Triple lock

I agree Ana.

I think many people would be happy to have National Health and Care Insurance contributions (using the system of NI that exists but not stopping at SP age,) if it was ring fenced for the NHS and Care, and they would then have to admit the pension comes from the main taxes (which would no longer be paying for the NHS. We would have a set amount (percentage of GDP?)for the NHS and would have to work within that or vote to pay more.

What I don't understand is why they continue to insist on calling them 'National Insurance Contributions', when as you say GGMk2, it's just a common or garden tax.

I know this is argued a lot Jalima. I have seen it on other forums too but, to be honest, the idea that we could take the argument to any government (of any flavour) makes me loose the will to live. We will not win so best to go on to the next battle - you do have to choose. I totally understand why and that people believe they have paid for their pension but it was not set up like that. The pot has always been drawn on before it was filled (if you see what I mean). I agree that it is unfair in all sorts of little and bigger ways and it is hugely unwieldy.

So, if for arguments sake we accept that what we pay is a tax and what we get is a benefit then there are two ways we can deal with the mess. Either we can give everyone the same and equal pension on retirement and tax the rich and richer pensioners to balance it or we can go to a completely means tested system where we only pay state pensions to those on lower income. As I understand it - and it does feel counterintuitive - it is cheaper to do the equal pension and tax system but people view these things politically as well as practically and will have different views because of this.

I know they call it that GGMK2 - in fact when I first started receiving my 'benefit' I wrote a letter to the then Secretary of State for Pensions and complained about the terminology. Most people would not regard it as a 'benefit'. People seem to think that the State Pension is something that they have paid into through their NI all their working lives although in reality they do know that it is paid out of existing tax.

The fact that there are so many anomalies in the present and future pension payments, the variation in the number of years of contributions, makes it all very unequal especially if some pensioners will be falling behind in the future.

It IS a benefit Jalima whether we like it or not. Get out your annual letter re your state pension and it will call it just that. If you are eligible for Carers Allowance you will not get it if you are getting SP because they are deemed to be 'overlapping benefits'.

If it wasn't, but was a pension in its own right, each year you would be told what you had saved towards your pension and what you would be likely to get and you Pension holder could not take that away or completely change the pension as they have done.

I don't know how you would wish to view Pension Credit but - loophole or whatever but, unless they make a point of the old pension + pension credit equalling the new pension those in the position of claiming pension credit will gradually drop behind. You may think it a good thing or a bad thing but it is a fact whether you fight the fight about SP being a benefit or not.

You may have to live on this income for 20 years, and if you have no other income, that means no holidays and limited new clothes
on a less serious note, my friend said that she never throws out any clothes, she has wardrobes full of them because when she is very old and perhaps in the retirement home, she'll never have to buy any more.

GG - a good point about Pension Credit not being triple locked. Have the Powers That Be found a loophole to be exploited?
Is it a loophole or is it that state pensions are not actually a benefit even though they refer to them as that, but Pension Credit is a benefit which not all receive?

A different definition rather than using a loophole.

DH along with many others was made redundant at 55 and because of ill health didn't look for work so didn't claim any benefits, but I know some who did despite having no intention of working.

GG - a good point about Pension Credit not being triple locked. Have the Powers That Be found a loophole to be exploited?

And you certainly have thought on Rigby. NI etc is a minefield of further loopholes. It's all a way to keep the triple lock while taxing through the back door. At least Ms May is no longer committing to promises which will probably be broken the way Mr Cameron did.

