Today’s inflation figures should have given retirees reassurance that, come next April, their lagging state pension income will increase in real terms.
But despite Prime Minister Liz Truss’s repeated commitment to the triple lock in her leadership campaign, her Government has this week refused to stick to its word.
The triple lock has now become a weighty Tory party promise to woo older voters.
A U-turn on the triple lock after it was suspended last year would surely now be unthinkable.
Perhaps not now, but something has to give eventually. Using today’s inflation rate of 10.1pc, the state pension should rise by £22.70 a week to £203.85 from April 2023 for those collecting the post-2016 state pension.
The state pension is becoming increasingly expensive. There are more of us, people are living longer, and the triple lock adds to that growing cost. Each percentage point rise is thought to cost the Treasury around £1bn.
And the problem with the triple-lock is that while millions of pensioners rely on it, many do not need it. It’s a colossal expense that it is both valuable and wasteful.
The state pension started out as a means-tested benefit purely to keep the very poorest over 70s out of poverty at a time when the average life expectancy was well below 60.
Now the state pension is a retirement staple that pensioners, both rich and poor, expect to receive. It’s vital income for some, and a bonus for others.
But with the triple lock promise, the Government has chained itself to an enormous commitment that would now be political suicide to abandon. To get out of this hole, Britain needs to radically rethink its relationship with the state pension.
Expectation for the state to provide for us in retirement has evolved into entitlement
Ben Wilkinson
Head of Personal Finance
19 October 2022 • 9:00am
Ben Wilkinson
Despite Prime Minister Liz Truss’s repeated commitment to the triple lock, her Government has refused to stick to its word
Despite Prime Minister Liz Truss’s repeated commitment to the triple lock, her Government has refused to stick to its word Credit: Kirsty Wigglesworth/ AP
Today’s inflation figures should have given retirees reassurance that, come next April, their lagging state pension income will increase in real terms.
But despite Prime Minister Liz Truss’s repeated commitment to the triple lock in her leadership campaign, her Government has this week refused to stick to its word.
The triple lock has now become a weighty Tory party promise to woo older voters.
A U-turn on the triple lock after it was suspended last year would surely now be unthinkable.
Perhaps not now, but something has to give eventually. Using today’s inflation rate of 10.1pc, the state pension should rise by £22.70 a week to £203.85 from April 2023 for those collecting the post-2016 state pension.
The state pension is becoming increasingly expensive. There are more of us, people are living longer, and the triple lock adds to that growing cost. Each percentage point rise is thought to cost the Treasury around £1bn.
And the problem with the triple-lock is that while millions of pensioners rely on it, many do not need it. It’s a colossal expense that it is both valuable and wasteful.
The state pension started out as a means-tested benefit purely to keep the very poorest over 70s out of poverty at a time when the average life expectancy was well below 60.
Now the state pension is a retirement staple that pensioners, both rich and poor, expect to receive. It’s vital income for some, and a bonus for others.
But with the triple lock promise, the Government has chained itself to an enormous commitment that would now be political suicide to abandon. To get out of this hole, Britain needs to radically rethink its relationship with the state pension.
It is right that it remains a universal benefit available to all retirees – but those who need more, should get more, and vice versa.
An obvious way the Treasury could save money is to raise the state pension age even higher. But this solution risks penalising those who have toiled in physical, hard jobs and need to retire earlier on health grounds.
It is also unfair on those who have a lower life expectancy. Perversely, those from deprived areas who rely on the state pension the most, are likely to receive the least of it.
Another idea would be to means-test the state pension again. Do retired public servants really need the taxpayer to subsidise two inflation-linked pensions for them? How can it be right that a judge or senior civil servant on a £100,000 annual pension, receives a full state pension?
Retirees of all walks of life often say that they deserve a state pension because they have paid in, and therefore the taxpayer must pay out. But do they realise how generous the payout is?
Sums from pension firm Aegon show that a worker earning £30,000 a year would pay around £2,092 in National Insurance contributions a year, some of which goes towards funding the NHS too. Yet if they make that contribution every year for 35 years, they will qualify for the full state pension currently worth £9,627 a year.
That’s a total contribution of less than £75,000 to receive at least £9,627 a year – or more than £185,000 over a typical 20-year retirement.
