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

nigelbb

Exodi said:

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.

No, but then nobody is legally earning just £200/week. State pension is half what somebody earns on National Minimum Wage.

MattMattMattUK

Yes it should be scrapped

BlackKnightMonty said:

MattMattMattUK said:

BlackKnightMonty said:

Hoenir said:

BlackKnightMonty said:

coastline said:

booneruk said:

coastline said:

Beats me why posters want something stopping when it benefits everyone. 

Spending that's on an unsustainable trend certainly does not benefit everyone. Pensions and health spending are going to be huge problems in the future.

Read between the lines the triple lock isn't a permanent fixture. When the government decide it's ran it's course they'll create another formula etc etc. At best basic SP is £11K and remember there's an old and a new pension so most get different payments at the moment. 

Why not develop something sustainable instead of keeping on raising the pension age squeezing future generations harder and harder?

People are generally living longer and longer. Thereby requiring ever increasing costly levels of healthcare provision.

Not anymore.

There is a minor anomaly caused by Covid slightly increasing the death rate, however even with the expected impact of lifestyle diseases the long term trend will likely to continue upwards, though at a reduced pace. The biggest issues will however come from the huge rise in obesity and the strain that it is putting on the health service, the life expectancy will continue rising but the number of healthy years people have is already starting to decline, increases in T2 diabetes, circulatory conditions and joint damage are putting more and more strain on the health service and doing so earlier in people's lives than ever before. That, combined with diseases of aging such as dementia and cancer create a particularly expensive problem that we will have to solve.

The fall in life expectancy started before Covid.

https://www.ons.gov.uk/generator?uri=/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2020to2022/b8697a35&format=xls

Those are multi-year figures, they only go negative in the 2018-2020 (-0.34) figure, which includes an element of Covid, they then stay negative in the 2019-2021 (-0.24) and 2020-2022 (-0.11) two year windows (with obvious overlap), until they pass outside of the Covid period, so we are getting 2023-2025 data they will still include that increase death rate. There are some issues with an unfortunate rise in infant mortality amongst some communities that have impacted overall life expectancy. What it appears happened with Covid is that we brought forward a small number of deaths and the predictions are that we will see a rebound over the next few years, but that overall we will see life expectancy plateau over the next decade, largely due to obesity driven health issues. 

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/datasets/healthstatelifeexpectancyallagesuk

There is another really good dataset that I cannot find at the moment, but it was hugely comprehensive and breaks it down demographically, healthy life expectancy changes over time, regional, income based, life expectancy at each point in life (eg. life expectancy at birth will be X, but life expectancy at 60 will be X+). I will have a bit of a hunt later and see if I can find where it is as I thought I had it bookmarked but cannot locate it. 

nigelbb

coastline said:

Grumpy_chap said:

coastline said:

Never said they would honour it . Read back . It's under 20% of government spend , those are the figures. . It's been upgraded to help people in retirement survive using their own money. The second pension has also been encouraged to supplement this. DB pensions are fading fast so DC pots have taken their place. That doesn't mean everyone will be well off ? Maybe reduces the benefits paid out . All swings and roundabouts . Those in rental accommodation are rising fast together with BTL we are talking 30% plus of the housing stock. Millions. Plenty links out there to confirm this. Unfortunately a second pension won't help them as it'll be swallowed up in rent. Many might still be claiming benefits ? There's no real policy from any party just the same old tinkering . That's all they'll do play around with increases on the day.  

Triple lock was introduced 2011 and if it's linked to GDP then there's hardly been any change either side of 5%. Blue on the chart. Maybe a blip during covid but that was an extreme case. 

[img]https://i.postimg.cc/PxWZ6WkL/ukgs-chart-Sp42t.png[/img]

ukgs_chartSp42t.png (350×230) (ukpublicspending.co.uk)

Throw some average salaries to this but as I said it's been upgraded recently for a genuine reason . There again the retirement age continues to go up. Somebody mentioned perks earlier well the buss pass is now 66 yo from 60 yo.

Basic State Pension (Rate) - Royal London for advisers

That is a very difficult post to read.

20% of Government spend is £1 in every £5.  Quite a high proportion for any single line item.

The chart you shared for SP costs versus GDP shows 4% up to 2010 and then risen to 6% before falling back to 5%.  Still an increase and, eventually, that increase against GDP will become unsustainable - a point that has been expressed by several posters and you have refused to acknowledge.

I ain't refusing to acknowledge the triple lock . It's there for a purpose which can be altered anytime they like and it will be. Beats me why posters want something stopping when it benefits everyone. The next thread will be scrapping the 25% lump sum in the private pension or reducing the contribution perks to basic rate income tax. Just as well Mr JH isn't logged in on here at times. At the end of the day it's in one hand and out of the other. Income tax was 38% years ago and now 20% . VAT was 5% and now 20% . 

Standard rate of VAT has never been 5%. It was 10% when introduced & reduced to 8% for a few years but there was also  a higher rate

BlackKnightMonty

Yes it should be scrapped

MattMattMattUK said:

BlackKnightMonty said:

MattMattMattUK said:

BlackKnightMonty said:

Hoenir said:

BlackKnightMonty said:

coastline said:

booneruk said:

coastline said:

Beats me why posters want something stopping when it benefits everyone. 

