Should the triple lock on pensions continue?

[SuspectUsual]

mods note - split from this thread

We never needed a triple lock, it was always a sop to pensioners. All that’s needed is a guaranteed link between pensions and the true cost of living

 

[najaB]

We never needed a triple lock, it was always a sop to pensioners. All that’s needed is a guaranteed link between pensions and the true cost of living

Indeed. It should only ever have been a single lock to the average RPI over the previous six months.

 

[duncanp]

Indeed. It should only ever have been a single lock to the average RPI over the previous six months.

This may well happen, perhaps with a proviso that the state pension should not fall below 25% of average earnings. (it is currently about 32%)

So most years the state pension would rise in line with inflation, but if average earnings growth was higher than inflation over several years, perhaps a larger than inflation increase is justified.

As someone who is due to receive the state pension in 8 years time (at age 67, increased twice) I wouldn't have a problem with this.

 

[AlterEgo]

We never needed a triple lock, it was always a sop to pensioners. All that’s needed is a guaranteed link between pensions and the true cost of living

Well quite. The triple lock should never have happened it it’s a matter of social injustice that it did.

 

[Sm5]

If you’re retired in an £800,000 house you paid off before young people were mostly locked out of capital, you should, actually, be forced to downsize or borrow.

Why should young people stuck renting subsidise these people? Triple lock should have gone in the bin years ago. The social settlement for most young people in their 20s in grossly unfair.

I would like to think if I worked hard all my life, didnt claim benefits, was not unemployed, that I get to keep my hard earned cash.

If the only thing to look forwards to in old age is being stripped of all I have to subsidize people who did not work as hard, did claim benefits and was unemployed… then I’d ask myself… why bother, why not pass it on, or why not just blow it all and become one of them too ?

There is a big difference between some one who has done well, and a multi-millionaire..but a very small one between someone who has done well and someone who couldnt be bothered.

I bet no one on here, owning a property would agree to hand over there keys when they hit 65, just so the money could be shared with someone they dont know and resents every penny youve earned.

Its the same unfairness that sees retired home owners stripped of their homes, and their children disinherited to pay for social care.. yet those who have never had any money, lives on benefits, handouts etc get access to the same resource for free… it completely ignores the tax contibutions more successful earners have made throughout their lives.

if thats how it is, when I hit 64, i’m selling up, getting out, sharing the wealth to my family, enjoying the big one.. then at 65, i’m back standing in line waiting penniless for a handout with the rest of them… why not play the same game as everyone else ?

This country is obsessed with dragging everyone down to their level. No wonder its failing, it resents success.

 

[najaB]

This country is obsessed with dragging everyone down to their level. No wonder its failing, it resents success.

Alternatively, it can be viewed as pulling everyone up.

 

[duncanp]

Its the same unfairness that sees retired home owners stripped of their homes, and their children disinherited to pay for social care.. yet those who have never had any money, lives on benefits, handouts etc get access to the same resource for free… it completely ignores the tax contibutions more successful earners have made throughout their lives.

My mother is in a nursing home at the moment, and what annoys me about the current system is that those residents who are self funding pay about 40% more per week than the local authority pays on behalf of those whose care is fully paid for by the state.

In other words, self funding residents subsidise those whose care is paid for by the local authority.

 

[dosxuk]

Well quite. The triple lock should never have happened it it’s a matter of social injustice that it did.

The Tories see different, presumably hoping to bank on the pensioner vote at the forthcoming general election.

https://twitter.com/trussliz/status/1582737425431830529

Managed to get the trademark triple repetition in there too!

 

[AM9]

I don't believe that anyone should be forced to sell, but it should definitely be made easier and encouraged.

I agree with that entirely, but social care in senior years should be paid with assets above a certain level. It is morally wrong for a younger generation to effectively be paying tax to enble the wealthy to retain their estate to pass it onto their benefactors is their completely the wrong way round. The level of a current residual estate after which the state pays all care costs (ISTR £23250) may be woefully low, but it does provide protection to those who need it the most.
I heard somewhere today that the introduction of a social care cost cap has been deferred again.

 

[Sm5]

My mother is in a nursing home at the moment, and what annoys me about the current system is that those residents who are self funding pay about 40% more per week than the local authority pays on behalf of those whose care is fully paid for by the state.

In other words, self funding residents subsidise those whose care is paid for by the local authority.

Thats the same in income tax, and NI... the more you earn the more you pay.
But what you get back is the same as everyone else.

one could argue thats how it is, but if one person pays £50k a year in taxes for 40 years, and the man next to him pays £0k, its not exactly fair to expect that tax payer to then sell his house to subsidize that guy next to him in retirement as well… pension imo should be at a minimum equal, or at best means tested against lifetime contributions… if you didnt play the lottery, you shouldnt expect a lottery win.

