Pensions triple lock

[Bigteddy1954]

Hi folks just a few lines on this . Tories promise to keep triple lock going but because they have to payout more than expected start to look at deferring it or suspending it . Then they looking at pensioners to start paying NI payments again . I have paid NI for 49 years and this government are getting above a joke . During the pandemic not a mention of help for pensioners . What's other members thoughts on this .cheers teddy

 

[Rewulf]

IF , and its a big IF , the tories start tampering with pensions, you can likely look forward to a lovely labour government in a few years time.

How does that grab you ?

[JohnfromUK]

1 minute ago, Bigteddy1954 said:

What's other members thoughts on this .cheers teddy

I don't draw a state pension yet - but soon will, so I do have an interest.  The triple lock was introduced as the highest of inflation, earnings growth, or 2.5%.

This was in 2010, and since then (11 years) it has functioned 'fine'.  However, owing to the financial turmoil surrounding the Covid pandemic, it looks like the way in which the "earnings growth" is calculated will return a very odd and completely 'out of line' result because earnings growth was negative last year and has since been strongly positive this year as (at least some peoples) earnings play catch up.  Last year the pension increase (for 20/21 year) was 3.9%, when earnings were falling.  IF triple lock is honoured in the same way - it is predicted that an 8% increase would result.  This is clearly very expensive to current tax/NI payers.

Two logical solutions have been 'mooted'

1. Reduce the triple lock for this year only to a 'double lock' by dropping the 'earnings' element and making it the higher of inflation or 2.5%.  This would give an increase around 2.5% - 3% depending what inflation does.
2. Retain the triple lock, but base the earning section of an 'average over a few years, maybe 3 years.  This would also probably give an increase around 2.5% - 3% depending what inflation does.

[Bigteddy1954]

Hi John I see your point but why bring a system in then when the going gets rough dabble with it .I have just retired haven't used my private pension as of yet because due to the pandemic my pension pot has fallen quite a lot as it stands it's the same as it was 8year ago . Cheers teddy

[oldypigeonpopper]

51 minutes ago, Rewulf said:

IF , and its a big IF , the tories start tampering with pensions, you can likely look forward to a lovely labour government in a few years time.

How does that grab you ?

Hello, not with another Gordon Brown type labour MP , 👎 as for the NI payments they can stick that where the sun don't shine 🤔😁

Edited August 3, 2021 by oldypigeonpopper

[RockySpears]

51 minutes ago, Bigteddy1954 said:

why bring a system in then when the going gets rough dabble with it

  Because times change.  No one could have foreseen the absolute turmoil caused by Government overreaction to the Pandemic.

A rolling 3-5 year average would seen an excellent solution for that lock.  You wait until we hit the 1970's era inflation @25%, see what happens to that lock too,

 

RS

[JohnfromUK]

57 minutes ago, Bigteddy1954 said:

I see your point but why bring a system in then when the going gets rough dabble with it .

Well, it has been going unchanged for 10 years - which is quite a long time in Gov't pensions policy!  But my own view is to drop to 'double lock (greater of inflation or 2.5%) for this year (and possibly next) - and return to triple lock when things have stabilised.  That would still give at least a 'status quo held' level of pension income.  IF the earnings bit had been calculated based on an average of a 3 year period - then it would be no issue - and so just remain.  But it isn't and so we have this 'out of step' result suggesting an 8% increase.

The 'young' are already seeing themselves as most badly hit by the pandemic, which isn't much now, but it is mainly them who will be paying back all of the furlough money over the next 20/30/50 years.  It therefore seems to me that to pay pensioners an 8% increase on top of a 3.9% increase last year (when earnings dropped for many) will cause resentment.

Like you, I haven't used my private pension yet (fortunately I have two modest 'final salary' ones to start next year) - and get my state pension in 2023/24.  At the moment I am retired a little early - perhaps better described as voluntary unemployed! - and live from a combination of savings and savings dividends - which are much reduced by the pandemic.  I can switch on my private pension 'as and when' needed.

Edited August 3, 2021 by JohnfromUK

[oowee]

The whole premise of triple lock is madness. The same as independent pay review bodies for the NHS, it's all laudable in principle but in practice no got wants to give away the control.

This Govt does not have a strategic plan or objective for any part of government so can only react on a piecemeal basis. Having thrown, and wasted so much money on covid we can and should expect more knee jerk reactions to any items of expenditure. 

One exception, no doubt, MP's salary increase. 

[Bigteddy1954]

Hi folks some good comments but this government is still looking at a double lock , pensioners paying NI on pensions ,and also lifting the age from 55 to 57  before you can even draw on your own private pensions wot a joke .cheers teddy