Discussion
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.
Any means testing will either be set at so high a level to be effectively meaningless in terms of saving money or be so politically toxic as to make revising the "triple lock" look extremely popular among older people by comparison.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.
It would also chip away still further at the incentive to work and save.
Edited by JagLover on Friday 18th June 09:39
Nickgnome said:
Please cite the evidence that supports your assertion that the Vast majority do own their own homes.
ONS said:
Almost three-quarters of people aged 65 years and over in England own their home outright.
and a further 5% own with a mortgage they are still paying off (very likely close to end of mortgage term) https://www.ons.gov.uk/peoplepopulationandcommunit...
Biggy Stardust 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.
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.
What is the average wage now? £27K or so. Minimum wage say £15K. Unfortunately many in this bracket will not have been well educated.
The soluthon is simple. Announce today workers who are aged 25 an under will not got a state pension. At the same time remove NI for them and employers NI goes into a private pension. They are free then to make contributions or not. 40 years from today zero new state pensions and much lower take up.
But it would need to be carrot (no NI) and stick (your not getting one). O government is ever going to do that but when I was 18 (24 years ago) I was told there would not be a state pension....well nothing has changed and they have had 24 years so far.
But it would need to be carrot (no NI) and stick (your not getting one). O government is ever going to do that but when I was 18 (24 years ago) I was told there would not be a state pension....well nothing has changed and they have had 24 years so far.
JagLover said:
Nickgnome said:
Please cite the evidence that supports your assertion that the Vast majority do own their own homes.
ONS said:
Almost three-quarters of people aged 65 years and over in England own their home outright.
and a further 5% own with a mortgage they are still paying off (very likely close to end of mortgage term) https://www.ons.gov.uk/peoplepopulationandcommunit...
Expecting people who may have lived in a home for decades is cruel. Not all are itinerant types and need stability.
PS the link took me to other data not what you sated but will take it as read anyway.
Edited by Nickgnome on Friday 18th June 09:44
Nickgnome said:
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,
Isn't this exactly what the current system does? Pensioners are still taxable on income above their Tax Code rate, so someone receiving a state pension + a decent private pension is effectively repaying some or all of the state pension in tax.The only difference is that pensioners don't pay NI any more.Additionally, an ever growing number are working beyond retirement age and so still contributing tax through earnings.
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.
I don't agree with means testing it; I think there's a big risk that those who contribute (via taxes) increasingly become disconnected from the system and don't care about it. If you are earning £100k plus and are told you don't get child benefit, won't get a state pension, etc. then it's easy to se those that will as 'sponging' off you and separate from you, rather than as your fellow citizens. It's essentially the 'tax explained via beer' theory (https://metro.co.uk/2017/05/19/cheers-finally-a-way-we-can-understand-the-tax-system-and-it-involves-booze-6648029/). My fear is that once those funding the system, see little or no benefit from it, they have even less incentive than they do currently to pay into it, campaign/vote for it, etc.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.
I personally think that we ought to hypothecate tax (NI) for pensions and provide everyone over 18 with a statement each year that shows what their expected pot is (just like a private pension scheme). Might focus minds when people see a statement showing that they are net takers from the system. Reform the pension and SERPS so that the basic state pension is (stays) very basic (wouldn't allow you to run a car or take a holiday, for example) but there's an increasingly good pension available to those who have funded it. We could also get rid of the formal pension age, so those with a smaller pot could choose to work longer and top up their pot if they needed to. That would increasingly give people fair warning about what they could expected to receive in retirement, so they could take action; if you are life-long unemployed and on-track for a basic (not triple locked...?) state pension, you'll know and can't cry foul when it comes to retirement.
Ronstein said:
Nickgnome said:
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,
Isn't this exactly what the current system does? Pensioners are still taxable on income above their Tax Code rate, so someone receiving a state pension + a decent private pension is effectively repaying some or all of the state pension in tax.The only difference is that pensioners don't pay NI any more.Additionally, an ever growing number are working beyond retirement age and so still contributing tax through earnings.
