Completely bonkers.
Wages and productivity increase -> pensions increase by at least that much
Wages and productivity decrease -> pensions increase by 2.5% anyway
Triple-lock on pensions will stay. Pensions will increase when earnings have decreased
- Thread starter HACO
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Completely bonkers.
Wages and productivity increase -> pensions increase by at least that much
Wages and productivity decrease -> pensions increase by 2.5% anyway
Soldato
I think this is a bit of a fallacy (in the kindest possible way)..
The punchline is that every generation lives longer than the previous generation that's why pensions are a mess (or not reacting to this simple fact is the real problem), so in essence you are trading short term financial impingement for being able to live longer.. Sounds like the younger generation are very focussed on money and not on life..
And lets not forget that everyone ages and every generation is allegedly better off than the previous, so you will inevitably be part of the very problem you are complaining about.
The issue is the definition of 'poverty' "A child is said to be living in poverty when they are living in a family with an income below 60% of the UK's average after adjusting for family size.".. As someone that grew up in tangible poverty myself and compare my experience of 'poverty' with todays experience of 'poverty' it is hard to reconcile..
I love the example in the article:
"A couple with two children living in poverty has less than £58 per day – that’s £15 each - after housing costs to pay for food, bills, childcare, transport, household items, clothes and other expenses like school trips or children’s activities."
So £1764 a month to pay after rent/mortgage..
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You might want to research your claims as I seem to recall there is evidence that neither of them can be taken as a given any more, especially the assumption that young people today will be financially better off than their parents.
There are so many reports that show this is not true. Millennials are not better off than previous generations.
Millennials poorer than previous generations, data show
Millennials are on track to have worse health in middle age than their parents
UK millennials fall behind on living standards
Millennials: Britain's first generation since the 1800s to do worse than their parents
Life expectancy is also not increasing anymore by any meaningful amount. It's been pretty much stagnant for the last 10 years and is expected to be stagnant for the next few decades.
Don
Life expectancy is thought to have largely peaked now and is actually anticipated to drop (there's a correlation between living standards and expectancy - so as you've pointed out already millennials are already seeing a drop in living standards). I think the figures in the US are saying life expectancy is already dropping.
Parties are already coalitions of individuals with differing views working together to run the country, honestly what the hell
Soldato
As a matter of interest what does everyone think the average yearly pension income is for these old codgers?
Soldato
All I know is that there is no easy fix and that ultimately people will suffer until we find more ideal solutions and it sucks 
.
.I think it's low (compared to other developed countries), but it's because they paid very little into the system in their working lives. The US for example, significantly increased social security tax in the 1970s and 1980s, anticipating the increase in the number of pensioners in later decades, so that the social security trust fund ran a surplus for years and invested the difference in treasury bonds so that it grows for the retirement of the same people.
UK's state pension being comparatively low is no argument to significantly increase taxes on current workers to give even more to pensioners, who are already the richest population in the country and have lowest levels of poverty. It just shows a failure of planning of previous governments.
Privately though, current pensioners receive excellent, world-leading private defined benefit final year salary pensions. Something that no longer exists for young people.
All I know is that there is no easy fix and that ultimately people will suffer until we find more ideal solutions and it sucks
Tax defined benefit final salary pensions and use that fund to increase the state pension
Tax defined benefit final salary pensions and use that fund to increase the state pension
They already are taxed.
Yeah, increase that marginal tax. A lot of these pensions are actually worth more than the £1.07m lifetime allowance (i.e. you can't buy an equivalent annuity for £1.07m today), but they don't get taxed that way (too much break and super conservative valuation at only 20x, should be closer to 35x). Another tax-break that the super rich pensioners receive at the expense of everyone else (including poorer pensioners).
Soldato
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Another sweeping statement. I know many pensioners who receive nothing like an “excellent, world-leading private defined benefit final year salary pension.” Those that do were in well paid jobs that had such pensions as a bonus.
And you’ll have to define “young people” far better. Final salary pensions were phased out many years ago for the huge majority of people. I’m not going to get one but I wouldn’t call myself young anymore.
The problem with this is that you're ignoring the fact there is a problem with how we handle pension benefits. When someone can earn over £100k a year AND receive a state pension, as well as other benefits (winter fuel, bus passes etc.) then there is a problem. Personally I'd do clawbacks of all the benefits over certain income threshold a la the High Income Child Benefit Charge.
State pensions are quite odd when you consider anyone at all over a certain age is entitled to receive it.
I’m ignoring nothing. I was responding to HACO who mentions nothing that you’ve introduced to the argument. Everyone is entitled to receive a state pension because we all pay national insurance. There’s absolutely nothing wrong with that. However, I completely agree that it’s silly that people who receive (for example) £40k a year in pensions can also receive benefits such as winter fuel allowance and free bus passes. I also agree that there should be a taper introduced where if you receive so much from a private pension then your state pension should be reduced. However, that way lies political pain and politicians are wimps...
Worst pension in Europe. So sorry, no sympathy from me. Perhaps the government could waste less money on foreign aid or legal aid for example. Another idea maybe is to police the borders or stop family reunification for child refugees. Pensioners have actually contributed to this countries economy for a large proportion of their lives.
I don't think we have that much disagreement on policy, I agree with those, and don't want to go much further. I wouldn't even means-test the state pension, just increase taxes on those with huge pensions (could effectively be the same thing).
If you actually run the math, the current pensioners do get a lot more than they paid in, adjusted for inflation. I think their return on what they put in is very high. In the US, this on average is 0.5% APR, not even adjusting for inflation. This doesn't mean they get a lot, it means they paid so very little compared to other countries.
More here:
Right now, workers do pay into the pension trust fund in a comparable rate to other countries, but instead of running a surplus that will be used for their retirement (like the US and many other countries do), it's used on the boomer generation who didn't pay in enough. Running that fund empty (and insolvent within a couple of decades), unless taxes are again raised on future generations.