I’ve easily found £30bn of savings, so why can’t the government do this?

[OwnGravityField]

How about this state pension adjustment proposal?

Currently, the state pension system pays the same to everyone, even to households with very large private pensions and investment incomes. Much of this money ends up funding luxuries.

The proposal is simple:
*full SP for everyone who depends on it (60% of pensioners)
*households with more than £12,000 a year from private pensions, work, or investments have 50p of SP withdrawn for every £1 above that level, up to the value of the pension itself
*A quarter of pensioners would only have a modest reduction, and only the wealthiest 15% would no longer receive a publicly funded pension they do not need.

I used chatGPT to do the calculations.

Savings? THIRTY BILLION A YEAR

That’s 1% of GDP

List of things that could improve?

restored trust between generations so young taxpayers see their money spent on genuine need, not luxury.

national renewal: homes, NHS, lower childcare costs, investment in schools, training, the police force. It could be used to help families who are struggling with mortgage costs.

re-directing spending from low-value consumption (luxuries, imports) to investment (homes, healthcare, infrastructure) improves living standards

Positive effect on the bond markets, sterling value, credit-rating agencies, inflation trends, reduction in government debt - the UK really really needs this right now

I’d absolutely get up off my bum and vote for a party that proposed this. Would you?

Chat GPT is not a sentient being - it frames an answer based on the phrasing of the question and the vast amounts of data available to it. It predicts an answer - but it doesn’t actually think anything. If you phrase a question differently you will get a different answer. The data and references it uses are sometimes made up.

Australia has a means tested pension.

they had to exclude private pensions from the means testing as people deliberately weren’t investing in them because they knew it would only replace the state pension.

chatgpt is not reliable.

there are countries that do this and you can look at their experience.

this is why the UK won’t do it.

Same, I’d rather live in a cave, caravan or tent than go into shared housing.

ChatGPT has been noted for its wokery, and may well be left-leaning. It’s been trained by ‘progressives’ in California.

I agree.
I have a friend, married couple with children both doing exactly the same jobs as her parents did. Except her mum gave up work when her kids were young, then went back part time. My friend could only afford mat leave off. My friends live in a smaller house in a cheaper part of the country than her parents. Have a similar lifestyle in terms of holidays although both parents work harder for this. Her parents are retired (retired at 60) and have a HIGHER income from pensions they My friend and her husband have from working. So my friend and her husband will never have the lifestyle or money her parents have despite doing the same jobs and working harder at them.
I don't resent her parents luck, good for them. What I do resent is her parents attitude, they are very much in the entitled, 'young people spend all their money on avocados' lot.

No, absolutely not. We need to encourage people to save into their private pensions, not disincentivise it.

households with more than £12,000 a year from private pensions, work, or investments

12k a year is really not a lot, and if you are counting households, that's only 6k of pension each for 2 people. This site suggests you need around 13,400 for 1 person, or 21,600 for 2 people, for a minimum standard of living in retirement; 31,700/43,900 for a modest standard. At about 12k per year state pension, you'd need an extra 19k per year for a single person to reach the "modest" standard, so you're targetting people well below that.

I think we’ll start to see more people who don’t care if they’re called evil- we’re looking at the thin end of the wedge aren’t we - there’ll be no more big society

You can’t say never - that acceptance of downward spiral needs to change

What is this social Contract bollocks that people keep coming out with? There’s no social Contract be clear on that. It doesn’t exist.

I am sick of doing the right thing and being penalised for it by the government, I have a job and have been building my pension. Why would I (yet again) be paying for someone else who couldn’t be arsed or spent all their extra money that could have gone into a pension?

How about we completely get rid of child benefit and charge a nominal sum for schools say 250GBP per year per child. I mean, getting old is an inevitability whereas having kids is a choice.

I wouldn’t vote for this. I’ve already been shafted on so many levels. I’m not going to work until I’m 68 to yet again finance/support everyone around me.

Maths isn’t my strong point but you are saying pensioners receiving over £24k (combination of SP and private pension) would be taxed at 20% and also lose 50% from SP? So anyone receiving £24k - £36k would be ‘taxed’ at 70% on that band?

Ridiculous. It wouldn’t be worth trying to save a private pension of over £12k pa.

