Pension triple lock under threat

[Box Brownie]

My mortgage was also paid during the high interest rate years, my wife was robbed of her state pension she should have got at 60.
The date for mine was extended by a year and company pension pay out date was also extended by two years.
Despite those setbacks I do not agree with the triple lock continuing now or the heating allowance for all
On top of that the free bus pass is also unsustainable, councils have had to cut bus subsidies to pay for it, crazy.

Sick of hearing i've paid in all my life, it wasn't for a specific benefit although some seem to think so
When I worked heard complaints about no jobs for the youngsters then people stayed on claiming their company pension and getting paid.
Some very greedy people about and as usual those deserving people go unheard most of the time

All good points!

Unless a person is paying into a private fund of some sort that builds up specific contribution based benefits (or even final salary based pensions for these who still were in such as scheme), they indeed are not paying taxes and NI with a direct payment related benefit. What we were paying were the state pensions of our parents/grandparents.

Though I see that your ref to young folk and lack(?) of jobs is quite specific. It has long been the case and still is (extremely so now) that though there are jobs of lower pay and/or none too nice a job......they are not taken up by young citizens. Until that is addressed and "job entitlement mentality" is countered that cry will continue to be spread. NB side note ~ when I still lived at home one of the neighbours sons went to university to train as a doctor but in the holidays he got a job as a binman.

In regard to bus passes, it is not as simplistic as might be seen. Giving such a benefit to retired folk improves footfall in shopping locations and likely spending that is increased in town centres. Not withstanding that aspect, face to face interaction is known to improve well being and health benefits compared to those who are isolated i.e. potential improvement to local economy and reduced NHS care costs.

 

[Yardbent]

I live (?) on a State Pension and a works pension from 20 years in Canada
no help with rent, no help with Council Tax, soon to lose my TV licence (no sweat)

BUT I'm lucky
If it wasn't for my brother paying my Scottish Power monthly bill, I could not manage to heat the cottage

and I'm sure many pensioners are worse off than me

 

[Cobra]

Genuine question but was it cheaper to buy with high interest rates but at 2x or 3x salary or today’s low rates but at 4x or 6x salary and a bigger deposit?

The quick answer to that is, I couldn't afford to buy my own house. Bought late '70's with about 16% interest.
It cost me 2x my annual salary, on slightly above, what would have been classed as an average salary.
its now worth about 12.5 x on a slightly above average salary.
So I'd say its all about the ridiculously inflated property market rather than interest rates / deposit costs

 

[tijuana taxi]

All good points!

Unless a person is paying into a private fund of some sort that builds up specific contribution based benefits (or even final salary based pensions for these who still were in such as scheme), they indeed are not paying taxes and NI with a direct payment related benefit. What we were paying were the state pensions of our parents/grandparents.

Though I see that your ref to young folk and lack(?) of jobs is quite specific. It has long been the case and still is (extremely so now) that though there are jobs of lower pay and/or none too nice a job......they are not taken up by young citizens. Until that is addressed and "job entitlement mentality" is countered that cry will continue to be spread. NB side note ~ when I still lived at home one of the neighbours sons went to university to train as a doctor but in the holidays he got a job as a binman.

In regard to bus passes, it is not as simplistic as might be seen. Giving such a benefit to retired folk improves footfall in shopping locations and likely spending that is increased in town centres. Not withstanding that aspect, face to face interaction is known to improve well being and health benefits compared to those who are isolated i.e. potential improvement to local economy and reduced NHS care costs.

The point I was making about bus passes is that the cost has led to people having a pass, but no bus to use it on.
Unfortunately too many young people went to university with no specific aim.
A degree ended up the modern equivalent of five O levels that were required for an entry level job

Unfortunately Brexit also stirred up animosity between the generations, some of which carried over into the recent crisis.
Many youngsters feel the older people have messed up their future, the very same age group who now want their consideration.
No easy answer, but not sharing the burden can only make matters worse

 

[Box Brownie]

The point I was making about bus passes is that the cost has led to people having a pass, but no bus to use it on.
Unfortunately too many young people went to university with no specific aim.
A degree ended up the modern equivalent of five O levels that were required for an entry level job

Unfortunately Brexit also stirred up animosity between the generations, some of which carried over into the recent crisis.
Many youngsters feel the older people have messed up their future, the very same age group who now want their consideration.
No easy answer, but not sharing the burden can only make matters worse

Succinct and well put ~ no single answer = no single group happy......................as you say/infer it (UK .Gov) need to be more inclusive, with well thought out actions that are "inclusive" ~ fingers crossed, eh!

PS on the part I have made bold!
A lot of what I hear of students talking about University as the social experience, with b***er all mention of the academic annoys me intensely ~ yes, there is an important aspect of them becoming grown ups but that can happen doing a job emptying the bins!

I ask myself, to what purpose are they paying the fees if not to get a degree and hence all being well a better entry into a career path. The way university education is seen (sold?) is that everyone can become a chief...............but what about all the sub-ordinate roles ~ not everyone can or will be a chief!

