Discussion
brickwall said:
It’s a massive electoral bribe and everyone knows it. No government dares touch it.
If the triple lock didn’t exist, what would be the argument for its introduction? Would anyone be making that argument?
What is so special about the the state pension specifically that makes it worthy of a triple lock, but no other state benefits are? Not veterans’ pensions, not benefits paid to disabled children, not school spending, not anything.
Why is 2.5% such a magic number? Why not 3%? Or 4%? Or 0.5%? Or any other number.
Inflation linkage is sensible. Inflation or growth linkage is defensible. The highest of inflation, growth, or *some random number dreamed up 20 years ago*….absolutely nonsensical.
True enoughIf the triple lock didn’t exist, what would be the argument for its introduction? Would anyone be making that argument?
What is so special about the the state pension specifically that makes it worthy of a triple lock, but no other state benefits are? Not veterans’ pensions, not benefits paid to disabled children, not school spending, not anything.
Why is 2.5% such a magic number? Why not 3%? Or 4%? Or 0.5%? Or any other number.
Inflation linkage is sensible. Inflation or growth linkage is defensible. The highest of inflation, growth, or *some random number dreamed up 20 years ago*….absolutely nonsensical.
We need a decent state pension but the design of the "triple lock" is political. We could return to a near zero inflation environment in the future and have minimal growth and the state pension would still be going up by 2.5% a year.
CoolHands said:
The state pension is poor, and you want to allow it to get worse? We can afford it, and we should keep it.
It depends how you look at it... It's not poor for many of those who are retired or are retiring soon. Most people argue they have paid into it so deserve it. The thing they ignore is they have paid far less into it than they will take out. How could they have, when they likely worked approximately 40 years paying a few % of their salary in, but will be taking money out for approximately 25-30 years? The amount you get paid is not going to give an amazing life, but versus the amount paid in it's a huge windfall for pensioners, because the pension age was never adjusted to be the approximately 10 years at the end of life like it used to be. And yes, it would be great if it was 30 years like now, but it's not affordable. In the meantime for example we'll have seen those working now having a big % fall due to corona. The pensioners will have got the +2.5% at the same time. Now that there's the 6% growth mentioned above the workers will get that, but so will the pensioners. So the pensioners in just this year or two had a nice salary rise while the workers didn't get it. Over 20-30 years of retirement that is a lot of money. How is that fair?
CoolHands said:
What - it’ll be worse when I get there so you shouldn’t have anything decent?
One reason for increasing above cpi is so you are improving people’s standard of living. Your argument(s) is they could afford bread and water in 1952 how dare they want it to ever be anything better?
That would be fine if it's not lowering other people's living standard. Particularly when we already see that the current pensioners are the ones who will probably have had the best pension life in history, with falls in living standards going forward. Instead you're happy to boost them even more at the expense of those paying in now?One reason for increasing above cpi is so you are improving people’s standard of living. Your argument(s) is they could afford bread and water in 1952 how dare they want it to ever be anything better?
It's a reasonable amount for a couple on full state pension who've paid the mortgage off.
Also, if you are not a couple you will get a benefits pension credit top up too (I don't know how much).
These days, to get there, you need to put in 35 years of stamp, and make no mistake this will increasingly be the ONLY meaningful pension provision for MOST people going forward. So it needs protecting and keeping in line with rising costs.
Also, if you are not a couple you will get a benefits pension credit top up too (I don't know how much).
These days, to get there, you need to put in 35 years of stamp, and make no mistake this will increasingly be the ONLY meaningful pension provision for MOST people going forward. So it needs protecting and keeping in line with rising costs.
Weird that people are moaning about pensioners when they either are one or have a relative/loved one who is. Besides the cost of pensions is nothing to what they cost the NHS. All the boomers who retired at 55 or 60 are on their last legs so gradually any perceived unfairness will right itself.
I’m more worried by the current generation of working age feckless, people in their 30s & 40s who should be saving for their future but blow their salaries on rent and credit. Who’s going to pay for their Costas and leased Audis when they retire?
I’m more worried by the current generation of working age feckless, people in their 30s & 40s who should be saving for their future but blow their salaries on rent and credit. Who’s going to pay for their Costas and leased Audis when they retire?
JagLover said:
Nickgnome said:
I'm retired but consider that affluent pensioners should be taxed more. In reality i do not need it.
I think I get £750/month state pension so not remotely enough to live off.
Many pensioners live off this and a few other top ups. For them it is exiting not living.
