Conservatives invented the triple lock and made it their policy in the 2015, 2017, 2019 and 2024 elections. I supported the idea, as the starting basic pension was low. As people were paying in for their pension Ā a percentage of their earnings it seemed fair they could receive Ā a pension based on growth in earnings,which was likely most of the time to give the higher uprating.
Labour were forced to match the triple lock pledge and did so in 2024. Ā The triple lock should therefore be safe until the next election. I expect all the main parties to pledge it again then. I did not read Kemi Badenochās remarks as meaning she had any wish or plan to remove it. She spoke about means testing pensioner fuel support,implying she would not restore fir very wealthy people whilst probably restoring it for most of the others that have lost it.
The obvious much delayed change government should make to pensions to tackle the rising bills is to remove the option of a very expensive index linked pension for the civil service for all new entrants and to consider reducing or limiting future contributions and accruals for existing members. I tried to get George Osborne to do this Ā in 2010. instead billions more liability has been heaped up with hundreds of thousands of new recruits and with fast inflation.
January 18, 2025
Good morning.
Unfortunately this subject can only be properly answered with a very long reply, something I wish to avoid. But I will explore something about State Pensions that perhaps will not be covered.
Like many State provisions they start off with good intentions. They seek to provide some level of relief to those who would otherwise go without. Many feel that this is a good thing as we wish to be charitable to those less fortunate then ourselves. The problem is, when does one draw the line when it comes to said State provision ?
Very few realise than the State Pension is classed as a ‘benefit’ and, like all benefits can be modified (as recently as 2016) or removed. When State Pensions where first introduced by the Liberal Government headed by David Lloyd-George back 1909 to qualify one had to at least been shown to have worked. There were other minimum thresholds to meet to receive this provision but I will not list them for brevity. Oh and the age at which you could qualify back then was 70. And that is for both men and women.
There were changes in 1928 with the pension age being reduced to 65. But the biggest changes were to come in 1948 and this is where the problems for today have come from. Whereas before only those who who paid in received a meagre return, now thanks to a Labour government, now everyone whether they worked / paid in or not were eligible for a pension. This and the fact that the age for women was reduced to 60. As I am sure many now agree, why work for something when you know that you are going to get it regardless.
In summary, we have come almost full circle. The government of 1948 and its largess has broken what was at the time a sensible system. Recent governments have tried to address this with SIRPS and the like. Only for reckless Chancellors to raid those private pension funds and cause more trouble elsewhere and further down the line.
As I always like to remind people. You can always tell where government has been by the mess it leaves behind.
Reply The National Insurance fund and the need to pay contributions survived.
January 18, 2025
Two tier Britain will continue with the over generous public centre pension and the meagre state pension.
The public sector should be removed from the system pension scheme if a certain threshold is reached.
This would be a start.
Reply All the time state employees pay into the National Insurance scheme they have a right to the state pension like anyone else. All MPs older than 66 get their state pension as well as their Ā£91,000 salary.
January 18, 2025
Mark, In fewer words the UK state pension is a ponzi scheme. No Government invested the money nominally collected in NI. No Government verified that contributions could fund benefits. No Government explained to the population how the structure worked.
The UK state pension scheme and the civil service scheme are both unaffordable. A visionary Government would gradually wind them down and tell the population to fully fund their own retirement.
January 18, 2025
Yes it is, and here’s why. In 1948, the actuarial life expectancy for a man was about 65 years. The state pension was never intended to cost anything.
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/articles/howhaslifeexpectancychangedovertime/2015-09-09
Through improvements in living conditions and health services we live a lot longer. The solution is to really take the NI contributions and invest it, a bit like a real pension…
January 18, 2025
The problem with NI is that most believe it is a contribution to a national pension and the NHS. It is income and employment tax using a different name to diguise the fact. It should have been ring fenced in a national social investment fund outside the control of government and the Treasury. In the control of the City and free to be invested worldwide, there would be no problem if overlooked with a parliamentary committee with a city background.
The current system tied in to the performance of the economy is a secknd best compromise if you can think of nothing better than taxing Peter and his employer to pay Paul. Thw prkblem is that the tax pot is subject to every virtue project that politicians can dream up, and their insanitg of back loading the population with dependants.
The CS should buy their own pensions in the predatory markef as everyone else to top up the state pension.
The drift of all government towards less wealth creation and greater dependency is a route to disaster that the current bunch of chancers have acceleratwd down.
January 18, 2025
JR says “I tried to get George Osborne to do this in 2010” but this dreadful tax to death Chancellor just put up taxes hugely instead.
In the summer budget of 2015, Chancellor George Osbourne, announced his intention to limit the ability of landlords to claim tax relief on finance costs including mortgage fees and mortgage interest payments. Thus taxing landlords on “profits” they have not even mad. Healey gave us 98% income tax and the IMF. Osborne gave us over 100% taxes on landlords and indeed on capital gains without indexation.
He did this using the dishonest claim that owner occupiers did not get relief so Landlords why should landlords? Because if is a cost of business and the bank pays tax on the interest given to them by the landlord. This is double taxation of the interest. Rather like the dishonest claim of Labour now that private school users are getting a “tax subsidy” by not paying VAT when in reality they will pay four times over with VAT.
