Triple Lock Becomes Double Lock For 1 Year

jamesd

lauran1902 said:

Very few pensioners are 'wealthy'.  At least I don't know any.    

In any case, we have one of the lowest state pensions in the world.  The fact that some previous uplifts have been more 'generous' than expected doesn't compensate for that fact.  My pension is £8700 per year.  That's all.  I have a very small occupational pension of about the same amount.  Would any one of you who are working like to try and live on that, especially with rising prices all round?
...
Just to add balance, I am not in favour of the NI increase on jobs either.  It's disingenuous to think that this is going to solve the 'social care problem'.  Most people will still have to sell their houses.  It's just smoke and mirrors.  And I think it's perfectly reasonable that my home (my only asset) should be used to fund my care in later life if it is needed.    

If you know a person who owns a house in SE England without a mortgage you know someone who is wealthy by some definitions. With average property prices there over 400k and houses higher than average properties it's a normal consequence. It's also usually easy to get access to that capital to boost retirement income.

Your occupational pension is on the large size, with around 32% of pensioner income being average for them.

Average weekly income of pensioners in 2020 was 370 under age 75, 302 above. After tax yours seems to be about 316 a week so definitely on the low side for pensioners overall, about average if you happen to be over 75. I considered early retirement where around 12,000 a year was a possible income level. Ended up not doing it because I liked my job and wanted more safety margin. Ended up wit much more potential than that now I'm retired.

Most people receiving social care probably don't own their home. That's because more than half of social care spending is on people of working age with assorted conditions which limit their ability to care for themselves. Lots of focus on generational war and old people but that's not the majority.

I agree with you that selling a home is reasonable, though it would be nice to do it only after death when it's of no possible use to the deceased.

I'm not trying to criticise you, just fill in some data gaps.

zagfles

Ganga said:

zagfles said:

lauran1902 said:

The fact that some previous uplifts have been more 'generous' than expected doesn't compensate for that fact.  My pension is £8700 per year.  That's all.  I have a very small occupational pension of about the same amount.  Would any one of you who are working like to try and live on that, especially with rising prices all round? 

So you have about £17k income? Or have I misunderstood? Some couples spend less than that, even though they could afford to spend more. Read the "squirrelled nuts" thread here.

Whilst i agree with you ,a lot of the people on the " Squirreled nuts thread " have in excess of half a million quid and a lot have more ,their worries are exceeding the LTA .

Yes. That's the point. Like the OP of that thread who has over half a million but who only spends about £13k (IIRC) between her and her OH.

Like it's some sort of challenge to live on £17k  Many here live on less and not through necessity. 

zagfles

german_keeper said:

jamesd said:

Personally I'd rather see some split between NI to cover the younger ages portion and inheritance taxation for the older bit, since you can't spend money when you're dead already and it's one of the least painful taxes for the money owners that there can be.

I find it interesting that this is the only mention of the sacrosanct inheritance tax I have seen, and an opinion I completely agree with. Nothing on telly, newspapers, general chit chat either. It just confirms to me how far out of step I am with my opinions on IHT compared to the vast majority of the population. 

The current system for paying for care is like inheritance tax, puting a charge on your house to pay for care costs, as was Theresa May's so-called "dementia tax" proposal which went down like a lead balloon at the 2017 election. The new proposal still has an "inheritance tax" element but capped at £86k

michaels

That massive 'half a million' pension pot equates to a guaranteed income from age 55 of about the amount of your  8.5k occupational pension with 12 years to wait for a state pension on top.

[Deleted User]

zagfles said:

german_keeper said:

jamesd said:

Personally I'd rather see some split between NI to cover the younger ages portion and inheritance taxation for the older bit, since you can't spend money when you're dead already and it's one of the least painful taxes for the money owners that there can be.

I find it interesting that this is the only mention of the sacrosanct inheritance tax I have seen, and an opinion I completely agree with. Nothing on telly, newspapers, general chit chat either. It just confirms to me how far out of step I am with my opinions on IHT compared to the vast majority of the population. 

The current system for paying for care is like inheritance tax, puting a charge on your house to pay for care costs, as was Theresa May's so-called "dementia tax" proposal which went down like a lead balloon at the 2017 election. The new proposal still has an "inheritance tax" element but capped at £86k

Not sure it falls under the definition of “tax”. Not unless you also consider paying for your other needs as “tax”, eg food shopping at Tesco or buying a car you can use to get you to work. 

pensionpawn

michaels said:

That massive 'half a million' pension pot equates to a guaranteed income from age 55 of about the amount of your  8.5k occupational pension with 12 years to wait for a state pension on top.