PS my niece did her degree a few years back in Tourism & Business (not 100% sure of the exact degree title) this was well planned on her part as some years later she was & still is a general manager of an exclusive 5* hotel.

PPS my cousin back in the grant aided days ~ did a science degree, he was exposed to the 'milk round' and confided in me about it and how his degree would be of little use. I encouraged him to think carefully and use his degree in a more meaningful way. He did, he went on to get his teaching certificate................taught for approx 15 years in a tough area secondary school......then went on to do approx another 15 years in other equally social responsible non teaching roles. During which time he also got his PhD.....................IMO very much giving back.

 

[tijuana taxi]

Succinct and well put ~ no single answer = no single group happy......................as you say/infer it (UK .Gov) need to be more inclusive, with well thought out actions that are "inclusive" ~ fingers crossed, eh!

PS on the part I have made bold!
A lot of what I hear of students talking about University as the social experience, with b***er all mention of the academic annoys me intensely ~ yes, there is an important aspect of them becoming grown ups but that can happen doing a job emptying the bins!

I ask myself, to what purpose are they paying the fees if not to get a degree and hence all being well a better entry into a career path. The way university education is seen (sold?) is that everyone can become a chief...............but what about all the sub-ordinate roles ~ not everyone can or will be a chief!

PS my niece did her degree a few years back in Tourism & Business (not 100% sure of the exact degree title) this was well planned on her part as some years later she was & still is a general manager of an exclusive 5* hotel.

PPS my cousin back in the grant aided days ~ did a science degree, he was exposed to the 'milk round' and confided in me about it and how his degree would be of little use. I encouraged him to think carefully and use his degree in a more meaningful way. He did, he went on to get his teaching certificate................taught for approx 15 years in a tough area secondary school......then went on to do approx another 15 years in other equally social responsible non teaching roles. During which time he also got his PhD.....................IMO very much giving back.

Not much more to say, think you have covered it all very nicely.
We have become a very intolerant society and hoping this virus might make us more inclusive again, not holding my breath though

 

[lindsay]

Just to correct a typo in my last post - I have 2 years to go not 22 till I get my state pension. I'd not say it was wishful thinking to be 42 again though...

Degrees - indeed some vocational degrees are very worthwhile, that's why we used to have polytechnics. Academic degrees may not have been very much practical use in the workplace but they weren't necessarily meant to be. Taking Classics, Greats, English etc were not meant to qualify someone for a job, they denoted the ability to learn at a higher level - which is a practical skill that can be applied in any field. The subject learnt was almost immaterial.

 

[AndrewFlannigan]

We have become a very intolerant society and hoping this virus might make us more inclusive again

I do wonder where some of these ideas come from. Britain has always been a socially and racially divided society. Every so often we have made efforts to alleviate our social failings but we always fall back into our bad old ways. The Normans hated the Anglo-Saxons for centuries after the conquest. After the Union of the Crowns the Scots hated the English and after the Treaty of Union the English hated the Scots even more. The Irish and the Welsh have always hated whoever was on the English throne. The Jews were driven out several times but were always invited back when their financial skills and international contacts were neeeded. The Romanies were generally loathed but needed as a source of skills and a mobile workforce. The only time when the British have appeared not to hate one another has been when they've hated some foreign nation more, generally during a hot war. The moment that's done it's back to disharmony as usual.

 

[boogie man]

Granted this pandemic has created a major crisis with some staggering sums of debt being built up........!

But a not entirely unrelated history...
Back when Geoffrey Howe was Chancellor I used to joke(?) to colleagues that my taxes were helping to pay "the national debt", so fast forward to the State Pension time, I have worked 47 "qualifying years" to ensure I would receive the full state pension.

I think I understand where the extra years came from, as it often stated that a worker needs 30 qualifying years to 'get' the entitlement to the full state pension. I kept contributing to guarantee I would get the full entitlement.

So after 47 years of working and in those years paying my taxes to help dig the UK out a debt hole on more than one occasion, I am pleased that my pension is helped by the triple lock (NB But I am a realist in regard to what must be done now to, so to speak, reset the system ~ see post #27)

PS not withstanding that when I borrowed money to buy my house (the mortgage) I was paying more, compared the "cheap money period" we have had for some years, for many years it was between 13 to 15.5% ~ might have been 17.5% per the odd year. So I dug deep and was not spending what I did not have!

Just a couple of points. You actually need 35 full years of NI contributions to qualify for a full pension.
Even then there’s no guarantee that you’ll actually receive the full amount; if you’ve had a private pension arrangement and your workplace “opted out“ of full NI contributions then you will get less state pension. A lot of big companies did this, so check your forecast on the gov.uk site to see what you actually will get. A lot of people also don’t seem to realise that the state pension can be taxable.

