But when you retire if you have a business to sell you can get entrepreneurs relief and only pay 10%tax. It's a big bonus
Pension Triple Lock proposed suspension
- Thread starter Clipgate
- Start date
Grianan
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But you have not paid for your pension, although that is a common misapprehension. You paid for the pensions of those who were retired when you were working. It is the workers of today who are paying for your pension now. There’s not enough money in the pot. So who should get it? Those who need it or those who don’t?
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I'd like to see what all those who say we (pensioners) shouldn't get a rise for whatever reason have to say when it comes to pension time for them.
Easy to knock pensioners when you aren't one.
Easy to knock pensioners when you aren't one.
deleted79651
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Agreed! If I could get the same return on my other investments as my NI contributions have given [2 hips replaced, heart attack, blood clots, some 6 MRI Scans, a couple of stress related breakdowns [the 'Red Mist' is real!] plus the usual A&E running repairs when still playing sports etc etc], I would be a very rich man!
Steve
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In spite of having a drawdown pension, the state pension is the bedrock of my retirement income, as I expect it is for many on here. In fact if it wasn't for the Osborne reforms my retirement would have to have been postponed probably until I was too old to enjoy it. The big problem is cost, we all know taxes are lower here than in most European countries, but no political party has ever come to power promising higher taxes. The roads, police, ambulance, NHS etc. are falling apart and unless we pay more we won't get an improvement, but we won't pay more, so we will just be very English and moan about it.
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My wife and I are both receiving the state pension and are in the very lucky position of not needing the 8% uplift. I would be happy with an inflation only increase if the money goes to those who need it more instead.
It feels wrong to get a financial boost from a statistical distortion caused by other peoples misfortune. The reason for the 8% is that the permanent job losses caused by the pandemic have fallen mostly on the lowest paid i.e. the lowest paid were often not furloughed but made redundant. If you remove a large number of low paid people from the average wage figure the average goes up.
It feels wrong to get a financial boost from a statistical distortion caused by other peoples misfortune. The reason for the 8% is that the permanent job losses caused by the pandemic have fallen mostly on the lowest paid i.e. the lowest paid were often not furloughed but made redundant. If you remove a large number of low paid people from the average wage figure the average goes up.
Good point, well made.
If the State Pension is going to be treated as a "benefit" because it is paid out of current taxes, then all unfunded public sector pensions (including those of the mandarins at HM Treasury, and Judges) should be treated the same way. At present it isn't a level playing field, because the State Pension is seen as a soft target for what is in effect a cut in income in real terms for one of the poorest and most vulnerable sectors of society.
Don't forget that keeping the Triple Lock was a manifesto promise by your party, Mr Sunak.
[Private pensions ... if they are paid from an actual fund that's different.]
My wife is having hers delayed by 6 years but I think it's perfectly reasonable and any reduced increase now is going to affect all pensions in the future . Not everyone is just looking at their own bank account. Our kids generation will be paying for ours the same as we paid for our parents generation. I don't recall them rolling in cash.
It won't be a cut in real terms unless they increase by less than inflation. I suspect that won't be the case.
On the point about "temporary" adjustments, we have had 12 years of "emergency" interest rate cuts since the financial crisis of 2009.
If you are going to consider a fair balance between the fixed incomes of pensioners and the average variable income of furloughed workers, you should not overlook the dire situation of the retirees who had planned to boost their income from interest on savings. There is no foreseeable prospect of IRs being raised. As a result not only are many retirees suffering a (most likely) permanent cut in their income from savings, but also their capital is being eroded by rising inflation, itself a direct consequence of government economic policy.
Zero interest rate policy results in a massive distortion of purchasing power that impacts mostly the over-65s. If interest rates were allowed to rise towards the long term average of about 5%, the result would be an economic boost to the UK retail and service sector because we would spend more.
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deleted79651
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- Mar 9, 2021
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But you have given a further misapprehension! Your assertion was true up to about 1973, since when all UK State Pensions have been paid from current taxation revenue across the many forms of taxation and Government borrowing, together all part of the National Debt. And, just to complicate matters, what constitutes the National Debt is still being debated! Some argue that it is the oft reported £2 trillion+ figure that looks good in newspaper headlines; other economists argue that Modern Monetary Theory requires the Quantitative Easing sum in issue to be deducted from the £2 trillion+, because it is Money issued by the Government so the Government cannot owe money to itself!Prof Richard Murphy has wrtten some good blogs and 'Tweet 1 of 21' series of explanations that are best read in a dark room and contemplated for hours.
Or, do as we're about to do and clear off in the m/home and create some more Consumer Debt to kickstart the economy by having a Lithium Battery and Refillable Gas Bottles installed +a Rally.And then we won't be able to afford to use the m/home until the State Pension increase is agreed ...
Squaring the Circle, anyone?
Steve
Steve
It all depends on what is used as a measure of actual inflation. CPI (used for uprating the State Pension and most private pensions) is on average about 1% below RPI. Even RPI will be lagging behind expected big increases in energy bills next winter, for example.
