Let's for a second look at the "triple lock" in reality.
The triple lock "ensures state pension payments rise in line with the highest of inflation, average wage growth or 2.5pc every year."
But that is unrealistic. For example, inflation rose massively in 2023. And, because most major wage negotiations happen annually, inflation was far higher than wage rises. Whereas, in 2024 inflation dropped considerably. But wage rises were far higher-because those negotiations took into account the real terms pay cut in 2023.
All modern private pensions take this into account.
Suppose, for the sake of simplicity, inflation was 10% in 2023 and 5% in 2024. And average wage growth was 5% in 2023 and 10% in 2024.
Private pensions vary. But typically the rises would be some sort of average between inflation and wages. In my example, it might well be 7.5% a year.
But under the triple lock the State Pension goes up by 10% in 2023. And 10% in 2024. More than inflation. And more than today's workers who are expected to pay for it.
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
Let's for a second look at the "triple lock" in reality.
The triple lock "ensures state pension payments rise in line with the highest of inflation, average wage growth or 2.5pc every year."
But that is unrealistic. For example, inflation rose massively in 2023. And, because most major wage negotiations happen annually, inflation was far higher than wage rises. Whereas, in 2024 inflation dropped considerably. But wage rises were far higher-because those negotiations took into account the real terms pay cut in 2023.
All modern private pensions take this into account.
Suppose, for the sake of simplicity, inflation was 10% in 2023 and 5% in 2024. And average wage growth was 5% in 2023 and 10% in 2024.
Private pensions vary. But typically the rises would be some sort of average between inflation and wages. In my example, it might well be 7.5% a year.
But under the triple lock the State Pension goes up by 10% in 2023. And 10% in 2024. More than inflation. And more than today's workers who are expected to pay for it.
Whose fault? The Coalition Government introduced it. Both main parties have pledged to continue with it. You cant blame the pensioners.
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
PS. I am not talking about me. Unless they change the rules yet again, I will receive a State Pension in 2029. And I think 2035 will be crunch time. But what is done in the 2020s is going to impact greatly on how bad the 2030s are going to be for new pensioners in the late 2030s
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
You mean something like the income tax threshold being frozen for years, and the age at which I could draw my pension being increased.
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
You mean something like the income tax threshold being frozen for years, and the age at which I could draw my pension being increased.
You just don't get it. That is like spitting in the World's largest bucket.
Look at that article again. £1 in every £8 of Govt spending goes on the State Pension. And that will go up to £1 in every £6
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
The point I was making is that each generation has recieved a higher state pension than the last.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
PS. I am not talking about me. Unless they change the rules yet again, I will receive a State Pension in 2029. And I think 2035 will be crunch time. But what is done in the 2020s is going to impact greatly on how bad the 2030s are going to be for new pensioners in the late 2030s
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
You mean something like the income tax threshold being frozen for years, and the age at which I could draw my pension being increased.
You just don't get it. That is like spitting in the World's largest bucket.
Look at that article again. £1 in every £8 of Govt spending goes on the State Pension. And that will go up to £1 in every £6
I was merely making the point that my own state pension has been eroded. I havent a clue what the plan is. Perhaps another f ag packet. I cant understand that committing to the triple lock, as well as reducing NI contributions, can make any sense at all. Looks more like sabotage than a plan.
Let's for a second look at the "triple lock" in reality.
The triple lock "ensures state pension payments rise in line with the highest of inflation, average wage growth or 2.5pc every year."
But that is unrealistic. For example, inflation rose massively in 2023. And, because most major wage negotiations happen annually, inflation was far higher than wage rises. Whereas, in 2024 inflation dropped considerably. But wage rises were far higher-because those negotiations took into account the real terms pay cut in 2023.
All modern private pensions take this into account.
Suppose, for the sake of simplicity, inflation was 10% in 2023 and 5% in 2024. And average wage growth was 5% in 2023 and 10% in 2024.
Private pensions vary. But typically the rises would be some sort of average between inflation and wages. In my example, it might well be 7.5% a year.
But under the triple lock the State Pension goes up by 10% in 2023. And 10% in 2024. More than inflation. And more than today's workers who are expected to pay for it.
So the average increase over the last 10 years which includes the big increases over the last 2 years is 4.1%. If you take the previous 8 years it was only 2.83% per year. So maybe the last 2 have caught up a little on the previous 8.
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
PS. I am not talking about me. Unless they change the rules yet again, I will receive a State Pension in 2029. And I think 2035 will be crunch time. But what is done in the 2020s is going to impact greatly on how bad the 2030s are going to be for new pensioners in the late 2030s
Well that is exactly what is happening now isn't it.
I certainly wasn't told that I would have to pay tax on my pension when I paid in all those years ago.
No political Party dares do anything other than kick this particular can down the road. Simply because to tell the truth is something the voters will not accept.
The election would be won by whoever promised the impossible. Not the 1 that told the truth. Simply because voters will vote for whatever suits them in the short term.
There desperately needs to be a cross-party, in-depth discussion on this topic. Using real figures from real experts, rather than effectively forcing politicians not to tell the truth on this topic.
It's not a Party Political issue. For decades, Retired people pretend that it is their contributions that fund today's state pension. And it is not true. It has always been today's workers that fund today's state pensions. Not their own.