 

[ChrisC]

If you’re retired in an £800,000 house you paid off before young people were mostly locked out of capital, you should, actually, be forced to downsize or borrow.

Why should young people stuck renting subsidise these people? Triple lock should have gone in the bin years ago. The social settlement for most young people in their 20s in grossly unfair.

I’m retired, living alone in a 3 bedroom £200,000 house, which if in London probably would be worth around £800,000. I already have my pension from work and will shortly get my state pension when I reach 66. I don’t have millions of pounds in savings but I do have a reasonable amount in savings to be able to live a fairly comfortable life now that I have retired. I am in this fortunate situation because I worked hard for almost 40 years, hardly had any time off work due to illness, and have paid NI and other taxes all my working life.

There are sadly many people who are not as fortunate and are now in a desperate situation facing the coming winter with rising energy costs and food bills. These people do need help. There are also sadly people who know how to work the system and have claimed benefits for years. They have not paid much NI or income taxes, when they were quite capable of going to work. If money made available to pay energy costs is means tested from next April I will get nothing. I agree that I don’t need it, but it does seem unfair after working hard all my life I get nothing, when a some people who could have worked, but wouldn’t, get everything.

 

[Yew]

. Make a real cut to the state pension and the leisure has to be cut. That would hit hotels & holiday accommodation, food bought out from a three course meal to a couple of coffees, visits to heritage e.g. stately homes, museums, railways. All these are already struggling and weekdays outside school holidays the main income can be from the retired.

will it, or will the demographics change, as working people will have more money?

 

[AlterEgo]

I would like to think if I worked hard all my life, didnt claim benefits, was not unemployed, that I get to keep my hard earned cash.

I like to think I will be comfortable but don’t live under the notion that as someone with more means that young people poorer than I will be forced to pay for a gilt-locked pension.

If the only thing to look forwards to in old age is being stripped of all I have

Nobody is suggesting that.

to subsidize people who did not work as hard

Why do you think young people locked out of capital aren’t working *as hard* as you or I are? Housing is extremely expensive, and takes up a massive portion of younger peoples’ incomes than it used to.

, did claim benefits and was unemployed

We aren’t talking about the mythical doleybum which is an increasingly rare species, but rather a dispossessed younger generation with fewer prospects of owning their own home or being able to pay into a private pension.

… then I’d ask myself… why bother, why not pass it on, or why not just blow it all and become one of them too ?

No you wouldn’t.

There is a big difference between some one who has done well, and a multi-millionaire..but a very small one between someone who has done well and someone who couldnt be bothered.

You’re right, there is a tiny difference, and a large portion of success in life is due to luck.

I bet no one on here, owning a property would agree to hand over there keys when they hit 65, just so the money could be shared with someone they dont know and resents every penny youve earned.

Nobody is suggesting that.

Its the same unfairness that sees retired home owners stripped of their homes, and their children disinherited to pay for social care..

Sounds like what’ll happen to my sister and I with my parents.

if thats how it is, when I hit 64, i’m selling up, getting out, sharing the wealth to my family, enjoying the big one.. then at 65, i’m back standing in line waiting penniless for a handout with the rest of them… why not play the same game as everyone else ?

This country is obsessed with dragging everyone down to their level. No wonder its failing, it resents success.

It doesn’t really. I’m a property owning 30-something with a very comfortable income and I don’t resent the idea of raising others up a little.

If you wish to cultivate a political climate where people have faith in hard work, capitalism, saving, and responsible finances, you do also need to…let them have a fair crack at building capital!

 

[AlterEgo]

I’m retired, living alone in a 3 bedroom £200,000 house, which if in London probably would be worth around £800,000.

So you *don’t* have £800K of assets then and you’re not an asset millionaire as described upthread?

 

[Nicholas Lewis]

I’m retired, living alone in a 3 bedroom £200,000 house, which if in London probably would be worth around £800,000. I already have my pension from work and will shortly get my state pension when I reach 66. I don’t have millions of pounds in savings but I do have a reasonable amount in savings to be able to live a fairly comfortable life now that I have retired. I am in this fortunate situation because I worked hard for almost 40 years, hardly had any time off work due to illness, and have paid NI and other taxes all my working life.

Invest your savings well because inflation is going to erode it at a rate not seen for decades as there is no other way out for the government who have borrowed recklessly for the last 12 years as well Brown beforehand.

There are sadly many people who are not as fortunate and are now in a desperate situation facing the coming winter with rising energy costs and food bills. These people do need help. There are also sadly people who know how to work the system and have claimed benefits for years. They have not paid much NI or income taxes, when they were quite capable of going to work. If money made available to pay energy costs is means tested from next April I will get nothing. I agree that I don’t need it, but it does seem unfair after working hard all my life I get nothing, when a some people who could have worked, but wouldn’t, get everything.

