Are pensioners about to be shafted – again?

OldBeanz

xylophone wrote: »

The late Margaret Thatcher began her pension reforms with the Social Security Act of 1980. This saw the correlation between average earnings and state pension increases severed, with the aim to reduce public spending.

Pensioners have only started "catching up" with what they would have received had the link not been severed.

The full new state pension is still below what a basic state pension would have been had the earnings link not been severed?

Which is why I have limited concern for those who have not saved. They have had 37 years notice that their pension was unlikely to be sufficient.

Jackieboy

marlot wrote: »

Don't forget that the state pension is taxable, so higher rate taxpayers will be giving 40% of it back to the Government. That's a particularly easy way of targetting it at the people who need it!

They may be paying back a small percentage at this rate of it but to imply they pay back 40% of it all is misleading.

Bootsox

Sambella wrote: »

Just look at the Governments record on austerity....

The government's record is indeed lamentable, they have failed to bring public sector spending under control in any meaningful way.

Jackieboy

Sapphire wrote: »

I take it you don't have to exist on a state pension. :rotfl:

Nobody has to exist on just the state pension. Pension credit is £155 for a single person but rent/mortgage and most council tax is paid on top. Not untold riches but not poverty either.

Sapphire

Bootsox wrote: »

The government's record is indeed lamentable, they have failed to bring public sector spending under control in any meaningful way.

'The government': let's not forget that it was the previous labour government that did this, and this government under Osborne continued it.

Perhaps more money should be retrieved from those who 'avoid' tax, rather than taking it from those who are hard pressed (and many of them are). Also don't forget that the standard of care provided for elderly people is dire, so they have to pay for their own care unless they need to rely on the state, which I would never recommend having seen how it treats old and vulnerable people. And paying for it is extremely expensive – I've seen how much friends' parents have to pay for care, and the spend is massive (sorry, bang goes the inheritance).

Number75

I'm not as negative about the younger adults as you though.
For every 30 year old living at home that you know, I can probably find a 20 year old (my stepdaughter) working hard part time to find her own degree. And I daresay when you were working hard in <insert year!> there were others just bumming around.

I work for a big blue chip and it's full of bright, motivated and hard working "snowflake" millennials.

I agree that automation will have a massive impact on jobs - but there is creation too. More of our children will code - someone has to create the automation! And that isn't all high level project management senior programming roles. I met a guy on a course who saw call centres as the new mines (in that, they could be poorly paid and bad for your health but one of limits options!)

There is great scope for our children in creative industries, technology and (perhaps sadly!) marketing. When I was at school, no-one would have suggested I aim for a job managing a company's social media presence. New types of job are emerging all the time, and I'm actually quite positive that lots of younger people are working bloody hard at those!

Number75

Ooooh, I think I'm using the wrong word... not millennials, adults in their 20s. My point is the same though!

Number75

Specifically your relative who lives at home age 30 and lets out the flat his father bought him...?
Well, is it HIS fault rather than his father's that as flat landed in his lap?
If he's happy at home, and his mother is (widowed, maybe she's particularly glad he's there still) then what's the issue?
Perhaps... he's putting that flat rent income into his... PENSION PLANNING!!!! Not such a wastrel afterall?!

BananaRepublic

rpc wrote: »

My father spent a lifetime in public service (and my mother, once she returned to work after children) and you would take their pensions away just because they worked for the government?

You can't really take away accrued pension benefits, and I'm not convinced that taxing wealthy pensioners is the answer. However, many in the public sector do have enviable pension benefits that seem unfair when viewed from the private sector. Most people in the private sector have defined benefit pensions, with a modest contribution from the employer, and they go through many jobs, usually not through choice, often starting again on a lower salary. Those I know in the public sector have well defined career paths, yearly pay reviews, promotions, good security and excellent pension benefits. Those pension benefits were created when the state was more able to pay them, in part because people now live much longer. Hence it is more than reasonable to reassess them. No doubt most public sector workers do not have enviable pension benefits, but very many do.

rpc wrote: »

Fact is, so few people are in the high rate tax band after retirement that means testing would probably cost more than it would save.

I believe that is correct. It is certainly true that there is a large overhead for means testing.

rpc wrote: »

Another fact is that pensioners (through various payments) make up the lions share of the benefits bill so if you want to reduce that bill you have to look at pensioners at some point. Most other benefits have had quite enough attention.

The current approach of increasing the age of retirement and increasing the number of years of state pension contributions seems fair. It is not fair to attack those who have already retired, in part because they did so based on existing pensions and taxes.

Sapphire

Number75 wrote: »

Specifically your relative who lives at home age 30 and lets out the flat his father bought him...?
Well, is it HIS fault rather than his father's that as flat landed in his lap?
If he's happy at home, and his mother is (widowed, maybe she's particularly glad he's there still) then what's the issue?
Perhaps... he's putting that flat rent income into his... PENSION PLANNING!!!! Not such a wastrel afterall?!

Fat chance of him taking out a pension! :rotfl: He has already calculated how much he will get once his remaining parent dies.

I don't think his mother is happy about it, but she is hoping he will eventually go.