 

[Box Brownie]

Just a couple of points. You actually need 35 full years of NI contributions to qualify for a full pension.
Even then there’s no guarantee that you’ll actually receive the full amount; if you’ve had a private pension arrangement and your workplace “opted out“ of full NI contributions then you will get less state pension. A lot of big companies did this, so check your forecast on the gov.uk site to see what you actually will get. A lot of people also don’t seem to realise that the state pension can be taxable.

Ah! 35 not 30 ~ my bad recall, doh!

You are right indeed, re mitigating factors that will influence the qualification for a Full State Pension but suffice to say I did check, cross check and indeed called the HMRC or was that DWP to confirm my understanding..........and kept an eye on my online (.Gov) Pension Forecast to be sure I had reached the right status for the full state pension

So, yes there are .Gov tools available to check 'status'.

As for the Tax, yes, the State Pension is still an income....thus combined with any other company or private pensions income if you exceed the Personal Allowance you will pay income tax on the amount above that figure. All covered here https://www.gov.uk/tax-on-pension

 

[Al1944]

Us oldies had to have 44 years to qualify for state pension

 

[broc]

Just a couple of points. You actually need 35 full years of NI contributions to qualify for a full pension.
Even then there’s no guarantee that you’ll actually receive the full amount; if you’ve had a private pension arrangement and your workplace “opted out“ of full NI contributions then you will get less state pension. A lot of big companies did this, so check your forecast on the gov.uk site to see what you actually will get. A lot of people also don’t seem to realise that the state pension can be taxable.

My state pension is not taxed, it is less than my personal tax allowance, however my company pension(s) are taxed, when added to my state pension the total exceeds my personal tax allowance.

My employer pension scheme was contracted out, I took my company pension a few years before reaching state pension age, when I received my state pension I also received an increase in my company pension from the 'contracted' out scheme.

 

[AndrewFlannigan]

Even then there’s no guarantee that you’ll actually receive the full amount;

A few years before we retired we topped up our state pension with voluntary contributions. A few minutes work with a spreadsheet had convinced us that it's the best deal in the pensions market.

 

[Suvv]

My state pension is not taxed, it is less than my personal tax allowance, however my company pension(s) are taxed, when added to my state pension the total exceeds my personal tax allowance.

My employer pension scheme was contracted out, I took my company pension a few years before reaching state pension age, when I received my state pension I also received an increase in my company pension from the 'contracted' out scheme.

The state pension is taxable, they just subtract the amount of state pension from your personal tax allowance and pay it without tax deduction. The reduced personal tax allowance is then applied to your company pension and any other income you may get such as annuity payments.

Edit. Just seen post #50

 

[boogie man]

.....when I received my state pension I also received an increase in my company pension from the 'contracted' out scheme.

Interesting, never heard of that before. Do you know why? Are you sure it’s not just a coincidence that your work pension increased? Or maybe went up as a result of a personal tax change? I thought the whole point of contracting out was that you paid less NI contributions while you were working , but in exchange you got a lower state pension.

I’m actually in the same position, I took my work pension early at 60 and qualify for my state pension in a few months. Looking at my forecast I’ll be losing about £10 a week from the state pension due to contracting out but haven’t seen any mention of my work pension increasing.

 

[broc]

Interesting, never heard of that before. Do you know why? Are you sure it’s not just a coincidence that your work pension increased? Or maybe went up as a result of a personal tax change? I thought the whole point of contracting out was that you paid less NI contributions while you were working , but in exchange you got a lower state pension.

I’m actually in the same position, I took my work pension early at 60 and qualify for my state pension in a few months. Looking at my forecast I’ll be losing about £10 a week from the state pension due to contracting out but haven’t seen any mention of my work pension increasing.

The increase was a surprise to me too, it was separate from my annual work pension increase. It was around 3 years ago.....

 

[tijuana taxi]

Yes your private pension could well go up to counteract the loss of state pension. Believe mine will do that, five years before I find out.

 

[Suvv]

AFAIK You could only contract out of SERPS if you paid the same amount, or more, additionally into your private pension scheme. Therefore your private pension would increase due to the extra payment. My private scheme paid out the full amount when I retired at age 54 but some schemes may have only paid out the extra at state retirement age.

 

[Suvv]

Article in the Guardian https://www.theguardian.com/commentisfree/2020/jul/03/scrapping-pensions-triple-lock-young-people

 

[Deleted sulking member 63079]

Interesting, never heard of that before. Do you know why? Are you sure it’s not just a coincidence that your work pension increased? Or maybe went up as a result of a personal tax change? I thought the whole point of contracting out was that you paid less NI contributions while you were working , but in exchange you got a lower state pension.

I’m actually in the same position, I took my work pension early at 60 and qualify for my state pension in a few months. Looking at my forecast I’ll be losing about £10 a week from the state pension due to contracting out but haven’t seen any mention of my work pension increasing.

That's how it worked. Your SERP amount went into your work pension, you didn't lose it.