Announced But Not Yet Confirmed: £488 Rise For State Pensions

I agree, it does create unfairness.

Ros Altmann has published a piece here:

pensionsandsavings.com/triple-lock-trouble-time-for-a-rethink-on-how-to-protect-the-state-pension-properly/

... saying the whole system needs a rethink.

Quote:

Pension Credit is already tax exempt and will also be over the tax threshold: A further rationale for trying to exempt the new State Pension recipients from tax, is that Pension Credit, Savings Credit or other benefits that take pensioners over the tax threshold, are tax-free. So pensioners on Pension Credit with the same income as those with a full National Insurance pension record, would end up with higher incomes if those with a full new State Pension had to pay tax.

Which is what I am saying - it's just not fair. It's not that I think anyone should be living on a low income, but occupational pensions are not gifts, and many people on lower rates of state pension are getting less because they paid less in for various reasons. Some of those people will be living comfortably because their household income is higher, or because they have savings or inheritance. To exempt them from tax when those with occupational pensions pay it is ridiculous when the system depends on having more contributors than claimants.

I think it is worth remembering that it is not the fault of pensioners that the triple lock is 'not sustainable' (another media-fed cliche). Governments have had access to demographic data all along, and should have been well aware that we would reach a point where there were more older people than young ones. It is because nobody acted on that knowledge that we are where we are now, not because any of us had the brass neck to grow older.

Doodledog

Which is what I am saying - it's just not fair. It's not that I think anyone should be living on a low income, but occupational pensions are not gifts, and many people on lower rates of state pension are getting less because they paid less in for various reasons. Some of those people will be living comfortably because their household income is higher, or because they have savings or inheritance. To exempt them from tax when those with occupational pensions pay it is ridiculous when the system depends on having more contributors than claimants.

I think it is worth remembering that it is not the fault of pensioners that the triple lock is 'not sustainable' (another media-fed cliche). Governments have had access to demographic data all along, and should have been well aware that we would reach a point where there were more older people than young ones. It is because nobody acted on that knowledge that we are where we are now, not because any of us had the brass neck to grow older.

Excellent post. Worth another read.