As a principle it’s not a bad one tbh. Pension credit is pretty much the same amount as SP, but people still happily pay their NI in order to get the SP. Losing half is too much though given that PPs tend to being people above the tax threshold - so they’d lose much more than half.

Politically it would be disastrous… What if the current SP was kept, but pension credit top up was tied to the triple lock? Far more pensioners are now claiming pension credit thanks to removing the winter fuel allowance, those with no other income would get the current rate ?£12k a year plus pension credit which would increase each year using the triple lock mechanism. It’s a fiscal drag policy so would take a bit longer but relatively straightforward administratively.

They can however buy an expensive house in catchment for a top school and have a great free state education for their kids.

They can also use the NHS, free at point of use.

Arguably they could pay for private for both and save the taxpayer a packet. Many choose not to.
Where is the cutoff proposed?

I'd just cash in my private pension to bring me under the threshold and give the money to the children for house deposits.

@kittywittyandpretty
It’s a theory- Social Contract Theory that describes the written and unwritten social agreements between the rulers and the ruled, the government and the citizens.
See
https://en.wikipedia.org/wiki/Socialcontract

This explains SO clearly why chat GPT cannot be trusted OP. Have you ever researched AI hallucinations? You should.

I work in this area and I can absolutely assure you that Chat GPT is 100% inaccurate in mush of what it reported to you, (what evidence sources did it give you? Have you checked them out?) and that your inputs bias, even if unintended and unrecognised by you, have additionally influenced its analysis. It is well known that it broadly answers in the positive to warm you to it :).

It has also not considered adequately the wider factors which would need to be considered (I can off my head think of another five or six).

You should research more on how to strengthen and make robust responses and how you can verify them. Understand more the limitations of it as a tool - at the moment it’s rather like you talking as gospel a random persons opinion on it and then shouting to the world this is 100% fact. And you wouldn’t do that, would you? Would you?…

You really think £12k private is a large pension? You are an idiot.

You say in the OP “households” that have more than £12k a year from private pensions, but how would you propose to define a household? If you have a couple, do they share a single allowance and both lose their SP if they go over the £12k jointly? Do they get individual allowances, in which case benefit from double the SP income than equivalent single-person households, alongside their private pensions? What about if one person in the household dies, would the SP be reinstated for the surviving person if their private pension income subsequently fell below the £12k? How about older people who benefit financially from living with family in their retirement, would wider household income be factored in?

A better way of saving money would be to bring back the fair rent register which would fix a fair rent on a rental property. Would save millions Housing benefits and would also benefit working people. If it forces some landlords to sell their properties then house prices would reduce to allow more people to buy their own property, ideally giving existing tenants first dibs

Milliionaires are not why this country is in trouble! We have a massive client of state of people just being given money and the sums are eyewatering. The SP is about the only cash benefit that is universal. The idea that it should be taken from those who have contributed the most to funnel yet more money to those who are already draining resource from the country, is absolutely extraordinary.

I am wondering, would a government or armed forces pension be considered a private pension under this brave new world order or exempt?

or what if they had a SP from an EU or other country as well as the UK SP?

@OwnGravityField because it’s a very fine balancing act between what can work and what people will actually vote for - the express and mail and telegraph etc would damn well make sure that it was known you were trying to kill pensioners!! The UK electoral system too doesn’t help - decisions are not made always on the national good because they would be very unpopular and mean 50% of Britains rather dim population would just say ‘I’m not having that, let’s give the others go’ - I’m sure plenty of us now think that rejoining the EU or at least the EEA would add a ton to GDP and get things moving economically without much pain - but again you would then have the press doing the ‘going against democracy’ bullshit - because for the right wing press the decision suited their agenda- it’s not as if they mention that the small boat issue exploded exponentially post Brexit etc - a great deal of over60s do indeed get their info purely from the BBC and right wing press and they vote!! ( and I’m 63 so well aware of how many in my age group don’t think sideways including reasonably intelligent people on paper).- and yes like you OP I can see multiple ways of making the system work better but wouldn’t be popular, including with many mumsnetters on both sides of the political spectrum

it has a point but also pensioners are treated as sacred cows here so no doubt they’ll have a fit. And they are one of the most active voting demographic.

there is an issue with the fact that wealthiest probably paid most into the government coffers throughout their life so they may object that it’s not fair that they were paying most and are again getting back least.