An annuity paying the same as the state pension would cost £211,700 to buy today. Whatsmore, if a worker was to pay that same £2,092 annual NI contribution into a private pension which grew at 4.25pc a year, it would only be worth £120,000 in today’s money over their career.
Expectation for the state to provide for us in retirement has evolved into entitlement.
The state pension has also become a tool with which to bribe older voters, and as a result the triple lock is one U-turn the Government can perhaps not afford to make.
Yet for our state pension system to be affordable and help those who need it, it will need to be seen as a benefit again rather than an entitlement.
Given the amount of u-turns this government has done recently I wouldn’t be suprised if triple lock is suspended/scrspped soon.
[removed]
If they’re going to do austerity again, which seems very likely, they can’t cut everything else while increasing the pension. Not only would be it morally unacceptable, it would be counterproductive since the pension increase would swallow whatever savings they managed to make elsewhere.
[deleted]
Hey, hey, blue rinse army. They’re finally coming for you! And not before time.
Pensions should be linked to average wages. Jumping them up when inflation far outstrips the earning power of those funding the pensions is simply unsustainable.
Linking them to average earnings would me the government has to work harder for everyone. Heck, link it to the average earning of the bottom third?
(For “average earnings”, please feel free to inset/recommend some other measure linked to the buying power of those in work.)
Just get over with it and announce that everyone under age of like 50 won’t get any state pension. It will be a big vote winner.
Listen you Tory fucks- the reason why it is unsustainable is because you have allowed the rich to hoard the excess wealth generated by the workers. You made it unsustainable, just like everything else in the UK. The workers are the most productive they have ever been, generating more wealth than ever, one look at corporate profits will tell you this but you’ve allowed the rich to continue to steal our wealth year after year. Tax the fucking rich and stop this bullshit of “there isn’t any money for this”.
How is she getting paid over £100,000 for the rest of her life for a month or so’s work?
If Sunak doesn’t block that…. He is a titbeam.
This comes from the generation that disagrees with strikes and payrises… But dands pensionen rises at minimum matches it.
Working people havnt had an inflation level payrise I’m over 20 years
Maybe they should start paying younger people more, their contributing more to the system. But no.
I’m waiting for my state pension to be void, it’ll just add to the inability to buy a house, NHS collapse, stagnant wages, and student loans.
Pensioners ARE entitled because they have worked and paid into the system that others benefit from. If you wish to save money, close the borders and restrict any social payments to anyone, foreign or domestic that has not contributed
Haven’t we got like the worst and lowest state pension scheme in the whole of Europe?
At 16-18 we enter the work force we are told if we work hard for X amount of years we will be rewarded with a pension. They have kept pushing the goal posts of when we can retire without any thought on quality of life in our retirement years. Yeah, we might be in good nick if we come from a middle/upper class area but if we come from a poor working class area we’re going to be buggered by retirement age and therefore not able to enjoy the fruits of our labour. Try to explain that to someone who has worked solidly without claiming anything from anyone when they get to retirement age sorry nowt for you even though we promised you.
The Tories have bled this country dry with their vile unnecessary policies. Try cutting one of the poorest state pensions in Europe and see what the workers of this country do. I’m sure the self serving MPs will be able to find away to keep theirs though.
1. We live in giant pyramid/Ponzi scheme made up of lots of other pyramid schemes. Pensions. The housing market. Etc etc.
2. The politician job is just to distract everyone from this.
3. Because the Tories know it is a Pyramid/Ponzi scheme they are stealing as much from the system as possible before the inevitable crash.
4. The money stolen has been used to buy hard asset so they have a head start when all is reset.
5. A World War is the only real way to reset the system.
6. This is a very simple description of what is happening. Obviously, it is more complex than this
We had a solution two years ago, it was called covid. But we decided to sacrifice the young to save the old.
This is called flying a kite to assist the Tory party in softening up the populus for forthcoming U-turns. Ever feel that politics has been hacked?…
Surprised to see people in this thread actively calling for their pensions to be taken away from them. Although I’m guessing its a case of I’m alright Jack.
State pension starts at 70 these days. The older you work to the sooner you die so few of us are going to see it – we will just work until we can’t work anymore and then go on disability.
Therefore, lets just cancel the whole thing and use the disability system in the first place. If everyone expects to need to depend on it maybe we will make it fairer and less punishing.