Let's say average household bills of £2K a month of which £900 is mortgage. The mortgage is paid off by the time you retire and so you that is £1,100 a month. The £750 a month isn't that far short of that and cash savings, private pensions, or downsizing to release funds could bridge the gap for the vast majority. Added to which are potential cost savings. No commute, one car rather than two, etc.I think I get £750/month state pension so not remotely enough to live off.
Many pensioners live off this and a few other top ups. For them it is exiting not living.
I think saying £750 isn't remotely enough to live on, mortgage free, does rather depend on lifestyle expectations.
Many live off the state pension and other government payments alone.
Edited by Nickgnome on Friday 18th June 09:01
wormus said:
Weird that people are moaning about pensioners when they either are one or have a relative/loved one who is. Besides the cost of pensions is nothing to what they cost the NHS. All the boomers who retired at 55 or 60 are on their last legs so gradually any perceived unfairness will right itself.
I’m more worried by the current generation of working age feckless, people in their 30s & 40s who should be saving for their future but blow their salaries on rent and credit. Who’s going to pay for their Costas and leased Audis when they retire?
Probably because it's unfair, particularly given the boomers already having a much better pension that many will expect. A percent or two may not sound like much, but it is a lot over a retirement of say 30 years. I’m more worried by the current generation of working age feckless, people in their 30s & 40s who should be saving for their future but blow their salaries on rent and credit. Who’s going to pay for their Costas and leased Audis when they retire?
As for your facts... they don't really add up. The boomers are between 57-75. Given average life expectancy that is another 5-20 years (and in reality is more, as having survived until now their average expectancy will be higher).
As for the spending... it's not nearly as different as you think. Around 42% of the welfare spending is pensions, so actually around £101 billion a few years ago. Health was £145 billion. So not exactly "nothing" compared to healthcare.
And for the generations below... they have to save for their own pensions and deal with the risk there, given the switch from DB to DC pensions.
Nickgnome said:
Not all pensioners have houses to downsize from or other occupational pension support do they.
Many live off the state pension and other government payments alone.
Yes a number of pensioners don't own their own home but the vast majority do. For those who don't there are income based benefits.Many live off the state pension and other government payments alone.
For those who do own their own home £750 a month isn't a pittance that represents "existing" rather than "living". Most have a pension and even a stakeholder pension is going to chip in some useful additional money when you retire. Also £750 a month isn't the maximum. For a couple the maximum seems to be £359 a week
https://www.fool.co.uk/mywallethero/your-money/lea...
Household bills can indeed come down when you retire with no impact on standards of living. As well as the mortgage payment which has gone, there are all work related costs, including the need for two cars in a household. Any spending on children (for those who have them) should hopefully be over by the time they reach their thirties and forties.
It won't fund a "powerfully built PH director" lifestyle but then hopefully such types are saving for their retirement in any case. For the ordinary household it seems a decent amount of money once you consider all other factors.
Personally I would be quite happy on £359 a week as long as I am not still paying for a mortgage. That plus a small private pension and some savings would do me fine.
Edited by JagLover on Friday 18th June 09:13
The State pension was brought in when the life expectancy was a lot lower than it is now. A working man would retire at 65 and if he was lucky, he would get to his 3 score years and 10. Compare that to now when people may be receipt of the state pension for 20 years.
The State pension is a giant Ponzi scheme which no political party really wants to change because more older people vote than younger. So it is seen as a vote winner or loser, hence the triple lock.
Should everybody receive it - of course not, in my opinion, it should be means tested so that the truly well off pensioners are not entitled to it. Not sure what that level should be though.
And I don’t go with the “I ve paid in all my life, so I should get it” attitude, that is not now taxation works and for all intents NI is just another tax.
I blame Blair and Brown, with the working tax credits for giving people the idea that they are entitled to money back from the state just because they paid in.
It is possible to live on the state pension only but as a single person, it is not a fantastic lifestyle I would suggest.
The State pension is a giant Ponzi scheme which no political party really wants to change because more older people vote than younger. So it is seen as a vote winner or loser, hence the triple lock.
Should everybody receive it - of course not, in my opinion, it should be means tested so that the truly well off pensioners are not entitled to it. Not sure what that level should be though.
And I don’t go with the “I ve paid in all my life, so I should get it” attitude, that is not now taxation works and for all intents NI is just another tax.
I blame Blair and Brown, with the working tax credits for giving people the idea that they are entitled to money back from the state just because they paid in.
It is possible to live on the state pension only but as a single person, it is not a fantastic lifestyle I would suggest.
Mr.Chips said:
dmahon said:
Is it reasonable to set fire to our economy to protect the elderly, damage the life prospects of everyone else including our children, then completely insulate them from any financial impacts?
https://www.independent.co.uk/news/uk/politics/ris...
