Omg 18%

Albermarle

arnoldy said:

Personally I feel they should give people inflation pay rises and not cap.

Agree. If the price of food staples doubles does that warrant yet another special handout? Are we going to have a bread cheese and milk price cap?

The best thing we can do it to raise the interest rates in a purposeful and sustained manner, control public expenditure, and hack away at unnecessary red tape. This is the only way to control inflation, which will be hard in the short term but has to be done. Even in the 70s there was not this current level of nanny state trying to make everything rosy in the garden and pretending we can push off the belt tightening.

Regarding your comment in bold, every politician of every party says they will get rid of red tape and have done since I can ever remember, especially at election time. It is a quick and easy soundbite that sounds positive. It was used a lot in the Brexit referendum.
In fact a lot of so called red tape are actually regulations that protect us ( Health and safety etc ) In some areas we need more red tape, like when setting up a company at Companies House. The lack of red tape makes it a scammers paradise.

zagfles

Pat38493 said:

NedS said:

daz378 said:

Surely they will cap prices  of energy at 2k a year....or will wreck the economy   believe 2 year cap  would cost 100 billion...together with rising interest rates    cost of living crisis could effect  upper working/middle class families...

Who do you think is going to pay for that? The problem with a cap is that it benefits everyone (almost equally). With limited resources, I would prefer to see what available resources we do have targeted towards those who need it most - the vulnerable and those on very low incomes. Middle Britain is going to have to suck up a lot of the pain, as they are the ones who can afford to do so. IMHO it is not right that we spend tax payers money capping or reducing energy bills of those best placed to be able to afford the increases.
I am lucky that we can afford the current price rises. It will still be very painful for us, but I will not have to choose between heating our home or putting food on the table - there are other things we can still cut back on before we have to make those kind of dire choices. Others are far less fortunate and I have no desire to see the government run up another 100 billion of debt to subsidise my energy usage. Target the help towards those who need it most.

In principle I agree but there are a couple of issues.

First, even relatively high earning households will find that the energy price increase alone, if it goes where some are predicting next year and stays there, will use up pretty much all their disposable income.  When they all stop spending on all discretionary items, this will obviously trigger a recession (or even potentially a depression) so this also has to be taken into account in the decision making process - maybe this is still the right thing to do, but slashing the discretionary spending of a large % of the population is not without other effects.

Second - the party that currently governs the UK gets a lot of their votes from those people that you think should pay the whole price, so even if it's the right thing to do, it's not evident that they will do it.

What makes you think that? It's a bit of an old stereotype.The Tories did better amongst lower income voters at the last election

https://yougov.co.uk/topics/politics/articles-reports/2019/12/17/how-britain-voted-2019-general-election

jimi_man

Silvertabby said:

jimi_man said:

Moby said:

I wonder whether we'll get matching increases in our ndex linked LGPS pensions this Sept. Wouldn't be surprised if the Govmt capped them!
I reckon I'll still get a larger increase than the pay increase I'd have got if I'd continued working though. 

Public sector pension increases are linked to State Pension increases, so if that increases then so will they. They could cap the SP though I don't imagine that would be popular. 

No they're not.  Public sector pensions (in payment or deferred) will increase by CPI.  State pensions will increase by triple lock.  Yes, next April both will increase by CPI as that will be the higher of the triple lock figures - but the April 2021 increases were 0.5% CPI for public sector pensions, and 2.5 % triple lock for State pensions.

What I meant was, that I didn't make clear, that there is a Statutory Requirement to increase public sector pensions by the same increase that is applied to (Additional) State pensions (I.e. not the triple lock). The point I was trying to make is that there is no facility to increase one and not the other.

Apologies.

Chickereeeee

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year) probably for the rest of their lives, they may get a bit annoyed.

zagfles

Chickereeeee said:

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year) probably for the rest of their lives, they may get a bit annoyed.

Yes, I've mentioned this here before the surge in inflation, it's something people just don't seem to consider in their retirement plans. The upside is that if inflation ever went negative (hopefully energy prices will fall in the future) then they might recoup some of the loss (I don't think any pensions in payment get reduced when inflation is negative).

For pensions in deferment increases are capped on the overall inflation over the whole period, so a decision to start drawing a capped DB pension this year could be a very bad one!

Ganga

Is it time to open up the coal mines again ,we could go back to producing town gas so not dependant on Mr Putin ,also coal fired power stations could produce cheaper electricity.
I know this will never happen due to the amount of greenhouse gas produced in the environment BUT if things get really really desperate. 

arnoldy

Chickereeeee said:

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year) probably for the rest of their lives, they may get a bit annoyed.

Imagine how people who brought annuities feel. 85% of annuity purchases were fixed non increasing, the inflation linked ones were so expensive they never washed their face.

sevenhills

Chickereeeee said:

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year)

I have looked at mine, WYPF and it just says that it will increase with CPI inflation.
Most might assume the same. I thought increasing by CPI was poor, as RPI is higher and some have inflation plus 1% (NHS)?

zagfles

sevenhills said:

Chickereeeee said:

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year)

I have looked at mine, WYPF and it just says that it will increase with CPI inflation.
Most might assume the same. I thought increasing by CPI was poor, as RPI is higher and some have inflation plus 1% (NHS)?

Another advantage of public sector pensions, I think they all have uncapped CPI increases. Whereas nearly all private sector schemes are capped. Some are RPI, but I'd prefer uncapped CPI to capped RPI any day.

zagfles

arnoldy said:

Chickereeeee said:

I think that when people realise that a lot (most) of their final salary pensions are capped at 3 or 5% inflation increases, and that that they will be worth maybe 7-15% less (if inflation is 10-15% for just one year) probably for the rest of their lives, they may get a bit annoyed.

Imagine how people who brought annuities feel. 85% of annuity purchases were fixed non increasing, the inflation linked ones were so expensive they never washed their face.

People have short memories, or have never experienced high inflation, so they don't think it'll happen. There might be mis-selling cases where people have used an advisor - the reason for buying annuities is you want a guaranteed income for life, a level annuity is no guarantee that your income won't be worth peanuts in a decade or two.