Third State Pension age review: independent report call for evidence - published today

Universidad

dunstonh said:

Why should wealth be distributed to those who have not earned it?

Billionaires must work really hard to earn all of that wealth. 

And isn't all taxation a form of redistributing wealth to those who have not "earned" it? 

Reasonable people can disagree about where the line should be, but let's at least start from the principle that the rationale for taxation is well established.

DE_612183 said:

we all know the result will be adding on a couple of years to the SPA...

I don't think that's a foregone conclusion. Raising the pension age to 70 takes nearly 25K out of the pockets of every living person dragged into the new age range. Bear in mind nearly 1/10 of us are public sector workers and it gets worse. The average public sector pension is, what, about 15K at this point? Those folks are being asked to be 50,000 worse off by the government, and they'll all respond with their votes. 

The boomer generation are losing their ability to directly control all national politics as their numbers decline. I think it would be politically extremely difficult to ask essentially everyone else to lose, give or take, a year's wages to a benefit change, when we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers.

And no matter how necessary it seems to raise the pension age, there'd still need to be a rationale presented to the public. With life expectency declining, they won't be able to use that. If the only rationale they have is "because we can't afford it", that's going to raise some questions about why we're still affording it for the current generation of pensioners, and what other things should go first. And, rightly or wrongly, that's direct fodder for populists who promise the moon on a stick.

I'm not sure there's a more sensible position politically than punting it down the road, which is precisely what happened at the last review.

Andy_L

NickPoole said:

I think they should abandon it, freeze retirement age and start to work on a proper fair taxation regime and redistribution of wealth.

Yes, we are living longer than 1946 or whenever but the country is infinitely wealthier too. It's just the increase in wealth has all gone into a few hands.

If that were true it would solve an awful lot of problems ;-)

Qyburn

Universidad said:

... we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers. ...

Are you referring to NI? I can't think of any other way that pensioners aren't subject to the same tax as worker.

MeteredOut

Universidad said:

dunstonh said:

Why should wealth be distributed to those who have not earned it?

Billionaires must work really hard to earn all of that wealth. 

And isn't all taxation a form of redistributing wealth to those who have not "earned" it? 

Reasonable people can disagree about where the line should be, but let's at least start from the principle that the rationale for taxation is well established.

DE_612183 said:

we all know the result will be adding on a couple of years to the SPA...

I don't think that's a foregone conclusion. Raising the pension age to 70 takes nearly 25K out of the pockets of every living person dragged into the new age range. Bear in mind nearly 1/10 of us are public sector workers and it gets worse. The average public sector pension is, what, about 15K at this point? Those folks are being asked to be 50,000 worse off by the government, and they'll all respond with their votes. 

The boomer generation are losing their ability to directly control all national politics as their numbers decline. I think it would be politically extremely difficult to ask essentially everyone else to lose, give or take, a year's wages to a benefit change, when we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers.

And no matter how necessary it seems to raise the pension age, there'd still need to be a rationale presented to the public. With life expectency declining, they won't be able to use that. If the only rationale they have is "because we can't afford it", that's going to raise some questions about why we're still affording it for the current generation of pensioners, and what other things should go first. And, rightly or wrongly, that's direct fodder for populists who promise the moon on a stick.

I'm not sure there's a more sensible position politically than punting it down the road, which is precisely what happened at the last review.

Can you give some examples where the boomer generation have directly controlled all national politics?

I do find the "blame it all on the boomers" is divisive and also creates a diversion from the bigger issue - which is the gap between the richest and the poorest is wider than ever. Creating a bogey-man out of the boomers is a entertaining side show but does nothing to address the real issues.

I do agree the triple-lock is unsustainable and the 2.5% floor should be removed,

(I'm not a boomer).

Exodi

Universidad said:
The boomer generation are losing their ability to directly control all national politics as their numbers decline. I think it would be politically extremely difficult to ask essentially everyone else to lose, give or take, a year's wages to a benefit change, when we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers.

And no matter how necessary it seems to raise the pension age, there'd still need to be a rationale presented to the public. With life expectency declining, they won't be able to use that. If the only rationale they have is "because we can't afford it", that's going to raise some questions about why we're still affording it for the current generation of pensioners, and what other things should go first. And, rightly or wrongly, that's direct fodder for populists who promise the moon on a stick.

I'm not sure there's a more sensible position politically than punting it down the road, which is precisely what happened at the last review.

Economic or fiscal reality matters little, what matters is votes, and if certain demographics want change, they have to vote. Politicians do not enact policies to the benefit of people who do not vote for them.

EDIT: deleted a lot of my post as this is clearly political.

The only thing I'll say is this situation is not unique to the UK. At the same time in the US:

"Social Security will not be able to fully pay monthly benefits to tens of millions of retirees and people with disabilities in 2034 if lawmakers don’t act to address the program’s pending shortfall, according to an annual report released Wednesday by Social Security’s trustees.

The combined Social Security trust funds – which help support payments to the elderly, survivors and people with disabilities – are expected to be exhausted in 2034, one year earlier than previously forecast, according to the trustees’ annual report. At that time, payroll tax revenue and other income sources will only be able to cover 81% of benefits owed.."

https://edition.cnn.com/2025/06/18/politics/social-security-trust-fund-annual-report

Exodi

Qyburn said:

Universidad said:

... we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers. ...

Are you referring to NI? I can't think of any other way that pensioners aren't subject to the same tax as worker.

I'd expect so.

Universidad

Qyburn said:

Universidad said:

... we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers. ...

Are you referring to NI? I can't think of any other way that pensioners aren't subject to the same tax as worker.

I am referring to NI. (Although, it's not strictly the only way that pensioners are subject to different taxation).