19 comments
Today’s inflation figures should have given retirees reassurance that, come next April, their lagging state pension income will increase in real terms.
But despite Prime Minister Liz Truss’s repeated commitment to the triple lock in her leadership campaign, her Government has this week refused to stick to its word.
The triple lock has now become a weighty Tory party promise to woo older voters.
A U-turn on the triple lock after it was suspended last year would surely now be unthinkable.
Perhaps not now, but something has to give eventually. Using today’s inflation rate of 10.1pc, the state pension should rise by £22.70 a week to £203.85 from April 2023 for those collecting the post-2016 state pension.
The state pension is becoming increasingly expensive. There are more of us, people are living longer, and the triple lock adds to that growing cost. Each percentage point rise is thought to cost the Treasury around £1bn.
And the problem with the triple-lock is that while millions of pensioners rely on it, many do not need it. It’s a colossal expense that it is both valuable and wasteful.
The state pension started out as a means-tested benefit purely to keep the very poorest over 70s out of poverty at a time when the average life expectancy was well below 60.
Now the state pension is a retirement staple that pensioners, both rich and poor, expect to receive. It’s vital income for some, and a bonus for others.
But with the triple lock promise, the Government has chained itself to an enormous commitment that would now be political suicide to abandon. To get out of this hole, Britain needs to radically rethink its relationship with the state pension.
Expectation for the state to provide for us in retirement has evolved into entitlement
Ben Wilkinson
Head of Personal Finance
19 October 2022 • 9:00am
Ben Wilkinson
Despite Prime Minister Liz Truss’s repeated commitment to the triple lock, her Government has refused to stick to its word
Despite Prime Minister Liz Truss’s repeated commitment to the triple lock, her Government has refused to stick to its word Credit: Kirsty Wigglesworth/ AP
Today’s inflation figures should have given retirees reassurance that, come next April, their lagging state pension income will increase in real terms.
But despite Prime Minister Liz Truss’s repeated commitment to the triple lock in her leadership campaign, her Government has this week refused to stick to its word.
The triple lock has now become a weighty Tory party promise to woo older voters.
A U-turn on the triple lock after it was suspended last year would surely now be unthinkable.
Perhaps not now, but something has to give eventually. Using today’s inflation rate of 10.1pc, the state pension should rise by £22.70 a week to £203.85 from April 2023 for those collecting the post-2016 state pension.
The state pension is becoming increasingly expensive. There are more of us, people are living longer, and the triple lock adds to that growing cost. Each percentage point rise is thought to cost the Treasury around £1bn.
And the problem with the triple-lock is that while millions of pensioners rely on it, many do not need it. It’s a colossal expense that it is both valuable and wasteful.
The state pension started out as a means-tested benefit purely to keep the very poorest over 70s out of poverty at a time when the average life expectancy was well below 60.
Now the state pension is a retirement staple that pensioners, both rich and poor, expect to receive. It’s vital income for some, and a bonus for others.
But with the triple lock promise, the Government has chained itself to an enormous commitment that would now be political suicide to abandon. To get out of this hole, Britain needs to radically rethink its relationship with the state pension.
It is right that it remains a universal benefit available to all retirees – but those who need more, should get more, and vice versa.
An obvious way the Treasury could save money is to raise the state pension age even higher. But this solution risks penalising those who have toiled in physical, hard jobs and need to retire earlier on health grounds.
It is also unfair on those who have a lower life expectancy. Perversely, those from deprived areas who rely on the state pension the most, are likely to receive the least of it.
Another idea would be to means-test the state pension again. Do retired public servants really need the taxpayer to subsidise two inflation-linked pensions for them? How can it be right that a judge or senior civil servant on a £100,000 annual pension, receives a full state pension?
Retirees of all walks of life often say that they deserve a state pension because they have paid in, and therefore the taxpayer must pay out. But do they realise how generous the payout is?
Sums from pension firm Aegon show that a worker earning £30,000 a year would pay around £2,092 in National Insurance contributions a year, some of which goes towards funding the NHS too. Yet if they make that contribution every year for 35 years, they will qualify for the full state pension currently worth £9,627 a year.
That’s a total contribution of less than £75,000 to receive at least £9,627 a year – or more than £185,000 over a typical 20-year retirement.
