Anyone who discusses the state pension – especially how it affects the poorest – without discussing the fuller package of Housing Benefit, Attendance Allowance/PIP and Council Tax Benefit that the poorer or more disabled pensioners (can) claim is not discussing the full picture.
Two issues which are directly linked.There are two issues
1 - the level of state support for pensioners
2 - the rate at which it changes
I don't think anybody here is conflating the two, although in reality that's exactly what the coalition did by introducing the 2.5% minimum at a time of historic low inflation
Two issues which are directly linked.
Reducing the rate of increase (not 'change') in the pension reduces the real-terms cost of pensions. That is the "level of state support for pensioners"
And to be clear I was making a broad post, purposefully not quoting anyone here.
but using the rate of increase as a fix for having got the level wrong in the first place is not the way to go about it
For what it's worth I would do some sort of double lock based on wage and price inflation, taking into account the delayed effect of one on the other (so in any given year it would be based on last year's RPI increase but this year's wage increase, taking the higher of the two). I would drop the 2.5 per cent thing.
Rather than merely being contrary: what is your suggestion? And does your suggestion account for the political landscape and realities?
(apologies if you've already explained, I haven't read all 13 pages, feel free to link to a post)
The problem with that is that there isn't a cast iron guarantee of a one year lag, and more fundamentally why should pensions increase if prices haven't? If we were to suppose that the state pension was at an acceptable level in year one, why should pensioners get a real terms increase in year two? That's not how other benefits work
Another would be that you give RPI but give more the next year based on a calculation of whether that RPI incease kept up with wages,
I just don't understand the relevance of earnings growth to pensions. All that needs to be done is to maintain buying power, it is nothing to do with income relative to those still in work
If those in work suffer reduced buying power, why should pensioners not share in this? If they don't, workers are funding pensioners' buying power while losing their own.
I have never understood pensions being protected more than any other benefit for working people beyond it being about the grey votes.If those in work suffer reduced buying power, why should pensioners not share in this? If they don't, workers are funding pensioners' buying power while losing their own.
I think one of the main arguments is regarding the control you have over your income. If you're in employment and you're feeling the pinch, then you may be able to do something about that. Whether that's doing more hours in your current employment or finding a better paying job. But once you're retired then that's it, your income is effectively fixed.I have never understood pensions being protected more than any other benefit for working people beyond it being about the grey votes.
Absolutely pensioners should feel the pinch just as much as workers. If inflation is ahead of wage growth, the state pension should go up by the wage growth rate not inflation so living standards fall for all irrespective of age.
Don't forget those pensioners with the most need would be claiming pension credit as well. For the avoidance of doubt, I think pension credit should rise by at least CPI each year.