Starmer’s chronicles

[Carth]

Pensions haha.
I never paid into a private pension, never thought I'd get to the age to collect on it. I now get the State Pension only, no other benefits (maybe I shouldn't have bought my own house). It appears I'm now holding the Country back because pensioners take too much from the 'taxes paid' pot.

Public Sector Pensions:

Public sector pensions are workplace pension schemes for government employees.

The largest public sector pension schemes in the UK are those for the armed forces, the Civil Service, NHS workers, teachers, police and firefighters, and employees working in local government.

These schemes are statutory defined benefit pensions, which provide an income in retirement based on how much you earned when you were working.

Most major public sector schemes are ‘unfunded’. This means that they're paid from current tax revenue, rather than from dedicated investment funds.

Seems to me that my basic pension isn't quite the biggest 'drain' from the tax pot.

Originally Posted by jfman

I could have been clearer - I wasn’t suggesting formalising that. But if it happened a few times it might make parties address unpopular issues because of how unsustainable it is.

The UK needs action on a number of issues it’s almost impossible to touch because parties tie themselves up in manifesto commitments unsuitable for reality.

• Benefit cuts
• Raising taxes
• Ending the triple lock
• Affordable housing
• Immigration
• Council tax reform

To name a few.

Agree to all of the above. I’d add social care to that list as well. There needs to be a UK-wide extension to the NHS that deals explicitly with how people who can no longer look after themselves move out of hospitals and into care. It’s such a far reaching reform, requiring a permanent solution that is not open to regular political meddling, that it ought to start with a royal commission with authoritative recommendations all main parties buy in to. They can then squabble over fine details and devolved administrations can decide exactly how it’s run, but the basic principle has to be established and made politically impossible to ditch, much as the NHS was.

And on that subject, it’s amazing to think just how much was achieved in this country in the decade after WW2 when we were in a far worse state than we are now. Nothing facing us today cannot be solved, we have simply been cursed with the worst crop of self-serving careerist politicians of the modern era.

[papa smurf]

Originally Posted by nomadking

Is anybody suggesting the pension shouldn't go up with inflation? If not, what's the problem?
Because it's applied on an annual basis, the rises tend to be higher than the original intent. Just a quirk of the system and how the real world operates. It's the understanding of these sorts of things that is grossly absent in general, not just in politics.

the problem is it's half the minimum wage and no where near the living wage, if it was comparable no one would complain but it aint

Originally Posted by nomadking

Is anybody suggesting the pension shouldn't go up with inflation? If not, what's the problem?
Because it's applied on an annual basis, the rises tend to be higher than the original intent. Just a quirk of the system and how the real world operates. It's the understanding of these sorts of things that is grossly absent in general, not just in politics.

I don't think it's the link to inflation that's the issue; it's that it will always rise by inflation, the average earnings growth or 2.5%. Whichever is higher.

So when inflation is higher than average, the pension right increases, but when inflation is low, the wages used to pay for the triple-lock can't catch up, as the pension will go higher still.

It should be tied to a percentage of the average wage so that the tax base that pays for it can catch up during periods of low inflation and wage growth. Not forever taking a bigger and bigger percentage of the budget each year.

I would keep the triple lock until we reach a level that we're comfortable with as a country (it's low compared to some European nations even now), and then change how it works personally.

Originally Posted by papa smurf

pension should not be classed as a benefit,it is bought and paid for by hard work and taxes, if it's means tested whats the point of contributing if you're a high earner, i lived on my private pensions for 5 years as i retired at 61 but had to cut back on spending,i do not see that most on benefits want a job,i look down my street and it's full of the bone idle, back when i was working there were six house holds working out of 93 houses ,it's probably about the same now, mostly 20s-40s years old fit an healthy puffing on weed all day and buying takeaways 2-3 times a day on my taxes.

No one is talking about scrapping a private pension. That's money you paid in and will get out.

When it comes to the state pension, that isn't what you paid into it. Most current pensioners paid for the retirements of a smaller cohort of retirees when they were workers. If the state pension was what you paid into it, then the triple lock wouldn't exist as it wasn't budgeted for when they were working. Of course, as you well know, that isn't how our pension system works. The current crop of pensioners are being paid out from the taxes of the currently working population. That's fine, that's how a country should work, but it's as much a decision for taxpayers as any other area of government spending. It's not a ringfenced fund from which workers get their money back. Most pensioners would be on a lot less money if it were.

---------- Post added at 11:52 ---------- Previous post was at 11:48 ----------

Originally Posted by Chris

Agree to all of the above. I’d add social care to that list as well. There needs to be a UK-wide extension to the NHS that deals explicitly with how people who can no longer look after themselves move out of hospitals and into care. It’s such a far reaching reform, requiring a permanent solution that is not open to regular political meddling, that it ought to start with a royal commission with authoritative recommendations all main parties buy in to. They can then squabble over fine details and devolved administrations can decide exactly how it’s run, but the basic principle has to be established and made politically impossible to ditch, much as the NHS was.

I think this either needs to be a type of state-mandated universal insurance scheme (as EU nations do with health care insurance) or do what May suggested, which was essentially a big inheritance tax scheme to claim social care costs upon death.

