Triple-lock on pensions will stay. Pensions will increase when earnings have decreased

[HACO]

https://www.thetimes.co.uk/article/...nak-to-keep-triple-lock-on-pensions-d57k5hl8z

So Boris Johnson overruled the chancellor and the triple lock on pensions will stay intact. This means in a year that earnings of people in the country are down, younger people are the most affected, pensioners will see their income go up.

Next year, because of furlough ending and returning to more a normal society, wages will increase but pensions will also increase by somewhere between 8% to 18%, due to the triple lock system.

Guess whose taxes/NI have to go up to pay for these pensions?

And people are surprised when they learn that intergenerational resentment is so high in this country.

 

[HACO]

Maybe if younger people bothered to vote (although I can't blame them when all choices are equally terrible) then parties currently holding the power wouldn't make strategic moves like this in order to gain favour with the larger portion of voters

It’s a circle. Parties don’t care about young people because they don’t vote reliably, and young people don’t see a party that cares about them so they won’t vote reliably. Personally, I always encourage people to vote.

 

[HACO]

It'll never happen but yeah IMO a working democracy means nothing without an actual option on the ballot to tell the current parties to do one whether that is a coalition or going back to the drawing board - we increasingly have utterly useless parties in this country that from a different perspective you'd question the intelligence of anyone voting for them :s

Fragmented votes for fringe parties and spoilt ballots generally just helps the status quo.

Proportional representation seems like a nobrainer to me.

 

[HACO]

The government is paying billions of pounds out of public money to keep workers in their private jobs.

Probably not the best time to be calling other generations.

Comparatively, it's been worse than plans that other developed countries put in place, except the US. And it's coming to an end, unlike other countries. So working people, through no fault of their own, had their earnings significantly reduced or lost their jobs completely, while pensioners will see their income increase.

This would require too much upheaval of our entire system of politics - away from the system of 'get a majority and whip vote through everything you want, whilst the opposition votes against it for show' to 'actually debate and vote legislation on merit instead of party politics'.

Yeah, I don't think it's going to happen anytime soon. But it should happen. Like you say, it will ensure that the party in power is seriously scrutinised, unlike now where it's all theatre.

 

[HACO]

I don't see why younger generations keep scapegoating older generations for everything, most of the policies that have lead to the situation we find ourselves in today are supported wholeheartedly by those naive younger generations. Older generations voted Brexit to try to curb mass unlimited immigration that drives down wages and drives up house/rent prices and how did youth react? we got the entirety of the younger generations protesting and calling them racists, demanding another referendum and the voting age be lowered so they can get their own way.

When you have the whole political establishment, corporate business world and one percenters fighting in your corner it's a basic rule of thumb that you're on the side that is shafting the little people in favour of the wealthy.

Because of things like this. At a time where younger people (the poorest demographics in the country) are having a jobs crisis, their earnings are significantly reduced through no fault of their own, the government decides to end the furlough scheme (unlike let's say Germany which will keep it up) and let them go unemployed and on benefits, while giving pensioners (the richest demographics in the country) an above-inflation income increase.

But yeah, young people are the one-percenter wealthy and powerful apparently.

 

[HACO]

Maybe read this, it's not all foreign holidays and high living for a lot of pensioners in this country.

https://www.ageuk.org.uk/globalasse...tters/poverty_in_later_life_briefing_2019.pdf

No doubt. I'm sure there are many poor pensioners and we should increase support for those of them who are really in need, instead of continuously helping the ones who are the richest among us.

 

[HACO]

Poverty by age:

Spoiler: Poverty by age figures

Quite clear that in the last 20 years, poverty among pensioners is massively decreased, while it's increased for everyone else, especially young people. This is for 2014, the situation is significantly worsened since then, and will continue to get worsen.

https://www.jrf.org.uk/mpse-2015/poverty-and-age

4 Million children live in poverty in this country, probably already reached 5 million:
https://www.childrenssociety.org.uk/what-we-do/our-work/ending-child-poverty/what-is-child-poverty

I guess that's what happens when you make everyone else poorer, to make the least poor demographics even richer.

