Triple Lock Becomes Double Lock For 1 Year

zagfles

Audaxer said:

zagfles said:

Audaxer said:

zagfles said:

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. 

We are retired with no mortgage, but we as a couple, couldn't live on £17k per year. Not including big spend items which are necessary from time to time, the minimum annual spend we can manage is around £24k. I know there are retirees on here that live on a lot less, and not through necessity, but I don't know how they manage it, because we are by no means big spenders.

Well, you clearly are compared to couples who live on £13k

Our normal spending on a family of 4 is about £30-35k (ex mortgage), but in the 2020/21 tax year I worked out we spent about £21k, this was with 2 kids "at uni" but who were with us most of that time for obvious reasons, so 4 people.  We had 1 foreign holiday and 2 UK ones, way below our usual quota (2019/20 we had 6 foreign holidays!)

So I'd say £17k is easily doable for a couple, let alone a single person, and £13k possible if you don't drink alcohol or eat meat etc.

Well, we hardly ever buy alcohol and we have not eaten out for the last 18 months, and had only one week's holiday in the UK. We have two cars, but they are not new and both are paid for, but we still couldn't manage on £17k a year. 

 

So where is your money going? Clearly, some couples manage on £13k so it is possible. £17k would be easily "manageable" for us. How does your spending compare to Which's "essential" lifestyle here where they reckon £18k for a couple: https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

jbrassy

zagfles said:

jbrassy said:

jamesd said:

jbrassy said:

Personally I find the whole debate around the tax and benefit system and the attitude of some baby boomers quite depressing.

Presumably the ones who disagree with you even though it'll be another ten years for the last of the boomers reaches their state pension age?

You probably missed the substantial cut in state pension for workers that was carried out in 2016. It was done by eliminating the earnings-related part of the state pension which caused a low paid worker with full work history to get around £190 a week when the new state pension maximum was set at £155 a week. As a result that low paid worker will have received only triple lock increases since 2016 when before their continued work from then and perhaps for the next ten years will no longer get them earnings-relate increases. If in 2016 they had more than the cap they keep the extra but it only increases with CPI.

That's one of the things that over the years has been done to make the state pension affordable and of course you are likely to feel the full effect since you probably don't have more than the single tier cap already and will end up capped there.

Another change back in 2016 helped to make the pension benefits more affordable in a different way. The minimum income guarantee means tested benefit that is paid via pension credit is funded out of general taxation, not NI. By increasing the accrual for credits more people have been lifted above the means test level with the cost for that coming out of NI since the increase in credit value is part of the state pension.

Add in the age increases and you shouldn't expect the state pension to become unaffordable because the changes needed to prevent that have already been made. The fundamental examination of what was necessary was done back around 2003 by the Turner Pensions Commission and governments of all parties in power since then have proceeded with them.

You're right about university cost but you missed something: at around the tail of the baby boom age it was about 25-30% of the UK 18 year old population that could go to university. A substantial part of the reason for the funding change is the large increases since then, with those who benefit from the education opportunity paying the cost instead of fully general taxation, though of course many people never pay off their full loan.

Winter fuel allowance is paid to cut the number of old people dying in winter and it has worked. Death from normal winter cold is an age-related risk so it's not useful to do the same for working age people.

Almost 90% of English prescriptions are free, 63% of items being for those over 60. Those on working age benefits or with some long term medical conditions and many others including healthy young people get them free, not just over 60s (there's a consultation to increase that from 60 to state pension age that just finished). What should be apparent from that is that need for prescriptions is age-related and that as a society we've liked to help both our young and old people with free treatment.

Thanks. That is genuinely very interesting. However, it still doesn't get over the inherent unfairness in a lot of this. A lot of working age people are paying large (and increasing) amounts of tax to fund and sustain the wealth of pensioners at levels that cannot be achieved by these working people. The proposed changes to NI and social care will only make this worse.

Personally, I would like to see income tax and NI decreased and the short fall made up by introducing a wealth tax. This would be paid annually by homeowners and the amount paid in tax would be determined by the value of their homes. This could go a long way to solving intergenerational (and other forms) of inequality in this country and ensure house price increases do not accelerate at a rate which is unsustainable. 

You realise that lots of pensioners have expensive homes but low income, right? Same with low income families, who need a big home. Where are they supposed to find the money to pay this tax?

It would be better to apply CGT to owner occupied, with roll forwards, then people can pay when they actually benefit from their house increasing in value.

The value of your house increasing while you need it to live in it doesn't actually make you richer you know. Even if headlines in rags like the Express imply otherwise. Your cost of living is increasing at the same time as your asset.

