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

MattMattMattUK

Yes it should be scrapped

Qyburn said:

Reading the comments you'd think the poll would be overwhelmingly "Scrap it". But in fact the majority voted "Keep". I guess it's a case of the strident minority.

I would suggest that it comes down to those that want to keep it largely want to do for selfish reasons and are unable to economically and socially justify the triple lock, so are less likely to engage in debate. 

GibbsRule_No3.

No it should be kept

nigelbb said:

BikingBud said:

Alex444 said:

Lowest pension in Europe and going to highest retiral age, got to be some perks,  it will soon be getting taxed as well!🤬

Pensions should increase but not all people should be getting a state pension.

It's already effectively means tested by taxation.

Happy if the people who don’t get it are the ones who don’t work to pay into it. Otherwise, at the end of a working life the choice should be, you can have what you paid in given back in exchange for the SP. I will then live on that lump sum (hopefully it will last until I die but that is the risk) and a private pension pot that I’ve paid into, paying less tax than I will if I get an SP payment. I am by no means wealthy but due to working for 53 + years I still get taxed on my pensions and monthly pay packet. 

westv

No it should be kept

I do think there's something a little unpleasant about basic food stuff being taxed.

coastline

They'll do what they want on the day whoever's in power. Tory or Labour will backtrack if necessary with some excuse. 
Why is it all unsustainable ? This gets trotted out all the time . Links below suggest it's less than 20 % of government spending . £10k isn't that much at the end of the day. Many are more concerned about the personal allowance not being upgraded . Imagine tax on the basic pension.

UK Public Spending - Numbers Charts Analysis History

UK Pensions Spending - Analysis, Charts 2015_2025Charts Tables (ukpublicspending.co.uk)

Grumpy_chap

coastline said:

Why is it all unsustainable ?

The current Triple Lock ensures that SP increases relative to earnings and increases as a proportion of GDP, when taken over an economic cycle rather than individual year assessment.
If that is taken to the extreme, the SP would exceed GDP, which would clearly be unsustainable.
Sometime between now and exceeding GDP, the Triple Lock would have to end.
(We could accept the whole population living in poverty apart from State Pensioners, I suppose...)

In fact, we have had two scenarios where the vulnerability of the Triple Lock has been demonstrated in recent times:
 - During COVID, earnings fell because a large chunk of the workforce was not working.  SP still increased.
 - Last year, SP rose by >10% (inflation rise greater than earnings rise) and this year SP will rise by 8.5% (earnings rise greater than inflation, showing typical lag).  So, SP received an increase across two years of 19% which is far higher than employed people enjoyed.

norsefox

Yes it should be scrapped

The problem is 'or 2.5%'.  The logical extension is that if you extend it long enough, the state pension will be more than entirety of GDP.

If there's an intention (in a similar vein to National Living Wage to hit 66% of median earnings) to hit a certain target, then it should have a temporary uplift for a period until that target is achieved.  At that point it can revert to its underlying maintenance calculations such as average earnings or CPI.

Edit: as noted above, there are many other problems, but the and/or, particularly with a 2.5% backstop is obviously a mathematical problem that cannot be wished or ignored away.

westv

No it should be kept

Grumpy_chap said:

 - Last year, SP rose by >10% (inflation rise greater than earnings rise) and this year SP will rise by 8.5% (earnings rise greater than inflation, showing typical lag).  So, SP received an increase across two years of 19% which is far higher than employed people enjoyed.

But what about the numbers though? What figures were involved after tax for SP and average earnings?

The_Green_Hornet

No it should be kept

After 13 years of the triple lock, the State Pension, as a percentage of earnings, is still below the level it was in the 1970s.


State Pension triple lock - House of Commons Library (parliament.uk)
 
Whether the State Pension should be linked to earnings or inflation (or both) is open to debate but without fundamental reform of how it is funded either the State Pension Age is going to have to increase or it will end up being means tested.

Either way, those who want to scrap the triple lock will end up being just as annoyed as they are now.

Exodi

Yes it should be scrapped

norsefox said:

The problem is 'or 2.5%'.

I don't think it is 'the' problem, though it is certainly a problem.

Even the double lock of CPI or average earnings can be problematic, as I and others have pointed out, earnings lagging inflation can cause the SP to double dip.

Linking my previous comment on it to save re-typing:

Exodi said:

Just look at the last couple of years. Inflation surges in 2022-2023, pensioners enjoy a 10.1% increase on account of inflation. Workers wages then increase in response to that inflation in 2023-2024 and pensioners scoop in again and enjoy a 8.5% increase this time on account of worker pay increases; an obvious double dip (and that's not even mentioning that this was calculated during the month many public sector workers received one off bonuses, meaning the earnings figure was higher than it should have been. But even the idea of removing the bonuses from the equation and increasing pensions by a meager 7.8% would cause uproar among pensioners which politicians couldn't be bothered to deal with).

I get that theoretically the double lock exists to ensure pensioners also get to reap the benefits of new UK prosperity (which tracking just CPI would not), but did you receive a cumulative 19.5% increase over the last two years at work? I certainly didn't.

coastline said:

Why is it all unsustainable ? This gets trotted out all the time

If you see this get 'trotted out all the time', then have you considered even a single time what is being said?

You don't need a masters in economics to work out why the triple lock is unsustainable.

Grumpy_chap

Exodi said:

Even the double lock of CPI or average earnings can be problematic,

Another factor that comes into play here, with regard to the earnings element is availability of work for the working age group.

AIUI (and I may be incorrect, so happy to be advised), the earnings metric uses median annual earnings but does not take account of people with no earnings because of redundancy, general economic downturn, illness etc.  Earnings can be taken away through events.  You can't be made redundant from Retirement, or too ill to continue being Retired.

The_Green_Hornet said:

After 13 years of the triple lock, the State Pension, as a percentage of earnings, is still below the level it was in the 1970s.

That chart shows the New State Pension is at the same level - only one year looks to be higher in history.
That chart is incomplete as it ignores the Additional State Pension which adds to the Basic State Pension.
That chart is incomplete - what will the percentage be from this April's uplift?


Finally, don't forget that those above SP age who chose to continue working also get the benefit of no NI contributions which is quite a significant benefit.