Will my pension keep pace with inflation?

Reg_Smeeton

Thrugelmir said:

Reg_Smeeton said:

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

I’m astounded more was not made of the governments broken promise on the triple lock. I know it was the wages part that was suspended rather than inflation on this occasion, but the precedent has been set now that if the numbers aren’t what the government want to see they will just override it.

Furlough caused an anomaly in the increase in wages. No one foresaw a pandemic when designing the triple lock.  There's no magic money trees. Someone has to pay for whatever the Government commits to spend. . 

That’s fine. But by it’s very definition it cannot be described as a “triple lock” if it can simply be overruled.

Silvertabby

Reg_Smeeton said:

Thrugelmir said:

Reg_Smeeton said:

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

I’m astounded more was not made of the governments broken promise on the triple lock. I know it was the wages part that was suspended rather than inflation on this occasion, but the precedent has been set now that if the numbers aren’t what the government want to see they will just override it.

Furlough caused an anomaly in the increase in wages. No one foresaw a pandemic when designing the triple lock.  There's no magic money trees. Someone has to pay for whatever the Government commits to spend. . 

That’s fine. But by it’s very definition it cannot be described as a “triple lock” if it can simply be overruled.

Exceptional circumstances.  The alleged 8% increase in salaries was largely due to the restoration of wages from (furloughed) 80% back up to 100%, and so can't - by any stretch of the imagination - be a true figure.

Next time you see a nurse ask her/him if they have received an 8% pay rise this year - and brace yourself for their answer.

This April's increase of 3.1% is CPI as at the end of last September.  Yes, the cost of living is now higher, but that's just way things are.

I'd be the first to agree with special measures to help those who are really struggling, but paying over the odds to ALL pensioners isn't the way to do it.  We are just coming out of a global pandemic that has knocked the whole world onto its financial a.r.s.e, yet some people still seem to expect more money/tax cuts. Unbelievable!

Albermarle

Reg_Smeeton said:

Thrugelmir said:

Reg_Smeeton said:

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

I’m astounded more was not made of the governments broken promise on the triple lock. I know it was the wages part that was suspended rather than inflation on this occasion, but the precedent has been set now that if the numbers aren’t what the government want to see they will just override it.

Furlough caused an anomaly in the increase in wages. No one foresaw a pandemic when designing the triple lock.  There's no magic money trees. Someone has to pay for whatever the Government commits to spend. . 

That’s fine. But by it’s very definition it cannot be described as a “triple lock” if it can simply be overruled.

It was never a particularly sensible policy in the first place . Done for vote winning purposes rather than as a rational policy .

[Deleted User]

Reg_Smeeton said:

Thrugelmir said:

Reg_Smeeton said:

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

I’m astounded more was not made of the governments broken promise on the triple lock. I know it was the wages part that was suspended rather than inflation on this occasion, but the precedent has been set now that if the numbers aren’t what the government want to see they will just override it.

Furlough caused an anomaly in the increase in wages. No one foresaw a pandemic when designing the triple lock.  There's no magic money trees. Someone has to pay for whatever the Government commits to spend. . 

That’s fine. But by it’s very definition it cannot be described as a “triple lock” if it can simply be overruled.

And the lesson is: trust in yourself rather than in the government. We vote for politicians who give away great promises and money. Eventually other peoples’ money runs out and promises don’t put dinner on the table, however great. 

Grumpy_chap

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

The part of the "triple lock" that was adjusted this year was to correct the anomaly in the average earnings part that followed furlough and should be looked at in the totality of the increase in 2021 when earnings had fallen and the increase in 2022 that does not follow the "unnatural" recovery of earnings.

The inflation indicator will always run with a lag (whether inflation is rising or falling) because it uses autumn data to set the level from the following spring.  Next year, that element should self-correct.

The "tripe lock" has the three parts:

• wage growth
• inflation
• 2.5%

The links to wage growth and inflation are connected to external indices that cannot be directly influenced.

The 2.5% is a purely "nominal" percentage that was set for political reasons and a desire at that time to recover past falls in relative spending power of the state pension.  The trouble is, that 2.5% has now become sacrosanct, but the original figure could have been anything.  Why not 3%?  Why not 2%.  They are both as valid options as 2.5%.

The "triple lock" has also been in place through a period of low inflation and low wage growth (many people having zero wage rises for several years following the 2008 banking crash) so the 2.5% has been the award level and relative spending power of the state pension has increased.  Whether it has increased enough is a matter of political decision.  Arguably, the "triple lock" has to end at some point, though the 2.5% looks as though it will be moot for the coming period.

Reg_Smeeton

Silvertabby said:

Reg_Smeeton said:

Thrugelmir said:

Reg_Smeeton said:

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

I’m astounded more was not made of the governments broken promise on the triple lock. I know it was the wages part that was suspended rather than inflation on this occasion, but the precedent has been set now that if the numbers aren’t what the government want to see they will just override it.

Furlough caused an anomaly in the increase in wages. No one foresaw a pandemic when designing the triple lock.  There's no magic money trees. Someone has to pay for whatever the Government commits to spend. . 

That’s fine. But by it’s very definition it cannot be described as a “triple lock” if it can simply be overruled.

Exceptional circumstances.  The alleged 8% increase in salaries was largely due to the restoration of wages from (furloughed) 80% back up to 100%, and so can't - by any stretch of the imagination - be a true figure.

Next time you see a nurse ask her/him if they have received an 8% pay rise this year - and brace yourself for their answer.

I work in local gov so well aware 

If the “exceptional circumstances” just happened to be within 12 months of a general election you could bet your bottom dollar they would have awarded it in full....

AlanP_2

sevenhills said:

QrizB said:

Are you expecting to be one of the "people with the least" in retirement? Because, from the sounds of it, you'll be enjoying a State Pension plus a local government DB one and will be somewhat better off that Jack Monroe's target demographic.

I am somewhat poorer than the average poster on these boards, but my aim is to have more money in retirement than I have now.

Even my combined state pension and local government pension is below the average wage. Someone retiring at 60 could have 20/30 years of inflation to cope with.

Not sure comparing your likely pension income to average wage is particularly meaningful.

For a lot of people that will be the case, but a lot of them won't have the housing, commuting, children costs that are being paid from the average wage. 

How does it compare to average pensioner income? 

drummersdale

My CS Union (PCS) is asking for a 10% pay rise this year lol 😂 - light touch paper and stand well back…….

sevenhills

AlanP_2 said:

Not sure comparing your likely pension income to average wage is particularly meaningful.

For a lot of people that will be the case, but a lot of them won't have the housing, commuting, children costs that are being paid from the average wage. 

How does it compare to average pensioner income? 

I was just answering the post by QrizB, as I am a below average earning I expect to have a below-average income in retirement, compared to the average.

How does the average pensioner income compare to average worker income?

I haven't paid off my mortgage yet, just a few more years to go.

Someone said in another post, pensioners are no longer seen as being poor. Ten years ago I would have been classed as living in poverty, single parent bringing up a child.

Average pensioner income = £17,212

https://www.gov.uk/government/statistics/pensioners-incomes-series-financial-year-2019-to-2020/pensioners-incomes-series-financial-year-2019-to-2020

Thrugelmir

Grumpy_chap said:

sevenhills said:

In previous years the state pension had the triple lock, but this year it is increasing by 3.1% when RPI inflation is presently 7.8%

The 2.5% is a purely "nominal" percentage that was set for political reasons and a desire at that time to recover past falls in relative spending power of the state pension.

BOE is set a mandate to control inflation at 2%. The minimum additional 0.5% above provided a small real terms increase in the basic level of state pension.