MSE News: Retirees to pocket up to £200 more a year once state pension rises next Apr

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  • jamesdjamesd Forumite
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    Nick_C wrote: »
    Of course the real story here is that State Pensioners are once again getting a totally unjustifiable above inflation increase
    It used to be normal for the state pension to increase with average earnings. That was eliminated in the Thatcher years by the 1980 Social Security Act. Concern about possible riots caused Chancellor Howe's plan for a 3% cut as well to be abandoned.

    The changed caused the basic state pension to drop over time from about 26% of average weekly earnings in 1980 to about 17.8% in 2014, up from 15.8% in 2008. If the link had been maintained the basic state pension today would be about £160 a week.

    The recent increases as a result of the Coalition partly reversing the Thatcher change are still quite a way from getting back to the pre-Thatcher level of state pension compared to average earnings and the current plan is for the flat rate state pension to be minimally above the single person's means tested Pension Credit level.

    Something set to be just above means test level is not normally considered to be particularly generous, particularly when it is based on contributions by the recipient, not just a safety net provided by society.
  • jamesdjamesd Forumite
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    Nick_C wrote: »
    Meanwhile, hard working low income families will be substantially worse off as they move from tax credits to universal credit.
    WTC is reduced for hard working families compared to less hard working because it's an income-related benefit. The more you work, the less WTC you get.

    It's not as if WTC is an essential part of the system. After all it and its predecessor only started in 1999. easy enough in principle to just stop something that's so recently introduced if savings are needed.
  • AcquinasAcquinas Forumite
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    Back in ye olden dayes, perhaps the majority of "retirees" lived on the state pension alone. In those times a circumstances a rise in line with RPI or earning was totally justifiable. My granddad retired at 65, the firm he had worked for for 40 years sent him off with a watch and a handshake (but no pension) and he was dead at 72. Not atypical and not much of a drain on the state either. We live in a totally different world now and it is unsustainable for the state to be paying out for people living into their late 80s and early 90s and protecting the payments through the triple lock, especially when so many more have occupational or private pensions (subsidised by the state through tax relief) anyway. People rightly criticised Gordon Brown for creating an army of public sector sinecures and welfare dependants who were sure to have a pre-disposition to vote Labour, but Cameron his mates were no better: bribing a generation of pensioners through the triple lock in the full knowledge that the national debt was soaring and the grandchildren would be in queer street. As ever though, no politicians will have the guts to be honest with us about what we can and can't afford.
  • ThrugelmirThrugelmir Forumite
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    greenglide wrote: »
    Obviously this doesn't help anyone on benefits - some of the changes in train are harsh to say the least.

    Many pensioners had to do without "benefits" during their entire working lives. Wasn't a top up if your income was low. Far too easy these days.

    Nor was there even a minimum wage.
  • Nick_CNick_C Forumite
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    Thrugelmir wrote: »
    Many pensioners had to do without "benefits" during their entire working lives. Wasn't a top up if your income was low. Far too easy these days.

    Nor was there even a minimum wage.

    Means tested benefits for working families were introduced by the Conservatives in 1970 and have now been around for 46 years.

    Unfortunately, Family Income Supplement in its various incarnations coupled with Minimum Wage have encouraged employers to pay the bare minimum knowing that the State would make up the rest.

    This has got worse as time has gone on.

    Back in the 80s, I was working seven days a week and had three different jobs. But I found in those days it was easy to get a well paid second job. Now, the type of work that people used to take on as a part time job will pay minimum wage.

    We have truly become a low wage society dependent on benefits.

    I think many pensioners don't realise how lucky they are, and take a selfish attitude to the wider problems facing the younger generations.
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