Triple lock increase for April 2027 is 3.9% (probably)

michaels

Demographics isn't really as simple as deaths minus births and ner immigration, we have the 'baby boom' demographic to think of as well.

Even if we had steady state working to retired proportions, triple lock implies a gradually increasing share of GDP goes on pensions so are we really surprised when projections show this?

michaels

The wfa was a similar amount to the extra tax to be imposed on the state pension?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82140042#Comment_82140042

Only by coincidence (for 2027) and obviously they wouldn't have known the values of the 2027 triple lock parameters in 2024!

Triumph13

Agree on the political difficulties of dropping the triple lock. I do think it may be possible though to sell a change to a double lock, losing the 2.5% element, and also to sneak through a change to make it the higher of inflation or wage growth on a cumulative basis, rather than an annual basis, as being too complicated a difference for people to understand / hard for an opposition party to fight against in easy soundbites.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82140257#Comment_82140257

Those aren't really comparable though - minimum wage needs regular adjustment as a matter of course, and changes to SPA are inherently long term plans for implementation several parliamentary terms later, but triple lock is such a hot topic that parties are expected make manifesto commitments to its retention…

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82140257#Comment_82140257

No argument with what you say, but the realpolitik is that the % of people over 60 who vote is much higher than younger people, who are more likely to be working on a minimum wage.

If I was a politician wanting to be re-elected, I wouldn’t be messing with the Triple lock, however logical/generationally unfair it might be.In the case of the large majority of pensioners some of it gets paid back in tax anyway.

chuffinnora

Although most politicians believe messing with Triple lock may end their careers, I'm not so sure thats true if they make a sensible change.

They could have a higher personal tax allowance for anyone of SPA, for example £20k or a moving annual rate alongside maximum SPA. Whatever is the simplest and easiest to implement. Anyone with additional pensions or income will still pay tax. Can't imagine too many of us would be ferociously unhappy with that.

The people who only get SP are protected from tax. Then remove the Triple lock for something more sustainable. Those are then less likely to riot as removing tax should cancel out some of the Triple lock loss.

Grumpy_chap

The very purpose of the TL was to increase SP relative to general incomes so the fact it has resulted in SP becoming a larger slice of the GDP pie is the very purpose it set out to achieve, though I don't recall it ever being stated like that at the outset.

The problem with any tool such as the TL is that, if no end point is set at the beginning, then the tool would eventually run until such time as the SP consumes the entirety of GDP (which is absurd) or there is a change that breaks the TL.

Ideally, some end point would have been set at the outset, so "TL until SP is xx% of average earnings" or "TL until SP is equal to Personal Allowance" or whatever.

No such end point was set so it will now need a brave politician to end the TL, or not commit to the TL in their manifesto, or - perhaps a third way - for one party to commit in a manifesto to TL until some end point is reached and all the other parties fall in behind.

michaels

The removal of TL will hurt you more the younger you are because the longer it will be for the state pension to fall behind average incomes. Seems not many are smart enough to realise that. Indeed if you are a higher income older person you are almost certainly better off with the TL being dialled back and lower increases in taxation.

The ever increasing minimum wage continues to price more and more young people and the low skilled out of work and onto long term sick.

QrizB

The ever increasing minimum wage continues to price more and more young people and the low skilled out of work and onto long term sick.

Do you have any evidence for this claim?