Triple lock

On Sunday, I was unfortunate to be in a Black Cab in central London. Driver had Talk Radio on. A Caller ranting about why he shouldn't have to sell his house, worth 500,000 if he gets dementia or some other debilitating disease, then have to go into expensive long-term care and be left with only a protected 80 to 100k. Host said he would pish and gamble it away rather than let Boris, who he described as Socialist, getting hold of his wealthy grown up kids inheritance. It was pointed out to the host that, at the moment, if he was unlucky to get dementia he might not be in a position to make that choice and to the caller that, at this time, there is no cap - so to stay in the expensive care home he would have to go through his savings followed by all the money he got from the sale of his home. Otherwise into the spare room for his poor kids to wipe his a**e. For me, there has to be a fairer way to do sort Social Care than a blanket tax rise through NI which is a very regressive form of taxation as it affects the lower paid and young more. Why not something on income through share dividends or inheritance.

On the Triple Lock, it should remain at least until our State Pensions are at the average of other similar nations.
 
 
Corcaigh_the_Cat said:
There shouldn't be any pensioners in that bottom group, they've done their bit and deserve some comfort in retirement.

Perhaps those over pension age should pay a higher rate of tax above a reasonable threshold. If they've done so well out of society then they can pay a bit more back to say thank you?
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Thank you for what?
As the writer of the letter below says, when our generation started work in the 70's tax was at 40-50% knowing it was to fund a welfare state and to pay for our pensions, little as it was and still is,- it is the Tories who have brought us to this situation, not pensioners.

Can someone tell me why the narrative around the raising of national insurance and income tax constantly alludes to the importance of pensioners paying their fair share (Raising national insurance to fund social care is fraught with political risk, 3 September)? I started my working life in the 1970s, when the average tax for low- and middle-income earners was 40%-50%. This compares with the 20% currently being paid. My generation paid this high rate gladly, on the assumption that we were investing in a health and welfare system that would protect us from birth to grave. All of us pensioners deserve every penny we are receiving, as we have paid our fair share.

Surely, the focus of our egalitarian concerns should be the top earners whose tax has dropped from 75%/83% in the 70s to 45%. This has arguably lead to the discrepancy in wealth distribution, and a struggling health and welfare service.
Hildegard Dumper
Nailsea, Somerset
 
John67 said:
On Sunday, I was unfortunate to be in a Black Cab in central London. Driver had Talk Radio on. A Caller ranting about why he shouldn't have to sell his house, worth 500,000 if he gets dementia or some other debilitating disease, then have to go into expensive long-term care and be left with only a protected 80 to 100k. Host said he would pish and gamble it away rather than let Boris, who he described as Socialist, getting hold of his wealthy grown up kids inheritance. It was pointed out to the host that, at the moment, if he was unlucky to get dementia he might not be in a position to make that choice and to the caller that, at this time, there is no cap - so to stay in the expensive care home he would have to go through his savings followed by all the money he got from the sale of his home. Otherwise into the spare room for his poor kids to wipe his a**e. For me, there has to be a fairer way to do sort Social Care than a blanket tax rise through NI which is a very regressive form of taxation as it affects the lower paid and young more. Why not something on income through share dividends or inheritance.

On the Triple Lock, it should remain at least until our State Pensions are at the average of other similar nations.
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John, on final point different countries have different ways/ cultures in relation to retirement incomes.

One country could have a lot wealthier pensioners even with lower state pensions for example if like the UK there is a culture of people paying into a private sector pension like a clear majority of people already do. In the UK we also high quite high home ownership especially amongst older people which gives retirement incomes to many thru things like equity release if thats what they choose to do.
Trug said:
Thank you for what?
As the writer of the letter below says, when our generation started work in the 70's tax was at 40-50% knowing it was to fund a welfare state and to pay for our pensions, little as it was and still is,- it is the Tories who have brought us to this situation, not pensioners.

Can someone tell me why the narrative around the raising of national insurance and income tax constantly alludes to the importance of pensioners paying their fair share (Raising national insurance to fund social care is fraught with political risk, 3 September)? I started my working life in the 1970s, when the average tax for low- and middle-income earners was 40%-50%. This compares with the 20% currently being paid. My generation paid this high rate gladly, on the assumption that we were investing in a health and welfare system that would protect us from birth to grave. All of us pensioners deserve every penny we are receiving, as we have paid our fair share.

Surely, the focus of our egalitarian concerns should be the top earners whose tax has dropped from 75%/83% in the 70s to 45%. This has arguably lead to the discrepancy in wealth distribution, and a struggling health and welfare service.
Hildegard Dumper
Nailsea, Somerset
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People print rubbish though dont they - a moment in the 1970's doesnt mean you spent a lifetime doing it and your total tax isnt just Income tax

The IFS (institute for fiscal studies) - not Hilda D, but good to listen to experts occasionally reckon the taxpayers in the next few years will be paying highest total tax levels to economy size of any generation since the war.
 
OttersBoro said:
John, on final point different countries have different ways/ cultures in relation to retirement incomes.

One country could have a lot wealthier pensioners even with lower state pensions for example if like the UK there is a culture of people paying into a private sector pension like a clear majority of people already do. In the UK we also high quite high home ownership especially amongst older people which gives retirement incomes to many thru things like equity release if thats what they choose to do.

