Gov launching pension age review

eskbanker

Stubod said:

I understood that even with the triple lock, the SP has only increased by around RPI since the triple lock was intoduced.??

Also noted that the UK SP is one of the lowest in Europe??....although I am aware there are other "benefits" that would need to be factored in.

However I guess the bottom line is that it is unafordabe and getting ever more so. Not sure why they don't simply increase income tax as that way everybody feels a bit of pain, (pensioners included), while at the same time increase the tax allowance to compensate lower incomes??

Because they were elected on a manifesto commitment not to do so?

(and yes, that potentially opens up a much wider political discussion about employer NI, etc, that runs the risk of thread deletion)

jimi_man

And also by increasing income tax to subsidise the SP you're asking people in their 20's  and 30's to pay extra for something that they are not going to see for 40-50 years. By getting rid of the triple lock and using a more reasonable measure (CPI or linked to average earnings) then you aren't going to hammer everyone. It will probably affect the rich more as they live longer and so benefit from the triple lock more and consequently would lose out a bit if it was got rid of.

SouthCoastBoy

From memory I think income tax was 30% when I started work, so as young adults we were paying a lot higher income tax than now.

Exodi

Stubod said:

However I guess the bottom line is that it is unafordabe and getting ever more so. Not sure why they don't simply increase income tax 

Are you a pensioner, by chance?

Surely the most obvious solution would be to abandon the inherently unsustainable triple lock - rather than forever needing to find ways to plug the ever-increasing bill?

I don't even know how you could conclude that increasing income tax on working families is the 'simplest' answer? How long do you think that the state pension should increase more than earnings and inflation?

Stubod

jimi_man said:

And also by increasing income tax to subsidise the SP you're asking people in their 20's  and 30's to pay extra for something that they are not going to see for 40-50 years. By getting rid of the triple lock and using a more reasonable measure (CPI or linked to average earnings) then you aren't going to hammer everyone. It will probably affect the rich more as they live longer and so benefit from the triple lock more and consequently would lose out a bit if it was got rid of.

..Equally, by increasing income tax,  (the more wealthy) pensioners would also be contributing more??

Also, as a note, CPI does not include Council tax which has risen significantly, (way above CPI), so CPIh would be a fairer option??

..and I understand the gov said they would not increase income tax, but I am sure there are other commitments they made that have now dropped by the wayside?? (NB not intended to be read as a political comment).

Exodi

SouthCoastBoy said:

From memory I think income tax was 30% when I started work, so as young adults we were paying a lot higher income tax than now.

I'm not sure how you can arrive at a conclusion like that with a single data point, without any substance like the tax bands, NI, etc.

An interesting chart shows more people than ever are becoming higher rate taxpayers (due to the continual freezing of the tresholds):

https://ifs.org.uk/taxlab/taxlab-data-item/number-taxpayers-and-higher-rate-taxpayers-over-time

40%>30%.

af1963

That table is interesting.  The year-by-year increases, based on the highest of the three figures in each year individually, produces a pension of £230.25.  Linking it to whichever of CPI or Earnings or 2.5%pa had increased most since the base year, *cumulatively*, would have produced £201.80, based on the link to wages, about 15% less.   (The CPI link would have been used until 2022-3 when wages finally overtook CPI for the first time during the period, then again in 2023-4 when wages fell behind inflation again.)

Exodi

af1963 said:

That table is interesting.  The year-by-year increases, based on the highest of the three figures in each year individually, produces a pension of £230.25.  Linking it to whichever of CPI or Earnings or 2.5%pa had increased most since the base year, *cumulatively*, would have produced £201.80, based on the link to wages, about 15% less.   (The CPI link would have been used until 2022-3 when wages finally overtook CPI for the first time during the period, then again in 2023-4 when wages fell behind inflation again.)

At least add value when you plagiarise. 

Earnings weren't used to uprate the state pension in 22_23 because they were seen as artificially inflated due to fluctuating earnings caused by pandemic measures like furlough.

https://commonslibrary.parliament.uk/research-briefings/cbp-9439/#:~:text=Pension rates in 2022/23,£179.60 in 2021/22.

Albermarle

BlackKnightMonty said:

MeteredOut said:

BlackKnightMonty said:

BrilliantButScary said:

It's a shame this thread has devolved into content best left to the Daily Telegraph.

There are two entrenched views.

Those who are collecting or soon to collect a state pension who want it to be plumped up as much as possible.

Those who are some way off collecting it who see the utter un sustainability of it, and who would like some changes made to keep it as a possible future option for them even though the likelyhood of them receiving it AT ALL/AT ANY AGE is rapidly diminishing.

I don’t know how you reconcile those two positions.

You really can't accept that there are people in the middle? You think its either boomer - handed millions, or Millenial/GenZ - no chance nomatter what they do?

As referred to above, its a shame this is another thread that has turned into a whinge rather than a grown-up discussion about the actual topic.

I've stated before - the pension will be around for as long as people who have paid NI are able to collect it, but it'd be naive to think the attainment age won't go up. Linking it to life expectancy seems a good starting point.

No, I think the State Pension faces extinction.

As mentioned before.
Any Govt/political party that got rid of the state pension would be the ones facing extinction. 
So that is why it will not happen. 

SarahB16

I haven't read through all of this long thread but in my opinion I think it's hard to justify increasing the age you receive your state pension as life expectancy hasn't increased.  However, I do wonder if there may be a watering down of the triple lock benefits.