It's not today's pensioners "fault". But they did not pay in anywhere near enough while working to fund the pensioners then. Resulting in a massive shortfall. So massive that there needs to be huge cuts. And today's pensioners believe that burden should only fall on today's workers and tomorrow's pensioners. Not them. Not this year. Not any year.
That position is becoming increasingly unsustainable.
I agree that it is a problem that needs to be resolved. It makes sense that there should be a cross party resolution. The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners. I can only refer to my own experience. When I was young I thought very little about the state pension. I just knew that making regular contributions throughout my working life, would entitle me to a state pension. I didnt have any idea how much it would be. I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts. It never crossed my mind about what my contributions were funding. It was just a contract to me, pay your contributions, and get a pension. I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions. Each generation will surely on average earn more than the previous one, and therefore pay increased contributions. They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
This simply isn't the case. Read your own article.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer 2. Receive a pension for a shorter time 3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
PS. I am not talking about me. Unless they change the rules yet again, I will receive a State Pension in 2029. And I think 2035 will be crunch time. But what is done in the 2020s is going to impact greatly on how bad the 2030s are going to be for new pensioners in the late 2030s
Well that is exactly what is happening now isn't it.
I certainly wasn't told that I would have to pay tax on my pension when I paid in all those years ago.
Nor me, I got mine a year later than I expected, and as I have said before the freezing of the personal allowance has made more of my additional income liable for income tax.
Let's for a second look at the "triple lock" in reality.
The triple lock "ensures state pension payments rise in line with the highest of inflation, average wage growth or 2.5pc every year."
But that is unrealistic. For example, inflation rose massively in 2023. And, because most major wage negotiations happen annually, inflation was far higher than wage rises. Whereas, in 2024 inflation dropped considerably. But wage rises were far higher-because those negotiations took into account the real terms pay cut in 2023.
All modern private pensions take this into account.
Suppose, for the sake of simplicity, inflation was 10% in 2023 and 5% in 2024. And average wage growth was 5% in 2023 and 10% in 2024.
Private pensions vary. But typically the rises would be some sort of average between inflation and wages. In my example, it might well be 7.5% a year.
But under the triple lock the State Pension goes up by 10% in 2023. And 10% in 2024. More than inflation. And more than today's workers who are expected to pay for it.
So the average increase over the last 10 years which includes the big increases over the last 2 years is 4.1%. If you take the previous 8 years it was only 2.83% per year. So maybe the last 2 have caught up a little on the previous 8.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND 2. The Labour Party haven't noticed AND 3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND 4. Every single political party, and every single 1 of their advisers and experts has missed this AND 5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND 2. The Labour Party haven't noticed AND 3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND 4. Every single political party, and every single 1 of their advisers and experts has missed this AND 5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Which do you think is more likely-
(1). Or (2)?
They are not my figures. You quoted an example earlier which I think was inaccurate. You also stated categoricaly in earlier posts that state pensions will never be taxable. When they already are for many people. I am arguing that a struggling state pension scheme, and reducing NI contributions, doesnt add up. I am also arguing that criticising the triple lock for providing large increases, and at the same time freezing the personal allowance, doesnt make sense either. I would be happy with a fair state pension scheme. I dont think that it is fair to expect people to work longer in future. Other alternatives should be explored. We could have the same argument about things like the NHS becoming unaffordable at some point in the future. Maybe doctors, nurses, and porters shouldnt have pay rises which effectively bring that day closer. The main parties should be clearer, and more honest about the choices that people in future will have to make.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND 2. The Labour Party haven't noticed AND 3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND 4. Every single political party, and every single 1 of their advisers and experts has missed this AND 5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Which do you think is more likely-
(1). Or (2)?
They are not my figures. You quoted an example earlier which I think was inaccurate. You also stated categoricaly in earlier posts that state pensions will never be taxable. When they already are for many people. I am arguing that a struggling state pension scheme, and reducing NI contributions, doesnt add up. I am also arguing that criticising the triple lock for providing large increases, and at the same time freezing the personal allowance, doesnt make sense either. I would be happy with a fair state pension scheme. I dont think that it is fair to expect people to work longer in future. Other alternatives should be explored. We could have the same argument about things like the NHS becoming unaffordable at some point in the future. Maybe doctors, nurses, and porters shouldnt have pay rises which effectively bring that day closer. The main parties should be clearer, and more honest about the choices that people in future will have to make.
It's like knitting fog.
Maximum State Pension is currently £11,502.40 a year. Zero Rate Tax Band is currently £12,570.00 a year.
People do not currently pay tax in their basic state pension. Because £11,502.40 is a lower number than £12,570.00.
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
If it continues to be the case that the Zero-Rate Band is Frozen for a few more years and/or the Triple Lock remains, it then becomes theoretically possible that, at some time in the future, then people really will start paying tax on the Basic State Pension.
I'm not giving "guarantees" that won't happen. I'm just confidently predicting that won't happen. Why?
1. That will cause far more outrage from Pensioners than the Triple lock; and 2. It will mean HMRC and other Govt agencies will have to bear a considerable part of the burden of taxing the State Pension at source. Rather than (as now) lumbering 2nd Pension providers and Pensioners with that burden.
