Here's how much the state pension triple lock and other benefits could rise by in April 2024

Eldi_Dos

Exodi said:

Albermarle said:

Exodi said:

Silvertabby said:

8.5% includes the one-off bonus to the likes of the NHS.  To be fair, this really isn't a true reflection of average pay rises - 7.8% sounds like a much more accurate figure.

As for the 2022 increase, the salary increase figure was artificially inflated due to those whose salaries had been reduced to 80% (during Covid) being restored back to their original 100%.  Not a true pay rise by any stretch of the imagination, so limiting that year's increase to CPI (being higher than the minimum 2.5%) seemed fair to me.  After all, I'm not aware of any pensioners who had their pension incomes reduced to 80% at that time. 

Spoken as a State pensioner. 

A lot of pension arguments made are emotive and with little heed to context like you have. I greatly admire your neutrality. Unfortunately I'm probably not so neutral.

As a full time employee in his 30s, I could have only dreamed of a 10.1% increase last year, or the suggested 8.5% this year.

It's not difficult to see why the triple-lock can not be sustainable long term. The current unfunded state and public pension liabilities are astronomical and ever-increasing. From a financial point of view this is correct, and all political parties know that.

The current system of effectively bribing pensioners with unsustainable pension increases, solely because they make up a significant part of voters that actually turn up to vote, is frustrating, but perhaps when I'm a pensioner I'll be happily to trade my vote for the same. The alternative is that more people in their Twenties and Thirties actually voted, which would be generally good for democracy.

I am loathed to pay National Insurance when there exists a remote possibility that the State Pension will eventually need to be cut down or means tested in the next few decades because it's simply unaffordable.

Of course, as someone said before, not likely to be a popular opinion on a board populated by a significant amount of pensioners. I would think that for most of the regulars on here, the state pension is only a part of their income and whether it goes up 6% or 8% is unlikely to have any material effect. (However as @xylophone points out that is not the case for many )

Surprised nobody has mentioned wealthy pensioner households getting a £500+ Winter Fuel Payment.
Maybe they will keep warm by buying a case of Malt Whiskey with it.

My stepfather and my wife's parents both make the same exact joke every year to me and we usually grit our teeth and offer a forced laugh.

Hope they have the good grace to not just show you whatever nice malt they have bought.

Pat38493

Eldi_Dos said:

Pat38493 said:
   Most state pensioners are not working anymore and don’t have to make any continuing contribution to national productivity 

One of the reasons you are able to post is there is more than one state pensioner who helped build the information superhighway and the infrastructure that allows us all to communicate, greatly helping national productivity. I do not think it is unfair to expect to share in the wealth being created rather than be treated as a pariah when they reach SPA.
Many of us state pensioners still pay taxes and we vote, so politicians take note of that.

I agree, but i don't really see having a cast iron protection against inflation as being treated like a pariah.  In fact, many working people don't even get pay rises that come anything close to matching inflation and / or have to go on strike just to end up with half of the rate of inflation.  I've even seen stories of people in NHS retiring because they know they will automatically get inflationary pay rises from then on.

Edit - also, if people are ending up with a discernably worse lifestyle because earnings rises outstripped inflation rises for prolonged periods, to me this indicates that the way we measure inflation is flawed - theoretically inflation should  include all the things that people typically do to live a reasonable life.

michaels

xylophone said:

On 6/4/16 my old pension scheme contributions including serps/s2p put me at but not above the new state pension max.  Thus since that date although I continue to pay NI my state pension does not increase.  Had I instead contracted out then I would have the contracted out pot 'mine to keep' and my current NI payments would be increasing my state pension to the max level - thus either I have lost the serps/s2p contributions or my current contributions are worthless.  Could have contracted out but it seemed at the time to be less socially responsible to do so.

I don't follow the "less socially responsible argument" - were those contracted out into a DB scheme "less socially responsible"?

If you had contracted out into a personal pension, you would have received payments into your fund as explained here.

https://www.pensiontracingservice.com/contracting-out#:~:text=By contracting out pension, both,from the additional state pension.

If you had contracted out. there would have been a deduction when calculating your Starting Amount as explained in my previous.

Your subsequent NI contributions could then only have improved your SA up to (but not in excess of) a full NSP - after that, if working and earning the relevant amount, you would still have had to pay NI up to SPA.

And with regard to your DC pension. it would appear to have bought a generous amount of pension in the CS DB scheme - this will be fully index linked up to and beyond claiming your benefits (in around twelve years time)?

It seems to me that you have little to complain about.

The state pension system is a pay as you go scheme - by opting out one was taking funds that would otherwise have formed part of the 'social' state pension system and putting them into a private vehicle.  Sure further down the line it was (seemingly) also reducing the liability of the public pot - but it turns out that actually there was effectively no liability arising from my non-opted out contributions as the extra pension entitlement they should have bought me instead would have been purchased from my current NI contributions which instead are basically worthless.

Not sure how my joining the CS pension scheme relates to my getting zero value form my serps/s2p contributions?

Eldi_Dos

Pat38493 said:

Eldi_Dos said:

Pat38493 said:
   Most state pensioners are not working anymore and don’t have to make any continuing contribution to national productivity 

One of the reasons you are able to post is there is more than one state pensioner who helped build the information superhighway and the infrastructure that allows us all to communicate, greatly helping national productivity. I do not think it is unfair to expect to share in the wealth being created rather than be treated as a pariah when they reach SPA.
Many of us state pensioners still pay taxes and we vote, so politicians take note of that.

I agree, but i don't really see having a cast iron protection against inflation as being treated like a pariah.  In fact, many working people don't even get pay rises that come anything close to matching inflation and / or have to go on strike just to end up with half of the rate of inflation.  I've even seen stories of people in NHS retiring because they know they will automatically get inflationary pay rises from then on.

