked after at home usually by the whole family including grandchildren.

@LiquoriceAllsort2 so how do families deal with it when their relative has Alzheimers and is violent or smears shit on the walls

Which country is this?

@JenniferBooth
The problem is that when my DM went into a Care Home, I was still at work full time, and my DC at uni.
So it makes things very complicated, as one parent, and in this case, presumably me as it was my DM, would have to give up work. Secondly, with dementia, it requires someone 24 hours, and wheel chairs, hoists, and proper training regarding lifting, etc, that most people could not really do this by themselves. Secondly, many elderly people do not have families.

I really dislike this contrived war between the different age groups.
I am aware of the difficulties in buying ones own home these days (from my DC), but today's elderly people had their own problems. It was not only the higher interest rates (reaching 15.25 on my mortgage statements which I have kept), but it was also much easier to get rid of people from jobs in those days. The right to return to work, only came in during the 1980s. But today's workforce have different problems. It is now almost compulsory to have a smart phone, the number of apps required for just general living.

With regard to pensions, the rules have changed so much over the last 50 years, that it is unfair to compare the different age groups.
I suspect the triple lock will be dismantled at some point, but otherwise they keep putting the state pension age up.

You seem very naive in your blase assumption that cutting state pension won't lead to pensioner poverty. When Margaret Thatcher removed the pension increase link with earnings, thousands of pensioners died of hypothermia - I give you a quote from hansard 1986:
:
All over Britain easterly winds have kept temperatures far below freezing—down even to minus 15 deg, and to minus 20 deg in many places. Deaths from hypothermia have run into thousands. In last winter's cold snap, which was less cold than the past four weeks have been, there were 46,000 more deaths than in summer—an increase of 16,000 over the previous mild winter. Therefore, it would not be surprising if this winter there were about 60,000 cold-related deaths.Even the Government's own figures—which grossly understate death due to the cold, because hypothermia-related deaths are classified separately as due to pneumonia, bronchitis or heart attack—tell the same story—that the death rate from hypothermia was 10 times higher last year than in 1978. They also show that in the first half of 1985 hypothermia killed 20 per cent.

UK Pensioner poverty was a scandal in the EU, I remember one year a pensioner friend showed me tins of meat that had been allocated to my area from the EU to alleviate this, plus hand knitted jumpers from Norway to try and prevent deaths from hypothermia, which incidently occur to this.

It's so depressing to think that in 2 years and 8 months, I will be resented for drawing a pension I have paid into for 43 years. You want state pension means tested? How much exactly would you like me to retire on to reduce your resentment? £150 a week? £200? I left work to care for my mother, and took a 22% hit on my works pension as I needed it to live on. It's currently £7000 a year, should that disqualify me?

Yes, there are some extremely wealthy pensioners. There are also extremely poor pensioners. Up to a third of pensioners don't claim benefits they are entitled to, being shamed because of their age may be a contributing factor. So, no worries, money is being saved.

In fact, in 20 odd years all us 'boomers' will in the main be dead, and you can complain about generation X instead.

Quite, all of europe has an aging population but as we live in the UK, its UK problems we need to address and in regard to the care of the elderly, thats down to not paying carers enough, so we import them, they don't stay in the industry and also bring in dependents, adding in many cases to stresses on public services - housing, maternity and education in particular.

Where would the money come from to pay higher wages? well, Hunt handed out £30 billion in NI tax cuts, a mere fraction of that would increase carers wages substantially, instead he made the choice to carry on with inadequate social care.

I worked for HMRC on one of the biggest pension schemes in the 80's, every week during winter we used to get massive boxes of P45's for pensioners who had died, in summer we got less than 25% of the amount we got in winter. Thatcher has a lot to answer for.

That's certainly the case in my dad's family - Eastern Europe.

For the person who's asking how they deal with the less pleasant aspects? I guess they just get on with it, hard though it is...but it's a different outlook and they're used to multigenerational homes.

I don't want to go into details here, but I think I've said that I was working full-time and caring for three adults at one point.

I dealt with the messier aspects. Looking back, I sometimes wonder how - but I did it. I'm not saying that others should, just that it's possible.

I also dealt with some aggression and a lot of bewilderment. If it had got to the stage of violence, I would have had to resort to using a care home since I had no other immediate family and I wouldn't have been able to call upon my cousins to help.

But as for how families in other countries cope - and I know that the question was directed at LA2, not me - they get on with it...but there is very much a dependence on family relationships.

Some of my relatives in E.E. live in multigenerational houses built in multiple levels.

I can think of an aunt and uncle who built a bungalow for their newly wed son and DIL in the garden of their home. The last time I visited, my cousin and his family were living in the main house and my aunt and uncle were living in the bungalow.

One of my cousins lived in her husband's family's house. She had a really tough time of it. She was running between her husband's family and her own parents' place. (One of her siblings married abroad; the other - an unmarried brother - lived with her parents. Her husband's sibling had died and her husband was injured in a car crash. Her two sons did as much as possible to help out.) Fortunately, the old folk in both families were compos mentis but there were physical problems.

The last time I saw my cousin's MIL, the old lady was bedridden with severe osteoporosis. The family managed to organise a downstairs inside bathroom for her. She and her husband have since passed away; ditto my cousin's parents.

I do know of one case where a marriage broke up because a young couple argued over which set of parents they would live with.

I'm not saying that this is someone that everyone should do...but it is doable. It can be very difficult, however.

@WearyAuldWumman
Houses in the UK are often quite small to house elderly relatives; a bungalow in the garden assumes someone has a garden to start off with, apart from getting planning permission, etc.
In the case of dementia, relatives require 24 hour care; so grandchildren at school, and an adult who works would not be available to help.
Many cases require specialised care, so I do not think it is that easy to take in an elderly relative.
Giving up work could affect one's own pension (personal, and also state qualifying years). Could also affect the ability to repay one's own mortgage.

I know all that. I'm responding to the query as to how people cope with this elsewhere.