 

[HACO]

It's bonkers, isn't it?

That's the problem with giveaways- you can't take them back.

Completely bonkers.

Wages and productivity increase -> pensions increase by at least that much
Wages and productivity decrease -> pensions increase by 2.5% anyway

 

[HACO]

I think this is a bit of a fallacy (in the kindest possible way)..

The punchline is that every generation lives longer than the previous generation that's why pensions are a mess (or not reacting to this simple fact is the real problem), so in essence you are trading short term financial impingement for being able to live longer.. Sounds like the younger generation are very focussed on money and not on life..

And lets not forget that everyone ages and every generation is allegedly better off than the previous, so you will inevitably be part of the very problem you are complaining about.

There are so many reports that show this is not true. Millennials are not better off than previous generations.

Millennials poorer than previous generations, data show
Millennials are on track to have worse health in middle age than their parents
UK millennials fall behind on living standards
Millennials: Britain's first generation since the 1800s to do worse than their parents

Life expectancy is also not increasing anymore by any meaningful amount. It's been pretty much stagnant for the last 10 years and is expected to be stagnant for the next few decades.

 

[HACO]

As a matter of interest what does everyone think the average yearly pension income is for these old codgers?

I think it's low (compared to other developed countries), but it's because they paid very little into the system in their working lives. The US for example, significantly increased social security tax in the 1970s and 1980s, anticipating the increase in the number of pensioners in later decades, so that the social security trust fund ran a surplus for years and invested the difference in treasury bonds so that it grows for the retirement of the same people.

UK's state pension being comparatively low is no argument to significantly increase taxes on current workers to give even more to pensioners, who are already the richest population in the country and have lowest levels of poverty. It just shows a failure of planning of previous governments.

Privately though, current pensioners receive excellent, world-leading private defined benefit final year salary pensions. Something that no longer exists for young people.

 

[HACO]

All I know is that there is no easy fix and that ultimately people will suffer until we find more ideal solutions and it sucks .

Tax defined benefit final salary pensions and use that fund to increase the state pension

 

[HACO]

They already are taxed.

Yeah, increase that marginal tax. A lot of these pensions are actually worth more than the £1.07m lifetime allowance (i.e. you can't buy an equivalent annuity for £1.07m today), but they don't get taxed that way (too much break and super conservative valuation at only 20x, should be closer to 35x). Another tax-break that the super rich pensioners receive at the expense of everyone else (including poorer pensioners).

 

[HACO]

I’m ignoring nothing. I was responding to HACO who mentions nothing that you’ve introduced to the argument. Everyone is entitled to receive a state pension because we all pay national insurance. There’s absolutely nothing wrong with that. However, I completely agree that it’s silly that people who receive (for example) £40k a year in pensions can also receive benefits such as winter fuel allowance and free bus passes. I also agree that there should be a taper introduced where if you receive so much from a private pension then your state pension should be reduced. However, that way lies political pain and politicians are wimps...

I don't think we have that much disagreement on policy, I agree with those, and don't want to go much further. I wouldn't even means-test the state pension, just increase taxes on those with huge pensions (could effectively be the same thing).

 

[HACO]

Worst pension in Europe. So sorry, no sympathy from me. Perhaps the government could waste less money on foreign aid or legal aid for example. Another idea maybe is to police the borders or stop family reunification for child refugees. Pensioners have actually contributed to this countries economy for a large proportion of their lives.

If you actually run the math, the current pensioners do get a lot more than they paid in, adjusted for inflation. I think their return on what they put in is very high. In the US, this on average is 0.5% APR, not even adjusting for inflation. This doesn't mean they get a lot, it means they paid so very little compared to other countries.

More here:

I think it's low (compared to other developed countries), but it's because they paid very little into the system in their working lives. The US for example, significantly increased social security tax in the 1970s and 1980s, anticipating the increase in the number of pensioners in later decades, so that the social security trust fund ran a surplus for years and invested the difference in treasury bonds so that it grows for the retirement of the same people.

UK's state pension being comparatively low is no argument to significantly increase taxes on current workers to give even more to pensioners, who are already the richest population in the country and have lowest levels of poverty. It just shows a failure of planning of previous governments.