Im in the same position and its frustrating that the majority of us who have worked hard and had no choice through PAYE but to pay the taxes due are the ones who get squeezed out every time.

 

[Tetchytyke]

one could argue thats how it is, but if one person pays £50k a year in taxes for 40 years, and the man next to him pays £0k, its not exactly fair to expect that tax payer to then sell his house to subsidize that guy next to him in retirement as well

The amount someone pays in tax judging entitlement is a slippery slope to go down. People who pay themselves dividends from a limited company pay less tax than employees paid by PAYE. There is a sweet spot where you pay yourself enough of a salary to get NIC entitlements whilst your actual NIC contribution is nil.

As for selling property to pay for care, it is unfair to have to sell a property (it isn't your home if you're not living in it) to pay for care someone else might get for free. However it is also unfair to expect taxpayers to pay increased taxes to fund your care so that the kids' inheritance is protected in full. I'm unsure how you ever square that circle.

As for pensions, there is a benefit called Pension Credit for the poorest pensioners. This should be protected from inflation. However the state pension should not be.

It's worth noting that the Tories are proposing to deliberately not offer a similar protection to the poorest people in society.

 

[stevetay3]

The Tories see different, presumably hoping to bank on the pensioner vote at the forthcoming general election.

https://twitter.com/trussliz/status/1582737425431830529

Managed to get the trademark triple repetition in there too!

Some people need to remember they will need a pension one day

 

[Nicholas Lewis]

It's worth noting that the Tories are proposing to deliberately not offer a similar protection to the poorest people in society.

No point spending money on those that won't vote for you

 

[Tetchytyke]

Some people need to remember they will need a pension one day

The Tories have already pushed my retirement back by five years, so my sympathy about the triple lock is rather muted.

No point spending money on those that won't vote for you

Quite. The "triple lock" is, like so much Tory policy over the last 12 years, unaffordable pork barrel politics.

 

[Sm5]

The amount someone pays in tax judging entitlement is a slippery slope to go down. People who pay themselves dividends from a limited company pay less tax than employees paid by PAYE. There is a sweet spot where you pay yourself enough of a salary to get NIC entitlements whilst your actual NIC contribution is nil.

your actually justifying what i’m saying there..

if they are bucking the system to avoid tax and ni.. then they should reap what they sow in pensions. Thats why I think it should be means tested.

its no different to a one time budget airline flyer asking the airline for a first class upgrade and whinging online when they dont, then becoming some eco warrior seeking to ban flying.

I think the reality for our working generation is there wont be a state pension when we retire. I hate to say it but giving your money to a private pension today, who takes his own comissions today and invests it in hopes and dreams, when the reality its actually being spent in Trusses debts promises is on a hiding to nothing. At some point a horror show will emerge, and it nearly did this month, it probably will in a few years when the government or the banks need a pot to raid in some crisis.

Coming around to the youth of today and housing…

my grandad bought his house brand new for £600 in 1906.
my mum bought her house brand new for £2000 in 1966
i could have bought a house for £30k in 2002

my grandads house sold in 2012 for £60k.
The house I could have bought in 2002 is now £300k.

The biggest difference is inflation… when you buy today the figure is always daunting, but by the time that mortgage is paid, the price wouldnt buy a decent car.

The £ will always decline. Inflation will always grow.
Someday a can of coke will cost £6k, a house about £5mn and people complain they cannot live off their £1mn salary with £50k heating bills.

The youth dont need help, they need encouragement, jobs and oppourtunities, not robbing someone elses parents to acheieve some fake measure of social equality, as a bonus for accepting low pay and standards.

I suspect house prices will come to a wrecking ball anyway. Much of our housing stock is 100 years old. At some point maintenance and environmental efficiency tax will come in. This will be an excuse for downing property values, leading to new build oppourtunities where new more expensive smaller houses are built on the site of existing land acquired cheaply. Housing is one of few industries where they havent become fashion icons and disposable.

I would suspect more wooden houses, mass assembly US style designed to last 30-50 years will become more of the future… cheap to build, expensive to sell, disposable (recyclable), but ultimately rottable, destroying future value, but highly profitable to the builder…they just need land to build on that isnt green.. crashing existing housing land and cramming more in, is the way to do it… we will be told its better for the environment.

 

[Tetchytyke]

The £ will always decline. Inflation will always grow.
Someday a can of coke will cost £6k, a house about £5mn and people complain they cannot live off their £1mn salary with £50k heating bills.

That's the nastiest part of the Tories' tax policies, where thresholds haven't risen alongside inflation. Income tax and IHT thresholds haven't changed for donkey's years. It's wrong.

It's the same with social care- the threshold was £16K 12 years ago, and it still is now. That should have risen with inflation.