Edit - also, if people are ending up with a discernably worse lifestyle because earnings rises outstripped inflation rises for prolonged periods, to me this indicates that the way we measure inflation is flawed - theoretically inflation should  include all the things that people typically do to live a reasonable life.

Well do not think that cast iron protection will be around forever, but if you compare average total earnings of £664  and average regular pay of £617 in July 2023 with the NSP of just short of £204  it kind of puts in perspective the raise we may or may not get. It is not a charitable donation we are looking for but a fair share for the contributions we have made.

xylophone

 Not sure how my joining the CS pension scheme relates to my getting zero value form my serps/s2p contributions?

I don't know how I can more easily explain that you have not got zero value from your SERPS contributions.

 Are you saying that your state pension forecast at 6/4/16 showed that you had already reached full NSP?

I gather that you are now aged around 55 so in 2016 would have been aged around 48.

If you had never been a member of a contracted out scheme at that point then your starting amount was the higher of

(NIQY/30 x £119.30) + SERPS/S2P

NIQY/35 x £155.65

If you are saying that you had reached full NSP by 2016, how can you claim that you gained zero benefit from your SERPs/S2P?

Your starting amount has been index linked under the triple lock and will continue to be index linked in some shape or form up to

 and beyond SPA.

If you have any "protected payment" it will have been indexed by CPI and will continue to be index linked under CPI once in payment.

Clearly during your years of employment you built up a fair sized DC  pension, receiving tax relief along the way.

That pension has been transferred into a public service pension which will be fully indexed when you come to claim your benefits.

All in all, you have received a good deal from the state?

michaels

xylophone said:

 Not sure how my joining the CS pension scheme relates to my getting zero value form my serps/s2p contributions?

I don't know how I can more easily explain that you have not got zero value from your SERPS contributions.

 Are you saying that your state pension forecast at 6/4/16 showed that you had already reached full NSP?

I gather that you are now aged around 55 so in 2016 would have been aged around 48.

If you had never been a member of a contracted out scheme at that point then your starting amount was the higher of

(NIQY/30 x £119.30) + SERPS/S2P

NIQY/35 x £155.65

If you are saying that you had reached full NSP by 2016, how can you claim that you gained zero benefit from your SERPs/S2P?

Your starting amount has been index linked under the triple lock and will continue to be index linked in some shape or form up to

 and beyond SPA.

If you have any "protected payment" it will have been indexed by CPI and will continue to be index linked under CPI once in payment.

Clearly during your years of employment you built up a fair sized DC  pension, receiving tax relief along the way.

That pension has been transferred into a public service pension which will be fully indexed when you come to claim your benefits.

All in all, you have received a good deal from the state?

So again:
(NIQY/30 x £119.30) + SERPS/S2P

Gave me my full entitlement to the new state pension (less about £2)

Thus all further NI paid since then has not increased my state pension

Had I contracted out of serps/S2p then I would no doubt have been several years short of the full new state pension and thus the NI have have paid since then would have increased my state pension entitlement and additionally I would have had a contracted out pot.  Thus by not contracting out I have effectively lost the value of the serps/s2p contributions.

Not too hard to follow?

xylophone

Thus by not contracting out I have effectively lost the value of the serps/s2p contributions.

Once again, you haven't lost anything.

You are now in a position to receive the full NSP.

You will receive all that you "paid for".

Those who contracted out will need to "buy out" their COPE by contributions, voluntary or otherwise.

Once they have reached full NSP, they too will have to continue to pay NI up to SPA if working and earning the relevant amount.

If they have gained, it does not mean that you have lost.

Are you familiar with the parable of the workers in the vineyard?

Once again, you will receive what you have paid for.

Those who contracted out and reached SPA shortly after the introduction of NSP may well not be in a position to improve their starting amount but they too will receive what they paid for.

And NI pays for more than just the state pension.

garden_girl_2

It's good to put up the state pension, but my hubby went into the tax bracket this year, so no better off really, he has a small private pension. They need to increase the tax free pay as well, as will be no better off again. He has already paid tax and now I think pensioners should be exempt, except, when you have a Massive private pension. It's just not fair. Worked hard all our lives and now need a bit of enjoyment in our life, not keep worrying if we can pay the bills, o and we don't live an extravagant life!!

NoMore

How are you no better off ? 80% of something is better than nothing.

Linton

Pat38493 said:

Eldi_Dos said:

Pat38493 said:
   Most state pensioners are not working anymore and don’t have to make any continuing contribution to national productivity 

One of the reasons you are able to post is there is more than one state pensioner who helped build the information superhighway and the infrastructure that allows us all to communicate, greatly helping national productivity. I do not think it is unfair to expect to share in the wealth being created rather than be treated as a pariah when they reach SPA.
Many of us state pensioners still pay taxes and we vote, so politicians take note of that.

I agree, but i don't really see having a cast iron protection against inflation as being treated like a pariah.  In fact, many working people don't even get pay rises that come anything close to matching inflation and / or have to go on strike just to end up with half of the rate of inflation.  I've even seen stories of people in NHS retiring because they know they will automatically get inflationary pay rises from then on.

Edit - also, if people are ending up with a discernably worse lifestyle because earnings rises outstripped inflation rises for prolonged periods, to me this indicates that the way we measure inflation is flawed - theoretically inflation should  include all the things that people typically do to live a reasonable life.

1) Many people do get pay rises matching or exceeding inflation over their lifetime simply by changing jobs. 

2) What is consided a reasonable life is driven by average wages.  Would you really want to have the standard of living of OAPs 50 or 100 years ago even if your income matched theirs increased by CPI?  That is what your proposal would imply.

Consider a reference in the national archives headlined 

Earnings have risen by 62% (after adjusting for inflation) since 1986