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Ed Balls and the State Pension

(58 Posts)
sunseeker Mon 10-Jun-13 10:01:22

It has been reported that Ed Balls has said that Labour would cap the state pension if they came to power. UK state pension is already low yet here is a politician who wants to reduce it further.

I think the problem is that the state pension is considered a "benefit" when, in fact, it is an entitlement by virtue of the contract working people had with the government that by paying a set amount every week they would receive free health care and a pension on retirement.

Movedalot Mon 10-Jun-13 10:33:55

If he has then I think he has shot his party in the foot! We are the voting generation!

whenim64 Mon 10-Jun-13 10:37:08

Here's what he has been saying ths weekend:

janeainsworth Mon 10-Jun-13 10:50:57

Thanks for the link When
Quote: A spokesman said: “Labour supports the triple lock on the state pension, but as Ed Balls said it would be perverse to exclude overall spending on pensioners and the impact of an ageing society from any sensible and long-term fiscal plan to monitor and control structural social security spending. That’s why we have supported increases in the retirement age as people live longer and why we have also said we would not pay the winter allowance to the richest 5 per cent.”

The triple lock is the pledge that pensions will rise either with inflation, earnings, or 2.5%, whichever is the greater.
How can that be 'capping pensions' ?
Does the right hand know what the left is doing, or do Labour think we are all so dim that we won't notice this little discrepancy?

janthea Mon 10-Jun-13 15:40:51

They have to get in first!

Dara Mon 10-Jun-13 16:00:42

Stupid remark by someone who could not run the economy capably when Labour was in power. If the state pension is a 'benefit' why is it taxed as my understanding is that benefits are not taxed. If it is an entitlement I challenge anyone at Westminster to can exist on the state pension alone. Its practically impossible. Stingy, callous and stupid.

glassortwo Mon 10-Jun-13 16:03:56

Just what we expect now a typical balls up!!!!

whenim64 Mon 10-Jun-13 16:28:22

Dara Unfortunately some benefits are taxed.

bluebell Mon 10-Jun-13 16:38:50

Dara- there is nothing intrinsic to the definition of benefit that means it isn't taxable. Although I agree that the basic state pension is inadequate, no one has to live on just that - there would be pension tax credit top up and council tax support and housing benefit if applicable. What I don't find clear from the article is whether it means capping the pension or capping the pension budget- the latter can be done by raising pension age again but still keep the triple lock in place.

bluebell Mon 10-Jun-13 16:41:43

The most common taxable state benefits are:
Carer's Allowance
Jobseeker's Allowance
Employment and Support Allowance - 'contribution' based (if you have paid enough National Insurance contributions)
Incapacity Benefit - from week 29
Weekly Bereavement Allowance
State Pension

bluebell Mon 10-Jun-13 16:42:08

When - crossed posts!

Aka Mon 10-Jun-13 17:04:19

Since when was the state pension taxed? I know it counts towards your tax allowance, so perhaps you mean that?

Aka Mon 10-Jun-13 17:05:01

Anyway 'spherical objects' to Mr Balls wink

bluebell Mon 10-Jun-13 17:10:20

What is meant is that these benefits are taxable - count as part of you total taxable income against which, as you say, your tax allowance is set.

bluebell Mon 10-Jun-13 17:11:07

Aka - you are such a wit!!

Aka Mon 10-Jun-13 17:15:12

Thank you Bluebell it's nice to be appreciated and your approbation is gratefully received smile

Galen Mon 10-Jun-13 18:11:09

As opposed to DLA which is not counted as taxable.
Does anyone know what will happen with PIP?

annodomini Mon 10-Jun-13 18:16:30

I think that PIP will be non-taxable as are DLA and AA, but don't quote me on that yet!

FlicketyB Mon 10-Jun-13 18:26:14

I suspect what he intends to do is cap how much state pension those with occupational/private pensions can receive. For example if your occupational/private pension exceeds £100 a week he will knock £5 off your state pension for every £10 of private pension. your receive over that amount.

Considering that most of us paid NI contributions each week towards our state pension, just as those who were also in occupational pensions schemes paid monthly sums into their company pensions it is a bit like your employer deciding how much pension you get should be based on how much state pension you get rather than how much you contributed to the scheme.

HUNTERF Mon 10-Jun-13 20:29:32


I he does what you say in your thread he will remove any incentive for people to save for a pension particularly people with smaller occupational pensions say under £10,000 per year.

With regard to you saying an employer deciding what you get my ex employer proposed that people who paid in an extra amount for the London element of the pension should not be paid if you retire outside London.

This was ridiculous as people who had chosen not to pay for their London element to be pensionable and not paid the extra contributions would get the same pension.


janeainsworth Tue 11-Jun-13 08:22:34

Flickety I hope you're wrong but fear you're right.
Have you any particular reason for thinking this is what he might do?

annodomini Tue 11-Jun-13 09:15:34

I wonder if he could get away with that. There would be a almighty protest (which I would join) and possibly a challenge in court.

FlicketyB Tue 11-Jun-13 12:03:18

How else can Ed balls aka the Labour Party put a cap on pensions? The state pension is not high and many people get it topped up by Pension Credit to reach an anywhere near acceptable amount. The only way it can be done is to reduce the amount of state pension you give better off pensioners, of whom I am one.

Yes, of course it will inhibit saving by the middle to lower paid but when have you ever known a government act rationally or even less think things through.

I read yesterday that the amount Westminster Council is paying in housing support has increased by 65% rather than decreased since the bedroom tax was brought in because so many people have been made homeless because they could not meet the rent on the extra bedroom from their benefits or low wages that the number of families in bed & breakfast and other temporary accommodation has rocketed costing the Council that extra 65%. In addition some people have had to give up work, particularly if they work unsocial hours because their temporary housing is so far from their workplace and so difficult to access they have been forced into unemployment.

bluebell Tue 11-Jun-13 12:24:23

But instead of a cap on pensions, they could change the pension age. What I don't understand is the still generous tax relief on the pension contributions of higher earners - capping that at the basic rate if tax would save a fortune

Movedalot Tue 11-Jun-13 12:55:11

Flickety I really hope you are right! If they propose that there will be such an outcry that EB will lose his job, which as far as I can see would only be a good thing. grin