I can't rely on politicians for much. But self-interest? Yup.
So-freezing of zero-rate bands may well continue. But there is going to be a deal whereby the State Pension is going to be equal to or less than the zero rate tax band for pensioners.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND 2. The Labour Party haven't noticed AND 3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND 4. Every single political party, and every single 1 of their advisers and experts has missed this AND 5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Which do you think is more likely-
(1). Or (2)?
They are not my figures. You quoted an example earlier which I think was inaccurate. You also stated categoricaly in earlier posts that state pensions will never be taxable. When they already are for many people. I am arguing that a struggling state pension scheme, and reducing NI contributions, doesnt add up. I am also arguing that criticising the triple lock for providing large increases, and at the same time freezing the personal allowance, doesnt make sense either. I would be happy with a fair state pension scheme. I dont think that it is fair to expect people to work longer in future. Other alternatives should be explored. We could have the same argument about things like the NHS becoming unaffordable at some point in the future. Maybe doctors, nurses, and porters shouldnt have pay rises which effectively bring that day closer. The main parties should be clearer, and more honest about the choices that people in future will have to make.
It's like knitting fog.
Maximum State Pension is currently £11,502.40 a year. Zero Rate Tax Band is currently £12,570.00 a year.
That is not true.
People do not currently pay tax in their basic state pension. Because £11,502.40 is a lower number than £12,570.00.
That would be obviouus if the state pension figure was correct.
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
I have a higher state pension than what you quote as the maximum, and will exceed the tax threshold next year.
If it continues to be the case that the Zero-Rate Band is Frozen for a few more years and/or the Triple Lock remains, it then becomes theoretically possible that, at some time in the future, then people really will start paying tax on the Basic State Pension.
It is supposed to be frozen until 2028. I will pay tax on it next year.
I'm not giving "guarantees" that won't happen. I'm just confidently predicting that won't happen. Why?
You may not recall that I previously posted an article that pointed out that around 500,000 people already pay tax on their state pension.
1. That will cause far more outrage from Pensioners than the Triple lock; and 2. It will mean HMRC and other Govt agencies will have to bear a considerable part of the burden of taxing the State Pension at source. Rather than (as now) lumbering 2nd Pension providers and Pensioners with that burden.
It is happening already.
I can't rely on politicians for much. But self-interest? Yup.
So-freezing of zero-rate bands may well continue. But there is going to be a deal whereby the State Pension is going to be equal to or less than the zero rate tax band for pensioners.
They are apparently foecasting an increase of 7.5% for next year. In 2021 the state pension was £9,300. This left me with almost £3,300 of my additional income tax free. By next year that will be wiped out, leaving me £660 worse off. My pension is currently £12,272. So lets say we get 7.5% next year. Which will be a decent increase of £920. That will take me up to £13,192. Which will take me over the threshold. That makes me liable for about £120 tax on my pension alone. Added to the £660, it becomes £780. So a £920 increase becomes £140. Not so good.
This article was last updated in 2020
Why is my friend on a much bigger £250 a week state pension, though I earned more? Steve Webb replies
For example, in February this year there were nearly 400,000 people with weekly state pensions of more than £250 per week, of whom nearly 70,000 were on more than £300 per week.
All of these people are getting a substantial Serps pension.
Although for those retiring now the standard flat rate is £175.20, those who had already built up more than this amount by April 2016 could get a pension under the old rules instead.
This is how your friend comes to get a pension of over £250 per week.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND 2. The Labour Party haven't noticed AND 3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND 4. Every single political party, and every single 1 of their advisers and experts has missed this AND 5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Which do you think is more likely-
(1). Or (2)?
They are not my figures. You quoted an example earlier which I think was inaccurate. You also stated categoricaly in earlier posts that state pensions will never be taxable. When they already are for many people. I am arguing that a struggling state pension scheme, and reducing NI contributions, doesnt add up. I am also arguing that criticising the triple lock for providing large increases, and at the same time freezing the personal allowance, doesnt make sense either. I would be happy with a fair state pension scheme. I dont think that it is fair to expect people to work longer in future. Other alternatives should be explored. We could have the same argument about things like the NHS becoming unaffordable at some point in the future. Maybe doctors, nurses, and porters shouldnt have pay rises which effectively bring that day closer. The main parties should be clearer, and more honest about the choices that people in future will have to make.
It's like knitting fog.
Maximum State Pension is currently £11,502.40 a year. Zero Rate Tax Band is currently £12,570.00 a year.
That is not true.
People do not currently pay tax in their basic state pension. Because £11,502.40 is a lower number than £12,570.00.
That would be obviouus if the state pension figure was correct.
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
I have a higher state pension than what you quote as the maximum, and will exceed the tax threshold next year.
If it continues to be the case that the Zero-Rate Band is Frozen for a few more years and/or the Triple Lock remains, it then becomes theoretically possible that, at some time in the future, then people really will start paying tax on the Basic State Pension.
It is supposed to be frozen until 2028. I will pay tax on it next year.
I'm not giving "guarantees" that won't happen. I'm just confidently predicting that won't happen. Why?
