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

Malthusian

BlackKnightMonty said:

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)

The tax free cash allowance is already limited to £268,275 in a person's lifetime.

Labour have suggested they might bring back the Lifetime Allowance and increase it in line with inflation, which would mean the tax free cash allowance would be increased unless their version of the LTA works differently to the old one.

BlackKnightMonty

Yes it should be scrapped

Malthusian said:

BlackKnightMonty said:

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)

The tax free cash allowance is already limited to £268,275 in a person's lifetime.

Labour have suggested they might bring back the Lifetime Allowance and increase it in line with inflation, which would mean the tax free cash allowance would be increased unless their version of the LTA works differently to the old one.

Ok cool - thanks for that.

MK62

I haven't voted in the poll as I don't believe you can say whether it should be scrapped or not without knowing what it would be replaced with. 
Mathematically the triple lock is unsustainable over the longer term, as if you increase the SP by the highest of 3 different measures every year, and which is the highest measure varies each year, then the SP will increase by more than any of them over the longer term......so yes, the method of SP annual increase needs to be reassessed, but I would not vote on whether to scrap the triple lock without knowing what would replace it. Even switching to a double lock does not remove the flaw, so some more creative proposals are needed. 
As both the main parties are scared of this issue, perhaps a cross party working group would be the way forward....but I won't hold my breath.

donnac2558

No it should be kept

GibbsRule_No3. said:

A few weeks back in The Guardian they had an article about the continued rise in the pension age.  The age of 70 was mention, saying the government was no doubt looking at this in a few years.  But, people yes living longer but many even if they keep raising the pension age will not be able to work due to ill health and will be claiming ESA or other sickness benefits before reaching the SP.

If 50 is the new 40, then 70 is the new 60, so perhaps the age should be 75?

That old chestnut pushed by the tabloids.  If that were true then 20 would be the new 10 year old

BlackKnightMonty

Yes it should be scrapped

donnac2558 said:

GibbsRule_No3. said:

A few weeks back in The Guardian they had an article about the continued rise in the pension age.  The age of 70 was mention, saying the government was no doubt looking at this in a few years.  But, people yes living longer but many even if they keep raising the pension age will not be able to work due to ill health and will be claiming ESA or other sickness benefits before reaching the SP.

If 50 is the new 40, then 70 is the new 60, so perhaps the age should be 75?

That old chestnut pushed by the tabloids.  If that were true then 20 would be the new 10 year old

We all know youth is everything. Which is why extending SP age into the seventies is so unpalatable.

hyubh

coastline said:

hyubh said:

coastline said:

booneruk 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. 

Those on the old pension generally enjoyed SERPS / DB pensions from their employer. As a 40 something I wish to hell I engaged with a private pension in my 20s. It took auto enrolment to get me on board, which is something we shouldn't forget when looking to the future. I would be against means testing the SP though.

It's going to take a gusty government to remove the triple lock, an aging population, the % of elderly who vote and 16+ pages of this chat demonstrates why.

Anything that grows as a % of GDP year on year is a problem, which is why I think it will be very interesting when it comes to manifesto time later this year.

Well I can answer that and the SP plus 27 years of DB service pension doesn't even add up to £20K in my case. 

Curious of the the details... even assuming a pre-2016 SPA and no SERPS/S2P, the full basic state pension is currently £8122.40 pa (27 years might imply some additional state pension too however?) So the DB pension can't be more than £11.K or so. Final pensionable salary in current money of around £28K? Or maybe a bit higher, but you had a nice lump sum...? Maybe you were part time...?

Nothing changes. 

Hmm, bit easy to say when you yourself have benefitted from a DB pension...

I paid 6% of salary to get a second pension . I was lucky it was DB but they are less and less these days . It's single figures and I know loads of people with similar stories.

If it's single figures, is that because you worked part time during those 27 years...?

I've paid extra NI to boost the pension but won't break even until 70 yo on that bit

So, considerably short of your life expectancy. Nice.

Millions of people end up with deferred DB pensions . Could be many reasons . Nice if can you get 40 years in until 65 yo but that's not the case in general. Many have been made redundant in their 50's and need another job. It happens.

Outside of public sector, this is sharply defined by age. There aren't proportionally lots of private sector workers under 40 with a DB pension, deferred or otherwise!

The new state pension £11,500 a year together with a £250K pension pot should see you with £20K a year. Not fantastic but manageable and more than millions today who have DB pensions. Yes some get way more. That £250K pot there'll be an employer contribution and sometimes as much as 8% matching.

