Pension triple lock

You're obviously not on a very low income, roses.

I can assure you that any pensioner receiving the equivalent of JSA (currently £73.10 a week) is exempt from council tax.

The level for pensioners is about £150pw.

So just the basic state pension then.

Yes, the basic state pension, which is double the amount working age people (ie anybody below 62 and rising) receives, but the working age people have to pay something towards council tax.

Should have said men below 65 and women below 62.

Reasons for keeping the triple lock.

touchstoneblog.org.uk/2016/11/quintuple-reasons-triple-lock/

People who retired before April do not get a basic £155 a week. They only get basic £119.

That's right - and people with a private pension that was "contracted out" will have a deduction from the £155, but obviously they will be better able to cope with the effect.

Will they? I will have an occupational pension and will not get anywhere near £150 state pension. I shall lose all the SERPs/SP2 I was expecting for the time I wasn't paying into an occupational pension. I shall be worse off than under the old system.

Jen, pensioners with no other source of income get their pension made up to a minimum amount with Pension Credit.

The government considers pensioners need approx £156 to survive. However, women of my age (61 going on 62) only need £73.10) and have to pay at least something towards their council tax and don't receive a bus pass or winter fuel allowance. If they had turned 60 just a few years ago, they would have been considered to need £150, but 2 or 3 years later they only need less than half. How does that work?

What really gets to those of us 61 year olds and younger is that we paid the pensions of those people older than us, while they paid less, because the generation they paid for didn't live so long. So we paid more and will receive less.

Reasons for abolishing the triple lock from Joseph Rowntree and the IFS:

"Having said that, there is one area of state pension policy that is poorly designed: that is the ‘triple
lock’ in the value of the state pension. Under the triple lock, the value of the state pension in the long
term (i.e. what future generations of pensioners will receive and the costs of this to future taxpayers)
depends not only on long-term inflation and increases in average wages, but also on the volatility of
wage growth and inflation (and the correlation between them). There is no sensible rationale for this.
If the government’s objective is to increase the state pension in line with earnings in the long-run, but
to protect pensioners from real-terms reductions in the state pension when earnings fall temporarily,
then a mechanism to claw back short-term above-earnings increases could instead be developed –
perhaps for implementation from the start of the next parliament. Such a claw-back system would not
only be more rational than the current system but also could save billions of pounds a year in pension
spending by the middle of the century, which could better be channelled towards meeting growing
demand for health and social care, which would also benefit future pensioners.
• The Conservative manifesto committed not to cut pensioner benefits. However, those born in the
1940s and 1950s (who are, or will soon be, eligible for pensioner benefits) appear to have fared
better financially than those who came before them and than those who are coming after. As such,
they do not seem to be – on average at least – a group in need of greater support from public
spending. At this time of continued public spending cuts, politicians should be wary of channelling
more public money towards this group through well-meaning, but likely poorly targeted, ‘protection’
of pensioner benefits."

www.jrf.org.uk/report/where-next-pensioner-living-standards (Need to click on downloads for the full version)

But if you take the triple lock away and pensions get even further behind, more pensioners will have to claim benefits to be able to survive. Or maybe that's the idea, they are not supposed to.

'The Basic State Pension pays £119.30 a week, while the new State Pension (introduced in April) is £155.65 at its full rate. This is 18.4% and 24%, respectively of average weekly earnings for full-time employees, which reached £648 in 2016. Because not everyone has full entitlement, the average amount of Basic State Pension received is £96.86 a week – that’s just 14.9 per cent of average full time wages.

Some 45% of pensioner couples and 71% of single pensioners receive more than half their income from state pensions and benefits. Among the current generation entering retirement many, though not all, supplement their state pension with decent defined benefit pensions that pay out an income based on length of service. But in the next few years more and more people will be getting into later life with little in the way of private saving. The State Pension will be particularly important to the standard of living.'

Is it not better for pensioners to have a decent base with no means tested pension credit? It will be cheaper in the long run.

