Andy Burnham’s chronicles

If wage increases start to go up, inflation normally follows suit.
So while there may be a delay, it probably wont have as big an effect on pension rises as some think.

[Carth]

Originally Posted by Damien

If Starmer was advised to be this bold, then he clearly wasn't listening.

I don't know if Burnham will work out, but I am pleased a politician is telling people they can't have everything for once. The triple-lock is expensive and was eventually going to have to go. Anyone who tells you otherwise is outright lying. The fact that it goes up by the highest increase of wages, inflation or 2.5% means it can increase real fast, and within a few years the government is suddenly having to find billions they may not have expected a few years prior.

The politicians now who say they will bring it back are almost certainly lying as well.

Next you'll be telling me that Burnhams not for Turning

[RichardCoulter]

Originally Posted by Damien

If Starmer was advised to be this bold, then he clearly wasn't listening.

I don't know if Burnham will work out, but I am pleased a politician is telling people they can't have everything for once. The triple-lock is expensive and was eventually going to have to go. Anyone who tells you otherwise is outright lying. The fact that it goes up by the highest increase of wages, inflation or 2.5% means it can increase real fast, and within a few years the government is suddenly having to find billions they may not have expected a few years prior.

The politicians now who say they will bring it back are almost certainly lying as well.

Oh yes, when Governments do potentially unpopular things that the opposition also wanted to do, the opposition will immediately attack them for it and then claim that they will reverse it in order to potentially gain power.

Originally Posted by Paul

If wage increases start to go up, inflation normally follows suit.
So while there may be a delay, it probably wont have as big an effect on pension rises as some think.

But that's what makes the triple lock so expensive because the effect compounds every year.

Inflation goes up, and the pension goes up to match it. Everyone agrees this is fair, because otherwise pensioners get poorer over time. The problem is wages don't rise straight away. They catch up a year or two later. When they do, the pension gets another increase to match the wage rise. Not only that, but it's a % increase on the amount that's already been pushed up by inflation.

So prices go up once, and wages go up to catch up, but the pension gets both. And it never goes back down, so the next increase starts from that higher amount too.

Say the pension is £200 a week. Inflation hits 10% but wages only go up 5%. The pension goes up by the higher one, so it's now £220. Happy days.

But then next year wages catch up and go up 10%, but inflation has dropped back to 3%. The pension goes up by the higher one again, so now it's £242.

If the pension had just followed inflation, it'd be £226.60. If it had just followed wages, it'd be £231. Instead it's £242. That's £800 a year extra per person. I think we have 12 million pensioners, so that's £10 billion extra a year the government has to find.

Keep doing this year after year, and it just rises very quickly. This isn't even talking about the 2.5% minimum.

It was never, ever, going to stay long-term.

[Carth]

Burnham could just decide to pay all pensioners £180 a week, take it or leave it.
What we gonna do, go on strike?

I wouldn't mind a reduced pension IF I could find a nice little part time job to make it up . . like old folk used to. Now we're screwed because of the National Minimum Wage . . which means it's cheaper to employ someone aged between 16 & 20 instead.

Don't get me wrong, they need jobs too, but for more than 8 hours a week or it doesn't make sense.

Anyway, if you get young people into work they'll (usually) pay Tax & NI, but if you set a minimum wage, jobs on offer start disappearing

It won't be a reduced pension. It will still increase by inflation or 2.5%, whichever is higher, and it will also be 'reviewed' occasionally to keep within a certain % of average earnings.

This is what it should have always been.

Let's say you want to target it at 35% of average UK earnings, and inflation means it's suddenly at 38%. Then, in subsequent years, you can allow that increase to cool down as wages catch up until it's back at 35%. If we get a period of high wage growth and it falls below 35%, then you can start increasing it more until, once again, it's at 35%.

This is what a lot of countries do. It's what Australia does.

The main difference is that it stops the double increase that happens here at the moment, where the pension would get the benefit of both the inflationary increase and then the wage increase.

---------- Post added at 17:51 ---------- Previous post was at 17:46 ----------

Originally Posted by Carth

I wouldn't mind a reduced pension IF I could find a nice little part time job to make it up . . like old folk used to. Now we're screwed because of the National Minimum Wage . . which means it's cheaper to employ someone aged between 16 & 20 instead.

Deliveroo

[papa smurf]

if pensioners aren't going to lose out can some mathematical genius tell me how the gov save all this money

[TheDaddy]

Originally Posted by papa smurf

if pensioners aren't going to lose out can some mathematical genius tell me how the gov save all this money

He's already explained it to you, its not so much losing out and more that the rises won't be as steep, there probably was a need for the triple lock 10 or 20 years ago because the state pension lagged behind, it's caught up again now so there's no justification for double increases