Personally I do not think the current system is sustainable as the ageing demographic is putting greater burden on a reduced workforce. Only an ever increasing population would rebalance this which of course also comes with issues.
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.
Hard to argue with the above.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.
Nickgnome said:
JagLover said:
Nickgnome said:
Please cite the evidence that supports your assertion that the Vast majority do own their own homes.
ONS said:
Almost three-quarters of people aged 65 years and over in England own their home outright.
and a further 5% own with a mortgage they are still paying off (very likely close to end of mortgage term) https://www.ons.gov.uk/peoplepopulationandcommunit...
Expecting people who may have lived in a home for decades is cruel. Not all are itinerant types and need stability.
PS the link took me to other data not what you sated but will take it as read anyway.
Edited by Nickgnome on Friday 18th June 09:44
Quoting all the section 2 summary point paints a picture for those pre-middle age today
- Almost three-quarters of people aged 65 years and over in England own their home outright.
- Younger people are less likely to own their own home than in the past and more likely to be renting. Half of people in their mid-30s to mid-40s had a mortgage in 2017, compared with two-thirds 20 years earlier.
- People in their mid-30s to mid-40s are three times more likely to rent than 20 years ago. A third of this age group were renting from a private landlord in 2017, compared with fewer than 1 in 10 in 1997.
- If this trend persists into their older ages, in the future, older people will be more likely to be living in the private rental sector than today.
- Changes in housing tenure patterns could have implications for what life will be like for older people in the future.
Lord Marylebone said:
Murph7355 said:
That nice man Rishi has a nice smile though...
Indeed.My 70 year old parents think the sun shines out of his arse, and my mum constantly refers to him as ‘Dishy Rishi’.
Nickgnome said:
Biggy Stardust 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.
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.
What is the average wage now? £27K or so. Minimum wage say £15K. Unfortunately many in this bracket will not have been well educated.
Captain Raymond Holt said:
It’s the second bullet of section 2, not sure why its not working for you.
Quoting all the section 2 summary point paints a picture for those pre-middle age today
- Almost three-quarters of people aged 65 years and over in England own their home outright.
- Younger people are less likely to own their own home than in the past and more likely to be renting. Half of people in their mid-30s to mid-40s had a mortgage in 2017, compared with two-thirds 20 years earlier.
- People in their mid-30s to mid-40s are three times more likely to rent than 20 years ago. A third of this age group were renting from a private landlord in 2017, compared with fewer than 1 in 10 in 1997.
- If this trend persists into their older ages, in the future, older people will be more likely to be living in the private rental sector than today.
- Changes in housing tenure patterns could have implications for what life will be like for older people in the future.
In addition to that the risk will be all on those people for pensions, due to the change in DC to DB. So less will own a house for reduced monthly costs, and they'll likely have less money too...Quoting all the section 2 summary point paints a picture for those pre-middle age today
- Almost three-quarters of people aged 65 years and over in England own their home outright.
- Younger people are less likely to own their own home than in the past and more likely to be renting. Half of people in their mid-30s to mid-40s had a mortgage in 2017, compared with two-thirds 20 years earlier.
- People in their mid-30s to mid-40s are three times more likely to rent than 20 years ago. A third of this age group were renting from a private landlord in 2017, compared with fewer than 1 in 10 in 1997.
- If this trend persists into their older ages, in the future, older people will be more likely to be living in the private rental sector than today.
- Changes in housing tenure patterns could have implications for what life will be like for older people in the future.
And their effective salary increases will be less than the pensioners due to the triple lock - hence the issues with it. It's currently paying the richest generation even more money by those who will be less well off.
NRS said:
Why would you expect people who have "existing" for their life to suddenly start "living"? I'd also hazard a guess many of those people would have regarded their life as pretty ok too. Are you not the person with homes in the UK and Taillin, and perhaps a yacht or something? Just because people don't have the same standard as you it's not like they're miserable people groveling away in the dirt.
