State pension set to rise by up to £460 a year

foot_the8ill

So what about the frozen Personal Tax Allowance? 

It’s all very well them saying the state pension will increase due to the Triple Lock but, with PTA frozen at £12,570 for 2 more years by Mr Hunt, a lot of pensioners could find themselves paying income tax on their pensions. 

The state pension is the lowest in Europe - we can’t afford to get taxed! Low incomes getting hit again!  

Serious question, are they intentionally keeping us poor?

JoeCrystal

foot_the8ill said:

So what about the frozen Personal Tax Allowance? 

It’s all very well them saying the state pension will increase due to the Triple Lock but, with PTA frozen at £12,570 for 2 more years by Mr Hunt, a lot of pensioners could find themselves paying income tax on their pensions. 

The state pension is the lowest in Europe - we can’t afford to get taxed! Low incomes getting hit again!  

Serious question, are they intentionally keeping us poor?

Why? Since the early 20th century, successive governments have believed that people are responsible for ensuring sufficient retirement provisions. The state pension is never designed to give you a comfortable income. It is there purely as income needed and maybe a tiny measure of wants.

Unfortunately, employees do not have choices if their employers cannot be bothered to contribute, so they cannot save up a significant enough provision for their retirement, which is why it is the main reason behind auto-enrollment after all, especially in the private sector. It is even worse among self-employed. As I recall, there is a general trend in decline among them in not bothering to save up for their retirement to date.

Do you understand that many pensioners only pay a per cent of the taxable amount above the personal allowance? So if I am a pensioner on £13,000 for the sake of argument (thanks to an increase of £430 per year), my expected tax bill will be £86 for the year. Are you suggesting they could not afford £86 for the year in taxes? Significantly, the increase is new money, so it is just a matter of planning or having other pensions reduced accordingly. However, pensioners are still seeing an increase in their income.

ali_bear

foot_the8ill said:

Serious question, are they intentionally keeping us poor?

No, no they're not. But I think we all have to recognize that the economy/taxpayer can no longer afford to generously feather-bed those on state retirement incomes. 

hugheskevi

foot_the8ill said:

Serious question, are they intentionally keeping us poor?

Since 2010 the Basic State pension has increased by 80%, average earnings by 58% and CPI by 55%.

How much more do you think pensioners should have been given, and who should politicians make pay for that? Tempting as it is to cite abstract taxes on the rich, the reality is that most taxes have been raised to as much as they can yield (eg look at dividend and capital tax allowances and how much they have been cut in recent years).

If those figures were more like  80%, 95% and 70% respectively, then there would be a good argument for more money to pensioners. But we cannot simply disregard anaemic earnings growth over the last decade - the size of the pie needs to grow before more can be given, whereas over the last 15 years pensioners have been protected and hence are taking increasingly large slices of a pie that is staying pretty much the same year-to-year. That is the part that is unsustainable.

Fix GDP and earnings growth, and everyone can have more, but at the current time there is an economic reality to face around resource distribution.

MK62

JoeCrystal said:

foot_the8ill said:

So what about the frozen Personal Tax Allowance? 

It’s all very well them saying the state pension will increase due to the Triple Lock but, with PTA frozen at £12,570 for 2 more years by Mr Hunt, a lot of pensioners could find themselves paying income tax on their pensions. 

The state pension is the lowest in Europe - we can’t afford to get taxed! Low incomes getting hit again!  

Serious question, are they intentionally keeping us poor?

Do you understand that many pensioners only pay a per cent of the taxable amount above the personal allowance? So if I am a pensioner on £13,000 for the sake of argument (thanks to an increase of £430 per year), my expected tax bill will be £86 for the year. Are you suggesting they could not afford £86 for the year in taxes? Significantly, the increase is new money, so it is just a matter of planning or having other pensions reduced accordingly. However, pensioners are still seeing an increase in their income.

Though it shouldn't be forgotten that this pensioner has also just lost the WFA, so I very much doubt he/she will see it that way........

german_keeper

I may be wrong on this as older people may still prefer more traditional payment methods. But if people pay by monthly direct debit then surely annual increases to state pension over a long period of time, which are much higher than increases to wages and inflation, are preferable to a one off lump sum at a certain time of the year. So given the pension increases since 2010 and an assumption that triple lock continues at least until the end of this parliament is that not the better option?

eskbanker

german_keeper said:

I may be wrong on this as older people may still prefer more traditional payment methods. But if people pay by monthly direct debit then surely annual increases to state pension over a long period of time, which are much higher than increases to wages and inflation, are preferable to a one off lump sum at a certain time of the year. So given the pension increases since 2010 and an assumption that triple lock continues at least until the end of this parliament is that not the better option?

It's unclear to me exactly which two options you're comparing, but if your reference to "a one off lump sum at a certain time of the year" is the WFA, then yes, I imagine that most would rather have the annual triple lock increase if having to choose one or the other, but of course up to now they've had both!

german_keeper

eskbanker said:

german_keeper said:

I may be wrong on this as older people may still prefer more traditional payment methods. But if people pay by monthly direct debit then surely annual increases to state pension over a long period of time, which are much higher than increases to wages and inflation, are preferable to a one off lump sum at a certain time of the year. So given the pension increases since 2010 and an assumption that triple lock continues at least until the end of this parliament is that not the better option?

It's unclear to me exactly which two options you're comparing, but if your reference to "a one off lump sum at a certain time of the year" is the WFA, then yes, I imagine that most would rather have the annual triple lock increase if having to choose one or the other, but of course up to now they've had both!

Yes I understand that.

My initial reaction to the removal of WFA was surprise and something approaching outrage. Of course we all have different opinions how the black hole should be filled; some may even suggest it doesn't need filling. My way would involve as a starter for ten, a complete overhaul of inheritance tax (not in a way the vast majority would agree with), and listing the 30 properties owned by a certain family on AirBNB with profits going to the Treasury. But with that sort of manifesto I ain't getting elected anytime soon!

So over to the ones who did get elected.It seems obvious that we are once again all in it together and the rest of us will find out in October what is expected of us. So I am trying to take a different perspective on the policy which I disagree with and see what the argument is from the other side, bearing in mind the suggestion is that we all have to do our bit.

I know several friends and family in receipt of SP, none of whom I would class as wealthy, and most have at one time or another commented that they don't know why they receive WFA. My concern would be the people who are just above the limit for Pension Credit, and I have no experience of anyone in that situation. It would seem that about 6 quid per week would be a significant amount to them. But based on figures quoted above they have done ok over the last 14 years compared to many others and I have also seen comments on other threads that some of the passported benefits on Pension Credit are also available to others on low incomes, just they don't get the automatic entitlement that PC brings. That may of course be nonsense.

pensioner2

I have just read a statement from our local Labour MP.   He justifies his decision to vote to remove the WFA by repeating the half truths from his PM.   The tax free WFA is worth over £750 to a double over 80s household.   The decision has been made too late to allow many pensioners to adjust their finances.       Those just above the pension credit limit are the new poor.    He states that many pensioners have agreed  with the decision to means test because they don't need it[perhaps they could accept it and give to a charity].    I wonder if the cost to the NHS from the extra illness caused has been costed.          On a lighter note,  some of the media are reminding us of the £10 Christmas bonus [unless that stops] The bonus started in 1972 and if index linked would be over £110 [what a black hole that would create] The 25p extra that over 80s receive has been the same for over 50 years.    I must stop because matron says I need a drink before using my bus pass, whilst I can, to get a warm.

westv

It might perhaps have been better if the WFA was removed from next year rather than this - given pensioners more time to budget/apply for PC.