Should the triple lock be scrapped in the 6 March Budget?

tghe-retford

BlackKnightMonty said:

Linton said:

BlackKnightMonty said:

artyboy said:

Silvertabby said:

sgx2000 said:

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Over 40% of UK adults don't pay any income tax.  Not one penny.

If we didn't have 'the rich' ........... 

but for mass affluent families on a few hundred thou' a year, it can feel like a pretty hostile place sometimes, given their relative contribution to society.

So true! Any conversation with average earners descends into “pay more tax!” despite the fact you already are paying double their entire wage in tax each year!

BlackKnightMonty said:

MarzipanCrumble said:

I would far rather pay higher taxation and have public services that work. 

I already pay over £50k a year in income tax and NI Alone. And services/benefits received nearly zero. I’m not sure if I want to pay anymore if I’m honest.

I mean, I’d like for that amount of tax to not have as many pot holes to avoid, or crumbling schools to dodge, or A&E waiting lists measured in hours rather than days.

 Doesn't that say more about the inequities in income than the inequities in tax?  If the income was more evenly spread then so would be the spread of contributions.

For sure incomes have stagnated. But there are a lot of micky mouse jobs being done. (I’m an engineer who designs/invents/builds things).

I don't know how you would deal with "Mickey Mouse jobs" unless you go down the road of employment committees who determined what jobs were to be done by who and how much people were paid. Just because its low paid doesn't mean its a pointless job. One example, I'm pretty sure having your bins being emptied and not having rubbish on the street being a biological and environmental hazard is essential!

The other problem is that people are looking at this in relation to wage rise percentages alone but it disregards what companies are doing to cut labour costs. Lower hours, asking employees to pay contributions such as parking costs and automation. The problem with the last one is that a machine, robot or computer does not need a wage, pension, time off, breaks, bonuses, to go on strike or workers rights. The problem for Government and companies is that you can't cut the number of hours someone is retired, expect to recoup costs from the retired or automate them. And the pension bill is ever increasing at a time where we have a continuing decrease in the working population demographics.

BlackKnightMonty

Yes it should be scrapped

westv said:

LightFlare said:

I voted no on the proviso that all public sector workers get the same annual uplift

If pensioners and unemployed/sick need or deserve the extra to exist, so does everyone else. As it is, its just the everyone else that suffers economically

Costs dont just rise for a select few 

Otherwise, scrap the triple lock and give them the same rise that public sector workers receive (and at the same time of year - usually Sept/Oct for April uplifts). After all, its all coming from the same place and funded by the same people.

But, say, 2% of £11k is a lot less than 2%: of, say, £30k

Higher percentages for low paid and lower percentages for higher paid is something I’ve been seeing more of recently.

On the surface it sounds nice. But what happens over time is that the nurses salary gets closer and closer to the doctors as wages compress. That’s not a good thing to happen at all.

westv

No it should be kept

BlackKnightMonty said:

westv said:

LightFlare said:

I voted no on the proviso that all public sector workers get the same annual uplift

If pensioners and unemployed/sick need or deserve the extra to exist, so does everyone else. As it is, its just the everyone else that suffers economically

Costs dont just rise for a select few 

Otherwise, scrap the triple lock and give them the same rise that public sector workers receive (and at the same time of year - usually Sept/Oct for April uplifts). After all, its all coming from the same place and funded by the same people.

But, say, 2% of £11k is a lot less than 2%: of, say, £30k

Higher percentages for low paid and lower percentages for higher paid is something I’ve been seeing more of recently.

On the surface it sounds nice. But what happens over time is that the nurses salary gets closer and closer to the doctors as wages compress. That’s not a good thing to happen at all.

It isn't a comparison between wages but one between the SP and wages.

stripling

No it should be kept

westv said:

Zero hours contract aren't a new thing. It was called casual labour previously.

Not the same at all. That's a completely untrue.

There were laws limiting how long casual labour could endure there are none for zero hours contracts. Many are on zero hours contracts for years. 

Zero hours force you to accept the terms and be available constantly for long periods  - like years. Amazon, for example but you often have no idea of your hours or guarantee of work. Plus Universal Credit forces claimants to accept Zero hours contracts.

Many jobs are only available on zero hours contracts - the list is long including not only Amazon but Deliveroo, most of the delivery companies, the platform-based jobs, a lot of warehouse and shops work, carers, a shocking amount of jobs. The workers have none of the protection offered by labour laws. 

However, casual labour you really could limit yourself to one very short term job or a few days and move on - fruit picking for example (I did spuds). You weren't forced onto these types of jobs by the unemployment benefit rules either. Employers could be prosecuted for keeping staff on the books as 'casual workers'. 

MattMattMattUK

Yes it should be scrapped

MK62 said:

MattMattMattUK said:

The VAT claim has been debunked many times, as "the poor" spend most of their income on rent and food they generally spend very little on goods which attract VAT. Yes, if one takes a headline figure it can appear that they do spend more on VAT, but when one delves into the detail it becomes very clear that there is somewhat of a statistical anomaly created by the wealthy with zero income in one year living off existing funds (loss on trading etc.).