Spending that's on an unsustainable trend certainly does not benefit everyone. Pensions and health spending are going to be huge problems in the future.

Read between the lines the triple lock isn't a permanent fixture. When the government decide it's ran it's course they'll create another formula etc etc. At best basic SP is £11K and remember there's an old and a new pension so most get different payments at the moment. 

Why not develop something sustainable instead of keeping on raising the pension age squeezing future generations harder and harder?

People are generally living longer and longer. Thereby requiring ever increasing costly levels of healthcare provision.

Not anymore.

There is a minor anomaly caused by Covid slightly increasing the death rate, however even with the expected impact of lifestyle diseases the long term trend will likely to continue upwards, though at a reduced pace. The biggest issues will however come from the huge rise in obesity and the strain that it is putting on the health service, the life expectancy will continue rising but the number of healthy years people have is already starting to decline, increases in T2 diabetes, circulatory conditions and joint damage are putting more and more strain on the health service and doing so earlier in people's lives than ever before. That, combined with diseases of aging such as dementia and cancer create a particularly expensive problem that we will have to solve.

The fall in life expectancy started before Covid.

https://www.ons.gov.uk/generator?uri=/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2020to2022/b8697a35&format=xls

Those are multi-year figures, they only go negative in the 2018-2020 (-0.34) figure, which includes an element of Covid, they then stay negative in the 2019-2021 (-0.24) and 2020-2022 (-0.11) two year windows (with obvious overlap), until they pass outside of the Covid period, so we are getting 2023-2025 data they will still include that increase death rate. There are some issues with an unfortunate rise in infant mortality amongst some communities that have impacted overall life expectancy. What it appears happened with Covid is that we brought forward a small number of deaths and the predictions are that we will see a rebound over the next few years, but that overall we will see life expectancy plateau over the next decade, largely due to obesity driven health issues. 

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/datasets/healthstatelifeexpectancyallagesuk

There is another really good dataset that I cannot find at the moment, but it was hugely comprehensive and breaks it down demographically, healthy life expectancy changes over time, regional, income based, life expectancy at each point in life (eg. life expectancy at birth will be X, but life expectancy at 60 will be X+). I will have a bit of a hunt later and see if I can find where it is as I thought I had it bookmarked but cannot locate it. 

2018-2020 is pre covid.

BlackKnightMonty

Yes it should be scrapped

nigelbb said:

coastline said:

Grumpy_chap said:

coastline said:

Never said they would honour it . Read back . It's under 20% of government spend , those are the figures. . It's been upgraded to help people in retirement survive using their own money. The second pension has also been encouraged to supplement this. DB pensions are fading fast so DC pots have taken their place. That doesn't mean everyone will be well off ? Maybe reduces the benefits paid out . All swings and roundabouts . Those in rental accommodation are rising fast together with BTL we are talking 30% plus of the housing stock. Millions. Plenty links out there to confirm this. Unfortunately a second pension won't help them as it'll be swallowed up in rent. Many might still be claiming benefits ? There's no real policy from any party just the same old tinkering . That's all they'll do play around with increases on the day.  

Triple lock was introduced 2011 and if it's linked to GDP then there's hardly been any change either side of 5%. Blue on the chart. Maybe a blip during covid but that was an extreme case. 

[img]https://i.postimg.cc/PxWZ6WkL/ukgs-chart-Sp42t.png[/img]

ukgs_chartSp42t.png (350×230) (ukpublicspending.co.uk)

Throw some average salaries to this but as I said it's been upgraded recently for a genuine reason . There again the retirement age continues to go up. Somebody mentioned perks earlier well the buss pass is now 66 yo from 60 yo.

Basic State Pension (Rate) - Royal London for advisers

That is a very difficult post to read.

20% of Government spend is £1 in every £5.  Quite a high proportion for any single line item.

The chart you shared for SP costs versus GDP shows 4% up to 2010 and then risen to 6% before falling back to 5%.  Still an increase and, eventually, that increase against GDP will become unsustainable - a point that has been expressed by several posters and you have refused to acknowledge.

I ain't refusing to acknowledge the triple lock . It's there for a purpose which can be altered anytime they like and it will be. Beats me why posters want something stopping when it benefits everyone. The next thread will be scrapping the 25% lump sum in the private pension or reducing the contribution perks to basic rate income tax. Just as well Mr JH isn't logged in on here at times. At the end of the day it's in one hand and out of the other. Income tax was 38% years ago and now 20% . VAT was 5% and now 20% . 

Standard rate of VAT has never been 5%. It was 10% when introduced & reduced to 8% for a few years but there was also  a higher rate

Looks like pre ‘92 it was absolute gravy!

westv

No it should be kept

BlackKnightMonty said:

QrizB said:

BlackKnightMonty said:

Young people are likely to face a means tested SP

Citation required.

It's an idea that's commonly floated on this board, bit no-one has come up with any evidence that it's a proposal.

