Triple Lock Becomes Double Lock For 1 Year

jamesd

MSE_Petar said:

Hi everyone,

We've just published a news story about this which you can read at the link below:

State pension 'triple lock' suspended for a year

Many thanks,
MSE Petar

@MSE_Petar might be an idea to substitute "less than expected" for the relevant part of "The state pension will rise by a smaller amount next April" because it's likely to rise by more, not less, than it did last year.

pensionpawn

GunJack said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

This has just illustrated that the pledge BS.  Remove low income jobs for a year and suddenly you have a jump in average salaries.  This pledge made no sense when it was first introduced under Blair/Brown and hasn’t stopped being nonsensical when repeated at a later date. 

Provides a transparent non political method of annual increases. 

It only makes sense politically because older people vote a lot. If it was non-political, it would be linked to inflation. 

In the election Corbyn fought, actually more youngsters voted than pensioners...surprising, yes, but it happened..

Do you think that their political nativity was exploited with respect to Labour's tuition fee bribe? 

jamesd

Deleted_User said:

Thrugelmir said:

Deleted_User said:

This has just illustrated that the pledge BS.  Remove low income jobs for a year and suddenly you have a jump in average salaries.  This pledge made no sense when it was first introduced under Blair/Brown and hasn’t stopped being nonsensical when repeated at a later date. 

Provides a transparent non political method of annual increases. 

It only makes sense politically because older people vote a lot. If it was non-political, it would be linked to inflation. 

Linking it to inflation only was a political decision to cut it made during the Thatcher administration. Previously it had been linked to wages, which increase at about inflation plus one percent. The point of the triple lock is to slowly restore it to the late 1970s proportion of median wages that it's lost over the years of just inflation increases.

Given that relative poverty is set at 60% of median wages, trying to get things back to the 70s level from the lower level when the policy was introduced seems like a credible policy choice.

jamesd

Dale72 said:

2 election pledges gone in 1 day, can this government get any more useless?  Yes would be my guess.

Given that one was reacting to an unreasonable drop then rise in average wages and the other is in large part to handle a new social care program that primarily helps non-retired people I'd say that the government deserves credit for doing sensible rather than easy things. Which is what I'd hope to see from Conservative and other governments.

Meanwhile I'm continuing to withdraw money from my pension pots as fast as my whole basic rate band will allow, because my confidence that basic rate won't increase within a few years in a different government is low. Not spend, just withdraw and reinvest in other tax wrappers like ISA and VCT.

pensionpawn said:

The majority of the burden (in my family) of this NI hike will fall on my three young adult daughters early in their careers.

On the possibly brighter side, more than half of adult social care spending is on people below retirement age, per BBC six O'clock news today. Not too surprising since care is typically needed for only a few years by those near end of life but for decades at the younger ages. But the focus is on the minority of spending on older people, it seems.

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.

Thrugelmir

Deleted_User said:

Thrugelmir said:

Deleted_User said:

This has just illustrated that the pledge BS.  Remove low income jobs for a year and suddenly you have a jump in average salaries.  This pledge made no sense when it was first introduced under Blair/Brown and hasn’t stopped being nonsensical when repeated at a later date. 

Provides a transparent non political method of annual increases. 

It only makes sense politically because older people vote a lot. If it was non-political, it would be linked to inflation. 

There is a broader aim to progressively raise the state pension in a sustainable and affordable manner. 

Dale72

cfw1994 said:

Dale72 said:

2 election pledges gone in 1 day, can this government get any more useless?  Yes would be my guess.

I'm no fan of this government at all...but this strikes me as a daft response. 
Did anyone seriously think things wouldn't need to change after this crazy 18 months? 
 
Most opponents appear to think things don't go far enough.
Presumably you feel they should have kept the triple lock and not raise further funds to help pay for the pandemic?

Just stating a fact. If we're playing fantasy politics then it might be a good start to put policies in place so that people are not having to rely on a windfall rise in their pension to enjoy a decent standard of living.

Silvertabby

Dale72 said:

cfw1994 said:

Dale72 said:

2 election pledges gone in 1 day, can this government get any more useless?  Yes would be my guess.

I'm no fan of this government at all...but this strikes me as a daft response. 
Did anyone seriously think things wouldn't need to change after this crazy 18 months? 
 
Most opponents appear to think things don't go far enough.
Presumably you feel they should have kept the triple lock and not raise further funds to help pay for the pandemic?

Just stating a fact. If we're playing fantasy politics then it might be a good start to put policies in place so that people are not having to rely on a windfall rise in their pension to enjoy a decent standard of living.

Right from day 1, the State pension was only ever intended to fund a basic standard of living, with 'luxuries' being paid for from other pensions or savings.

Somehow, over the years, "The State pension will pay for everything you need" has Chinese whispered into: "The State pension will pay for everything you want".

eskbanker

MX5huggy said:

Thrugelmir said:

MX5huggy said:

They got one thing right today then.

What will this cost me on my SP to be taken in 2050?

The pandemic is far from over in economic terms. I'd be more concerned as to how the ongoing bill is going to be funded first. Tax raising measures are a certainty. 

I’m not concerned I wanted a mathematical answer, if the increase is 3% instead of 8% this year with compounding how much less will the pension be in 2050? 

It's a fairly straightforward (albeit arbitrary) calculation, as long as you have all of the inflation statistics for the next 29 years....

[Deleted User]

Thrugelmir said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

This has just illustrated that the pledge BS.  Remove low income jobs for a year and suddenly you have a jump in average salaries.  This pledge made no sense when it was first introduced under Blair/Brown and hasn’t stopped being nonsensical when repeated at a later date. 

Provides a transparent non political method of annual increases. 

It only makes sense politically because older people vote a lot. If it was non-political, it would be linked to inflation. 

There is a broader aim to progressively raise the state pension in a sustainable and affordable manner. 

Given that people have fewer kids and live longer the above is a self-contradictory statement. 

[Deleted User]

jamesd said:

Deleted_User said:

Thrugelmir said:

Deleted_User said:

This has just illustrated that the pledge BS.  Remove low income jobs for a year and suddenly you have a jump in average salaries.  This pledge made no sense when it was first introduced under Blair/Brown and hasn’t stopped being nonsensical when repeated at a later date. 

Provides a transparent non political method of annual increases. 

It only makes sense politically because older people vote a lot. If it was non-political, it would be linked to inflation. 

Linking it to inflation only was a political decision to cut it made during the Thatcher administration. Previously it had been linked to wages, which increase at about inflation plus one percent. The point of the triple lock is to slowly restore it to the late 1970s proportion of median wages that it's lost over the years of just inflation increases.

Given that relative poverty is set at 60% of median wages, trying to get things back to the 70s level from the lower level when the policy was introduced seems like a credible policy choice.

Setting the wonderful 1970s as the golden standard is smart. Britain was doing so well, who wouldn’t want to try that again? 

Making people think that more and more oldies would be able to live swimmingly on the backs of fewer and fewer working age taxpayers is unhelpful.  It deceives them and translates into relying less on yourself.  The objective for the state should be to provide a safety net, and safety net grows with inflation.