Yes, I do realise some pensioners live in expensive homes with low income. What's stopping them moving to a cheaper home so they could pay less tax? And as for the low income family that need a big home, could they not rent to avoid the tax which would be paid by the landlord? 

zagfles

jbrassy said:

zagfles said:

jbrassy said:

jamesd said:

jbrassy said:

Personally I find the whole debate around the tax and benefit system and the attitude of some baby boomers quite depressing.

Presumably the ones who disagree with you even though it'll be another ten years for the last of the boomers reaches their state pension age?

You probably missed the substantial cut in state pension for workers that was carried out in 2016. It was done by eliminating the earnings-related part of the state pension which caused a low paid worker with full work history to get around £190 a week when the new state pension maximum was set at £155 a week. As a result that low paid worker will have received only triple lock increases since 2016 when before their continued work from then and perhaps for the next ten years will no longer get them earnings-relate increases. If in 2016 they had more than the cap they keep the extra but it only increases with CPI.

That's one of the things that over the years has been done to make the state pension affordable and of course you are likely to feel the full effect since you probably don't have more than the single tier cap already and will end up capped there.

Another change back in 2016 helped to make the pension benefits more affordable in a different way. The minimum income guarantee means tested benefit that is paid via pension credit is funded out of general taxation, not NI. By increasing the accrual for credits more people have been lifted above the means test level with the cost for that coming out of NI since the increase in credit value is part of the state pension.

Add in the age increases and you shouldn't expect the state pension to become unaffordable because the changes needed to prevent that have already been made. The fundamental examination of what was necessary was done back around 2003 by the Turner Pensions Commission and governments of all parties in power since then have proceeded with them.

You're right about university cost but you missed something: at around the tail of the baby boom age it was about 25-30% of the UK 18 year old population that could go to university. A substantial part of the reason for the funding change is the large increases since then, with those who benefit from the education opportunity paying the cost instead of fully general taxation, though of course many people never pay off their full loan.

Winter fuel allowance is paid to cut the number of old people dying in winter and it has worked. Death from normal winter cold is an age-related risk so it's not useful to do the same for working age people.

Almost 90% of English prescriptions are free, 63% of items being for those over 60. Those on working age benefits or with some long term medical conditions and many others including healthy young people get them free, not just over 60s (there's a consultation to increase that from 60 to state pension age that just finished). What should be apparent from that is that need for prescriptions is age-related and that as a society we've liked to help both our young and old people with free treatment.

Thanks. That is genuinely very interesting. However, it still doesn't get over the inherent unfairness in a lot of this. A lot of working age people are paying large (and increasing) amounts of tax to fund and sustain the wealth of pensioners at levels that cannot be achieved by these working people. The proposed changes to NI and social care will only make this worse.

Personally, I would like to see income tax and NI decreased and the short fall made up by introducing a wealth tax. This would be paid annually by homeowners and the amount paid in tax would be determined by the value of their homes. This could go a long way to solving intergenerational (and other forms) of inequality in this country and ensure house price increases do not accelerate at a rate which is unsustainable. 

You realise that lots of pensioners have expensive homes but low income, right? Same with low income families, who need a big home. Where are they supposed to find the money to pay this tax?

It would be better to apply CGT to owner occupied, with roll forwards, then people can pay when they actually benefit from their house increasing in value.

The value of your house increasing while you need it to live in it doesn't actually make you richer you know. Even if headlines in rags like the Express imply otherwise. Your cost of living is increasing at the same time as your asset.

Yes, I do realise some pensioners live in expensive homes with low income. What's stopping them moving to a cheaper home so they could pay less tax? And as for the low income family that need a big home, could they not rent to avoid the tax which would be paid by the landlord? 

So you want to "socially cleanse" posh areas of low income people then? Or force them to rent? Anyway where do you think the landlord will get the money to pay this "tax"? It'll obviously just be added to the rent!

I'm all for taxing property gains, but do it when the gains are realised. CGT on owner occupied with roll forwards, so you only pay if/when you move downmarket, abroad etc. You pay when you actually have the money to pay. And would also reduce the investment potential of housing so less people buy to invest, rather than to live.

Sea_Shell

zagfles said:

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. 

My "nuts" seem to be gaining celebrity status!!! 🤣

We've actually spent £16,000 in the 12 months to date... including £3k for a new gas boiler!!


We're not "trying" not to spend money!!

We've had 4 UK holidays in that too!

We don't go without anything we want or need.


I've set myself a goal (been challenged!) to spend "22 in 22"

🤣🤣🤣🤣🤣

Silvertabby

Audaxer said:

zagfles said:

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. 