...and considerably more if you're not fixated on maintaining your pot size!

MK62

pensionpawn said:

michaels said:

That massive 'half a million' pension pot equates to a guaranteed income from age 55 of about the amount of your  8.5k occupational pension with 12 years to wait for a state pension on top.

...and considerably more if you're not fixated on maintaining your pot size!

I suspect michaels meant an RPI linked annuity.......a £0.5M pension pot will, at the moment, just about get you the same guaranteed index linked £8.5k pension.

You'd have the option of doing drawdown instead and going for higher income, but it's not guaranteed for life...or index linked.

Point is, half a million, on paper, sounds a lot.......but in the grand scheme of lifetime pension provision from 55yo.....it isn't really.

zagfles

Deleted_User said:

zagfles said:

german_keeper said:

jamesd said:

Personally I'd rather see some split between NI to cover the younger ages portion and inheritance taxation for the older bit, since you can't spend money when you're dead already and it's one of the least painful taxes for the money owners that there can be.

I find it interesting that this is the only mention of the sacrosanct inheritance tax I have seen, and an opinion I completely agree with. Nothing on telly, newspapers, general chit chat either. It just confirms to me how far out of step I am with my opinions on IHT compared to the vast majority of the population. 

The current system for paying for care is like inheritance tax, puting a charge on your house to pay for care costs, as was Theresa May's so-called "dementia tax" proposal which went down like a lead balloon at the 2017 election. The new proposal still has an "inheritance tax" element but capped at £86k

Not sure it falls under the definition of “tax”. Not unless you also consider paying for your other needs as “tax”, eg food shopping at Tesco or buying a car you can use to get you to work. 

That's why I said it's "like" tax, not that it's tax by "definition". If the state pays for your care and then if you have a house, puts a charge against your house to recoup the cost, that's "like" inheritance tax. If you didn't have the house or other assets, the state would pay. So that is "like" being taxed on that asset.

GunJack

MK62 said:

pensionpawn said:

michaels said:

That massive 'half a million' pension pot equates to a guaranteed income from age 55 of about the amount of your  8.5k occupational pension with 12 years to wait for a state pension on top.

...and considerably more if you're not fixated on maintaining your pot size!

I suspect michaels meant an RPI linked annuity.......a £0.5M pension pot will, at the moment, just about get you the same guaranteed index linked £8.5k pension.

You'd have the option of doing drawdown instead and going for higher income, but it's not guaranteed for life...or index linked.

Point is, half a million, on paper, sounds a lot.......but in the grand scheme of lifetime pension provision from 55yo.....it isn't really.

Why a 55-y-o?? the DB pension you're comparing to probably doesn't start until 60/65/SPA, so hardly fair comparison. That half-mil at a flat 8.5k is 58 year's-worth, you telling me an invested pot wouldn't provide for a 2% increase and still not last for 40 yrs plus??

zagfles

GunJack said:

MK62 said:

pensionpawn said:

michaels said:

That massive 'half a million' pension pot equates to a guaranteed income from age 55 of about the amount of your  8.5k occupational pension with 12 years to wait for a state pension on top.

...and considerably more if you're not fixated on maintaining your pot size!

I suspect michaels meant an RPI linked annuity.......a £0.5M pension pot will, at the moment, just about get you the same guaranteed index linked £8.5k pension.

You'd have the option of doing drawdown instead and going for higher income, but it's not guaranteed for life...or index linked.

Point is, half a million, on paper, sounds a lot.......but in the grand scheme of lifetime pension provision from 55yo.....it isn't really.

Why a 55-y-o?? the DB pension you're comparing to probably doesn't start until 60/65/SPA, so hardly fair comparison. That half-mil at a flat 8.5k is 58 year's-worth, you telling me an invested pot wouldn't provide for a 2% increase and still not last for 40 yrs plus??

Why 2%? You think inflation can't exceed 2% long term? Look at the 70's and 80's. Look at other countries today. Look at index linked annuity rates, they tell you how much it costs for a guaranteed index linked income for life. You can't compare a guaranteed index linked income to a drawdown pot invested in equities etc, that definitely wouldn't be a "fair comparison"