As much as 8%, eh... You're heavily underestimating the boon for reducing pensioner poverty that DB pensions have been.

coastline

hyubh said:

coastline said:

hyubh said:

coastline said:

booneruk 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. 

Those on the old pension generally enjoyed SERPS / DB pensions from their employer. As a 40 something I wish to hell I engaged with a private pension in my 20s. It took auto enrolment to get me on board, which is something we shouldn't forget when looking to the future. I would be against means testing the SP though.

It's going to take a gusty government to remove the triple lock, an aging population, the % of elderly who vote and 16+ pages of this chat demonstrates why.

Anything that grows as a % of GDP year on year is a problem, which is why I think it will be very interesting when it comes to manifesto time later this year.

Well I can answer that and the SP plus 27 years of DB service pension doesn't even add up to £20K in my case. 

Curious of the the details... even assuming a pre-2016 SPA and no SERPS/S2P, the full basic state pension is currently £8122.40 pa (27 years might imply some additional state pension too however?) So the DB pension can't be more than £11.K or so. Final pensionable salary in current money of around £28K? Or maybe a bit higher, but you had a nice lump sum...? Maybe you were part time...?

Nothing changes. 

Hmm, bit easy to say when you yourself have benefitted from a DB pension...

I paid 6% of salary to get a second pension . I was lucky it was DB but they are less and less these days . It's single figures and I know loads of people with similar stories.

If it's single figures, is that because you worked part time during those 27 years...?

I've paid extra NI to boost the pension but won't break even until 70 yo on that bit

So, considerably short of your life expectancy. Nice.

Millions of people end up with deferred DB pensions . Could be many reasons . Nice if can you get 40 years in until 65 yo but that's not the case in general. Many have been made redundant in their 50's and need another job. It happens.

Outside of public sector, this is sharply defined by age. There aren't proportionally lots of private sector workers under 40 with a DB pension, deferred or otherwise!

The new state pension £11,500 a year together with a £250K pension pot should see you with £20K a year. Not fantastic but manageable and more than millions today who have DB pensions. Yes some get way more. That £250K pot there'll be an employer contribution and sometimes as much as 8% matching.

As much as 8%, eh... You're heavily underestimating the boon for reducing pensioner poverty that DB pensions have been.

Millions of people between the age of 60-80 yo , pensioners , have broken service due to mass redundancy which took place between 1980-2010 . This period was the fall in DB pensions as in many cases there were more pensioners than workers. Millions of people found themselves looking for any kind of work to make ends meet until they could access their pensions . As a result their DB pensions became deferred and not the golden egg many thought. I'm not making it up ask a few older guys who worked either public or private sector. That's the reason mine and other people I know don't have £20K combined state pension and DB pension. Just like everybody else I've saved to improve my retirement. What else can you do ?
I bought 8 years NI in an attempt to improve my state pension when the rules changed in 2016. I didn't make the full amount but the difference between old and new pension is £169 and £221 . In future with full NI everyone will get £221 a week. What's not to like ? Maybe the retirement age is going up but there's always swings and roundabouts. 
So the state pension will be £11,500 a year and to get to £20K which I haven't got you'll need £8,500. Let's just go back to that £250K pot I highlighted. Withdraw 4% a year of £250K is £10K . That's £21,500. Invest £150 a month for 40 years at 5% return and you end up with £230K. Factor in inflation of course but that's been the case for everyone. You end up with a reasonable pension. If you want cruises and Audis at the door then that's another matter . 

Savings Calculator With Regular Deposits/Withdrawals (thecalculatorsite.com)

How to make sure your pension is big enough to last - Investors' Chronicle (investorschronicle.co.uk)

Now then what's your details ? You've asked plenty questions. I've been honest with mine. 

hyubh

coastline said:

hyubh said:

coastline said:

hyubh said:

coastline said:

booneruk 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. 

Those on the old pension generally enjoyed SERPS / DB pensions from their employer. As a 40 something I wish to hell I engaged with a private pension in my 20s. It took auto enrolment to get me on board, which is something we shouldn't forget when looking to the future. I would be against means testing the SP though.

It's going to take a gusty government to remove the triple lock, an aging population, the % of elderly who vote and 16+ pages of this chat demonstrates why.

Anything that grows as a % of GDP year on year is a problem, which is why I think it will be very interesting when it comes to manifesto time later this year.

Well I can answer that and the SP plus 27 years of DB service pension doesn't even add up to £20K in my case. 

