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

BlackKnightMonty

Yes it should be scrapped

nigelbb said:

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.

Under 18 it’s £6.40 an hour.

18-20 it’s £8.60 an hour.

The theory is that you should be paid less because there is some on-the-job training. But it sounds exploitative to me.

as EWaste incates, to earn that wage you undertake all the trappings of work; commuting costs, maybe working shifts, work clothes.

There’s just no way a SP should be at the same level as a working wage!

coastline

hyubh said:

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...

27 years , full time ,skilled job, private sector paying 6% plus the employer contribution.  Full annual rises aren't guaranteed as they're discretionary.  Not disputing public sector pensions aren't attractive .  It's possible for everyone to pay gaps in NI that's what I did annually. I don't think that will stop ? It's possible to get jobs in the public sector and I've heard of people transferring other pensions into the schemes. I could be wrong ? That DC pot figure I quoted was without any employer contributions so I don't think £20K combined pension is beyond the reach of the majority.  A 30% contribution to a DC pot is well beyond the majority of people but fair play. Good luck and don't forget to retire early as that 70 yo number you mentioned in good health mightn't be the case. Things happen out of the blue and I personally know all about it.

QrizB

coastline said:

27 years , full time ,skilled job, private sector paying 6% plus the employer contribution.  Full annual rises aren't guaranteed as they're discretionary.

For a DB pension, what you contribute is of relatively little relevance to what you get out of it.

What was the accrual basis? 1/60th, 1/80th, something else? Final salary or career average?

27 years in a 1/60th FS scheme would get you not-quite-half of your final salary, in a 1/80th scheme it would be worth a third of final salary.

For comparison, you'd need to contribute ~25% to a DC scheme for 27 years to have a pot good for a pension equivalent to one-third of your salary. Closer to 40% to get to half.

coastline

QrizB said:

coastline said:

27 years , full time ,skilled job, private sector paying 6% plus the employer contribution.  Full annual rises aren't guaranteed as they're discretionary.

For a DB pension, what you contribute is of relatively little relevance to what you get out of it.

What was the accrual basis? 1/60th, 1/80th, something else? Final salary or career average?

27 years in a 1/60th FS scheme would get you not-quite-half of your final salary, in a 1/80th scheme it would be worth a third of final salary.

For comparison, you'd need to contribute ~25% to a DC scheme for 27 years to have a pot good for a pension equivalent to one-third of your salary. Closer to 40% to get to half.

1/60th scheme minus the state pension. If £30K salary today scheme would be around £20K . 27/60th of £20K would be around £10K
Once deferred we're in a different ball game. Increases can be as low as 2.5% until retirement. Millions of people have similar circumstances. Annual pay rises are discretionary and some years have been zero. £300 a month shared with employer over 27 years at 5% growth is £206K in a pot . Yes it'll be adjusted for inflation every year . A DC pot doesn't just stop at 27 years it continues to grow even in a drawdown situation. Well that's the theory. ? Annuity rates are more favourable today and the level figure was 7% recently. My pension has now been running 45 years from 20 yo that's a big factor . It ain't been doing much in last 20 years unfortunately due to being deferred and irregular annual rises . Why not get a transfer value ? Well what if it's not that favourable ? Yes there's risk with DC. I've paid 6% of salary so it's acceptable to say it would be minimum 10% with contribution from employer as DC. That £206K pot figure might even be conservative. You don't have to leave it in the default pension with your provider. The arrangements since 2016 open up a new world. I'm not complaining I'm telling a real world story , friends, family and others I know are similar. Those that have unbroken service until the day they retire are the winners with DB. Nice if they get index linked annual rises. Other schemes are more complicated than many think. The way it's turned out isn't much different to DC route since the rule changes. During that deferred period it might have been ticking along nicely in a stock market roll ? That's the way it goes.  

Malthusian

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

10 year olds used to go up chimneys or work in the fields. You now don't have to start work until 21 unless you choose to opt out of education earlier, 18 at the earliest. So I'd say that 20 is the new 10.

westv

No it should be kept

Malthusian said:

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

10 year olds used to go up chimneys or work in the fields. You now don't have to start work until 21 unless you choose to opt out of education earlier, 18 at the earliest. So I'd say that 20 is the new 10.

I bet it's been a long while since anybody did what i did - left school at 16 for an office junior role in the City.

The_Green_Hornet

No it should be kept

The OP has their answer.

3.33 The government is also committed to supporting pensioner incomes by maintaining the triple lock. In 2024-25, the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010. That’s £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings (since 2010).

HC 560 – Spring Budget 2024 (publishing.service.gov.uk)

Cus

westv said:

Malthusian said:

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

10 year olds used to go up chimneys or work in the fields. You now don't have to start work until 21 unless you choose to opt out of education earlier, 18 at the earliest. So I'd say that 20 is the new 10.

I bet it's been a long while since anybody did what i did - left school at 16 for an office junior role in the City.

Now the same individual would do A-levels, a degree in business and finance, rack up some serious debt, then go on to a graduate program doing the exact same job...with different expectations 

Hoenir

No it should be kept

The_Green_Hornet said:

The OP has their answer.

3.33 The government is also committed to supporting pensioner incomes by maintaining the triple lock. In 2024-25, the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010. That’s £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings (since 2010).

HC 560 – Spring Budget 2024 (publishing.service.gov.uk)

Same discussion will pop up over and over prior to every budget. 

hugheskevi

The_Green_Hornet said:

The OP has their answer.

3.33 The government is also committed to supporting pensioner incomes by maintaining the triple lock. In 2024-25, the full yearly amount of the basic State Pension will be £3,700 higher, in cash terms, than in 2010. That’s £990 more than if it had been uprated by prices, and £1,000 more than if it had been uprated by earnings (since 2010).

HC 560 – Spring Budget 2024 (publishing.service.gov.uk)

I did like the rounding used here - some real effort put in to demonstrate that earnings have fallen in real terms over the last 14 years, rather than simply saying that the State Pension is now £1,000 per year higher than if it had been uprated by either prices or earnings since 2010.