I didn’t say it was a proposal. I said they are likely to. That’s my opinion based on the frequency it comes up in the wider pension debate.

 https://amp.theguardian.com/commentisfree/2023/jan/26/britain-rich-pensioners-state-pension-age-68-poor

Given other countries (like Australia) have a means tested SP already, it seems likely to happen here too.

https://www.dss.gov.au/seniors/benefits-payments/age-pension#:~:text=The%20Age%20Pension%20is%20designed,Australian%20price%20and%20wage%20increases.

The 25% tax free sum frequently comes up too but that's also no basis to assume anything will happen to it.

BlackKnightMonty

Yes it should be scrapped

westv said:

BlackKnightMonty said:

QrizB said:

BlackKnightMonty said:

Young people are likely to face a means tested SP

Citation required.

It's an idea that's commonly floated on this board, bit no-one has come up with any evidence that it's a proposal.

I didn’t say it was a proposal. I said they are likely to. That’s my opinion based on the frequency it comes up in the wider pension debate.

 https://amp.theguardian.com/commentisfree/2023/jan/26/britain-rich-pensioners-state-pension-age-68-poor

Given other countries (like Australia) have a means tested SP already, it seems likely to happen here too.

https://www.dss.gov.au/seniors/benefits-payments/age-pension#:~:text=The%20Age%20Pension%20is%20designed,Australian%20price%20and%20wage%20increases.

The 25% tax free sum frequently comes up too but that's also no basis to assume anything will happen to it.

They could quite easily limit the tax free allowance, or taper it off. Just like they do with the income tax allowance and earnings over £100k. (A 60% tax rate + 2% NI)

westv

No it should be kept

BlackKnightMonty said:

westv said:

BlackKnightMonty said:

QrizB said:

BlackKnightMonty said:

Young people are likely to face a means tested SP

Citation required.

It's an idea that's commonly floated on this board, bit no-one has come up with any evidence that it's a proposal.

I didn’t say it was a proposal. I said they are likely to. That’s my opinion based on the frequency it comes up in the wider pension debate.

 https://amp.theguardian.com/commentisfree/2023/jan/26/britain-rich-pensioners-state-pension-age-68-poor

Given other countries (like Australia) have a means tested SP already, it seems likely to happen here too.

https://www.dss.gov.au/seniors/benefits-payments/age-pension#:~:text=The%20Age%20Pension%20is%20designed,Australian%20price%20and%20wage%20increases.

The 25% tax free sum frequently comes up too but that's also no basis to assume anything will happen to it.

They could quite easily limit the tax free allowance, or taper it off. Just like they do with the income tax allowance and earnings over £100k. (A 60% tax rate + 2% NI)

But we are talking about probability, not our guesses.

Andy_L

Yes it should be scrapped

hugheskevi said:

Qyburn said:

BlackKnightMonty said:

Chart added to further the discussion.

The UK population is changing in both size and structure. By 2050, it is projected that one in four people in the UK will be aged 65 years and over – an increase from almost one in five in 2018. 

Thats more of an argument for increasing State Pension age, as opposed to reducing the amount paid.

Speaking of which in 2050 the SP age will 68, so the comparison should really be the proportion of people 68 or over in 2050 vs proportion 65 or over in 2018.

Increasing State Pension age has a very different impact on people depending on where they live. Some areas have much lower life expectancy that others. So managing expenditure by increasing State Pension age results in redistributing the State Pension away from areas with low life expectancy and toward those areas with good life expectancy. 

coastline said:

Triple lock was introduced 2011 and if it's linked to GDP then there's hardly been any change either side of 5%. Blue on the chart. Maybe a blip during covid but that was an extreme case. 

Remember the impact of increasing State Pension age. During this period State Pension rose from 60/65 to 66 for all. You see similar flat-lining or even reduction of spend for the years SPA is scheduled to increase (2026-28 and 2044-46). But in all other years expenditure steadily increases.

and, if you don't want the elderly to live on other benefits instead, requires employers to employ those in the 65-71 range

BlackKnightMonty

Yes it should be scrapped

westv said:

BlackKnightMonty said:

westv said:

BlackKnightMonty said:

QrizB said:

BlackKnightMonty said:

Young people are likely to face a means tested SP

Citation required.

It's an idea that's commonly floated on this board, bit no-one has come up with any evidence that it's a proposal.

I didn’t say it was a proposal. I said they are likely to. That’s my opinion based on the frequency it comes up in the wider pension debate.

 https://amp.theguardian.com/commentisfree/2023/jan/26/britain-rich-pensioners-state-pension-age-68-poor

Given other countries (like Australia) have a means tested SP already, it seems likely to happen here too.

https://www.dss.gov.au/seniors/benefits-payments/age-pension#:~:text=The%20Age%20Pension%20is%20designed,Australian%20price%20and%20wage%20increases.

The 25% tax free sum frequently comes up too but that's also no basis to assume anything will happen to it.

They could quite easily limit the tax free allowance, or taper it off. Just like they do with the income tax allowance and earnings over £100k. (A 60% tax rate + 2% NI)

But we are talking about probability, not our guesses.

Given the taxation approach for high earners - looks quite likely to me.