Not according to the ONS.......in 2022 (latest available report) the poorest quintile paid 28.3% of their income on indirect taxes (of which VAT is the biggest component), whereas the richest quintile paid 9%

The richest fifth of people paid 1.9 times more in indirect taxes (£9,000) than the poorest fifth (£4,800) in FYE 2022. However, richer households pay a smaller proportion of their disposable income on indirect taxes (9.0%) than the poorest fifth (28.3%). As such, indirect taxes increased income inequality by 3.5 percentage points as measured by the Gini coefficient.

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2022

The ONS article is based on raw income data with no deeper analysis. The issue is that some hugely wealthy people can have low incomes or even make losses (which they carry over for tax purposes) in any one year, but because they still have large reserves their spending is not impacted, they have an income of £0, but spend hundreds of thousands or more on goods which attract VAT. Someone who crystallises losses in one year but buys a new helicopter or restocks their wine cellar could easily be in that situation, they fall into the lowest income quintile because they have zero or negative income for one year, but they continue spending hundreds or thousands or even millions because they have vast reserves.

As an example the raw data shows that the lowest quintile spend 50% of their income on VAT, however that would require them to spend 50% of their income on goods which attract full rate VAT, yet we know from spending data the poorest will be spending more than half of their income on rent. Almost all in that group are in receipt of UC or pension credit with housing elements, where the housing element which covers their rent makes up around two thirds, that means there is not enough required income to reach the 50% of income expended on full rate VAT goods, that is even before one accounts for food, energy and children's clothes. 

So yes, if one looks simplistically at the raw data it appears to be the case, but it is actually an anomaly caused by not accounting for the reality of what is going on and requires a deeper look to get a true picture of the situation. 

stripling

No it should be kept

MattMattMattUK said:

MK62 said:

MattMattMattUK said:

The VAT claim has been debunked many times, as "the poor" spend most of their income on rent and food they generally spend very little on goods which attract VAT. Yes, if one takes a headline figure it can appear that they do spend more on VAT, but when one delves into the detail it becomes very clear that there is somewhat of a statistical anomaly created by the wealthy with zero income in one year living off existing funds (loss on trading etc.).

Not according to the ONS.......in 2022 (latest available report) the poorest quintile paid 28.3% of their income on indirect taxes (of which VAT is the biggest component), whereas the richest quintile paid 9%

The richest fifth of people paid 1.9 times more in indirect taxes (£9,000) than the poorest fifth (£4,800) in FYE 2022. However, richer households pay a smaller proportion of their disposable income on indirect taxes (9.0%) than the poorest fifth (28.3%). As such, indirect taxes increased income inequality by 3.5 percentage points as measured by the Gini coefficient.

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2022

The ONS article is based on raw income data with no deeper analysis. The issue is that some hugely wealthy people can have low incomes or even make losses (which they carry over for tax purposes) in any one year, but because they still have large reserves their spending is not impacted, they have an income of £0, but spend hundreds of thousands or more on goods which attract VAT. Someone who crystallises losses in one year but buys a new helicopter or restocks their wine cellar could easily be in that situation, they fall into the lowest income quintile because they have zero or negative income for one year, but they continue spending hundreds or thousands or even millions because they have vast reserves.

As an example the raw data shows that the lowest quintile spend 50% of their income on VAT, however that would require them to spend 50% of their income on goods which attract full rate VAT, yet we know from spending data the poorest will be spending more than half of their income on rent. Almost all in that group are in receipt of UC or pension credit with housing elements, where the housing element which covers their rent makes up around two thirds, that means there is not enough required income to reach the 50% of income expended on full rate VAT goods, that is even before one accounts for food, energy and children's clothes. 

So yes, if one looks simplistically at the raw data it appears to be the case, but it is actually an anomaly caused by not accounting for the reality of what is going on and requires a deeper look to get a true picture of the situation. 

Me and @MattMattMattUK are on opposite sides of this debate but he is absolutely correct in his comments about the problems of 'raw data' and simplistic analysis.
The rent example for the lowest quintile is a good example. Although I think the housing element of UC/PC is actually less than 2/3. (It's really unrelated to the realities of current rent - particularly as social housing has all but disappeared.)
At the other end, there's a reason why the wealthiest employ 'tax specialists' and buy certain things (eg forests were popular for tax purposes) and use offshore trusts for example. 

Grumpy_chap

stripling said:

However, casual labour you really could limit yourself to one very short term job or a few days and move on - fruit picking for example (I did spuds). You weren't forced onto these types of jobs by the unemployment benefit rules either. 

Way back when, you were required to take casual labour as part of claiming Unemployment Benefit.
The first time I needed to sign on, the Job Centre staff asked if I was willing and available to work.  I said "yes" (obviously), so the JC staff made a phone call and committed me to doing work the next day and simply told me to report to X location at 8am.  I duly turned up and did a day delivering Yellow Pages.