Besides, the annual uprating in the State Pension is based on CPI in the previous September, and does not take effect until the following mid-April. I'm guessing that because of the timing difference the expected uprating will not include the greatly increased domestic energy costs over the winter. Not fair!
When you say a long term average for interest rates of 5% over what timescale and what was inflation over the same period?. I suspect that over most periods that interest rates have been only slightly higher than inflation at best.
There is an argument that wages will have to rise to attract workers to fill jobs that used to be reserved for eastern Europeans who have now left the UK. Also many young workers have left the hospitality sector because of the long antisocial hours and the variability of the pay. Economics dictates that there will be restructuring of wages and conditions whether the employers like it or not.
It was the Thatcher government that broke the link between the State Pension and average wages. That resulted in millions of pensioners falling into poverty. Gordon Brown helped the worst off by introducing means tested top-ups such as Pension Credit. The Triple Lock has been slowly closing that gap for the majority of state pensioners, but there is still a long way to go. Removing that link to rises in average income for expediency, merely because of one statistical anomaly, and because HM Treasury is looking for the weakest areas to make cuts, is totally wrong when you consider the historical background.
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One more observation on government cuts in an attempt to reduce the gap between tax receipts and government spending.
In an effort to balance the budget and restore confidence in the pound, on 10 September 1931 with Philip Snowden still as Chancellor, the new national government issued an emergency budget, which immediately instituted a round of cuts in public spending and wages. Public sector wages and unemployment pay were cut by 10%, and income tax was raised from 4s 6d to 5s on the pound[10] (from 22.5% to 25%). The pay cuts did not go down well, however, and resulted in a non-violent "mutiny" in the Royal Navy protesting the pay cut.
https://en.wikipedia.org/wiki/Great_Depression_in_the_United_Kingdom
Elsewhere I read that Judges had a 30% pay cut.
There is public outrage at so many public sector (and BBC) staff who get paid much more than the Prime Minister. So why are they being let off?
This time it is proposed that state pensioners will get a pay cut in real terms by abolishing or "adjusting" the Triple Lock, while inflation is set to rise sharply.
In an effort to balance the budget and restore confidence in the pound, on 10 September 1931 with Philip Snowden still as Chancellor, the new national government issued an emergency budget, which immediately instituted a round of cuts in public spending and wages. Public sector wages and unemployment pay were cut by 10%, and income tax was raised from 4s 6d to 5s on the pound[10] (from 22.5% to 25%). The pay cuts did not go down well, however, and resulted in a non-violent "mutiny" in the Royal Navy protesting the pay cut.
https://en.wikipedia.org/wiki/Great_Depression_in_the_United_Kingdom
Elsewhere I read that Judges had a 30% pay cut.
There is public outrage at so many public sector (and BBC) staff who get paid much more than the Prime Minister. So why are they being let off?
This time it is proposed that state pensioners will get a pay cut in real terms by abolishing or "adjusting" the Triple Lock, while inflation is set to rise sharply.
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Langtoftlad
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Minimum wage is about £8.70/h which translates to approx £17,000 pa for a standard 37.5 working week*.
A full state pension is what ... £9300.00
*full time with paid holidays
A full state pension is what ... £9300.00
*full time with paid holidays
Not forgetting that if you are on minimum wage you are probably claiming in-work state benefits as well.Minimum wage is about £8.70/h which translates to approx £17,000 pa for a standard 37.5 working week*.
A full state pension is what ... £9300.00
*full time with paid holidays
According to the ONS, in February 2021 the average total pay before deductions was estimated at £568 pw or £29,536 pa.
At the same date the full single tier State Pension was £175.20 a week, or £9,110 a year. Only 44% qualify for the full State Pension amount.
Most people don’t receive full state pension, government figures reveal
Just 44 per cent of 1.1m people currently claiming get full state support in old age
www.independent.co.uk
So as you think the value of pensions has erroded could you quote a time when it was higher and we'll index it up for price inflation and see how it compares. I suspect that in real terms it was always pretty poor but has not kept pace with the general standard of living because although a lot complain we're all pretty well off compared to 50 years ago. The question really is should tax payers today pay for better pensions for people who only funded basic pensions for people who were retired before.
The better view is that on every front the real value of savings for retirement has been eroded. Example - annuity rates - in 2002 you would have been offered 12% but today a flat 5% if you are lucky. That rate is directly linked to the yield on Gilts, on the floor thanks to zero interest rate policy.
Yes, our standard of living is better than 50 years ago, at least in material terms. Yet you seem to be convinced that retirees should not benefit from a general uplift in the living standards of those still in work, and somehow they should be content with that and grateful for the measly amount the State provides, even make no fuss about breaking election promises to keep the Triple Lock. Why? I don't understand that attitude.
You are lucky enough to still work part-time so you can top up your income. Others like me don't have that option (for health reasons).
