HMRC sending out assessment tax forms to pensioners.

MeteredOut

Hoenir said:

MeteredOut said:

Exodi said:

MeteredOut said:

Exodi said:

SouthCoastBoy said:

I never understand why people are upset when the state pension increases, as it is for eveyones benefit, even those currently working.

Silvertabby said:

Exactly, a lot of people don't seem to realise that it's not only the pensions actually in payment that receive the increases.

pinnks said:

I agree - it is locked in for everyone.

Sorry but I think this is a naive view at best, and disingenuous at worse.

It is virtually inevitable that the state pension will need to be cut back at some point in the future. The only people that don't acknowledge this possibility seem to be current pensioners.

The ageing population is adding and will continue to add considerable pressure on public finances without change. As an example, there are expected to be 25% more pensioners in 2050 than today, while the general population is only expected to increase by ~10%. Despite the common belief that there is a pot of money somewhere that people pay into earmarked to pay their pensions, in reality the state pension is paid by current tax payers so the only way to maintain the current pension as is would be tax the living smithereens out of the relatively fewer working people. That's ignoring the additional health and social spending required for an aging population.

The triple lock is inherently unsustainable, and I think we all know it's only in place because most political parties would not get elected if they dare touched it (as older people have the highest voting turnout). Current predictions are that the tripe lock could cost somewhere between £5B - £40B extra per year in 2050.

Currently the lever of choice for the government (as it is the less confrontational) is to just keep moving the state pension age up and up, but not only is it plainly unfair, but it disproportionately affects people in poorer areas with lower life expectancy.

Personally, I find it 'frustrating' to imply younger taxpayers should have no problem subsidising large increases to the state pension, when it's possible when they retire their age might need to begin with a 7 or an 8 before they can receive theirs.

It should just be linked to median full-time earnings. It is frustrating that pensioners hold politicians to ransom on this because they ultimately do not care whether the state pension is sustainable in the long term.

I just went looking to see if I could find figures, but failed, but I suspect that it is middle income brackets that are largely paying for the current pensions, in relative terms, not younger tax payers.

I agree that the triple-lock is only in place for political reasons, but don't see an issue with state pension age changing with life expectancy. 

Sorry I'm not clear on what your point is? Obviously any person paying NI (aka a tax payer ) will be paying for current pensions - unless you're making a point that higher earners contribute more? And that higher earners are generally older?

The reason I specifically referenced younger tax payers (which I didn't define, so please don't characterise it as an 18 year old with a part time job), is because an older tax payer that is closer to retirement will not have a problem with massive increases to the state pension knowing they'll be in receipt of it soon.

When my wife was a younger tax payer (no age defined), her state pension age was 60. It's now 8 years later. Things change.

Previous generations had far tougher working lives in poor conditions. Life expectancy just 50/60 years ago was far far lower. Medical science has moved forward in leaps and bounds. 8 years in the scheme of things is a fair compromise. 

Yes, I wasn't arguing against the change - I think equalising them was the right thing to do - but pointing out that changing the retirement age goal posts is not a new thing and will likely continue to happen.

thriftytracey

I saw a headline in the Daily Mail that the evil Labour Party are planning to reduce pension tax relief to a flat 30%.  This was stated as fact.

I thought it was a good idea (not being a 40% tax payer).

noitsnotme

MeteredOut said:

pinnks said:

Silvertabby said:

SouthCoastBoy said:

If you are lucky enough to live to SPA even the currently employed will receive the benefit of the recent state pension. I never understand why people are upset when the state pension increases, as it is for eveyones benefit, even those currently working.

Exactly, a lot of people don't seem to realise that it's not only the pensions actually in payment that receive the increases.

I agree - it is locked in for everyone.

Whole swathes of younger generations have convinced each other via social media other than the state pension will either be gone, or means-tested to anyone without a private pension, by the time they reach that state pension age (which will apparently be 80 by then).

To be fair, when I was younger, long before the advent of social media and when I was still fairly financially illiterate, I remember we all thought the state pension would be long gone before we reached our 60's.  It's partly why I started paying AVCs on top of an already decent final salary pension scheme.  Not sure where the influence came from back then.  I worked in a bank too so not entirely surrounded by the less well educated. 

Flugelhorn

noitsnotme said:

MeteredOut said:

pinnks said:

Silvertabby said:

SouthCoastBoy said:

If you are lucky enough to live to SPA even the currently employed will receive the benefit of the recent state pension. I never understand why people are upset when the state pension increases, as it is for eveyones benefit, even those currently working.