[nomadking]

Originally Posted by papa smurf

the problem is it's half the minimum wage and no where near the living wage, if it was comparable no one would complain but it aint

Not meant to be paying for a mortgage or for several kids at that stage.
Ridiculous that somebody can still be working(eg as an MP), get theor salary, pay no NI, get state pension and other pensions, yet somebody doing the same job just gets the salary and has to pay NI. Not what the notion of a pension is meant to be.

[Dingbat]

Originally Posted by nomadking

Not meant to be paying for a mortgage or for several kids at that stage.
Ridiculous that somebody can still be working(eg as an MP), get theor salary, pay no NI, get state pension and other pensions, yet somebody doing the same job just gets the salary and has to pay NI. Not what the notion of a pension is meant to be.

But if that pensioner’s income exceeds the threshold, they pay tax on ALL income (after personal allowance), including the state pension and any private pension they get.

[nomadking]

Originally Posted by Damien

I don't think it's the link to inflation that's the issue; it's that it will always rise by inflation, the average earnings growth or 2.5%. Whichever is higher.

So when inflation is higher than average, workers' wages increase, outpacing those increases, but when inflation is low, the wages used to pay for the triple-lock can't catch up, as the pension will go higher still.

It should be tied to a percentage of the average wage so that the tax base that pays for it can catch up during periods of low inflation and wage growth. Not forever taking a bigger and bigger percentage of the budget each year.

I would keep the triple lock until we reach a level that we're comfortable with as a country (it's low compared to some European nations even now), and then change how it works personally.

.

It's the different timing of things that cause the issues and extra costs. Eg inflation goes up to 10%, pension goes up by 10%. Months later, wages go up in response to the previous 10% inflation. But inflation has now dropped, so wage increases are higher than inflation. The pensions goes up twice over in response to the 10% inflation. Once for the inflation by itself, then again when wages respond, Overall wages may not have gone above inflation, but pensions have gone up above both of them.
Another example of the quirks of the calculations are why it had to be suspended during covid. Covid caused wages to drop, when the effect ended wages rose back up again. Should pensions have risen because of the rise of wages back to the previous level?

[1andrew1]

Originally Posted by Chris

Agree to all of the above. I’d add social care to that list as well.

That's one area to watch Burnham's administration on. The short video is worth watching as he says there's been political cowardice on the issue as it does not feature much in focus groups.

https://www.youtube.com/watch?v=jU5bmXjYzcI

[nomadking]

Originally Posted by Dingbat

But if that pensioner’s income exceeds the threshold, they pay tax on ALL income (after personal allowance), including the state pension and any private pension they get.

And? Their income is still a lot higher than somebody doing the same job, but not yet pension age.

[OLD BOY]

Originally Posted by 1andrew1

That's one area to watch Burnham's administration on. The short video is worth watching as he says there's been political cowardice on the issue as it does not feature much in focus groups.

https://www.youtube.com/watch?v=jU5bmXjYzcI

I'm dying to hear how he's going to pay for it! Another stupid commitment that will get kicked into the long grass.

Don't get me wrong, it's absolutely needed, but Burnham will not make the savings in expenditure necessary to achieve it.

[Dingbat]

Originally Posted by nomadking

And? Their income is still a lot higher than somebody doing the same job, but not yet pension age.

And, the vast majority of pensioners have paid into NI throughout their working lives. I’m sure you’ll change your tune when you retire.

[Jaymoss]

Originally Posted by nomadking

With sickness and disability extras, they can.

Yes but they are not as easy to get as you think. Just ask Peanut I think it was

[1andrew1]

Originally Posted by OLD BOY

I'm dying to hear how he's going to pay for it! Another stupid commitment that will get kicked into the long grass.

Don't get me wrong, it's absolutely needed, but Burnham will not make the savings in expenditure necessary to achieve it.

They cannot be made.
That's why a cross-party approach via a Royal Commission needs to be adopted ad Chris has outlined.

Originally Posted by Carth

Pensions haha.
I never paid into a private pension, never thought I'd get to the age to collect on it. I now get the State Pension only, no other benefits (maybe I shouldn't have bought my own house). It appears I'm now holding the Country back because pensioners take too much from the 'taxes paid' pot.

Public Sector Pensions:



Seems to me that my basic pension isn't quite the biggest 'drain' from the tax pot.

If the State Pension is your only income, you should be entitled to Pension Credit and Council Tax reduction…

[nomadking]

Originally Posted by Jaymoss

Yes but they are not as easy to get as you think. Just ask Peanut I think it was

The point being that if you get those extras, UC claimants CAN afford those things.

---------- Post added at 13:06 ---------- Previous post was at 13:02 ----------

Originally Posted by Hugh

If the State Pension is your only income, you should be entitled to Pension Credit and Council Tax reduction…

State Pension amount is £3.15/wk higher than the standard Minimum Income guarantee(Pension Credit) amount. So normally they wouldn't be eligible for Pension Credit. Other factors increase the Minimum Income guarantee amount, eg disability and caring for child or adults.