You may not recall that I previously posted an article that pointed out that around 500,000 people already pay tax on their state pension.
1. That will cause far more outrage from Pensioners than the Triple lock; and 2. It will mean HMRC and other Govt agencies will have to bear a considerable part of the burden of taxing the State Pension at source. Rather than (as now) lumbering 2nd Pension providers and Pensioners with that burden.
It is happening already.
I can't rely on politicians for much. But self-interest? Yup.
So-freezing of zero-rate bands may well continue. But there is going to be a deal whereby the State Pension is going to be equal to or less than the zero rate tax band for pensioners.
They are apparently foecasting an increase of 7.5% for next year. In 2021 the state pension was £9,300. This left me with almost £3,300 of my additional income tax free. By next year that will be wiped out, leaving me £660 worse off. My pension is currently £12,272. So lets say we get 7.5% next year. Which will be a decent increase of £920. That will take me up to £13,192. Which will take me over the threshold. That makes me liable for about £120 tax on my pension alone. Added to the £660, it becomes £780. So a £920 increase becomes £140. Not so good.
This article was last updated in 2020
Why is my friend on a much bigger £250 a week state pension, though I earned more? Steve Webb replies
For example, in February this year there were nearly 400,000 people with weekly state pensions of more than £250 per week, of whom nearly 70,000 were on more than £300 per week.
All of these people are getting a substantial Serps pension.
Although for those retiring now the standard flat rate is £175.20, those who had already built up more than this amount by April 2016 could get a pension under the old rules instead.
This is how your friend comes to get a pension of over £250 per week.
You think that proves that you are right. Whereas it proves I am right.
When I said:-
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
You have a Basic State Pension. Which is not taxed. And a 2nd Pension. Called the "State Earnings Related Pension Scheme" or the "State Second Pension". Which puts you over the current limit. More than the maximum Basic State Pension.
That is what your article was trying to explain.
But you don't understand it. In your example, you don't have a "state pension" of £12,272. You have 2 pensions organised by the state. And you pay tax in relation to the 2nd Pension. The additional pension.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND 2. The Labour Party haven't noticed AND 3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND 4. Every single political party, and every single 1 of their advisers and experts has missed this AND 5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Which do you think is more likely-
(1). Or (2)?
They are not my figures. You quoted an example earlier which I think was inaccurate. You also stated categoricaly in earlier posts that state pensions will never be taxable. When they already are for many people. I am arguing that a struggling state pension scheme, and reducing NI contributions, doesnt add up. I am also arguing that criticising the triple lock for providing large increases, and at the same time freezing the personal allowance, doesnt make sense either. I would be happy with a fair state pension scheme. I dont think that it is fair to expect people to work longer in future. Other alternatives should be explored. We could have the same argument about things like the NHS becoming unaffordable at some point in the future. Maybe doctors, nurses, and porters shouldnt have pay rises which effectively bring that day closer. The main parties should be clearer, and more honest about the choices that people in future will have to make.
It's like knitting fog.
Maximum State Pension is currently £11,502.40 a year. Zero Rate Tax Band is currently £12,570.00 a year.
That is not true.
People do not currently pay tax in their basic state pension. Because £11,502.40 is a lower number than £12,570.00.
That would be obviouus if the state pension figure was correct.
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
I have a higher state pension than what you quote as the maximum, and will exceed the tax threshold next year.
If it continues to be the case that the Zero-Rate Band is Frozen for a few more years and/or the Triple Lock remains, it then becomes theoretically possible that, at some time in the future, then people really will start paying tax on the Basic State Pension.
It is supposed to be frozen until 2028. I will pay tax on it next year.
I'm not giving "guarantees" that won't happen. I'm just confidently predicting that won't happen. Why?
You may not recall that I previously posted an article that pointed out that around 500,000 people already pay tax on their state pension.
1. That will cause far more outrage from Pensioners than the Triple lock; and 2. It will mean HMRC and other Govt agencies will have to bear a considerable part of the burden of taxing the State Pension at source. Rather than (as now) lumbering 2nd Pension providers and Pensioners with that burden.
It is happening already.
I can't rely on politicians for much. But self-interest? Yup.
So-freezing of zero-rate bands may well continue. But there is going to be a deal whereby the State Pension is going to be equal to or less than the zero rate tax band for pensioners.
They are apparently foecasting an increase of 7.5% for next year. In 2021 the state pension was £9,300. This left me with almost £3,300 of my additional income tax free. By next year that will be wiped out, leaving me £660 worse off. My pension is currently £12,272. So lets say we get 7.5% next year. Which will be a decent increase of £920. That will take me up to £13,192. Which will take me over the threshold. That makes me liable for about £120 tax on my pension alone. Added to the £660, it becomes £780. So a £920 increase becomes £140. Not so good.
This article was last updated in 2020
Why is my friend on a much bigger £250 a week state pension, though I earned more? Steve Webb replies
For example, in February this year there were nearly 400,000 people with weekly state pensions of more than £250 per week, of whom nearly 70,000 were on more than £300 per week.
All of these people are getting a substantial Serps pension.
Although for those retiring now the standard flat rate is £175.20, those who had already built up more than this amount by April 2016 could get a pension under the old rules instead.
