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

GunJack

No it should be kept

QrizB said:

One option would be to link NSP to NMW. If you set the full weekly NSP as a certain number of hours of adult NMW, you could move away from the triple lock.

You could link UC to NMW too, if you wanted to bring every adult under the same regime.

That's an interesting idea, heading towards a version of Universal Basic Income

hugheskevi

QrizB said:

One option would be to link NSP to NMW. If you set the full weekly NSP as a certain number of hours of adult NMW, you could move away from the triple lock.

You could link UC to NMW too, if you wanted to bring every adult under the same regime.

You would need to take account of the political reality of doing this.

We are in a position of (for the UK) high-tax, high-spend. That shows no sign of changing anytime soon, indeed, fiscal pressures are likely to get worse.

If you were to link large proportions of your expenditure to earnings, then you need adequate growth to pay for the commitment. But if that doesn't happen then to balance the books you need to:

• Borrow - adding to an ever growing debt/GDP ratio and just delaying the inevitable
• Raise tax, even though you have inadequate growth to support existing spending
• Break your commitment for one or more groups (and you only have to look at how attached pensioners have got to the Triple Lock, or the consequences of Lib Dems backing big increases to Tuition Fees to see the results of that)
• Break your commitment to all groups - likely to alienate widespread and different groups of voters. You may be able to run a narrative of national necessity, all in this together, etc, but that will only work for a short time, after which everyone will blame you for not meeting commitments

Whereas you can instead either not uprate things wherever possible, or just uprate them by prices and let fiscal drag do its thing. Rather than all the nastiness above, you should then get to award ad hoc increases to spending / cuts to taxes at each Budget and have nice headlines about your generosity. And if your fiscal plans don't work out, just leave things frozen or increasing by CPI and screws gradually tighten.

sgx2000

No it should be kept

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Silvertabby

Yes it should be scrapped

sgx2000 said:

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Over 40% of UK adults don't pay any income tax.  Not one penny.

If we didn't have 'the rich' ........... 

MK62

Silvertabby said:

sgx2000 said:

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Over 40% of UK adults don't pay any income tax.  Not one penny.

If we didn't have 'the rich' ........... 

You could equally say that 40% of UK adults have insufficient taxable income to pay any income tax........

Yes, there are a few with large ISAs (for example) from which they can draw income, tax free, but these did not have the tax relief which the same contributions to a pension would have received ie, the pension savers contributions were tax free, whereas the ISA saver's were not.

artyboy

No it should be kept

Silvertabby said:

sgx2000 said:

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Over 40% of UK adults don't pay any income tax.  Not one penny.

If we didn't have 'the rich' ........... 

And yet all 'the rich' get is opprobrium and cries of 'tax them more' - there may be an argument there for the UHNW non-doms and the like, but for mass affluent families on a few hundred thou' a year, it can feel like a pretty hostile place sometimes, given their relative contribution to society.

But I suspect this will not be a popular view...

DBdoobydoo

stripling said:

enthusiasticsaver said:

njkmr said:

How about matching it to Spain's pension .
I believe thats about £25000 per year.
No that im near drawing it yet unfortunately.

Apparently the average state pension in Spain is 900 euros a month so way off £25k.  They have similar system to us with a three pillar system. The state pension where you have to work until 65 or 67 I think for a minimum of 35 years to get full pension.  Employees pay in about 5% and their employers 24% of their income.  It is topped up by private or occupational pensions like here and then there is a nominal low income/minimum pension for non earners similar to pension credit here I guess. The only way you can get £25k is to have a state pension and a private one which is more or less the same as the UK. 

That's not quite right.
Half my family is Spanish and my sister is on a Spanish state pension, I paid taxes in Spain. There's basically 2 systems, one an old one that only a few very elderly are on now - we used to call them the Franco pension, I don't know the proper name. Anyway, they are relatively small and I've seen real elderly poverty in some rural areas. 

The majority in Spain are on a pension relative to their average earnings with a ceiling so it doesn't get too silly. Once you draw a state pension, you are not allowed to work, to free up jobs, although you can run a business. You become eligible for 'something' after 10 years but the full pension eligibility is 35 tax years. 

Private pensions are not pushed in Europe as much as they are in the UK it's a very British-roll-back-the-state-privatise-your-auntie thing. France also has good state pensions. 

Most of my friends and family in Spain do not have private pensions. My cousin does but he worked for a foreign multinational. My sister gets more in a week in her State Pension than what a British person gets in a month. It's still not huge but if mortgages are paid off it is much more liveable. 

The other important thing to be aware of is a Spanish (and French)  pensioner who rents a home benefits from secure tenancies and strictly regulated rent increases.  A British pensioner who rents is now in a very bad, insecure situation and the numbers are increasing. Britain is going to see more and more pensioner insecurity and poverty going forward. 

I have a partial French pension from living in France for fourteen years. It's about €2100/month made up of about €500 basic state pension €1250 earnings related €250 earnings related €100 private company pension. I was in a high paid job for for about eleven of those years (€100K/year) then on unemployment benefit for three years (50% of my previous earnings & taxed). The earnings related pensions are state administered pensions but managed by private providers (AGIRC & ARRCO in my case).

My UK state pension after working for thirty years in the UK is about £675/month.

https://en.wikipedia.org/wiki/Pensions_in_France

booneruk

DBdoobydoo said:

My UK state pension after working for thirty years in the UK is about £675/month.

https://en.wikipedia.org/wiki/Pensions_in_France

Did you contribute as heavily to any UK private pensions as you did to the French ones? You don't seem to have detailed your UK private pension situation.

Linton

Silvertabby said:

sgx2000 said:

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Over 40% of UK adults don't pay any income tax.  Not one penny.

If we didn't have 'the rich' ........... 

Yes but the working poor pay a higher % of their income on NI, VAT and council tax .

Better in my view to judge the situation on income after tax rather than on tax taken.

MattMattMattUK

Yes it should be scrapped

sgx2000 said:

MattMattMattyeUK said:

sgx2000 said:

Uk already the worst pension in  Europe.....

The bottom two thirds of earners in the UK pay the lowest rate of income taxation in the EU, I wonder if there is a connection...

Yes there is....
The differential between the rich and poor in the uk is larger.....

Not really, the UK has a lower wealth inequality than the European average.
https://www.statista.com/statistics/1416753/inequality-in-europe-wealth-distribution-by-country/

Someone in the bottom two thirds of earners in the UK pays the lowest rate of effective income taxation in the EU, the top third pay the fifth highest. The top third pay roughly the same percentages of their income as income taxation as in Germany, Spain, Norway, Switzerland etc. but the bottom third pay less than a quarter and the middle third pay less than half of the tax they would pay in most other EU countries. Someone on less than £50k pays less tax in the UK than in any other EU country, only once one's income gets over £60k would they pay more tax in a few more EU countries, at around £75k they pay more than the EU average and over £125k they pay the fifth highest rate of effective income taxation.