We are retired with no mortgage, but we as a couple, couldn't live on £17k per year. Not including big spend items which are necessary from time to time, the minimum annual spend we can manage is around £24k. I know there are retirees on here that live on a lot less, and not through necessity, but I don't know how they manage it, because we are by no means big spenders.

Same here.  We don't go daft (in our opinion) but most of our fresh food shopping is from M&S.  We both have expensive hobbies - and I like knowing that I can pop into our local garden centre and spend £50+ on plants etc without even thinking about it.

We have never been ones for expensive holidays, but we do enjoy the luxury of a brand new car every 4 or 5 years 

We've spent a little less on hobbies/going out during lockdown, and so were able to pay for a new boiler and garage door from petty cash.

Yes, we are fortunate in that we both have good, fully index linked DB pensions, and so don't have to worry about stock market crashes or running out of money, but as the bulk if that is from our combined 50+ years of service in the Armed Forces, we certainly don't feel guilty about our lifestyle!

zagfles

Silvertabby said:

Audaxer said:

zagfles said:

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. 

We are retired with no mortgage, but we as a couple, couldn't live on £17k per year. Not including big spend items which are necessary from time to time, the minimum annual spend we can manage is around £24k. I know there are retirees on here that live on a lot less, and not through necessity, but I don't know how they manage it, because we are by no means big spenders.

Same here.  We don't go daft (in our opinion) but most of our fresh food shopping is from M&S.  We both have expensive hobbies - and I like knowing that I can pop into our local garden centre and spend £50+ on plants etc without even thinking about it.

We have never been ones for expensive holidays, but we do enjoy the luxury of a brand new car every 4 or 5 years 

We've spent a little less on hobbies/going out during lockdown, and so were able to pay for a new boiler and garage door from petty cash.

Yes, we are fortunate in that we both have good, fully index linked DB pensions, and so don't have to worry about stock market crashes or running out of money, but as the bulk if that is from our combined 50+ years of service in the Armed Forces, we certainly don't feel guilty about our lifestyle!

It's not about feeling guilty about spending, it's your money, spend it as you like, we'll probably end up spending over £30k a year in retirement, as we intend doing loads of travelling, we spent about £10k on holidays in the year before lockdown!

It's about what you could "manage" on, the PP seemed to think it was some of challenge to manage on £17k, and as a single person by the look of it. We could "manage" that as a couple - we could "manage" without 6 holidays a year!

Sea_Shell

If the 💩 hit the fan...we could "manage" on about £10.5k pa

Bills - 370
Food - 200
Car - 100

Misc - 200

So £870 per month.   We could probably shave a bit off that too...if we really had too!!

michaels

jbrassy said:

zagfles said:

jbrassy said:

jamesd said:

jbrassy said:

Personally I find the whole debate around the tax and benefit system and the attitude of some baby boomers quite depressing.

Presumably the ones who disagree with you even though it'll be another ten years for the last of the boomers reaches their state pension age?

You probably missed the substantial cut in state pension for workers that was carried out in 2016. It was done by eliminating the earnings-related part of the state pension which caused a low paid worker with full work history to get around £190 a week when the new state pension maximum was set at £155 a week. As a result that low paid worker will have received only triple lock increases since 2016 when before their continued work from then and perhaps for the next ten years will no longer get them earnings-relate increases. If in 2016 they had more than the cap they keep the extra but it only increases with CPI.

That's one of the things that over the years has been done to make the state pension affordable and of course you are likely to feel the full effect since you probably don't have more than the single tier cap already and will end up capped there.

Another change back in 2016 helped to make the pension benefits more affordable in a different way. The minimum income guarantee means tested benefit that is paid via pension credit is funded out of general taxation, not NI. By increasing the accrual for credits more people have been lifted above the means test level with the cost for that coming out of NI since the increase in credit value is part of the state pension.

Add in the age increases and you shouldn't expect the state pension to become unaffordable because the changes needed to prevent that have already been made. The fundamental examination of what was necessary was done back around 2003 by the Turner Pensions Commission and governments of all parties in power since then have proceeded with them.

You're right about university cost but you missed something: at around the tail of the baby boom age it was about 25-30% of the UK 18 year old population that could go to university. A substantial part of the reason for the funding change is the large increases since then, with those who benefit from the education opportunity paying the cost instead of fully general taxation, though of course many people never pay off their full loan.

Winter fuel allowance is paid to cut the number of old people dying in winter and it has worked. Death from normal winter cold is an age-related risk so it's not useful to do the same for working age people.