Exactly, a lot of people don't seem to realise that it's not only the pensions actually in payment that receive the increases.

I agree - it is locked in for everyone.

Whole swathes of younger generations have convinced each other via social media other than the state pension will either be gone, or means-tested to anyone without a private pension, by the time they reach that state pension age (which will apparently be 80 by then).

To be fair, when I was younger, long before the advent of social media and when I was still fairly financially illiterate, I remember we all thought the state pension would be long gone before we reached our 60's.  It's partly why I started paying AVCs on top of an already decent final salary pension scheme.  Not sure where the influence came from back then.  I worked in a bank too so not entirely surrounded by the less well educated. 

I was the same - got public sector pension and added AVCs - was slightly surprised to discover would get state pension too 

Albermarle

noitsnotme said:

MeteredOut said:

pinnks said:

Silvertabby said:

SouthCoastBoy said:

If you are lucky enough to live to SPA even the currently employed will receive the benefit of the recent state pension. I never understand why people are upset when the state pension increases, as it is for eveyones benefit, even those currently working.

Exactly, a lot of people don't seem to realise that it's not only the pensions actually in payment that receive the increases.

I agree - it is locked in for everyone.

Whole swathes of younger generations have convinced each other via social media other than the state pension will either be gone, or means-tested to anyone without a private pension, by the time they reach that state pension age (which will apparently be 80 by then).

To be fair, when I was younger, long before the advent of social media and when I was still fairly financially illiterate, I remember we all thought the state pension would be long gone before we reached our 60's.  It's partly why I started paying AVCs on top of an already decent final salary pension scheme.  Not sure where the influence came from back then.  I worked in a bank too so not entirely surrounded by the less well educated. 

I think in general a lot of people have similar attitudes to these issues, without really thinking them through.
As said many times on this forum, any political party/government ( now, or 30 years ago, or 30 years in the future) that stopped the state pension, would face oblivion at the next election. So they will never do it. That's the realpolitik.

Grumpy_chap

Teahfc said:

The combination of frozen tax thresholds and a substantial increase to the state pension has led to many more pensioners being dragged into paying income tax for the first time.

Pensioners can't really expect to have Triple Lock increases at a rate above wage increases and then also be magically exempt from income tax if they then become liable to taxation under the same rules that apply to the rest of the population.

MeteredOut said:

Whole swathes of younger generations have convinced each other via social media other than the state pension will either be gone, or means-tested to anyone without a private pension, by the time they reach that state pension age (which will apparently be 80 by then).

That is not really new, though.  "No state pension by the time I get there" was a common comment amongst peers when I started out my career.  Probably was when my Dad started out his career.  The only thing that changed is my Dad and I did not have social media but had to actually socialise to join the conversation.

Exodi said:

The triple lock is inherently unsustainable, and I think we all know it's only in place because most political parties would not get elected if they dare touched it (as older people have the highest voting turnout). 

Unsustainability of the Triple Lock is the truest thing said, except, perhaps the lack of political will to address the unsustainability.

thriftytracey said:

reduce pension tax relief to a flat 30%.  

Genuine question - how would that be applied in the case of employer pension contributions and / or defined benefit schemes?  

eskbanker

Grumpy_chap said:

Teahfc said:

The combination of frozen tax thresholds and a substantial increase to the state pension has led to many more pensioners being dragged into paying income tax for the first time.

Pensioners can't really expect to have Triple Lock increases at a rate above wage increases and then also be magically exempt from income tax if they then become liable to taxation under the same rules that apply to the rest of the population.

It's clear from other threads on this subject that many pensioners really do expect to be immune from taxation, while choosing to ignore the increase that got them above the threshold!

Grumpy_chap

eskbanker said:

It's clear from other threads on this subject that many pensioners really do expect to be immune from taxation, while choosing to ignore the increase that got them above the threshold!

I think there is a problem that some state pensioners also fail to recognise that they have received good increases in the State Pension, or that the increases they are receiving are not typical of the population at large.

I was speaking with my FiL last weekend - and he is an intelligent and reasonably well-informed person - and he was berating the pointless "10 pence per week" increase in the State Pension.  He refused to believe me when I said it was 10 percent, not a few pence a week, and that was on top of a high percent increase last year as well, so far above the increase in wages most working people received.  His position was very robustly defended until I made him go and dig out the letter, to which he simply retorted "well, it's still not really very much".  

There's no pleasing some people.