“Rishi Sunak says he is ready to hand £4bn to pensioners next year to keep his “triple lock” pledge, despite rejecting a Covid catch-up plan for schools as too expensive.
The bounce-back from the pandemic has pushed average wage rises close to 6 per cent – which, under the controversial rule, would then become the increase in the state pension.”
Yes, it is reasonable! Most of the people this applies to rely on their state pensions to survive. They won’t all have a great workplace pensions and need the triple lock to ensure that the state pension keeps up with inflation etc.https://www.independent.co.uk/news/uk/politics/ris...
“Rishi Sunak says he is ready to hand £4bn to pensioners next year to keep his “triple lock” pledge, despite rejecting a Covid catch-up plan for schools as too expensive.
The bounce-back from the pandemic has pushed average wage rises close to 6 per cent – which, under the controversial rule, would then become the increase in the state pension.”
The young people at school will catch up with what they have missed and when they start work they will be at the start of their earning potential. To punish the elderly by dumping the triple lock, when they have worked for a lifetime would be a crappy thing to do, not to mention a guaranteed vote loser.
Before anyone asks, yes, I am retired, no I am not old enough for my state pension, but I look forward to getting it in just over 3 years, mainly because I have a full set of NI contributions and, in my opinion, I have earned it.
The grey vote is what’s causing most if the government’s current response to Covid.
If more young(er) people could be bothered to vote!
Boringvolvodriver said:
The State pension was brought in when the life expectancy was a lot lower than it is now. A working man would retire at 65 and if he was lucky, he would get to his 3 score years and 10. Compare that to now when people may be receipt of the state pension for 20 years.
The State pension is a giant Ponzi scheme which no political party really wants to change because more older people vote than younger. So it is seen as a vote winner or loser, hence the triple lock.
Should everybody receive it - of course not, in my opinion, it should be means tested so that the truly well off pensioners are not entitled to it. Not sure what that level should be though.
And I don’t go with the “I ve paid in all my life, so I should get it” attitude, that is not now taxation works and for all intents NI is just another tax.
I blame Blair and Brown, with the working tax credits for giving people the idea that they are entitled to money back from the state just because they paid in.
It is possible to live on the state pension only but as a single person, it is not a fantastic lifestyle I would suggest.
For me, the worry with making it means tested would be that they chip away the threshold over time, meaning those that have saved say £300-400k might as well have just spent it. The State pension is a giant Ponzi scheme which no political party really wants to change because more older people vote than younger. So it is seen as a vote winner or loser, hence the triple lock.
Should everybody receive it - of course not, in my opinion, it should be means tested so that the truly well off pensioners are not entitled to it. Not sure what that level should be though.
And I don’t go with the “I ve paid in all my life, so I should get it” attitude, that is not now taxation works and for all intents NI is just another tax.
I blame Blair and Brown, with the working tax credits for giving people the idea that they are entitled to money back from the state just because they paid in.
It is possible to live on the state pension only but as a single person, it is not a fantastic lifestyle I would suggest.
Nickgnome said:
The major flaw in the system is that we have not ' earned' it and it relies on future generations to pay for it.
Just look at your full set of NI contributions. It is a pittance and does not come remotely close to funding your retirement or any of the other loosely connected NI costs.
This is of course unsustainable especially with low inflation. There is not pot that follows a person.
A wholesale change is required but would take 30 years to implement and no government has the courage to risk the rash of the elctorate.
+1Just look at your full set of NI contributions. It is a pittance and does not come remotely close to funding your retirement or any of the other loosely connected NI costs.
This is of course unsustainable especially with low inflation. There is not pot that follows a person.
A wholesale change is required but would take 30 years to implement and no government has the courage to risk the rash of the elctorate.
Too many people think NI is their pension pot. I come across pensioners who will argue it is, ‘I have paid in, its my right’, tends to be the response to discussion about state pensions.
Of course as you point out, the size of a pension pot required to fund a state pension income is way beyond what most people will have contributed in Ni during their working lives. Last time I looked at annuities the number needed to be around £300k but that may have changed?
The problem with the state pension is it isn’t targeted to those that really need it, instead by being universal it is taken (by some) to pay for a couple of extra holidays a year (for example). If it was properly means tested those that need it would get more and vice versa, without increasing the burden on the rest of society. That would be fair.
JagLover said:
Yes a number of pensioners don't own their own home but the vast majority do. For those who don't there are income based benefits.