I'm not quite sure what I'm supposed to 'think on' about. I'm questioning the special treatment that all pensioners receive via the triple lock. In an ideal world all benefits would be more generous. As is alluded to above, it also makes sense in a Keynesian way as people with lower incomes obviously spend more of it and spend it here as opposed to saving or expensive holidays abroad and that's good for the economy. But we're now in a situation politically where we are not going to see a seismic shift to a different benefits model predicated upon higher basic incomes for those on benefits. So we have to start where we are and not where I would like us to be. There have been fundemental, conceptual changes to the whole NI system and yet pensioners keep getting special treatment why? This isn't about a race to the bottom or levelling down but about having a grown up sensible discussion about what could be done. Some people have said that its wrong that pensioners are excerpt from paying NICs on any earnings they have after reaching SPA. However for example, we could ask why is unearned income free of NICs? When the NI system was first set up there was a clear link between NI benefits and NICs - now that link has been broken as NI benefits have been drastically reduced in scope and relative value and people forced into means tested benefits. So NICs are basically just another tax and a tax on people going out to work. But can you see any government revisiting NICs - it would mean putting up the basic rate of tax ( this wouldn't impact on people with earned incomes as they wouldn't pay NICs any longer) but the better off with unearned incomes would pay more. I know this leads into a whole debate about 'punishing' savers. But basically we are now in a situation where means testing is more the norm than it ever has been and basic benefits( apart from SP) even lower and paid out for shorter periods of time. If people are happy to accept a society where a person has worked all their lives paying NICs and then is made redundant at 56 and can only get JSA for six months at £73 a week and yet think pensioners should be treated differently then I despair at the illogicality of this. And where is the morality in this? It's just the pensioner vote isn't it? As has also been said above, no one gets just the basic pension without any other help unless they have savings. And it's not true any longer that means testing is expensive - it was in the pre- online claiming days. Also attitudes to claiming means tested benefits have radically changed - there's no longer the same level of stigma there was. I think it's awful that pensioners have to rely on pension credits and other help but I also think it's dreadful that people working full time have to as well, that the redundant have to, people who are long term sick and disabled, carers. We have an utterly reprehensible benefits system so I'm trying to understand why pensioners should have special treatment. I just don't get it. And I rather think that I've 'thought on' quite a lot actually.

The new basic SP is currently £159.55 and the old one is £122.30. Both these are currently triple locked.

Pension Credit, which you will get if this is your only income is the old SP, or less than the full new SP with no other income, tops up to £159.35. As you can see there is already a small gap and the Pension Credit is not triple locked so the gap is likely to increase.

In both cases you will be able to claim other benefits if this is your only income.

My parents went without as my DF paid extra into a private pension which would also provide for my DM. It paid off handsomely in the end but they did go without quite a lot. No holidays abroad, very occasional meals out. They worked their way up to a nice house and then downsized to raise cash when they got older. Would it have been fair to have docked their state pension to pay out to those who couldn't or hadn't saved at all?

We did the same, although not so strictly, virtually no meals out - certainly not in good restaurants - few new clothes and only camping holidays. So we are now comfortably off in our little house with money put by for repairs. We have good holidays to exciting places, but I still have very few new clothes and we seldom eat out (Last week was the second meal in a restaurant this year.) We do consider ourselves to be very fortunate and my Christmas money from the government went on goodies for the local food bank.

I watch families eating out obviously as something they do frequently, see people wandering around the shops with bags and wonder how they can afford it. My DD2 works in a fashion store and says women come in to change items or buy new because a seam has come undone or a button fallen off. It's a different world and I do worry how the next generation will cope with being retired.

As I understand it the new maximum state pension is £155.50 a werk and there is no top up - this replaces lower pensions which could be topped up to this level with pension credit.
For a single person it is difficult to live on this and run a car - yes they have a bus pass, but you are very lucky if there is a bus that goes to all the places you may need to go to eg doctor, dentist, friends, relatives. You may have to live on this income for 20 years, and if you have no other income, that means no holidays and limited new clothes.
I think it was better to have a lower basic pension and top it up for those without private pensions - which are more likely to be women who worked part time when their children were young and maybe looked after parents or parents in law.
If you own your house you need to pay out for repairs too, and the pension certainly doesn't cover that. The only option is to cash in on the equity which, with compound interest, may mean that when you die there is no value left in it.

I think it may come Jen. The OECD seems to have picked up on:

Pearson said Britain’s pension system was among the least generous of the OECD’s 35 member countries. The basic state pension is worth £6,360 a year, and the full new state pension introduced in 2016 is worth £8,297 a year.
“The UK pension is pretty low,” he said.

