Labour and Pensioners

[Mycatsmudge]

So Labour has declared they will not increase taxes and NI on working people, but they need to raise money for their manifesto promises such as free breakfast clubs, more teachers, dentists etc. To help pay for it all would it be a good idea if they remove the triple lock on state pensions and make pensioners pay NI?

That's clearly the intention, but it will only work if future governments don't piss about with the rules. Unfortunately, history shows otherwise, i.e. the SERPS and S2P fiascos where people were encourage to "contract out" to personal pension schemes, but then some crazy government decided to just scrap all that!

Why would many have a reasonable pension? this scheme is primarily aimed at the lower paid and their contributions will be very small after 12 years max.
Someone on around the NMW is paying in just a few £ per month, even after 40 years, their pension pot will still be small.

Plus what about the self employed? many don't even have a private pension.

No, so long as there is NI, they'll be a SP, which is a worry as the Tories want rid of NI, which effectively breaks the link between a state pension and employee contributions.

So what about people like our PM who pay an overall rate of around 25% on their income now - why shouldn't they pay the same overall rate as someone earning, say £50k?

I'm always up for a dig at Sunak - because I think he's about as effective as a wet blanket and about as motivated for public service as a dog turd is.

BUT someone on £50,000 per year would pay about £11230 in income tax + NI. An overall rate of 22.5%.

I couldn't comment on his wife's rate because she's obviously subscribed to no dom status which means she is not obliged to pay the same level of taxes. I would not be surprised to find she, therefore, pays a much lower overall rate. (That status clearly needs abolishing).

Something tells me that’s the motivation behind the desire to abolish NI.

Well quite clearly right wing parties all have policies suspending NI or cutting it. They don’t want to support state pensions, never mind Labour. If you want to end a universal benefit then the first thing you do is end its universal nature. Make sure that a certain percentage will never get it, and watch support evaporate. See child benefit and the huge resentment of who claims and who cannot.

It’s worth reading ‘The history of state pensions’ by the IFC
Ive attached the first page. See the last paragraph. ( it’s worth reading it all though)
The point is.
People making payments have a right to the system and promises in place at the time that those payments were made. Those promises may be tinkered with over time but cannot be revoked by a presiding Government.
For example. If a Government in 1980 requires you to pay % of your income into a system on the basis you will receive a state pension then subsequent Governments cannot renage on that.

People making payments have a right to the system and promises in place at the time that those payments were made. Those promises may be tinkered with over time but cannot be revoked by a presiding Government.

This. If we want to do away with state pension it needs to be for people not yet working and contributing and those people need to be relieved of NI payments so they can use that money for a private pension. It's a 50+ year plan to do it right.

I agree contracting out was the thing to do, I did, and then suddenly it’s scrapped and we re all buggered.

Exactly

Quite. The time to have done it for current pensioners was about 1970.

But a government can certainly change what you get and do that today. NI is not a hypothecated tax in law, it is morally. That means while it is your expectation that there will be a state pension, the amount is not guaranteed.

So what happens when we have another financial disaster? or anything else that causes the markets to crash just as you retire and need your pension?

As they say the value of your investment can go down as well as up.

I do think that state pensions should be means tested. It’s not about punishing people it’s just about affordability. Things like care costs, pensions, welfare entitlements all have to be looked at. We have an ageing population and a low wage economy. We have to be honest about that. Part of the reason we are so indebted is that as a society we start howling about any version of the future where we get less. It is what it is. We can’t say “let me keep mine but take it off her over there”. I think at some point we are all going to get less.

The one thing any government needs to look at is housing.

Legally, however, it cannot be means tested or abolished and the state pension was to provide for basic needs and a reasonable standard of living without taking into account any other assets.

The system and promises may be different now in which case future generations of the current 20/30 yr olds may not see a reasonable ( or any ) state pension but the rights cannot be taken away from those who were entrusted into paying into the system for many years.

As such we are a long way off from a major overhaul.