Curious of the the details... even assuming a pre-2016 SPA and no SERPS/S2P, the full basic state pension is currently £8122.40 pa (27 years might imply some additional state pension too however?) So the DB pension can't be more than £11.K or so. Final pensionable salary in current money of around £28K? Or maybe a bit higher, but you had a nice lump sum...? Maybe you were part time...?

Nothing changes. 

Hmm, bit easy to say when you yourself have benefitted from a DB pension...

I paid 6% of salary to get a second pension . I was lucky it was DB but they are less and less these days . It's single figures and I know loads of people with similar stories.

If it's single figures, is that because you worked part time during those 27 years...?

I've paid extra NI to boost the pension but won't break even until 70 yo on that bit

So, considerably short of your life expectancy. Nice.

Millions of people end up with deferred DB pensions . Could be many reasons . Nice if can you get 40 years in until 65 yo but that's not the case in general. Many have been made redundant in their 50's and need another job. It happens.

Outside of public sector, this is sharply defined by age. There aren't proportionally lots of private sector workers under 40 with a DB pension, deferred or otherwise!

The new state pension £11,500 a year together with a £250K pension pot should see you with £20K a year. Not fantastic but manageable and more than millions today who have DB pensions. Yes some get way more. That £250K pot there'll be an employer contribution and sometimes as much as 8% matching.

As much as 8%, eh... You're heavily underestimating the boon for reducing pensioner poverty that DB pensions have been.

Millions of people between the age of 60-80 yo , pensioners , have broken service due to mass redundancy which took place between 1980-2010 . This period was the fall in DB pensions

Au contraire, that's the high period of private sector DB...

As a result their DB pensions became deferred and not the golden egg many thought. I'm not making it up ask a few older guys who worked either public or private sector.

Public sector DB is as 'gold plated' as ever. Why do you think otherwise...?

That's the reason mine and other people I know don't have £20K combined state pension and DB pension.

Oh no it isn't.... You've stated you had 27 years membership - so, again, is your DB pension in single figures because you were part time and/or had a chunky lump sum...? Clearly if you were only part time, you would accrue at a slower rate than if full time - which wouldn't make your DB pension poor relatively. Or that a DC pension with an employer rate of 8% is by comparison top notch...

I bought 8 years NI in an attempt to improve my state pension when the rules changed in 2016.

Yet more generational privilege - being able to 'double dip' on the state pension

I didn't make the full amount

The 'full amount' represents both the Basic State Pension you already accrued plus the Additional State Pension you effectively get through your DB pension. You were a winner!

In future with full NI everyone will get £221 a week. What's not to like ?

Because the single tier state pension is less that what even most low paid full time workers would have got under the old system if contracted in.

Maybe the retirement age is going up but there's always swings and roundabouts. 

This is incorrect - the single tier state pension is to save money in the medium to long term, since most private sector taxpayers will be getting less that under the old system. This affected crossover people as well, since their state pension accrual was now capped to the single tier level.

Now then what's your details ? You've asked plenty questions. I've been honest with mine. 

I've asked you multiple times whether those 27 years were part time and/or you took a chunky PCLS, and you haven't answered...

Me? DC, employer pays 5%, I've voluntarily paid in 30% for nearly 10 years now. Geriatric millennial, so over 25 years to go...

ewaste

Yes it should be scrapped

nigelbb said:

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

NMW at 35hrs a week is around £318.01, 40hrs a week would be £352.40. That's after deductions and the 5% of Qualifying Earnings being paid under AE into a pension. That's if you're lucky enough to have a secure job and 35-40hrs of paid work per week. You'd naturally have various work related expenses e.g. travel costs for getting to and from work.

So a guaranteed £200 a week increasing annually by the triple lock is rather generous. Especially when you've had a lifetime to do what many pensioners preach e.g. work hard, better yourself and save. That's before we get into any of the additional little things like bus passes etc. 

nigelbb

ewaste said:

nigelbb said:

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

NMW at 35hrs a week is around £318.01, 40hrs a week would be £352.40. That's after deductions and the 5% of Qualifying Earnings being paid under AE into a pension. That's if you're lucky enough to have a secure job and 35-40hrs of paid work per week. You'd naturally have various work related expenses e.g. travel costs for getting to and from work.

So a guaranteed £200 a week increasing annually by the triple lock is rather generous. Especially when you've had a lifetime to do what many pensioners preach e.g. work hard, better yourself and save. That's before we get into any of the additional little things like bus passes etc. 

NMW is £11.44/hour from 1st Aptil 2024 which gives a take home pay of £379.33 after deductions including pension contributions. The new state pension is £221.20 from 1st Aptil 2024.or 58% of NMW so just a little more than half.