MattMattMattUK said:

As an example the raw data shows that the lowest quintile spend 50% of their income on VAT, however that would require them to spend 50% of their income on goods which attract full rate VAT, 

That must be an incorrect analysis.
If an individual spends 50% of their income (nett income I assume) on VAT and the VAT rate is 20% so the VAT is 16.7% of total spend.  The total spend has to be 50% / 0.167 = 300% of income.  Even accounting for the odd helicopter and wine cellar here and there, that can't be correct...

BlackKnightMonty

Yes it should be scrapped

westv said:

BlackKnightMonty said:

westv said:

LightFlare said:

I voted no on the proviso that all public sector workers get the same annual uplift

If pensioners and unemployed/sick need or deserve the extra to exist, so does everyone else. As it is, its just the everyone else that suffers economically

Costs dont just rise for a select few 

Otherwise, scrap the triple lock and give them the same rise that public sector workers receive (and at the same time of year - usually Sept/Oct for April uplifts). After all, its all coming from the same place and funded by the same people.

But, say, 2% of £11k is a lot less than 2%: of, say, £30k

Higher percentages for low paid and lower percentages for higher paid is something I’ve been seeing more of recently.

On the surface it sounds nice. But what happens over time is that the nurses salary gets closer and closer to the doctors as wages compress. That’s not a good thing to happen at all.

It isn't a comparison between wages but one between the SP and wages.

It’s the same principle.

Arguably this compression is what the triple is doing. 

1813

I haven’t voted but this is the way I see it 

I have a civil service pension and an nhs pension and I think that increases should be honoured and not tampered with as you have paid into this scheme. The State Pension is a bit trickier. However, the concerns are that the plans especially in the db scheme are not sustainable as of course is the state pension. 

Yet we have paid into these schemes and worked hard so it would be a blow to see the increases stop otherwise it could dissuade people from joining schemes. Also it’d be a blow of the state pension disappeared completely. 

So these are worries that I have about the pensions. 

As for the triple lock remaining, maybe pensions go up at a rate that can still meet living costs. 

Also in regards to the lump sum as a side note and I appreciate I am going off track, that you should be able to take all of your pension as a lump sum and allowed to transfer your pension as they are worth a lot of money. There needs to be more options available especially in times of hardship as we are all in now. We’ve earns that benefit at the end of the day. 

Soon though if things continue as they are, nobody will be able to retire. 

MK62

MattMattMattUK said:

MK62 said:

MattMattMattUK said:

The VAT claim has been debunked many times, as "the poor" spend most of their income on rent and food they generally spend very little on goods which attract VAT. Yes, if one takes a headline figure it can appear that they do spend more on VAT, but when one delves into the detail it becomes very clear that there is somewhat of a statistical anomaly created by the wealthy with zero income in one year living off existing funds (loss on trading etc.).

Not according to the ONS.......in 2022 (latest available report) the poorest quintile paid 28.3% of their income on indirect taxes (of which VAT is the biggest component), whereas the richest quintile paid 9%

The richest fifth of people paid 1.9 times more in indirect taxes (£9,000) than the poorest fifth (£4,800) in FYE 2022. However, richer households pay a smaller proportion of their disposable income on indirect taxes (9.0%) than the poorest fifth (28.3%). As such, indirect taxes increased income inequality by 3.5 percentage points as measured by the Gini coefficient.

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2022

The ONS article is based on raw income data with no deeper analysis. The issue is that some hugely wealthy people can have low incomes or even make losses (which they carry over for tax purposes) in any one year, but because they still have large reserves their spending is not impacted, they have an income of £0, but spend hundreds of thousands or more on goods which attract VAT. Someone who crystallises losses in one year but buys a new helicopter or restocks their wine cellar could easily be in that situation, they fall into the lowest income quintile because they have zero or negative income for one year, but they continue spending hundreds or thousands or even millions because they have vast reserves.

As an example the raw data shows that the lowest quintile spend 50% of their income on VAT, however that would require them to spend 50% of their income on goods which attract full rate VAT, yet we know from spending data the poorest will be spending more than half of their income on rent. Almost all in that group are in receipt of UC or pension credit with housing elements, where the housing element which covers their rent makes up around two thirds, that means there is not enough required income to reach the 50% of income expended on full rate VAT goods, that is even before one accounts for food, energy and children's clothes. 

So yes, if one looks simplistically at the raw data it appears to be the case, but it is actually an anomaly caused by not accounting for the reality of what is going on and requires a deeper look to get a true picture of the situation. 

The ONS report is based on averages.....and in all averages there are exceptions to that average......but on the whole, the data shows what it shows - and that is, the average lowest quintile household spends >3x more of their disposable income on indirect taxes compared to the average highest quintile household. That doesn't mean that every household will be like that though....it just means that "on average" that's the case.

You appear to be suggesting that the ONS report is flawed because the lowest income quintile must include millionaires who spend "hundreds or thousands or even millions" but who simultaneously have little or no annual income.

We'd better hope that the ONS data paints a reasonable picture of reality, as the data it's based on is used by government to set policy.

As to "the raw data shows that the lowest quintile spend 50% of their income on VAT", you should really give a link to the raw data which shows this, as it appears to be completely at odds with the ONS report, which shows the lowest quintile spending 12.4% - on average - of their disposable income on VAT.