Kemi is not going to win back voters with speeches as tedious and empty as the one this week. I have sympathy for her position, how can she every convince anyone to believe the Tories on tax rates, the size of the state, immigration levels… after three manifestoes that they did not even attempt to deliver their promises over 14 years? Still Kemi and Countinho are pushing the mad energy insanity of Net Zero (insanity just a bit more slowly)!
You need a bit more than that Kemi. You claim to be an engineer albeit one without a physics A level and Countinho even read a half maths degree at Oxford. You both how no excuse not to know that the net zero rip off energy agenda is moronic, economic lunacy and very dangerous.
January 18, 2025
Oh for goodness sake LL ,this is not about how you view your own position in society in comparisone to others.Try and be a little more objective.I sometimes agree with your comments ,but leave your self centered ego out of it.
January 18, 2025
” I tried to get George Osborne to do this in 2010″ – that would be the same Osborne who knew to repair the roof before the rains came, rather when the sun shone, but never did. He is another of the political class who let us all down badly.
Otherwise, do not forget nor overlook Dorothy Wainwright’s idea of generous pensions or honours but not both for the civil service.
January 18, 2025
Nobody gets index linked final salary pensions anymore – except the civil service. I heartily agree with Sir John’s views on ending this perk for new entrants. And existing public servants should have to sacrifice salary into their individual pensions on a gradual increase scheme.
I have always supported the pensions triple-lock. Pensioners have paid into the system all their working lives – people need 35 years of NI contributions to get the full state pension. Many folk paid additional contributions into the SERPS scheme to gain additional pension. Regardless of how difficult the nations finances are, making retrospective changes to the state pension (such as means testing it) would be grossly unfair.
January 18, 2025
People who have paid into pensions should receive a normal return on what they contributed. Many who have paid in feel cheated anyway, because Govt pays for many others who didnāt.
Some of the others spent decades doing nothing. Some spent nearly all they had on wine, women and song, and wasted the rest. Some spent on drugs and stole. Some gambled, incurring debts over Ā£100k. Some never lived in the UK, or paid anything in until they entered a short time before retiring. Some are here illegally. Govt still pays, ie: us.
Means testing is wasteful for claimants and handlers in both time and money. The tax system sorts out who gains what in balance. Paying state pensions to multi-millionaires is easier than trying to separate them as a non-eligible group, because tax thresholds cut through that.
Triple locks for pensions are daft, and means testing parts of it is even dafter.
Governments have to budget: according to what is affordable and right.
A good government does good things naturally, without needing some triple lock to force them.
Those who are worthy gain support.
January 18, 2025
Ms Badenoch appears to have a tendency to open her mouth and say something (inc.Twitter) without considering how others may interpret it, or what the consequences might be. The only memorable thing from her speech appears to be a threat to the State Pension. Genius – well done that woman!
It really doesn’t correlate with her often stated claim to “be an engineer who takes the time to really analyse a problem before setting out how to fix it.” She’s not going to fix the Not-a-Conservative-Party’s electoral problem by putting the wind up 12 million-or-so pensioners, plus those further millions expecting to be in receipt of one in the next few years.
If she has anything to say on the subject of pensions it should be a pledge to end the Two-Tier Pension system operating in this country between those working in the private sector and those in the cosseted Public Sector (inc MPs) whose overly generous pensions are paid by the taxpayer: it’s THEIR pensions which are quite obviously inappropriate are unaffordable.
Of course, the quickest way to reduce the future Public Sector pension liability is to reduce the number who are expecting to benefit from one.
Reply. Yes the civil service needs to return to 2016 staffing levels as soon as possible.Saving of 30%
January 18, 2025
I read about “The Chicago Boys” Chileans who went to Chicago University studying economics (I hope I remembered that correctly).
After one of the Chilean regimes they were asked to advise on pensions.
They said that everybody who could contribute would have their contributions ring fenced to themselves and would be allowed to invest their monies into any four state sponsored funds.
Those unable/ do not contribute would be entitled to a minimum state pension.
It has been a huge success. So much so that I expect the politicians are trying to get their hands on all those hard earned monies for their own pet projects.
I think we should look at this system for our pension system.
Reply I got the government to allow self invested pension pots or SIpP s so people can save for their retirement and benefit from good investment on top of state pension. It works well.
January 18, 2025
The Triple Lock should not become a “human right”. It is a limited means of increasing pensioner income gradually. However the fall back of 2.5% should eventually be removed and the increased tied to average wages rather than inflation to maintain parity with working people.
As for the winter fuel payment, this a not a conservative benefit and should be forgotten about. What is conservative is to encourage full competition between all forms of energy producers and the bring down the price of domestic energy to pensioners, by getting rid of Net Zero and all its complicated decarbonisation subsidies and charges, allowing drilling and fracking for gas and oil and expanding our nuclear capacity.
This whole Net Zero project, with no prospect of affecting the climate one iota, is destroying our industry and impoverishing us all. Complete madness.