This is how your friend comes to get a pension of over £250 per week.
You think that proves that you are right. Whereas it proves I am right.
When I said:-
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
You have a Basic State Pension. Which is not taxed. And a 2nd Pension. Called the "State Earnings Related Pension Scheme" or the "State Second Pension". Which puts you over the current limit. More than the maximum Basic State Pension.
That is what your article was trying to explain.
But you don't understand it. In your example, you don't have a "state pension" of £12,272. You have 2 pensions organised by the state. And you pay tax in relation to the 2nd Pension. The additional pension.
Fog lifted yet?
No it hasnt. I have never opted in or out of anything. I receive one pension payment. I have looked online for an explanation. I could only find two that seemed possible. The first was that much of my working life was spent as a higher rate taxpayer, and therefore made higher NI contributions, so this may have been an explanation for it, suggested on the MSE forum. The second one was something called protected payment, explanation below. You apparently get the protected payment due to having paid into the additional state pension. This is the most likely explanation. It is probably the result of making higher contributions, because it is not something I consciously did.
What you'll get Your State Pension amount depends on your National Insurance record.
Check your State Pension forecast to find out how much you could get when you reach State Pension age. It also shows your National Insurance record.
The full rate of new State Pension is £221.20 a week. Your amount could be different depending on:
if you were contracted out before 2016 the number of National Insurance qualifying years you have if you paid into the Additional State Pension before 2016
If you’re getting more than £221.20 a week If you paid into the Additional State Pension before 2016 and would have got more State Pension under the old rules, you’ll get a ‘protected payment’. This is paid on top of the full rate of new State Pension. https://www.gov.uk/new-state-pension/what-youll-get
I contributed to my own pension, which I havent started drawing yet. I also contribute to an employers scheme, which I also havent touched.
Whatever the story on my state pension, the amount I receive is down to the NI contributions I have made. So my arguments stand.
To put this in perspective. The amount I receive over and about the maximum is less than £15 per week.
Whatever the reason for the amount I receive, I never expected to pay tax on my state pension. I dont suppose those who are already taxed did either.
The reason you might be receiving more than the maximum state pension is due to a concept called the “protected payment.” Let me explain:
New State Pension: The full new State Pension, which you receive when you reach State Pension age, is currently £185.15 per week1. This amount is based on having 35 years of National Insurance contributions. It’s possible to have a starting amount higher than the full new State Pension if you have some Additional State Pension1. Protected Payment: If your starting amount (which includes any Additional State Pension) exceeds the full new State Pension, you receive an extra amount called your "protected payment"2. The protected payment ensures that your state pension won’t be lower than what you would have received under the old pension scheme. This protected payment increases each year in line with inflation2. Transitional Rules: The transition from the old pension system to the new one involved a lengthy period. Some people retiring around April 2016 may have received no more than they would have under the old scheme3. Factors like deferral and individual circumstances can also impact the final pension amount3. In summary, the protected payment ensures that your state pension reflects both the new system and any additional benefits you accrued under the old scheme. So, if you’re receiving more than the maximum state pension, it’s likely due to this protected payment mechanism. 😊321
You receive 1 payment. In relation to 2 separate pension schemes.
1. In relation to your Basic State Pension entitlement; and 2. In relation to payments you made (or, more accurately allowed to be deducted) in relation to what was once called SERPS, and then called the State 2nd Pension
There is no limit as to how many pensions you can have. But you only have 1 Basic State Pension. All the others, whether SERPS or Private Pensions, are separate schemes to your basic state pension.
The clue is in the name. Or do you believe something called a "State 2nd Pension" is not a 2nd Pension?
All I have been saying. For months. But feels like years. Is that no Govt is likely to allow the Basic State Pension to attract Tax but, in some way or another will fall within a zero tax band. In other words, while it has always been taxable, no tax is paid on it. And that Additional Pensions will not be afforded that luxury. And that people who have 2nd Pensions may fall into tax bands where they actually pay tax.
That has always happened. True to say that a Pensioner receiving £12,500 a year is treated for tax purposes like a Worker who earns £12,500 a year. Or £50,000 a year. I don't understand why Pensioners think that they shouldn't pay their fair share. Although I agree that freezing pay bands may be equally unfair on both.
You print an article that says, in relation to Pensioners who are paying tax, that-
"All of these people are getting a substantial Serps pension."
The article was trying to explain things for people who don't understand.
Like you.
You put lots of stuff on this forum. Lots of informative stuff. Lots of interesting stuff. And, occasionally, stuff that is wrong. I'm sure we all do. What we do not do is spend 3 million hours trying to prove that Black is White afterwards.
Which is why far fewer people read your posts than should read your posts.
You receive 1 payment. In relation to 2 separate pension schemes.
1. In relation to your Basic State Pension entitlement; and 2. In relation to payments you made (or, more accurately allowed to be deducted) in relation to what was once called SERPS, and then called the State 2nd Pension
There is no limit as to how many pensions you can have. But you only have 1 Basic State Pension. All the others, whether SERPS or Private Pensions, are separate schemes to your basic state pension.
The clue is in the name. Or do you believe something called a "State 2nd Pension" is not a 2nd Pension?
