Starmer's vision quest

[Psamathe]

And stop the public sector platinium plated pension schemes, moving them all over to money purchase schemes like the rest of us.

My concern stems from that many people talk very glibly about ending the tripple lock but don't appreciate that for those entire dependent on the New State Pension it really isn't "generous" and they really stuggle. That is maybe masked as many have additional income sources (eg public sector and workplace pensions, savings).

Triple to double is not a massive issue if the double is wages and inflation as the fixed minimum has had its day. But may just throw in "the triple lock is too expensive" without appreciating option or impacts for those struggling.

Personally I wonder if the way forward is "means testing" except that has negative impacts so it would need to be carefully designed to offset against those (eg why prepare for retirement if that preparation means scrimping now just to receive less in retirement?)

 

[Dorset Boy]

It did occur to me that one factor in so many things being outsourced by 'government' is the platinum plated public sector pensions. Having those functions done in-house means employing more civil servants and we, the tax payer, are then saddled with an open ended liability in respect of their pension benefits.
Stop those pensions to future accrual, and to new entrants, and running more in-house would become more affordable.

 

[Rusty Nails]

I heard a suggestion the pension should be linked to MP salary increases. That will keep them lower, won't it?

 

[TailWindHome]

It shouldn't be 'locked' to anything

 

[bobzmyunkle]

It shouldn't be 'locked' to anything

Why not?

 

[TailWindHome]

Why not?

why should it be?

 

[Psamathe]

The triple lock has alredy ended. Most on New State Pension no longer get income increaes aligned with inflation, wage growth or minimim increase.

For virtually everyone receiving the New State Pension Labour have changed it so they only get 80% of the "lock". Labour now taking back 20%.

So we've already ended the tripple lock. But Labour done it by stealth and hiding what they've done by pretending "we should discuss the triple lock" to hide them having ended it.

 

[bobzmyunkle]

why should it be?

Ermm, so the miserly amount doesn't become more miserly due to inflation.
The 'triple lock'

The triple lock ensures that the State Pension doesn't lose value over time, and in practical terms, guarantees that every year it will rise by the highest of average earnings, inflation (measured by the Consumer Prices Index) or 2.5%.

 

[Pross]

Still don't see what it needs the minimum rise or a link to wages though. Just link to inflation and if it needs to rise faster (as when it was originally set up) just make it inflation + n%. We'll all eventually be beneficiaries hopefully but it seems odd to have these mechanisms for increasing how much you get whilst at the same time making it so you don't get it until you're older and older due to the cost.

 

[Psamathe]

Still don't see what it needs the minimum rise or a link to wages though. Just link to inflation and if it needs to rise faster (as when it was originally set up) just make it inflation + n%.

Inflation is a poor indicator for the costs faced by retirees. eg recent inflation has been such that food and energy costs have been inflating far more than the quoted rate.

Gov. inflation figures include a lot that is way outside the dreams of those struggling on just New State Pension.

Hence the inflation or wage growth provides a limited safeguard.

 

[bobzmyunkle]

whilst at the same time making it so you don't get it until you're older and older due to the cost.

It's due to people living longer. Some even staying healthy longer. What was the average life expectancy when the state pension was originally introduced?
Let's go for the 1948 version.

1948 (Age 65): A 65-year-old could expect another 13.5 years of life.

 

[Pross]

Inflation is a poor indicator for gbe costs faced by retirees. eg recent inflation has been such that food and energy costs have been inflating far more than the quoted rate.

Gov. inflation figures include a lot that is way outside the dreams of those struggling on just New State Pension.

Hence the inflation or wage growth provides a limited safeguard.

Just have a bespoke inflation rate using their 'basket of goods'. Wage increases have no relevance to a retired person.

 

[Psamathe]

Just have a bespoke inflation rate using their 'basket of goods'. Wage increases have no relevance to a retired person.

Trouble comes in that it would probably be giving higher New State Pension increases than the triple lock and the "debate" is about reducing the cost.

Recent food and energy inflation is way higher than the triple lock has been awarding. Add that Labour have put in changes to reduce the triple lock increases to just 80% of the "triple lick" and it be a significant increase in the pension bill.

 

[Rusty Nails]

Just have a bespoke inflation rate using their 'basket of goods'. Wage increases have no relevance to a retired person.

One of the purposes of the triple lock was to increase the state pension as a % of the average earnings of those in work. It has worked well in that respect (although still low compared to most developed countries).

I understand that the Australian system is a sort of averaging/flexible system that seems to work well, but as with all these things the topic is too complicated to be dealt with by kneejerk and simplistic tweaks. As with most things in the UK it needs considered thought and concensus by politicians, of the sort that we always seem to kick into the long grass.

 

[Psamathe]

As with most things in the UK it needs considered thought and concensus by politicians, of the sort that we always seem to kick into the long grass.

I agree. Trouble is that most raising it are looking only at "it's too expensive" eg " to fund the money for increased defence spending ".

For me the cucial aspect is protecting those entirely dependeyon it who are already struggling.

Finding money for increased spending in other areas maybe took at why so many are on sick benefits (UK way out of line with comparable European countries). Help those people recover so they can work reduces benefit costs, generates tax revenue, improves productivity, etc.