IndeedMany people have a somewhat simpler lifestyle and are quite happy about it. There are many hobbies that involve minimal expenditure of money. Country walking is very popular with the retired community for example.
JagLover said:
NRS said:
Why would you expect people who have "existing" for their life to suddenly start "living"? I'd also hazard a guess many of those people would have regarded their life as pretty ok too. Are you not the person with homes in the UK and Taillin, and perhaps a yacht or something? Just because people don't have the same standard as you it's not like they're miserable people groveling away in the dirt.
IndeedMany people have a somewhat simpler lifestyle and are quite happy about it. There are many hobbies that involve minimal expenditure of money. Country walking is very popular with the retired community for example.
Whilst others get their kicks from flying about, yachting in the med and being a sanctimonious twit on the internet.
Captain Raymond Holt said:
It’s the second bullet of section 2, not sure why its not working for you.
Quoting all the section 2 summary point paints a picture for those pre-middle age today
- Almost three-quarters of people aged 65 years and over in England own their home outright.
- Younger people are less likely to own their own home than in the past and more likely to be renting. Half of people in their mid-30s to mid-40s had a mortgage in 2017, compared with two-thirds 20 years earlier.
- People in their mid-30s to mid-40s are three times more likely to rent than 20 years ago. A third of this age group were renting from a private landlord in 2017, compared with fewer than 1 in 10 in 1997.
- If this trend persists into their older ages, in the future, older people will be more likely to be living in the private rental sector than today.
- Changes in housing tenure patterns could have implications for what life will be like for older people in the future.
Then perhaps people shouldn't plan retirement on home ownership. Besides, what's happening now is history repeating itself, look at what happened to house prices in 1989 (when interest rates were 15%) and 2008, we are most likely due another recession in the next 5 years.Quoting all the section 2 summary point paints a picture for those pre-middle age today
- Almost three-quarters of people aged 65 years and over in England own their home outright.
- Younger people are less likely to own their own home than in the past and more likely to be renting. Half of people in their mid-30s to mid-40s had a mortgage in 2017, compared with two-thirds 20 years earlier.
- People in their mid-30s to mid-40s are three times more likely to rent than 20 years ago. A third of this age group were renting from a private landlord in 2017, compared with fewer than 1 in 10 in 1997.
- If this trend persists into their older ages, in the future, older people will be more likely to be living in the private rental sector than today.
- Changes in housing tenure patterns could have implications for what life will be like for older people in the future.
wormus said:
Then perhaps people shouldn't plan retirement on home ownership. Besides, what's happening now is history repeating itself, look at what happened to house prices in 1989 (when interest rates were 15%) and 2008, we are most likely due another recession in the next 5 years.
Looking at that chart and house prices were at there most affordable in the mid twentieth century and then the Town and Country planning act came along in 1947.Whenever the State buggers around with tax and benefits and it always buggers them up some more.........
Ronald Reagan "The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help. "...........
I would say the truly 'fair' policy would be a reasonable (and reasonably affordable) state pension. If you want more than this then the individual would be expected to save up.
But there should be NO tax relief.
Why should those with higher incomes be given any *tax payer funded* incentive to save?
Just because 'it's been done in the past' is no justification - surely.
The basic SP is currently £137.60 pw - but a more 'survivable' sum of - the full rate- £179.60 pw (which, so say, reflects x years contributions) is payable. I don't think this is 'over generous'.
The full rate equals £9340 pa.
The average Band B council Tax is (in for example) Mendip £1536. So, 16% of the (full) State Pension is given with one hand and taken by the other!
I think the current rate (£179.60 pw) is just about affordable. And I don't have a problem with it going up over time (in real terms) - the triple lock, because - the fact is - the UK has (had) on of the 'worst' basic state pensions in the developed world
https://www.ftadviser.com/pensions/2018/02/13/uk-s...
I get that young people feel aggrieved that pensioners are seemingly getting real term increases due to the triple lock and perhaps because pensioners don't pay NI on income then perhaps their tax allowance should be reduced from £12570 to £9340 (ie the only the tax free element to a pension is the basic (full) state pension.