Almost 90% of English prescriptions are free, 63% of items being for those over 60. Those on working age benefits or with some long term medical conditions and many others including healthy young people get them free, not just over 60s (there's a consultation to increase that from 60 to state pension age that just finished). What should be apparent from that is that need for prescriptions is age-related and that as a society we've liked to help both our young and old people with free treatment.

Thanks. That is genuinely very interesting. However, it still doesn't get over the inherent unfairness in a lot of this. A lot of working age people are paying large (and increasing) amounts of tax to fund and sustain the wealth of pensioners at levels that cannot be achieved by these working people. The proposed changes to NI and social care will only make this worse.

Personally, I would like to see income tax and NI decreased and the short fall made up by introducing a wealth tax. This would be paid annually by homeowners and the amount paid in tax would be determined by the value of their homes. This could go a long way to solving intergenerational (and other forms) of inequality in this country and ensure house price increases do not accelerate at a rate which is unsustainable. 

You realise that lots of pensioners have expensive homes but low income, right? Same with low income families, who need a big home. Where are they supposed to find the money to pay this tax?

It would be better to apply CGT to owner occupied, with roll forwards, then people can pay when they actually benefit from their house increasing in value.

The value of your house increasing while you need it to live in it doesn't actually make you richer you know. Even if headlines in rags like the Express imply otherwise. Your cost of living is increasing at the same time as your asset.

Yes, I do realise some pensioners live in expensive homes with low income. What's stopping them moving to a cheaper home so they could pay less tax? And as for the low income family that need a big home, could they not rent to avoid the tax which would be paid by the landlord? 

It would cost us way more to rent than a mortgage on the equivalent property (although we wouldn't have the income multiple to be able to get such a mortgage~ if we were forced to sell by a home confiscation tax and that is before rents were increased to cover the same property confiscation tax levied on the landlord.  I have to say the logic of raising taxes on housing that is already hard to afford for the poorest is a little tricky for me to follow.  Would you also propose raising taxes on gas and electricity and water bills and perhaps food while you were at it or is it only housing that gets special extra tax treatment?

As noted just moving would result in a 4% tax on the entire value, not just any gain despite PPR not incurring CGT, as a result of stamp duty a pretty hefty bump on the price of housing for everyone.

Notepad_Phil

michaels said:
...  and that is before rents were increased to cover the same property confiscation tax levied on the landlord.  I have to say the logic of raising taxes on housing that is already hard to afford for the poorest is a little tricky for me to follow.  Would you also propose raising taxes on gas and electricity and water bills and perhaps food while you were at it or is it only housing that gets special extra tax treatment?

A landlord tax along with some kind of robin hood/tobin type tax seems to be Keir's preferred route - like you I can't see the logic of a landlord or housing tax, especially a landlord tax as it'll just get passed on to the people renting who in the main will be on less money than those who own their house; and as for a tax on financial transactions, well if there was any one proposal that would make the higher ups move their operations and highly paid (and taxed) employees away from the UK then that must surely be it

Audaxer

zagfles said:

Audaxer said:

zagfles said:

Audaxer said:

zagfles said:

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. 

We are retired with no mortgage, but we as a couple, couldn't live on £17k per year. Not including big spend items which are necessary from time to time, the minimum annual spend we can manage is around £24k. I know there are retirees on here that live on a lot less, and not through necessity, but I don't know how they manage it, because we are by no means big spenders.

Well, you clearly are compared to couples who live on £13k

Our normal spending on a family of 4 is about £30-35k (ex mortgage), but in the 2020/21 tax year I worked out we spent about £21k, this was with 2 kids "at uni" but who were with us most of that time for obvious reasons, so 4 people.  We had 1 foreign holiday and 2 UK ones, way below our usual quota (2019/20 we had 6 foreign holidays!)

So I'd say £17k is easily doable for a couple, let alone a single person, and £13k possible if you don't drink alcohol or eat meat etc.

Well, we hardly ever buy alcohol and we have not eaten out for the last 18 months, and had only one week's holiday in the UK. We have two cars, but they are not new and both are paid for, but we still couldn't manage on £17k a year. 

 

So where is your money going? Clearly, some couples manage on £13k so it is possible. £17k would be easily "manageable" for us. How does your spending compare to Which's "essential" lifestyle here where they reckon £18k for a couple: https://www.which.co.uk/money/pensions-and-retirement/starting-to-plan-your-retirement/how-much-will-you-need-to-retire-atu0z9k0lw3p

That link also shows that households with two people spend an average of £26k per annum, so we were under that last year for regular spend. Looking at our spend last year, £13k covered just food/supermarket £5.5k, bills £5.5k and pet costs £2k. I don't think the rest of our regular spend is excessive and as we are well within what we have budgeted for in retirement, I'm quite happy with our level of expenditure.