All I have been saying. For months. But feels like years. Is that no Govt is likely to allow the Basic State Pension to attract Tax but, in some way or another will fall within a zero tax band. In other words, while it has always been taxable, no tax is paid on it. And that Additional Pensions will not be afforded that luxury. And that people who have 2nd Pensions may fall into tax bands where they actually pay tax.
That has always happened. True to say that a Pensioner receiving £12,500 a year is treated for tax purposes like a Worker who earns £12,500 a year. Or £50,000 a year. I don't understand why Pensioners think that they shouldn't pay their fair share. Although I agree that freezing pay bands may be equally unfair on both.
You print an article that says, in relation to Pensioners who are paying tax, that-
"All of these people are getting a substantial Serps pension."
The article was trying to explain things for people who don't understand.
Like you.
You put lots of stuff on this forum. Lots of informative stuff. Lots of interesting stuff. And, occasionally, stuff that is wrong. I'm sure we all do. What we do not do is spend 3 million hours trying to prove that Black is White afterwards.
Which is why far fewer people read your posts than should read your posts.
Which is a shame.
The State Earnings Related Pension Scheme (SERPS), originally known as the State Earnings Related Pension Supplement, was a UK Government pension arrangement, to which employees and employers contributed between 6 April 1978 and 5 April 2002, when it was replaced by the State Second Pension.
Employees who paid full Class 1 National insurance contribution between 1978 and 2002 earned a SERPS pension. Members of occupational pension schemes could be "contracted out" of SERPS by their employer, in which case they and the employer would pay reduced NI contributions, and they would earn virtually no SERPS pension. https://en.wikipedia.org/wiki/State_Earnings-Related_Pension_Scheme
Well I might have the full set. Although I did contribute to my employers scheme from August 2014. I just havent a clue. I havent made a conscious decision to go along with any of them. I dont know what the cost of not opting out might be. Or if I had the opportunity. I do know I have benefitted by around £15 per week. Although this will be diluted when I start paying tax on it. I havent a clue what the cost was.
I stand by my argument that freezing the personal allowance has undermined the purpose of the triple lock. I am sure that there are many people like me, who had no expectation of paying tax on their state pension, that already are. Freezing the personal allowance has also diluted my additional income. Instead of reducing NI contributions the government could have chosen to increase the personal allowance, and or reduce the basic rate of tax, benefitting everyone.
I was quite clear about the benefits and obligations of my personal pension, when I took it out. This is obviously not the case when it comes to my state pension
Comments
The triple lock "ensures state pension payments rise in line with the highest of inflation, average wage growth or 2.5pc every year."
But that is unrealistic. For example, inflation rose massively in 2023. And, because most major wage negotiations happen annually, inflation was far higher than wage rises. Whereas, in 2024 inflation dropped considerably. But wage rises were far higher-because those negotiations took into account the real terms pay cut in 2023.
All modern private pensions take this into account.
Suppose, for the sake of simplicity, inflation was 10% in 2023 and 5% in 2024. And average wage growth was 5% in 2023 and 10% in 2024.
Private pensions vary. But typically the rises would be some sort of average between inflation and wages. In my example, it might well be 7.5% a year.
But under the triple lock the State Pension goes up by 10% in 2023. And 10% in 2024. More than inflation. And more than today's workers who are expected to pay for it.
It makes sense that there should be a cross party resolution.
The alternative is that one or the other of the parties will resort to bribery pensioners in the quest for votes.
I dont necessarily think you are being fair to todays pensioners.
I can only refer to my own experience.
When I was young I thought very little about the state pension.
I just knew that making regular contributions throughout my working life, would entitle me to a state pension.
I didnt have any idea how much it would be.
I just knew that to be comfortable in retirement, I would need to make my own arrangements, pay off my mortgage, and settle any debts.
It never crossed my mind about what my contributions were funding.
It was just a contract to me, pay your contributions, and get a pension.
I suppose I felt it was exactly the same arrangement that I had with Standard Life.
It is difficult to gauge the value of contributions, and pensions.
Each generation will surely on average earn more than the previous one, and therefore pay increased contributions.
They will also recieve a more generous state pension, but it must be very difficult to relate one with the other.
The Coalition Government introduced it.
Both main parties have pledged to continue with it.
You cant blame the pensioners.
Tomorrow's pensioners will increasingly pay more to subsidise today's pensioners. And receive less. Because their triple lock is this:-
1. Pay in for longer
2. Receive a pension for a shorter time
3. Hope and pray that, by the time they need a state pension, it is just your triple lock that has gone. As opposed to the state pension becoming means-tested, rather than universal
Because you have been entirely sensible not just relying on the state pension. Making alternative provision.
Now-how would you feel if it became more and more likely that, if you had saved for a £20,000 a year private pension, that that meant you lost £5,000 a year off your state pension?
But were only told after you had saved that money?
PS. I am not talking about me. Unless they change the rules yet again, I will receive a State Pension in 2029. And I think 2035 will be crunch time. But what is done in the 2020s is going to impact greatly on how bad the 2030s are going to be for new pensioners in the late 2030s
Look at that article again. £1 in every £8 of Govt spending goes on the State Pension. And that will go up to £1 in every £6
I havent a clue what the plan is.
Perhaps another f ag packet.