OECD figures, and how the UK compares.

www.oecd.org/unitedkingdom/PAG2015_UK.pdf

In the long run (decades ahead) everyone will have the £155 plus whatever they may have been able to get privately. Workplace pension law should mean most people have something, but those that have been getting the minimum won't have much - pretty derisory. The new, increased basic pension increased in line with the higher of wages or prices, plus the private pension, with a means tested backup, feels to me like the way to go, but having read more on this I would now agree that it's too early to scrap the 2.5% measure.

According to DJ's link Statepensions in the Uk are well below the world average. The one that stands out for me is 'poor wee Ireland* which pays its pensioners 33% of the average wage. If they can do it why can't the UK? I believe it is a question of spending priorities and not a matter of which group - Young, old, disabled, etc. deserves most help. The reason why Ireland can afford a decent pension is that they do not claim to be a 'World Power' possessing WMD and throwing their weight about, but instead concentrate on providing a reasonable standard of living and good services for the people of their country. Likewise Denmark - also high on the list.

www.ftadviser.com/state-pension/2016/11/07/dwp-won-t-contact-state-pension-losers/

You need to check on your pension to find out if you are going to lose out with this new system, and see if you can add years if necessary.
Once again they are not going to tell you if you are.

It is also said that the triple lock is needed for 30 years, to do its job properly.

www.ftadviser.com/Articles/2016/11/08/Triple-lock-has-not-yet-done-its-job

Yes I remember when it was brought in because there was so much poverty amongst pensioners as the state pension had been badly neglected by successive governments. I think it was a Brown incentive, and has done a lot of good.

I am unclear -although I haven't given it much thought why the triple lock is bad for the economy. As the pensioner will almost certainly spend the pension and help the economy.

I'm a woman born in the fifties who DIDN'T get any notification of the age change and to be honest if I read about it anywhere it must have passed over my head.I've worked since I was 15 and I'll be 66 when I finally get a pension I expected at 60 ...thats £42000 of money the government have already had from me plus the extra NI I'll pay until my pension is due.I also have no problem with equality of age for pensions but a letter telling me about the changes would have been appreciated

Exactly, whitewave. It's like having a basic income. Or a proper living wage, that people can live on and have some dignity with, rather than having to apply for benefits to subsidise their pay or pensions.

Unless people have substantial private pensions, it is very difficult to live on what I consider to be a very meagre state pension. 2.5% of it isn't very much.

Ah yes! Different expectations. £150pw after housing costs is a fortune to me. How the other half lives! I seriously wish I had that now.

I would perhaps be a tad more sympathetic towards pensioners if they'd shown a bit more solidarity. As it is, losing the triple lock probably won't mean much to them, because inflation and interest rates are likely to rise over the next few years as a result of Brexit, but pensioners will still be protected - not so the rest of the country.

Sorry, paddy, but didn't you ever follow the news or make any plans? I'm afraid I just don't understand how women didn't know. I was born in 1955 and I'll be one of the first to have to work to 66. I've known for years that I wouldn't receive my state pension until 65. The increase to 66 was a blow and I'm angry that I won't receive any of the add-ons and the implications for tax credits. It's the loss of add-ons not the pension itself which don't do my blood pressure any good.

The triple lock was a LibDem initiative during the coalition.

Fitzy,

How about getting your head out of the clouds and finding out what the new state pension really means for real people, rather than just reading about it?

Daphne, you can't say that just because you are not well off, no pensioners should be. You will be a pensioner soon enough.
Pensioners pay tax on anything over the threshold, the same as anyone else.

You should be wanting everyone to have enough to live on, not wanting pensioners to have no proper rise in pensions because you are not yet a pensioner.
When I became a state pensioner I didn't have much time to show solidarity. I had a disabled husband, and a guest house to run in order to make enough money for us to live on.

Daphne, I think the new SP will be better for some people, worse for others, and some won't be affected. I mentioned means tested backup - I should have made it clear that this is absolutely critical to ensure those in real need get the help they need. I'm really just making the point that there is limited money available so at some point we need to stop spreading it across the entire pensioner population and start targeting more at those who need it most.

I should have made it clear that when I say those who need it most, I don't mean just pensioners.