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Some real leadership would be good!
www.theguardian.com
Gordon
Jacinda Ardern and ministers take pay cut in solidarity with those hit by Covid-19
New Zealand PM says: ‘If there was ever a time to close the gap between groups of people across New Zealand in different positions, it is now’
Gordon
My point really has been that it's always been difficult to live for quite a few years off savings. What was inflation when annuities were 12%and what was the real terms buying power after say 10 years. I don't think there ever has been a time when the state pension was enough for anything but a beans on toast existence but do think it's wrong having funded a basic pension for previous retirees to expect today's workers to fund anything better for us.
I think in a low inflation environment that we have been living in the past 15 years it would have been sensible to spend some of the capital. I don't think it makes any difference between spending capital in a low inflation environment or keeping the same capital when inflation is high and the numbers being the same but the money being worth less.
The really bad time will be if we have rising wages and inflation due to labour shortages but with little economic growth so no money to keep state pensions up which sadly I think seems quite likely.
I think in a low inflation environment that we have been living in the past 15 years it would have been sensible to spend some of the capital. I don't think it makes any difference between spending capital in a low inflation environment or keeping the same capital when inflation is high and the numbers being the same but the money being worth less.
The really bad time will be if we have rising wages and inflation due to labour shortages but with little economic growth so no money to keep state pensions up which sadly I think seems quite likely.
I think we're unlucky to not have had similar leadership.Some real leadership would be good!
Jacinda Ardern and ministers take pay cut in solidarity with those hit by Covid-19
New Zealand PM says: ‘If there was ever a time to close the gap between groups of people across New Zealand in different positions, it is now’
Gordon
"but do think it's wrong having funded a basic pension for previous retirees to expect today's workers to fund anything better for us."
If young workers resent the fact that a bit of their income tax (only 20%) goes towards state pensions they are (a) ignoring the unwritten duty that each generation pays the small state pension their parents get so they aren't destitute; and (b) allowing the political class to move towards abolishing the state pension entirely in favour of the new Workplace Pensions (the young can opt out of that). It seems to me that workplace pensions are there to benefit the financial services industry more than the workers who are going to be disappointed as a result of the charges and mediocre growth of their funds. The whole risk will be transferred from the Treasury (best placed to take such risk) to the private sector worker. It's a scam.
I recall when the basic rate of income tax was 33% - reduced in 1979 to 30%. I didn't resent paying for the state pension. There was also an added earnings-related element which became SERPS and S2P, both cancelled after 2016. Depending on your earnings you could have a higher state pension under the old system than you can get under the new single tier state pension. Effectively that is a cut for retirees who were higher earners. (There is a transition arrangement under which you can claim the higher of the old or new State Pensions whichever applies to you, but that will end eventually.)
"... so no money to keep state pensions up which sadly I think seems quite likely."
Yet at the same time this government wants to raise the overseas aid percentage back from 5% to 7% GDP. Therefore borrowing about £5Bn more to throw away overseas, yet unwilling to borrow about £3Bn to uprate the State Pension in line with average earnings. It's all about priorities. There's no chance to virtue signal at international meetings of Heads of Government about the UK's State Pension. Mainly because at 29% replacement of earned income the UK is so far below the EU average of 71%. The Netherlands is 100.6%. Shameful.
So having worked full time since I was 17, went self employed at 30 paid all my required NI contributions for a full state pension , never claimed any sickness or other benefits, when at 65 In 2013 I only received the £137.00. If I had retired in 2016 I would have received £174.00. (Born 3 years later)
I have never been able to work that one out apart from discrimination !
Thankfully I had the foresight to make additional private arrangements which of course I paid for. Yes I would like to see Politicians adhere to their manifesto promises.
I have never been able to work that one out apart from discrimination !
Thankfully I had the foresight to make additional private arrangements which of course I paid for. Yes I would like to see Politicians adhere to their manifesto promises.
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I don't know anyone self employed who retired and "sold the business "?what are you selling? There isn't anything?
Exactly. And it will just become more money for the politicians to pass up the wall. Exactly why they have removed any ring fencing and it all goes in a general pot. This allows all sorts of scams,smoke and mirrors obfuscation to be employed to use it in any ways that they fancy, with the least benefit to the population,when in fact there sole purpose is to provide & improve the lives of the population and the conditions that they have to live,work and travel in.
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Totally agree, however, when we were younger we saved and put money away, some colleagues when it was bonus time came in with a new car....... I was branded a tight bar steward, however, when we were all faced with closure and redundancies I was then the rich so and so who never spent earlier..... to be honest we have enjoyed life since, but still get the comments about how lucky we are............... 'you make your bed and lie in it"
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Exactly. I think Rishi missed a trick at his last budget. Would have been an ideal time to float the idea of a 1p - 2p tax rise, and to ring fence it for NHS. I sure I'm not the only one that has we travel through the small towns and villages abroad (particular in France) how well maintained and kept they look. All this cost, and can only be paid from the tax receipt.
The goodwill equipment trading name stock etc etc. Even if you had just a good trading history and an online business selling advice you could sell the goodwill.
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