Right now, workers do pay into the pension trust fund in a comparable rate to other countries, but instead of running a surplus that will be used for their retirement (like the US and many other countries do), it's used on the boomer generation who didn't pay in enough. Running that fund empty (and insolvent within a couple of decades), unless taxes are again raised on future generations.

 

[HACO]

And they'd have to start thinking long term too, as you wouldn't just be able to blame the other fellow for everything bad that happened in the last 15 years.

Sounds like a lot of work tbh.

The only countries that have stable coalitions are those joke countries like Germany and most of the EU. Clearly the UK/US system is far superior, with its polarised voters and elections that consistently "represent" about 25% of the populace at any given time.

But worse of all, you'd not be able rig the system to end up with 80% of the seats from 40% of the votes. Sounds hideous.

Yeah. The state pension system, as it currently stands, will be insolvent in a few decades. For millennials to receive a state pension, it will either have to be significantly reduced, retirement age significantly raised, means-tested, or come with significantly increased taxes on future generations. This comes at a time where life expectancy is not increasing. I don't even think within 30 years there will be a concept such as retirement. People would just have to work until they die.

We'd be extremely lucky if NHS or any social care systems were to exist by time we get old. I personally have planned for my life as if a) there will be no state pension system, b) there will be no NHS, and c) there will be no social care. If I'm wrong, I won't be worse off. If I'm right, I've prepared for it and never expected much else. I believe if you're 20 or more years from retirement, you need to plan for this and have a nest egg that covers aall of this to ever even dream of retirement, or you'll just be working until you die.

 

[HACO]

No sympathy.

We will not have a pension at that age. Probably none

To keep triple lock is disgusting

Yeah. Assuming current levels of taxation, UK state pension fund runs dry in 2033. If we keep the triple lock for these two years (2.5% increase this year, 18% increase next year), it could run dry much much faster:
https://www.boringmoney.co.uk/learn...-a-state-pension-when-i-reach-retirement-age/

There's just no way that a state pension system (in its current form) will exist in 30 or 40 years time.

 

[HACO]

Do we really think it will increase 18% next year? Surely the government will perform some conjuring trick to get out of that one.

They're being very adamant that the triple lock system will stay intact. The short-termism of British politics means they can just increase it by 18%, let the state pension fund dry up and let the next government decrease pensions or increase taxes to keep pensions solvent.

 

[HACO]

I will not be paying for someone else's mistakes.

You and I won't have a choice.

 

[HACO]

There are some obvious problems with defining living in poverty as being below a certain percentage of average income. The article states that 66% of families with children have an income below 60% of the national average, and are therefore defined as living in poverty. Doesn't sound anywhere near as shocking when you word it like that, does it?

Yeah but the whole "2 million pensioners live in poverty" claim also uses that same definition, and is used to justify increase in the state pension and other policies that benefit them, at the expense of someone else. Applying the same definition, a lot more children (and workers) live in poverty.

 

[HACO]

Rents are high because of bad supply/demand, and thats bad because there is a lack of social housing, its not caused by immigration. It is caused by not enough new social homes been built. If the older generation think its caused by immigration, then they have had wool pulled over their eyes. If that was correct Leicester would have the highest rents in the country.

It seems to me the older generation maybe just believe what the daily mail tells them?

The older generation are very anti public spending, thinking it will be 1979 again, so they just look for the cheaper options on the ballot.

Not immediately related to immigration, but we do have a serious population problem in this country. We are almost as dense as Japan in terms of population per square mile, yet we pretend we're like France or Spain when it comes to housing. We are more than twice as dense as France, and more than three times as dense as Spain.

We can't just build new houses, we need to learn from the likes of Japan and South Korea, go on build entire cities. We need a wartime mobilisation effort to build houses. We need to build massive skyscrapers in London and other major cities like they have them in Tokyo or Seoul. We need a plan to build 10 million houses/flats in 5 years.

If we don't do it, property prices will continue to skyrocket by more than 8% a year, and within 20 or 25 years, median house in this country will go over £1m.