People print rubbish though dont they - a moment in the 1970's doesnt mean you spent a lifetime doing it and your total tax isnt just Income tax

The IFS (institute for fiscal studies) - not Hilda D, but good to listen to experts occasionally reckon the taxpayers in the next few years will be paying highest total tax levels to economy size of any generation since the war.
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You can't base a social policy using those who have been lucky enough to be able to afford a private pension, so many working people can't afford to do that, and for many the meagre amount they can afford to invest is worth next to nothing once retirement comes along.

Also, with the private sector pensions how much of the contribution is filtered away by the pension companies?

What happens to the empty properties in High Streets currently held by pension companies, how is a lack of renters going to affect private pensions in future?
 
OttersBoro said:
Many pensioners are very poor, yes absolutely and soceity should protect them better but many many are very affluent - do I think its right that millionaires who winter in Spain or South Africa should get this ... no I dont
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Many pensioners are very poor, your correct there. And how many of them are Millionaires that winter in Spain and South Africa?
Did you realise HOW MANY are very poor?...a recent report from Age UK..

New figures show 1.9m pensioners still living in poverty as Age UK steps up appeal for donations to fund vital services to help older people most in need​

By: Age UK
Published on 26 March 2020 02:00 PM
New Government figures published today show that there are 1.9 million pensioners in the UK living in poverty and a worrying 8% - equivalent to 940,000https://fmttmboro.com/file:///L:/In... fundraising appeal 26.03.20 FINAL.docx#_edn1 would not be able to pay an unexpected bill of £200.[ii]
Many of these older people are likely to be in poor health and feeling extremely vulnerable as the country shuts down to stem the spread of Covid-19. At this time of national crisis, vital frontline services provided by charities such as Age UK have never been more important or in such high demand. Local Age UKs across the country are racing to put systems and processes in place so they can provide practical and emotional support to their older populations in the weeks and months to come.
 
This govt has shafted older pensioners for years. Since 2016 new pensioners now get £42 more a week basic pension for making fewer NI contributions than those of us who retired pre 2016. Just add the loss of triple lock to that and the removal of free tv licences for those 75+
 
In the past there was no free TV licences for anyone, nor no right to free buses or winter fuel payments or warm front payments or pension credit payments.

My granny lived on the equivalent of £120 per week OAP in today's money - she did have most of her council house rent paid and rates paid because of her low income. Her husband died from industrial disease related to the furnaces @ Cargo Fleet which she got small compensation for - £4,000 in todays money when she was 51. When I was a boy I helped collect free wood to burn in her coal fire which was the only heating she had. She could never afford a colour TV or a colour TV licence or a telephone and I am tallking early 1980s. She didn't have a car because she could not afford it or could not drive. There was no pension scheme at Cargo Fleet in the period 1919 to 1958 when my grandad worked there and no private occupational pensions. She was very frugal and would have died if she wasn't.

Today she would have got all the above. Every pensioner gets their income topped up to a minimum of around £180? per week if they claim.

All governments shafted pensioners then (1960s,70s,early 80s). I simply don't accept pensioners are worse off now than then.
 
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Ref 1.9m pensioners living in poverty - what is poverty income now..... around £250/week?

Its a very limited retired life I agree on £250/week - no car, no holidays, few luxuries and takeaways, but not the poverty of the past.
 
Trug said:
Thank you for what?
As the writer of the letter below says, when our generation started work in the 70's tax was at 40-50% knowing it was to fund a welfare state and to pay for our pensions, little as it was and still is,- it is the Tories who have brought us to this situation, not pensioners.

Can someone tell me why the narrative around the raising of national insurance and income tax constantly alludes to the importance of pensioners paying their fair share (Raising national insurance to fund social care is fraught with political risk, 3 September)? I started my working life in the 1970s, when the average tax for low- and middle-income earners was 40%-50%. This compares with the 20% currently being paid. My generation paid this high rate gladly, on the assumption that we were investing in a health and welfare system that would protect us from birth to grave. All of us pensioners deserve every penny we are receiving, as we have paid our fair share.

Surely, the focus of our egalitarian concerns should be the top earners whose tax has dropped from 75%/83% in the 70s to 45%. This has arguably lead to the discrepancy in wealth distribution, and a struggling health and welfare service.
Hildegard Dumper
Nailsea, Somerset
Click to expand...

Whilst I hesitate to wander into the middle of an inter-generational war, I'm afraid the author of that letter is both economically and fiscally illiterate.

Whilst the basic rate of income tax was higher in the 1970s (peaking at 35% compared with 20% today), the rate of National Insurance was significantly lower at 5.5% compared with 12% today (and rising to 13.25% following today's anouncement). VAT was also much lower in the 1970s, being just 8% rather than the 20% payable in 2021.

I won't go into all of the specific duties levied on fuel, alcohol, tobacco, etc., but I think we all know that (even allowing for inflation) these were much lower in the 1970s than today.

In addition, home owners in the 1970s were able to claim tax relief on their mortgage interest payments. This effectively reduced their mortage interest payment by 35%, providing a significant government subsidy to the cost of home ownership.

So, the overall tax burden payable by the average worker was lower in the 1970s than it is today, not higher as claimed. What's interesting, of course, is that rates of Corporation Tax and Capital Gains Tax were much higher in the 1970s than they are now (52% and 30% respectively, compared with 19% and 10-20% today), so the last 50 years have really seen a shift away from taxing businesses and wealth towards placing that burden of taxation on average workers instead.

Anyway, to address the point of the OP, I firmly believe that the triple lock should have remained in place, as it helps address the historically poor state pensions provided in this country. It would also benefit younger working-age people in the long-term, although that is dependent on the government not coming up with more spurious reasons to keep raising the state pension age.
 
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