I used to think pensioners should pay NI, but now I think we should abolish employee NI and increase income tax to meet a similar proportion of income, and thereby have pensioners pay the same rates of tax on income as workers. There's no good reason why pensioners should pay less tax on their income than workers, and the proof of intergenerational fairness is that it's a change for pensioners that I would support for myself as a future pensioner. 

Most other solutions to the problem of an aging population amount to pulling up the ladder for young workers, and as I say this will become a fertile battleground for populists. 

Exodi said:

Economic or fiscal reality matters little, what matters is votes

This is key. Boomers have had the levers of power for a long time because of the size of their demographic, their relative economic status, and the fact that older generations tend to vote more. I'm not apportioning blame over any of these facts, just treating them at face value. That voting advantage is diminishing, and when you look at what issues a populist party would try to gain power with five or ten years from now the picture will be quite different.

Exodi

Universidad said:

Qyburn said:

Universidad said:

... we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers. ...

Are you referring to NI? I can't think of any other way that pensioners aren't subject to the same tax as worker.

I am referring to NI. (Although, it's not strictly the only way that pensioners are subject to different taxation).

I used to think pensioners should pay NI, but now I think we should abolish employee NI and increase income tax to meet a similar proportion of income, and thereby have pensioners pay the same rates of tax on income as workers. There's no good reason why pensioners should pay less tax on their income than workers, and the proof of intergenerational fairness is that it's a change for pensioners that I would support for myself as a future pensioner. 

Just to be fair to both sides of the debate - an employee enrolled in a run of the mill workplace pension scheme will be effectively paying NI on their pension contribution that is not relieved at source with the income tax. In this situation, charging NI in retirement would thus cause NI to be charged on the same money twice.

Of course, alternatively in a net pay arrangement (ironically named, as i refers to contributions taken from gross pay), such as salary sacrifice, NI is not incurred, meaning they never pay NI on their private pension contributions or withdrawals.

While I can get behind merging of NI into Income Tax, I think the biggest source of injustice stems from, what some might see as, overly generous salary sacrifice perks, whereas others might see as an unfair imbalance of workplace pension schemes. Another issue, in my opinion, is the LEL, which disproportionately hamstrings lower income income workers ability to save for retirement.

I don't really want to engage in the boomer conversation as it will cause the thread to be shut down.

hugheskevi

Exodi said:

Just to be fair to both sides of the debate - an employee enrolled in a run of the mill workplace pension scheme will be effectively paying NI on their pension contribution that is not relieved at source with the income tax. In this situation, charging NI in retirement would thus cause NI to be charged on the same money twice.

Of course, alternatively in a net pay arrangement (ironically named, as i refers to contributions taken from gross pay), such as salary sacrifice, NI is not incurred, meaning they never pay NI on their private pension contributions or withdrawals.

A net pay arrangement is different to salary sacrifice, and employee NI is levied on contributions made through net pay. To recap, there are 4 main ways of contributing to a pension for an employee:

• Relief-at-Source - Both income tax and employee NI deducted by employer, 80% of gross contribution deducted by employer and sent to provider, basic rate relief added by provider, employee claims any extra relief due from HMRC. This is also the way most private pension providers deal with contributions made outside of employment.  
• Net Pay - Both income tax and employee NI deducted by employer, 100% of gross contribution deducted by employer and sent to provider.
• Salary sacrifice - contractual change such that employee has lower pay in return for higher employer contributions, so no income tax or employee NI payable on contribution. Employer may share some or all of the savings on employer NI with employee.
• Lump sum contribution with no relief - members pay from their own funds, and claim all income tax relief back from HMRC. Employee NI will have already been paid if funds come from employment income.

zagfles

Exodi said:

Universidad said:

Qyburn said:

Universidad said:

... we're unwilling to break the triple lock for current pensioners, or even tax them in line with current workers. ...

Are you referring to NI? I can't think of any other way that pensioners aren't subject to the same tax as worker.

I am referring to NI. (Although, it's not strictly the only way that pensioners are subject to different taxation).

I used to think pensioners should pay NI, but now I think we should abolish employee NI and increase income tax to meet a similar proportion of income, and thereby have pensioners pay the same rates of tax on income as workers. There's no good reason why pensioners should pay less tax on their income than workers, and the proof of intergenerational fairness is that it's a change for pensioners that I would support for myself as a future pensioner. 

Just to be fair to both sides of the debate - an employee enrolled in a run of the mill workplace pension scheme will be effectively paying NI on their pension contribution that is not relieved at source with the income tax. In this situation, charging NI in retirement would thus cause NI to be charged on the same money twice.

Of course, alternatively in a net pay arrangement (ironically named, as i refers to contributions taken from gross pay), such as salary sacrifice, NI is not incurred, meaning they never pay NI on their private pension contributions or withdrawals.

Net pay is NOT the same as sal sac, net pay doesn't give NI relief, only tax relief, so charging NI on pension income would be charging it twice on the same income. Which is why NI is not charged on pension income, as until the last decade or so most people either used RAS or net pay which meant no NI relief on contributions. Sal sac is a relatively new thing. 

While I can get behind merging of NI into Income Tax, I think the biggest source of injustice stems from, what some might see as, overly generous salary sacrifice perks, whereas others might see as an unfair imbalance of workplace pension schemes. Another issue, in my opinion, is the LEL, which disproportionately hamstrings lower income income workers ability to save for retirement.

Why? 11 hours a week at NMW would reach the LEL. 

I don't really want to engage in the boomer conversation as it will cause the thread to be shut down.

Just report that sort of bull to get the post deleted. This thread is perfectly on topic here, political drivel about wealth redistribution or blame the boomers, blame the immigrants, blame anyone but me and my sort isn't.