I cant understand that committing to the triple lock, as well as reducing NI contributions, can make any sense at all.
Looks more like sabotage than a plan.
2023-10.1%
2022-3.1%
2021-2.5%
2020-3.9%
2019-2.6%
2018-3.0%
2017-2.5%
2016-2.5%
2015-2.5%
So the average increase over the last 10 years which includes the big increases over the last 2 years is 4.1%.
If you take the previous 8 years it was only 2.83% per year.
So maybe the last 2 have caught up a little on the previous 8.
Well that is exactly what is happening now isn't it.
I certainly wasn't told that I would have to pay tax on my pension when I paid in all those years ago.
2024-6.4%
2023-5%
2022-3%
2021-5.3%
2020-6.4%
2019-3.8%
2018-3.5%
2017-6.4%
2016-2.3%
2015-3.9%
So in comparison the average increase over the 10 years was 4.6%.
The average over the first 8 was 4.33%.
Let's look at your latest figures in relation to Pension increases, wages, and inflation.
There are only 2 possible conclusions that can be drawn:-
(1).
1. The Govt has conned pensioners out of about £100 Billion over the last 10 years by not using the triple lock AND
2. The Labour Party haven't noticed AND
3. Every single campaigner such as Ros Altman and the various focus groups supporting pensioners' interests AND
4. Every single political party, and every single 1 of their advisers and experts has missed this AND
5. You are the only person who has worked all this out OR
(2)
You are using misleading figures that do not relate to the reality of how the Triple Lock works
I'm sure you are not doing this deliberately. You are not that sort of person.
Which do you think is more likely-
(1). Or (2)?
You quoted an example earlier which I think was inaccurate.
You also stated categoricaly in earlier posts that state pensions will never be taxable.
When they already are for many people.
I am arguing that a struggling state pension scheme, and reducing NI contributions, doesnt add up.
I am also arguing that criticising the triple lock for providing large increases, and at the same time freezing the personal allowance, doesnt make sense either.
I would be happy with a fair state pension scheme.
I dont think that it is fair to expect people to work longer in future.
Other alternatives should be explored.
We could have the same argument about things like the NHS becoming unaffordable at some point in the future.
Maybe doctors, nurses, and porters shouldnt have pay rises which effectively bring that day closer.
The main parties should be clearer, and more honest about the choices that people in future will have to make.
Maximum State Pension is currently £11,502.40 a year.
Zero Rate Tax Band is currently £12,570.00 a year.
People do not currently pay tax in their basic state pension. Because £11,502.40 is a lower number than £12,570.00.
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
If it continues to be the case that the Zero-Rate Band is Frozen for a few more years and/or the Triple Lock remains, it then becomes theoretically possible that, at some time in the future, then people really will start paying tax on the Basic State Pension.
I'm not giving "guarantees" that won't happen. I'm just confidently predicting that won't happen. Why?
1. That will cause far more outrage from Pensioners than the Triple lock; and
2. It will mean HMRC and other Govt agencies will have to bear a considerable part of the burden of taxing the State Pension at source. Rather than (as now) lumbering 2nd Pension providers and Pensioners with that burden.
I can't rely on politicians for much. But self-interest? Yup.
So-freezing of zero-rate bands may well continue. But there is going to be a deal whereby the State Pension is going to be equal to or less than the zero rate tax band for pensioners.
In 2021 the state pension was £9,300.
This left me with almost £3,300 of my additional income tax free.
By next year that will be wiped out, leaving me £660 worse off.
My pension is currently £12,272.
So lets say we get 7.5% next year.
Which will be a decent increase of £920.
That will take me up to £13,192.
Which will take me over the threshold.
That makes me liable for about £120 tax on my pension alone.
Added to the £660, it becomes £780.
So a £920 increase becomes £140.
Not so good.
This article was last updated in 2020
Why is my friend on a much bigger £250 a week state pension, though I earned more? Steve Webb replies
For example, in February this year there were nearly 400,000 people with weekly state pensions of more than £250 per week, of whom nearly 70,000 were on more than £300 per week.
All of these people are getting a substantial Serps pension.
Although for those retiring now the standard flat rate is £175.20, those who had already built up more than this amount by April 2016 could get a pension under the old rules instead.
This is how your friend comes to get a pension of over £250 per week.
https://www.thisismoney.co.uk/money/pensions/article-8627327/Why-does-friend-bigger-state-pension-earned-more.html
When I said:-
There are lots of people with additional pensions. From private pensions, to what used to be called SERPS or S2P. Increasing numbers of those people pay tax on their additional pensions, due to getting higher pensions and the freezing of the Zero-Rate Band.
You have a Basic State Pension. Which is not taxed.
And a 2nd Pension. Called the "State Earnings Related Pension Scheme" or the "State Second Pension". Which puts you over the current limit. More than the maximum Basic State Pension.
That is what your article was trying to explain.
But you don't understand it. In your example, you don't have a "state pension" of £12,272. You have 2 pensions organised by the state. And you pay tax in relation to the 2nd Pension. The additional pension.
Fog lifted yet?
I have never opted in or out of anything.
I receive one pension payment.
I have looked online for an explanation.
I could only find two that seemed possible.