An annuity paying the same as the state pension would cost £211,700 to buy today. Whatsmore, if a worker was to pay that same £2,092 annual NI contribution into a private pension which grew at 4.25pc a year, it would only be worth £120,000 in today’s money over their career.
Expectation for the state to provide for us in retirement has evolved into entitlement.
The state pension has also become a tool with which to bribe older voters, and as a result the triple lock is one U-turn the Government can perhaps not afford to make.
Yet for our state pension system to be affordable and help those who need it, it will need to be seen as a benefit again rather than an entitlement.
Given the amount of u-turns this government has done recently I wouldn’t be suprised if triple lock is suspended/scrspped soon.
[removed]
If they’re going to do austerity again, which seems very likely, they can’t cut everything else while increasing the pension. Not only would be it morally unacceptable, it would be counterproductive since the pension increase would swallow whatever savings they managed to make elsewhere.
[deleted]
Hey, hey, blue rinse army. They’re finally coming for you! And not before time.
Pensions should be linked to average wages. Jumping them up when inflation far outstrips the earning power of those funding the pensions is simply unsustainable.
Linking them to average earnings would me the government has to work harder for everyone. Heck, link it to the average earning of the bottom third?
(For “average earnings”, please feel free to inset/recommend some other measure linked to the buying power of those in work.)
Just get over with it and announce that everyone under age of like 50 won’t get any state pension. It will be a big vote winner.
Listen you Tory fucks- the reason why it is unsustainable is because you have allowed the rich to hoard the excess wealth generated by the workers. You made it unsustainable, just like everything else in the UK. The workers are the most productive they have ever been, generating more wealth than ever, one look at corporate profits will tell you this but you’ve allowed the rich to continue to steal our wealth year after year. Tax the fucking rich and stop this bullshit of “there isn’t any money for this”.
How is she getting paid over £100,000 for the rest of her life for a month or so’s work?
If Sunak doesn’t block that…. He is a titbeam.
This comes from the generation that disagrees with strikes and payrises… But dands pensionen rises at minimum matches it.
Working people havnt had an inflation level payrise I’m over 20 years
Maybe they should start paying younger people more, their contributing more to the system. But no.
I’m waiting for my state pension to be void, it’ll just add to the inability to buy a house, NHS collapse, stagnant wages, and student loans.
Pensioners ARE entitled because they have worked and paid into the system that others benefit from. If you wish to save money, close the borders and restrict any social payments to anyone, foreign or domestic that has not contributed
Haven’t we got like the worst and lowest state pension scheme in the whole of Europe?
At 16-18 we enter the work force we are told if we work hard for X amount of years we will be rewarded with a pension. They have kept pushing the goal posts of when we can retire without any thought on quality of life in our retirement years. Yeah, we might be in good nick if we come from a middle/upper class area but if we come from a poor working class area we’re going to be buggered by retirement age and therefore not able to enjoy the fruits of our labour. Try to explain that to someone who has worked solidly without claiming anything from anyone when they get to retirement age sorry nowt for you even though we promised you.
The Tories have bled this country dry with their vile unnecessary policies. Try cutting one of the poorest state pensions in Europe and see what the workers of this country do. I’m sure the self serving MPs will be able to find away to keep theirs though.
1. We live in giant pyramid/Ponzi scheme made up of lots of other pyramid schemes. Pensions. The housing market. Etc etc.
2. The politician job is just to distract everyone from this.
3. Because the Tories know it is a Pyramid/Ponzi scheme they are stealing as much from the system as possible before the inevitable crash.
4. The money stolen has been used to buy hard asset so they have a head start when all is reset.
5. A World War is the only real way to reset the system.
6. This is a very simple description of what is happening. Obviously, it is more complex than this
We had a solution two years ago, it was called covid. But we decided to sacrifice the young to save the old.
This is called flying a kite to assist the Tory party in softening up the populus for forthcoming U-turns. Ever feel that politics has been hacked?…
Surprised to see people in this thread actively calling for their pensions to be taken away from them. Although I’m guessing its a case of I’m alright Jack.
State pension starts at 70 these days. The older you work to the sooner you die so few of us are going to see it – we will just work until we can’t work anymore and then go on disability.
Therefore, lets just cancel the whole thing and use the disability system in the first place. If everyone expects to need to depend on it maybe we will make it fairer and less punishing.