To youngsters I point this out:
Remember, if the state pension goes up by 6% for current retirees it will also go up 6% for future retirees (you youngsters)
And, this will be a cumulative increase, in real terms, in YOUR future state pension
Put simply, if we had nil inflation and nil wage rises then for every year YOUR future pension will go up 21/2%.
Thus in real terms the £179.60 pw that a pensioner gets now would rise to £230 pw in (say) ten years time, £294 in 20 years time and £377pw in 30 years time. Not so bad is it?
Ronald Reagan "The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help. "...........
I would say the truly 'fair' policy would be a reasonable (and reasonably affordable) state pension. If you want more than this then the individual would be expected to save up.
But there should be NO tax relief.
Why should those with higher incomes be given any *tax payer funded* incentive to save?
Just because 'it's been done in the past' is no justification - surely.
The basic SP is currently £137.60 pw - but a more 'survivable' sum of - the full rate- £179.60 pw (which, so say, reflects x years contributions) is payable. I don't think this is 'over generous'.
The full rate equals £9340 pa.
The average Band B council Tax is (in for example) Mendip £1536. So, 16% of the (full) State Pension is given with one hand and taken by the other!
I think the current rate (£179.60 pw) is just about affordable. And I don't have a problem with it going up over time (in real terms) - the triple lock, because - the fact is - the UK has (had) on of the 'worst' basic state pensions in the developed world
https://www.ftadviser.com/pensions/2018/02/13/uk-s...
I get that young people feel aggrieved that pensioners are seemingly getting real term increases due to the triple lock and perhaps because pensioners don't pay NI on income then perhaps their tax allowance should be reduced from £12570 to £9340 (ie the only the tax free element to a pension is the basic (full) state pension.
To youngsters I point this out:
Remember, if the state pension goes up by 6% for current retirees it will also go up 6% for future retirees (you youngsters)
And, this will be a cumulative increase, in real terms, in YOUR future state pension
Put simply, if we had nil inflation and nil wage rises then for every year YOUR future pension will go up 21/2%.
Thus in real terms the £179.60 pw that a pensioner gets now would rise to £230 pw in (say) ten years time, £294 in 20 years time and £377pw in 30 years time. Not so bad is it?
alfaspecial said:
I would say the truly 'fair' policy would be a reasonable (and reasonably affordable) state pension. If you want more than this then the individual would be expected to save up.
But there should be NO tax relief.
Why should those with higher incomes be given any *tax payer funded* incentive to save?
Just because 'it's been done in the past' is no justification - surely.
Restricting tax relief on pension contributions to the basic rate would likely raise far more money than means testing the state pension. But there should be NO tax relief.
Why should those with higher incomes be given any *tax payer funded* incentive to save?
Just because 'it's been done in the past' is no justification - surely.
alfaspecial said:
To youngsters I point this out:
Remember, if the state pension goes up by 6% for current retirees it will also go up 6% for future retirees (you youngsters)
And, this will be a cumulative increase, in real terms, in YOUR future state pension
Put simply, if we had nil inflation and nil wage rises then for every year YOUR future pension will go up 21/2%.
Thus in real terms the £179.60 pw that a pensioner gets now would rise to £230 pw in (say) ten years time, £294 in 20 years time and £377pw in 30 years time. Not so bad is it?
Assuming it's sustainable.Remember, if the state pension goes up by 6% for current retirees it will also go up 6% for future retirees (you youngsters)
And, this will be a cumulative increase, in real terms, in YOUR future state pension
Put simply, if we had nil inflation and nil wage rises then for every year YOUR future pension will go up 21/2%.
Thus in real terms the £179.60 pw that a pensioner gets now would rise to £230 pw in (say) ten years time, £294 in 20 years time and £377pw in 30 years time. Not so bad is it?
If it's not sustainable, it won't build up to providing that, it'll have to be restricted. Paying an unsustainable annual increase now robs future pensioners of a decent provision.
So, is it sustainable like this for another 3-4 decades?
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