Chancellor Rishi Sunak hints at ruling out 8% pension rise

Aretnap

Alexland said:

zagfles said:

Indeed, any reasonable person would agree. But it'll still be endlessly expolited by those who want to use it as a political weapon, although I think it will backfire...

I just downloaded the Conservative 2019 manifesto as a PDF from their website and can't see that they even promised the triple lock would be measured on an annual basis so they might get away with extending the measurement period and saying that despite the pandemic it was 'honoured across the term of the parliament'.

Indeed, and I'm also fairly sure that while the legislation on the triple lock specifies that the state pension must rise by the higher of CPI, earnings etc, it doesn't specify which measure of earnings must be used - that's left to the chancellor to decide.

So if the chancellor wants to switch to using a two year average of earnings increases, or some sort of Covid-adjusted measure, he can do so without any change to the law and while reasonably claiming to have kept the triple lock intact.

Grumpy_chap

steampowered said:

I accept that private pensions are more popular than they used to be, but what happened to the rest of the money that people working in the 60s and 70s earnt over their working lives?

I don't think that private pensions can be said to be "more popular" than in the good old days.  More prevalent, certainly, but also a necessary evil rather than popular.

The prevalence of the final salary pension through the 1960's & 1970's meant the need for private pensions was far more muted.

JezR

The law explicitly lays down that the assessment of earnings increases has to be done in an annual basis although a specific index is not so enshrined. The law can of course be changed.

GunJack

michaels said:

GunJack said:

steampowered said:

I accept that private pensions are more popular than they used to be, but what happened to the rest of the money that people working in the 60s and 70s earnt over their working lives?

Savings, buy-to-let properties, bigger owned properties, stock market investments .... these are all things that could provide for retirement. 

for one thing, income tax standard rate was 30-odd% and personal allowance was tiny, a lot more deductions than now...and higher rate was a stonking 83%.

The Thatcher govt started reducing rates after 1979, but it didn't drop below 30% until 1986. 

And Ni and VAT were much lower, and there was MIRAS - not sure what your point is?

NI and VAT not much lower - VAT 15% through that period, and NI averaged 8%. MIRAS hardly made a difference (up north & wales anyway, our house prices were so low the typical mortgage was not a lot...)

beduth

steampowered said:

daveyjp said:

The world of the 60s, 70s when current pensioners were starting out in life, was very much different to today, even more so for women.

Sorry, why couldn't people who started work in the 60s and 70s save for their retirements during the course of their working lives?

If you haven't put aside anything from your retirement, why should it be the government's job to top that up through the benefit system (and the state pension is a benefit). It shouldn't. No more than it should be the government's job to give you a lavish lifestyle if you are on working age benefits. 

People who worked in the 70s did save. They also paid national insurance contributions for 50 years.
State pension is not a benefit,it’s an earned and paid for return on 50 years of investment. 

Notepad_Phil

beduth said:

steampowered said:

daveyjp said:

The world of the 60s, 70s when current pensioners were starting out in life, was very much different to today, even more so for women.

Sorry, why couldn't people who started work in the 60s and 70s save for their retirements during the course of their working lives?

If you haven't put aside anything from your retirement, why should it be the government's job to top that up through the benefit system (and the state pension is a benefit). It shouldn't. No more than it should be the government's job to give you a lavish lifestyle if you are on working age benefits. 

People who worked in the 70s did save. They also paid national insurance contributions for 50 years.
State pension is not a benefit,it’s an earned and paid for return on 50 years of investment. 

I think you may need to revise your opinions if you believe that the state pension comes from investing your national insurance. My first job was in the 70's and even at that young age I knew that my national insurance had nothing to do with being invested for my future state pension and that any bearing on state pensions was solely to pay the state pensions of those who were currently retired.

JJC1956

Notepad_Phil said:

beduth said:

steampowered said:

daveyjp said:

The world of the 60s, 70s when current pensioners were starting out in life, was very much different to today, even more so for women.

Sorry, why couldn't people who started work in the 60s and 70s save for their retirements during the course of their working lives?

If you haven't put aside anything from your retirement, why should it be the government's job to top that up through the benefit system (and the state pension is a benefit). It shouldn't. No more than it should be the government's job to give you a lavish lifestyle if you are on working age benefits. 

People who worked in the 70s did save. They also paid national insurance contributions for 50 years.
State pension is not a benefit,it’s an earned and paid for return on 50 years of investment. 

I think you may need to revise your opinions if you believe that the state pension comes from investing your national insurance. My first job was in the 70's and even at that young age I knew that my national insurance had nothing to do with being invested for my future state pension and that any bearing on state pensions was solely to pay the state pensions of those who were currently retired.

Really, all i thought about in the 70’s was going out drinking with my mates and losing my virginity

nigelbb

sevenhills said:

Dazed_and_C0nfused said:

Winger Fuel Payment

Christmas Bonus
Bus pass
Eye test
Prescriptions

If you live in Scotland, then you get free prescriptions and eye tests at any age, free bus pass at 60

All prescriptions are free in Wales & Northern Ireland too. In England all those over 60 have free prescriptions not just pensioners.

OldScientist

Notepad_Phil said:

beduth said:

steampowered said:

daveyjp said:

The world of the 60s, 70s when current pensioners were starting out in life, was very much different to today, even more so for women.

Sorry, why couldn't people who started work in the 60s and 70s save for their retirements during the course of their working lives?

If you haven't put aside anything from your retirement, why should it be the government's job to top that up through the benefit system (and the state pension is a benefit). It shouldn't. No more than it should be the government's job to give you a lavish lifestyle if you are on working age benefits. 

People who worked in the 70s did save. They also paid national insurance contributions for 50 years.
State pension is not a benefit,it’s an earned and paid for return on 50 years of investment. 

I think you may need to revise your opinions if you believe that the state pension comes from investing your national insurance. My first job was in the 70's and even at that young age I knew that my national insurance had nothing to do with being invested for my future state pension and that any bearing on state pensions was solely to pay the state pensions of those who were currently retired.

Rather sadly I recently calculated my 'NI pot' - had it been invested at 6% nominal growth since I started work in the 80s, it would now provide an income (assuming a 4% rule of thumb) of about £7.5k. Of course, NI payments were originally intended to support the NHS as well as pensions and other benefits so only a fraction of this 'income' would actually be available to pay a pension based on what I contributed.

molerat

OldScientist said:

Rather sadly I recently calculated my 'NI pot' - had it been invested at 6% nominal growth since I started work in the 80s, it would now provide an income (assuming a 4% rule of thumb) of about £7.5k. Of course, NI payments were originally intended to support the NHS as well as pensions and other benefits so only a fraction of this 'income' would actually be available to pay a pension based on what I contributed.

I have just done that - but went for a single life 3% escalating annuity with no guarantee as that is more or less what you get - and it came out at £4K, think I will stick with the £9K    Just goes to show what surprisingly good value your NI contributions can be.