I don't have an issue with assets being sold to pay for care. A house you no longer live in is no different to any other asset. But the amount being left over ought to rise with inflation.

 

[david1212]

My mother is in a nursing home at the moment, and what annoys me about the current system is that those residents who are self funding pay about 40% more per week than the local authority pays on behalf of those whose care is fully paid for by the state.

In other words, self funding residents subsidise those whose care is paid for by the local authority.

Within that are you including the nursing home taking all but a small amount of the state pension ?? For full payment new state pension that would add around £160 per week.

Invest your savings well because inflation is going to erode it at a rate not seen for decades as there is no other way out for the government who have borrowed recklessly for the last 12 years as well Brown beforehand.

Savings just holding their value against the CPI would be good never mind any real gain. The best 1 year cash ISA rate is under 4% so against the CPI a 6+% loss.

The Tories have already pushed my retirement back by five years, so my sympathy about the triple lock is rather muted.

For me against 12 months ago I estimate 3 years now. As cost rises further outstrip the state pension buying power and my personal pension in real terms devalues this will increase. As I posted earlier before the thread was split I don't care about the triple lock, I'd be happy with state pension matching the increases in the cost of essentials.

 

[Sm5]

Within that are you including the nursing home taking all but a small amount of the state pension ?? For full payment new state pension that would add around £160 per week.



Savings just holding their value against the CPI would be good never mind any real gain. The best 1 year cash ISA rate is under 4% so against the CPI a 6+% loss.



For me against 12 months ago I estimate 3 years now. As cost rises further outstrip the state pension buying power and my personal pension in real terms devalues this will increase. As I posted earlier before the thread was split I don't care about the triple lock, I'd be happy with state pension matching the increases in the cost of essentials.

Probably better to invest it in something that is not £ denominated.
anyone remeber the “ New Pence ” ? We might soon have a “New Pound”.

 

[Busaholic]

The Tories have already pushed my retirement back by five years, so my sympathy about the triple lock is rather muted.

Assuming you are male, the age at which you receive a state pension is 66, due to increase to 67 in May 2026: the decades-old age of 65 was breached in 2018. There are no definite plans for further increases in age qualification. That means the government has only been responsible for pushing your retirement back by two years, by my calculation: if you're female, it's a different matter, admittedly. I'd also point out that when the new pension was introduced in 2016 for the newly retired it paid out much more than on the old pension arrangements and nobody was allowed to transfer. A year or so ago the difference for those with the same full N.I. contribution record was £42.50 per week approximately. That is the context in which the triple lock came into being, though the lock appears far from secure.

 

[Tetchytyke]

Assuming you are male, the age at which you receive a state pension is 66, due to increase to 67 in May 2026

I am, and my retirement age is 68. So three years not five, but they have created a road map to extend it further, which I fully expect to be followed.

 

[najaB]

I am, and my retirement age is 68. So three years not five, but they have created a road map to extend it further, which I fully expect to be followed.

AFAIA, the increase to 68 is the only thing set in stone. The only pending plan at the moment is a change in the sliding scale for those born between 1970 and 1978, for example, my pension age is currently 67 and might become 67 and three months.

 

[SynthD]

Having different measures of inflation for different ages of benefits recipients seems like a clear cut case of ageism. The government should decide on one measure (CPI or RPI) and heavily justify any use of the other.

 

[david1212]

I am, and my retirement age is 68. So three years not five, but they have created a road map to extend it further, which I fully expect to be followed.

Apologies for jumping to a conclusion because it is my scenario.

When you stated ' The Tories have already pushed my retirement back by five years, so my sympathy about the triple lock is rather muted ' I took it to mean that because of the combination of prices rises particularly directly and indirectly energy and your personal pensions and investments in real terms falling in value that to have the saming buying power you would have to work another five years.

I have for almost 30 years been planning early retirement with of course funding upto age 67 ( it was I recall still age 65 30 years ago and I have not counted this two year delay ) totally myself followed by topping up the state pension. With the increase in costs and real devaluation of my funding pot to have the same buying power as just 12 months ago currently I estimate I will have to work another 3 years.

 

[Busaholic]

I am, and my retirement age is 68. So three years not five, but they have created a road map to extend it further, which I fully expect to be followed.

But you'll be already receiving your state pension by then, surely?

I've just alarmed myself by consulting the Office for National Statistics life expectancy calculator and found a male of my age (74) and gender can expect to live to...75. B****y Nora! A man of 50 can expect to live to 84, so that explains why retirement ages will and should be a little later imo, combined with the better deal now on offer for 75% of claimants.

 

[Enthusiast]

That's the nastiest part of the Tories' tax policies, where thresholds haven't risen alongside inflation. Income tax...thresholds haven't changed for donkey's years. It's wrong.

Income tax allowances were last increased in April 2021.