I’m not sure any amount is guaranteed now? You could easily cut it; that is not unlawful. That is definitely something that can be done; guaranteed income or time of receipt are not nailed down. Those things can be changed

If you re going to offer a min basic amount, that puts the burden back onto the state, so why change?

Then what happens when the stock market performs very well? Govt then cuts what this basic amount will be...

Will they be so keen to increase it when there is a down turn?

Personally, i'd keep what we have but NI needs to be increased, not cut, which seems to have been done to mess up Labours plans, which is absolutely a terrible thing to do, as its not Lab they are hurting but us lot!!

I don’t support changes myself but really saying that the permanence of any government policy is untrue. They literally can change the law, and the state pension isn’t immune from that process. Morally the case is quite different because people will have certain expectations, but that is definitely not the same as things like age of qualifying, contributions, amount received etc being set in stone. They are definitely not.

This. ☝

Haven't caught up on the thread so might've missed something, but it's not possible to tell how affluent someone is just by that.

Lots of older people especially the older pensioners dress up in their 'best' when going out and about. For all you know they bought their 'well dressed' clothes from a charity shop. It's also not uncommon for people of that generation to keep clothes for decades (and even cheaper clothes tended to be better made than they are today).

As for the cab. Lots of older people have mobility and other health issues. They may not need a wheelchair but still need cabs because they'd struggle with public transport. Not to mention this could've been their one day out in months.

But even if that particular couple were well-off, the fact remains that generalisations ignore the data I posted yesterday

People aged 60-64 now have the highest relative poverty rate at 25%. (so people on the cusp on being pensioners).

The other thing is that
The other noticeable trend is that inequalities within older generations are some of the most extreme in society.

I've posted this on several threads and I'm sorry if it's poor etiquette to copy paste my own posts. Pensioner poverty is such an important and too often ignored issue that I think it's worth me reposting.

Within any group (age, or whatever other unhelpful and unfair generalisation) the ones with less do matter, and need and deserve empathy and support.

Their needs shouldn't be ignored just because others in their designated group (age or whatever) might not have those needs.

One of the reasons why pensioner poverty is a growing problem is precisely because of the lumping together of people by age, who are in varied social and financial circumstances.

Limited help or concern for them, because 'lots are ok'. So the ones who aren't ok are ignored.

Where did I say they shouldn't?? I'm all for the same rates/allowances of taxes regardless of the source of the income/gain.

Also relevant as MN tends to be a female dominated board is that women are particularly affected it seems. Single pensioners too. Data from Age UK and Independent Age below.

We know that the poverty rate for single pensioners is double that of couples. Pension age women tend to have higher poverty rates

And pensioners who enter poverty didn’t have high incomes in their working lives and those groups who are at greater risk of poverty in later life also have greater risk of entering poverty past State Pension Age.

More than 4.6 million people 50 and older still having to pay off mortgages. No guarantee they'll eventually own outright. Life events like divorce, job loss, of illness, then can't afford mortgage payments...at an age when soon the only income will be a pension

The highest number of older people in rented accommodation ever (almost 2 million aged 50 and older).

More than one in three (37%) pensioners who rent homes privately are in poverty.

Labour hasn’t stated that. They said they wouldn’t increase the rates of income tax, NI or VAT.

They have not committed to not increasing the amount paid through changing thresholds or adding taxes to new activities such as VAT on private schools.

Their comments are throughly disingenuous as they do plan huge tax rises just not via increasing the % rates.

@Againname

People aged 60-64 now have the highest relative poverty rate at 25%.(so people on the cusp on being pensioners).

Raw statistics are meaningless. I've just checked on the definition of poverty and quite surprised that based on my household income and circumstances, that we're "in poverty" under the official statistics. That's because we're both working part time (aged 59 turning 60 within a couple of months) as we're winding down towards retirement. The thing is, we don't feel "in poverty" and we have a good standard of living, mortgage long paid off, cars bought outright, so no loans, and just basic household bills and the odd simple holiday we can easily afford out of our part time wages. So, I'll take the 25% with a pinch of salt.

They've also not said they won't extend the scope of NI to other forms of income besides wages!