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

MattMattMattUK

Yes it should be scrapped

Linton said:

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, 

It depends how you define "working poor", if they are over the NI threshold then yes they do pay more in NI than high earners, however they would also be in receipt of benefits which would more than cancel out the NI that they pay. 55% of households receive more in cash benefits than they pay in tax. 

Linton said:

VAT

The VAT claim has been debunked many times, as "the poor" spend most of their income on rent and food they generally spend very little on goods which attract VAT. Yes, if one takes a headline figure it can appear that they do spend more on VAT, but when one delves into the detail it becomes very clear that there is somewhat of a statistical anomaly created by the wealthy with zero income in one year living off existing funds (loss on trading etc.).

Linton said:

and council tax .

Many low earners have their council tax partially or fully discounted. Council tax is also a badly designed tax, the poll tax was far more sensible in it's design, but people had a tantrum because they did not feel that they should have to contribute. 

Linton said:

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

If you are trying to be objective then it would need to be judged after taxation and benefits which are effectively negative taxation. 

Grumpy_chap

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.

I like this idea and would even take it further.
AIUI, NMW is linked to average salary and the "tweaked" or "confirmed" by the Government.  From April, NMW will be £11.44 (for the majority) so just under £24k for a full time employee.
Average (median) salary is £35k  (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2023)
That makes NMW about 70% of average salary.

It would be entirely possible to set Basic SP as a ratio or average salary
And tax thresholds (personal allowance, higher rate threshold, HICBIC, etc)
And benefits allowances

It would take the politics out of the annual determinations and mean that any changes to taxation / benefits are transparent - it would either be a change of tax rate or a change of the ratio to average salary.
Therefore, it won't ever happen (unless I somehow end up in charge):

• Politicians favour a generous change to NMW as it gives individuals more money but no direct cost to Government
• Linking to average salary is a market metric, not one that Government control
• It would negate the current tool of choice - fiscal drag

njm123

No it should be kept

Voted it should be kept.  But that's for now. 

I think it needs to be reformed as part of a much wider reset of the pensions, tax  and benefit systems to make them fit for purpose again.    Unfortunately for decades our political classes have tinkered with the systems, helping this group here, making sure that group doesn't lose out in a change.  All for political expediency rather than as part of any long term plan.  Keeping the triple lock keeps ramping up the pressure to have the debate.

For pensions what I'd like to see is that

a) For anyone born after a certain date they will be auto-enrolled  in a private pension scheme, which will be funded from contributions from their earnings and their employers (both as now with legal minimums set) plus a contribution from their national insurance again legally set.  When not working there would be credits available for the NI element similar to now - i.e. whilst in Education or claiming benefits.

For this cohort there would also be access to a "Pension Credit" to ensure a minimum income when they reach SPA.

b) For everyone else the system would carry on as is.

c) The annual increase on the State Pension would be based on the rise in average earnings (using the higher of the measures including/excluding bonuses to stop the use of bonuses being manipulated).

If a date for this change is set that includes people who have already started accruing their state pension Government would make a payment into the private pensions that covers the State Pension "lost".

There also need to be widespread reforms of the tax and benefit system in parallel

MarzipanCrumble

No it should be kept

I am one of the grey brigade.  I played the system and am truly grateful to the triple lock.  Old style SP, eligible to retire at 63 but worked on and deferred. 10% interest (yes not exactly accurate - tad more).

And worked until 68.  Plus some of my dead husband's state pension accrued to me as he was about 9 years older.

I would far rather pay higher taxation and have public services that work.  Though that is a whole new argument as our public services are neither effecient nor particularly effective as independent reports are beginning to show.

Andy_L

Yes it should be scrapped

Grumpy_chap said:

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.

I like this idea and would even take it further.
AIUI, NMW is linked to average salary and the "tweaked" or "confirmed" by the Government.  From April, NMW will be £11.44 (for the majority) so just under £24k for a full time employee.
Average (median) salary is £35k  (https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2023)
That makes NMW about 70% of average salary.

It would be entirely possible to set Basic SP as a ratio or average salary
And tax thresholds (personal allowance, higher rate threshold, HICBIC, etc)
And benefits allowances

It would take the politics out of the annual determinations and mean that any changes to taxation / benefits are transparent - it would either be a change of tax rate or a change of the ratio to average salary.
Therefore, it won't ever happen (unless I somehow end up in charge):

• Politicians favour a generous change to NMW as it gives individuals more money but no direct cost to Government
• Linking to average salary is a market metric, not one that Government control
• It would negate the current tool of choice - fiscal drag

"The National Living Wage was introduced in April 2016, and in 2019, the government set a target for the National Living Wage to reach two-thirds of median earnings by 2024 for workers aged 21 and over, taking economic conditions into account...The government remains committed to the 2024 target, but if the economic evidence warrants it, the Low Pay Commission should advise the government to review the target or its timeframe. "

https://www.gov.uk/government/publications/national-minimum-wage-and-national-living-wage-low-pay-commission-remit-2022/national-living-wage-and-national-minimum-wage-low-pay-commission-remit-2022-accessible-webpage

BlackKnightMonty

Yes it should be scrapped

artyboy said:

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' ........... 

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.

So true! Any conversation with average earners descends into “pay more tax!” despite the fact you already are paying double their entire wage in tax each year!

BlackKnightMonty

Yes it should be scrapped

Linton said:

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.

But any and all taxes they might pay are more than paid back in direct benefits and wider services received.

An average wage of £30k pays just over £5k in Income Tax and NI. That does’t even cover the cost of one £7.5k secondary school place.

westv

No it should be kept

BlackKnightMonty said:

Linton said:

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.

But any and all taxes they might pay are more than paid back in direct benefits and wider services received.

An average wage of £30k pays just over £5k in Income Tax and NI. That does’t even cover the cost of one £7.5k secondary school place.

A bit like the SP though. They get the benefit for 5 years but contribute for 40.

BlackKnightMonty

Yes it should be scrapped

MarzipanCrumble said:

I would far rather pay higher taxation and have public services that work. 

I already pay over £50k a year in income tax and NI Alone. And services/benefits received nearly zero. I’m not sure if I want to pay anymore if I’m honest.

I mean, I’d like for that amount of tax to not have as many pot holes to avoid, or crumbling schools to dodge, or A&E waiting lists measured in hours rather than days.

Zopa_Trooper

No it should be kept

In my opinion and I haven't read through the entire thread, the Conservatives got elected on this "pledge" so until another election they shouldn't be allowed to remove it or if they did that should immediately bring about an election. I'm sick of parties promising the earth to get elected and then reneging on those promises.

Anyway, there's an easy way to solve all these raise problems, just have everything linked to a MP's wages, I think we'd all be fine then.