The first was that much of my working life was spent as a higher rate taxpayer, and therefore made higher NI contributions, so this may have been an explanation for it, suggested on the MSE forum.
The second one was something called protected payment, explanation below.
You apparently get the protected payment due to having paid into the additional state pension.
This is the most likely explanation.
It is probably the result of making higher contributions, because it is not something I consciously did.
What you'll get
Your State Pension amount depends on your National Insurance record.
Check your State Pension forecast to find out how much you could get when you reach State Pension age. It also shows your National Insurance record.
The full rate of new State Pension is £221.20 a week. Your amount could be different depending on:
if you were contracted out before 2016
the number of National Insurance qualifying years you have
if you paid into the Additional State Pension before 2016
If you’re getting more than £221.20 a week
If you paid into the Additional State Pension before 2016 and would have got more State Pension under the old rules, you’ll get a ‘protected payment’. This is paid on top of the full rate of new State Pension.
https://www.gov.uk/new-state-pension/what-youll-get
I contributed to my own pension, which I havent started drawing yet.
I also contribute to an employers scheme, which I also havent touched.
Whatever the story on my state pension, the amount I receive is down to the NI contributions I have made.
So my arguments stand.
To put this in perspective.
The amount I receive over and about the maximum is less than £15 per week.
Whatever the reason for the amount I receive, I never expected to pay tax on my state pension.
I dont suppose those who are already taxed did either.
The reason you might be receiving more than the maximum state pension is due to a concept called the “protected payment.” Let me explain:
New State Pension:
The full new State Pension, which you receive when you reach State Pension age, is currently £185.15 per week1.
This amount is based on having 35 years of National Insurance contributions.
It’s possible to have a starting amount higher than the full new State Pension if you have some Additional State Pension1.
Protected Payment:
If your starting amount (which includes any Additional State Pension) exceeds the full new State Pension, you receive an extra amount called your "protected payment"2.
The protected payment ensures that your state pension won’t be lower than what you would have received under the old pension scheme.
This protected payment increases each year in line with inflation2.
Transitional Rules:
The transition from the old pension system to the new one involved a lengthy period.
Some people retiring around April 2016 may have received no more than they would have under the old scheme3.
Factors like deferral and individual circumstances can also impact the final pension amount3.
In summary, the protected payment ensures that your state pension reflects both the new system and any additional benefits you accrued under the old scheme. So, if you’re receiving more than the maximum state pension, it’s likely due to this protected payment mechanism. 😊321
You receive 1 payment. In relation to 2 separate pension schemes.
1. In relation to your Basic State Pension entitlement; and
2. In relation to payments you made (or, more accurately allowed to be deducted) in relation to what was once called SERPS, and then called the State 2nd Pension
There is no limit as to how many pensions you can have. But you only have 1 Basic State Pension. All the others, whether SERPS or Private Pensions, are separate schemes to your basic state pension.
The clue is in the name. Or do you believe something called a "State 2nd Pension" is not a 2nd Pension?
All I have been saying. For months. But feels like years. Is that no Govt is likely to allow the Basic State Pension to attract Tax but, in some way or another will fall within a zero tax band. In other words, while it has always been taxable, no tax is paid on it. And that Additional Pensions will not be afforded that luxury. And that people who have 2nd Pensions may fall into tax bands where they actually pay tax.
That has always happened. True to say that a Pensioner receiving £12,500 a year is treated for tax purposes like a Worker who earns £12,500 a year. Or £50,000 a year. I don't understand why Pensioners think that they shouldn't pay their fair share. Although I agree that freezing pay bands may be equally unfair on both.
You print an article that says, in relation to Pensioners who are paying tax, that-
"All of these people are getting a substantial Serps pension."
The article was trying to explain things for people who don't understand.
Like you.
You put lots of stuff on this forum. Lots of informative stuff. Lots of interesting stuff. And, occasionally, stuff that is wrong. I'm sure we all do. What we do not do is spend 3 million hours trying to prove that Black is White afterwards.
Which is why far fewer people read your posts than should read your posts.
Which is a shame.
Employees who paid full Class 1 National insurance contribution between 1978 and 2002 earned a SERPS pension. Members of occupational pension schemes could be "contracted out" of SERPS by their employer, in which case they and the employer would pay reduced NI contributions, and they would earn virtually no SERPS pension.
https://en.wikipedia.org/wiki/State_Earnings-Related_Pension_Scheme
Well I might have the full set.
Although I did contribute to my employers scheme from August 2014.
I just havent a clue.
I havent made a conscious decision to go along with any of them.
I dont know what the cost of not opting out might be.
Or if I had the opportunity.
I do know I have benefitted by around £15 per week.
Although this will be diluted when I start paying tax on it.
I havent a clue what the cost was.
I stand by my argument that freezing the personal allowance has undermined the purpose of the triple lock.
I am sure that there are many people like me, who had no expectation of paying tax on their state pension, that already are.
Freezing the personal allowance has also diluted my additional income.
Instead of reducing NI contributions the government could have chosen to increase the personal allowance, and or reduce the basic rate of tax, benefitting everyone.
I was quite clear about the benefits and obligations of my personal pension, when I took it out.
This is obviously not the case when it comes to my state pension