Keeping pensioners in poverty is really not good for the country. I know some on here think an argument about relative poverty solves the problems ('I can live in a hole in the road and licking the back of a stamp from time to time', stuff) but it really isn't. The cost of benefits (other than the State Pension)to pensioners and the take-up should be made known as they depress the economy as does having a such a low pension in the first place.

I wonder if daphnedill may change her tune when she is in receipt of the State Pension.

You're right grannygranby, people of pension age don't have to apply for their state pension; if they do they could return their fuel allowance or give it to charity if they wish, do not have to apply for a bus pass and can offer to pay the tv licence after 75 too.

No-one is forcing people to accept all these things that they have paid in for over their working lives.

DH's private pension forecast seemed quite reasonable until they told him just as he retired that they had made a mistake and failed to apply GMP which is apparently made up by SERPS. So his private pension is one quarter less than we had anticipated.
Give with one hand, take it away with another!

Good point, grannygranby.
The government actually encourages you to postpone taking your state pension.

If pensioners like Rigby feel they are getting too much they didn't have to apply for the State Pension. The only pension I get is the State Pension and as I am self employed have some extra income. After 40 years NI contributions and paying extra for many years I now get a little over £150 per week State Pension. 2.5% rise which is what everyone is screaming against and waging generational wars is about £3 a week. well well. That is keeping the country poor I don't think. Means testing is very costly and often means poor uptake by the most needy. Pension credit is a 'benefit' and automatically enables receiver into many other benefits - no council tax - free dental etc. The State Pension is paid for by historical contributions, it is not a welfare benefit. Pension Credit is. People who have trusted the pension and paid for it over many years deserve it without feeling it is a handout. I happen to know a few people who have not paid their NI and they immediately get Pension Credit to top them up to full pension with all the other unquestioned benefits. Though as Claimants they are not free to earn other income etc without accounting for it to the authorities or risk accusations of fraud. So think on Rigby.

One way to solve the problem.

www.theguardian.com/business/2017/apr/27/uk-state-pension-rich-oecd

I can't imagine Theresa May doing it, though.

www.theguardian.com/money/2017/apr/30/poorest-pensioners-double-whammy-triple-lock

The figures for pensioners weekly income can be very misleading, especially if they live in rented property as if you are on Pension credit you are also entitled to Housing Benefit and Council tax benefit.

Estimated average rent paid by retired people varies between £100 to £300 a week and average Council tax for a band C property averages at £25 a week. A retired person in a rented band C property pays between £125 - £325 a week in rent and council tax and can probably get £100 - £250 of this back in HB and CTB.

So the true income of many Pension Credit pensioners goes as follows: £155.60(PC) + £100 - £250(HB&CTB, estimated) = £255.60 - £405.60 a week. I am not suggesting that this is riches, but many families would love to have over £100 a week left in their bank accounts after paying rent and rates.

If you are on pension credit and own your home then you get nowhere near as much.

theconversation.com/why-the-pensions-triple-lock-has-become-a-key-general-election-issue-76816

I haven't time to read your posts atm daphnedill but I will try to later as there does seem to be an anomaly with women's pensions which is not right.

However, I would just like to say that I was brought up with the mantra that 'Two wrongs don't make a right' and just because JSA is too low does not mean that pensions are too generous. As someone posted up-thread, anyone in receipt of generous private pensions in addition to the State Pension will be paying tax at the normal rate, some at the higher rate I suppose; there is no longer an additional personal allowance either.

Crossed posts, Eloethan.

I am a pensioner and am not sheltered from austerity.
My private pension is fixed and small, and my state pension rises do not cover my rises in utilities and council tax.
Pensioners eat as well, and food prices go up for pensioners just as much as the working population.

Why do you want pensions to be dragged down to the lowest common denominator?
Pay should rise to equal pensions, not pension rises be cut.
Why are you not criticising the fact that MPs have a five times bigger annual pay rise than pensioners?
My pay rise this year is less than £200. An MPs is over £1000.
I am surprised at you using austerity as a stick to beat pensioners with. As Damien Green said on QT, everyone who complains about the amount pensioners get will become a pensioner sooner or later.
What the government decides to do is not the pensioner's fault. Stop blaming; start fighting.