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

Grumpy_chap

It does not matter whether it should or should not be scrapped.

SP Triple Lock is popular among pensioners.
Pensioners have a higher propensity to vote than the populace at large.
There is a General Election coming soon.

Triple Lock will not be scrapped in the budget.

molerat

Sea_Shell said:

Triple - yes
Double - No

Remove the 2.5% "regardless" bit.

So is that a vote for yes or no?

The 2.5% floor has only been invoked 4 times since 2011

2012, CPI 2.2%, wages 1.5% (RPI 2.6%) an additional 0.3%

2014, CPI 1.2%, wages 0.6% (RPI 2.3%) an additional 1.3%

2016, CPI 1%, wages 2.3% (RPI 2.0%) an additional 0.2%

2020, CPI 0.5%, wages -0.8% (RPI 1.1%) an additional 2%

So in general the floor is not the big issue it is made out to be especially where the pre 2016 pension is concerned as it only affects the basic pension.

enthusiasticsaver

Yes it should be scrapped

Sea_Shell said:

Triple - yes
Double - No

Remove the 2.5% "regardless" bit.

So is that a vote for yes or no?

I would count that as a yes.  I agree they should be linked to average earnings/CPI  but the 2.5% pledge should go. I think it was Maggie Thatcher who got rid of the average earnings link back in the 80s.  I wonder if she had not done that what level the pension would be now.  

Regardless of that I think we need a lot more education and debate on how we fund our retirements.  I have just spent a few hours with my DDs and son in law going over pension arrangements and was pleasantly surprised that they have started to educate themselves on their pensions now in their 30s. Mind you I have drummed it into them enough times

enthusiasticsaver

Yes it should be scrapped

handful said:

It's irrelevant, they (whoever is in power) will claw it back by cutting NI and not increasing PA, thereby hitting those receiving the benefit of the triple lock.

The PA already seems to be frozen. 

NorfolkCanary

Yes it should be scrapped

Of course it needs scrapping.
Unfortunately given the lack of political and financial critical thinking from the populace in this country, that way lays electoral annihilation.

There is only so long that the younger working population will fund the elders pension through tax.
Whilst it may have been agreed 15 years (?) ago by the major parties, the long term implications of funding the privilege wasn't.
I suspect by the time myself and people my age range come to retire, there won't be a S.P. to fall back on.

Linton

Assuming that earnings continue to rise above inflation in future years I disagree that SP should be increased by CPI only. During the Thatcher years it was CPI only.  Over that time the policy caused a drop in SP from 25% of average earnings to 15% of average earnings. Such a fall in affordable standard of living compared  with the rest of the population seems diffficult to justify. SP has only relatively recently risen back to the 25% of average earnings that was the figure 50 years ago (ignoring the 2016 change which was a redistribution of SP rather than an overall increase).

I suspect the young advocating such changes dont understand that it would affect subsequent generations to an increasingly large extent as the difference between average income and SP steadily increases.  It is not current pensioners who would be penalised by a CPI basis as much as those retiring in say 40 years time for who SP will have ceased to form a significant part of their retirement income.

SP increasing with earnings should not of itself be an extra burden on NI payers since NI being % based will tend to increase with earnings rather than CPI.

westv

No it should be kept

enthusiasticsaver said:

handful said:

It's irrelevant, they (whoever is in power) will claw it back by cutting NI and not increasing PA, thereby hitting those receiving the benefit of the triple lock.

The PA already seems to be frozen. 

Until 2028 I think.

Steve_666_

my vote: CPI only

BlackKnightMonty

Yes it should be scrapped

NorfolkCanary said:

Of course it needs scrapping.
Unfortunately given the lack of political and financial critical thinking from the populace in this country, that way lays electoral annihilation.

There is only so long that the younger working population will fund the elders pension through tax.
Whilst it may have been agreed 15 years (?) ago by the major parties, the long term implications of funding the privilege wasn't.
I suspect by the time myself and people my age range come to retire, there won't be a S.P. to fall back on.

I think by the time I reach SP age it will either be means tested or it will be scrapped entirely.

either way all the years of NI I have made, as well as some tasty amounts of Income tax, will have bought me absolutely zero SP.

stripling

No it should be kept

BlackKnightMonty said:

eskbanker said:

BlackKnightMonty said:
Should the triple lock be scrapped in the 6 March Budget?

As above, what alternative options are you proposing, and on what grounds?

I think linking it / limiting it to worker’s average pay rise would make a great deal of sense.

No it wouldn't, that's irrelevant to what is effectively one of the lowest state pensions in Europe. It was originally introduced because of pensioner poverty.  

Please be aware of the political 'excuses' for cutting in various ways, often driven by those who promote private pensions. Also 'workers' / young people retire so it is their loss further down the line. Perhaps wages should increase more, but that is a separate discussion from the state pension.

We used to have the 'intergenerational fairness' line promoted as an excuse to cut pensions (it originated in from a hedge fund owner in the US). That has quietened down now for similar reasons - the young get old. 

Pensions are taxed so anyone who has any other income pays tax so it returns to the state. If you are worried about state funding then maybe target those who move their assets offshore or into trusts in 'tax avoidance' schemes. There's plenty of holes in the top end of the tax bucket. 

Pensioners no longer have access to council housing and do not qualify for full housing benefit either - the numbers of pensioners in poverty and insecure, substandard housing, including only renting rooms not flats, is only going to increase. Plus they will have no "assets" to pay for social care if needed.

Be very wary of the rhetoric that plays one group off against the other with the end goal of cutting back the state. It is this very move that leaves us with a pot-holed, broken infrastructure, shattered NHS and decimated public services, state.  It doesn't actually have to be this way.