For those who do own their own home £750 a month isn't a pittance that represents "existing" rather than "living". Most have a pension and even a stakeholder pension is going to chip in some useful additional money when you retire.
Household bills can indeed come down when you retire with no impact on standards of living. As well as the mortgage payment which has gone, there are all work related costs, including the need for two cars in a household. Any spending on children (for those who have them) should hopefully be over by the time they reach their thirties and forties.
It won't fund a "powerfully built PH director" lifestyle but then hopefully such types are saving for their retirement in any case. For the ordinary household it seems a decent amount of money once you consider all other factors.
There will be a fair proportion of retired people who worked in lower paid jobs that will not have any extra pension entitlements- the requirement for employers to provide pensions is only a relatively recent thing. In addition, many older women did not build up a pension in their own right as they didn’t work back in the day. For those who do own their own home £750 a month isn't a pittance that represents "existing" rather than "living". Most have a pension and even a stakeholder pension is going to chip in some useful additional money when you retire.
Household bills can indeed come down when you retire with no impact on standards of living. As well as the mortgage payment which has gone, there are all work related costs, including the need for two cars in a household. Any spending on children (for those who have them) should hopefully be over by the time they reach their thirties and forties.
It won't fund a "powerfully built PH director" lifestyle but then hopefully such types are saving for their retirement in any case. For the ordinary household it seems a decent amount of money once you consider all other factors.
For them the state pension will be their only income and at a reduced rate.
JagLover said:
Nickgnome said:
Not all pensioners have houses to downsize from or other occupational pension support do they.
Many live off the state pension and other government payments alone.
Yes a number of pensioners don't own their own home but the vast majority do. For those who don't there are income based benefits.Many live off the state pension and other government payments alone.
For those who do own their own home £750 a month isn't a pittance that represents "existing" rather than "living". Most have a pension and even a stakeholder pension is going to chip in some useful additional money when you retire.
Household bills can indeed come down when you retire with no impact on standards of living. As well as the mortgage payment which has gone, there are all work related costs, including the need for two cars in a household. Any spending on children (for those who have them) should hopefully be over by the time they reach their thirties and forties.
It won't fund a "powerfully built PH director" lifestyle but then hopefully such types are saving for their retirement in any case. For the ordinary household it seems a decent amount of money once you consider all other factors.
However i know a number of pensioners that live solely from the sate pension and a few other allowances. They exist they do not 'live'
Why should there need to be 'other allowances' Is it not reasonable to give pensioners sufficient money from one source to have comfortable retirement? As any aside this should be adopted for minimum wage too.
Please cite the evidence that supports your assertion that the Vast majority do own their own homes.
Nickgnome said:
Not all pensioners have houses to downsize from or other occupational pension support do they.
Many live off the state pension and other government payments alone.
Even a minor amount of forward planning would lead people to the conclusion that after a period of time they will get old. This won't happen suddenly therefore they have a great deal of time to prepare for the future. They generally haven't done so.Many live off the state pension and other government payments alone.
I'm sure there's a few hard luck cases but the pension will enable them to survive.
Those who want to live to a better standard should have prepared accordingly.
soofsayer said:
+1
Too many people think NI is their pension pot. I come across pensioners who will argue it is, ‘I have paid in, its my right’, tends to be the response to discussion about state pensions.
Of course as you point out, the size of a pension pot required to fund a state pension income is way beyond what most people will have contributed in Ni during their working lives. Last time I looked at annuities the number needed to be around £300k but that may have changed?
The problem with the state pension is it isn’t targeted to those that really need it, instead by being universal it is taken (by some) to pay for a couple of extra holidays a year (for example). If it was properly means tested those that need it would get more and vice versa, without increasing the burden on the rest of society. That would be fair.
Under the current system i think everyone should be entitled to the state pension and use the tax system to claw back from the wealthier ones,Too many people think NI is their pension pot. I come across pensioners who will argue it is, ‘I have paid in, its my right’, tends to be the response to discussion about state pensions.
Of course as you point out, the size of a pension pot required to fund a state pension income is way beyond what most people will have contributed in Ni during their working lives. Last time I looked at annuities the number needed to be around £300k but that may have changed?
The problem with the state pension is it isn’t targeted to those that really need it, instead by being universal it is taken (by some) to pay for a couple of extra holidays a year (for example). If it was properly means tested those that need it would get more and vice versa, without increasing the burden on the rest of society. That would be fair.
Boringvolvodriver said:
NerveAgent said:
For me, the worry with making it means tested would be that they chip away the threshold over time, meaning those that have saved say £300-400k might as well have just spent it.
I don’t disagree with that - it is an issue I agree Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff