Quote:
Originally Posted by Paul
Which part of the lock is the issue ? and what will they replace it with ?
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I am not an economist, but the link with wages essentially means the state pension will always outpace the wage growth of the working population that funds it.
If inflation is higher than wage growth, then the state pension will grow faster than the tax base that pays it.
If wage growth is higher, then the state pension will match wage growth.
If neither wage growth nor inflation is that high, then the state pension will
still go up 2.5%.
It will just always become a bigger and bigger part of the budget. The only time it won't is if we see low inflation and very high economic growth but that seems a long way off.
You replace it by getting rid of the link to earnings, so that when wage growth finally exceeds inflation, there is a chance for the income of the working population to catch up with the pension bill it has to pay.
I would also say it's not fair that the government has to keep finding money to fund increasing pensions when there are other groups that could use some increase in benefits as well. The price of the triple lock could easily have covered the PIP payments, lifting the child credit cap and free school means.
We're not talking about cutting pensions here, or even not increasing them so they don't match inflation, but stopping them from always have the biggest increase possible every year.