Will the triple lock be BROKEN? State Pension (UK)

[@outdoorsman1140]

If the state moves to a position of penalising those who have sacrificed & saved for their old age, meanwhile rewarding those who have not by accelerating and boosting pension credit instead, it sends out a loud and clear message of spend and party now and throw yourself on the state later in the future. By rewarding those who have lived for today instead of saving a proportion for “tomorrow, the message will be loud and clear… live for today and there will be no downside tomorrow.

[@Banthah]

Unfortunately that message is already out there, when it comes to old age care. My parents-in-law had to pay for care using everything they had - all their savings and their house funded their care until they were left with literally nothing. My own mother, however, who had nothing to begin with, never saved, never really financially contributed to society, got it all for free. Now I’m not saying my mother should have been left there with no care, but my parents-in-law having to give up everything they own,, everything they’ve ever saved, to get the same care seems wrong to me… Where’s the incentive to look after yourself and save for your own future?!

[@timg1246]

The triple lock was introduced a little over a decade ago, yet some people talk as if it is something like an ancient right. Prime minister Cameron introduced it as a way of deferring any actual decision on what the pension should be. Well, he is no longer PM, so, for him, the policy worked. Nothing will be done now until after the next election. It is un-realistic to expect people on low wages to put away enough for a reasonable pension in later life. For the wealthier, if you tell them they should pay in but get less out at the end, that erodes overall support for the state pension.

[@neilcook1652]

The better off who have been responsible will always support the work shy and feckless in this country, plan accordingly!

[@michaeli160954]

No, and nor should it be means tested. Those of us who have worked all our lives, lived prudently are the ones who get penalised. How about not paying the pension to the ones who were perfectly fit to work but chose not to therefore didn’t contribute to the system. Let them find their own means of living.

[@terryb4547]

I know 2 guys who died in Thailand but had their state +private pensions paid into UK banks then transferred into their thai bank every month. But nobody told the uk embassy he'd died. So his thai lady still empties his ATM, every month, thankyou uk government

[@mattwuk]

Really good and interesting video, thanks, can I please suggest you lose the flashing graphics between chapters, I didn't enjoy that.

[@PrinciplesPersonalFinance]

Thanks for watching Matt. Noted, on your comment. It's an aesthetic thing and understand it's not for everyone. Grateful for you watching and taking the time to comment.

[@cooper8t]

I guess the state pension is an unfunded liability for a future Government. There are so many factors and moving parts that are involved it's impossible to say what will happen. However, 8% auto-enrollment is not enough on current below median wages from aged 22 to 65. The state pension (by default) has to exist in some form. The other issue I see is if the UK moves away from an unfunded liability model to a partially funded model, there will be an entire working generation who will have to "pay twice". Once for themselves, once for people already retired. I just don't think this can happen.

[@PrinciplesPersonalFinance]

Thanks for watching. Yes, it's going to be very hard to move away from a 'pay as you go' system to another one. Who loses out? Not easy to move from a system like that! Appreciate you taking the time to comment 👍

[@waynemay7327]

People on pension credit receiving larger increases than everyone else? As Thatcher would say - no, no, no.

[@stuartregan1627]

100% agree . Work hard & invest in your pension results in you getting less through means testing but live on benefits & dont save for your retirement & the government throws money at you hand over fist.

[@stuartregan1627]

Only give pensions to people who couldnt be arsed saving for their future & take it off the people who saved and planned their retirement.

[@grahamlees4394]

so, scrap NI contributions?

[@thomaschilds8781]

Using the data in your table, you could work out an average percentage of how state pension is outpacing wages. From there, you could do very rough forecasting of when triple lock might become unaffordable (assuming tax revenue relates to wage growth).

[@PrinciplesPersonalFinance]

Good point. One of the tables the IFS put together covered something similar on projections (not exactly the same but close.) I guess it all depends on what we deem as affordable which is tricky to define. Appreciate you watching 🙌

[@davidfolts5893]

Thanks, George, for the excellent explanation; I love the video work, which augments your discussion.🎯🎯🎯

[@PrinciplesPersonalFinance]

Thanks David, appreciate your support! 🙌

[@aj-cp9xe]

Today's 50/60 year olds spent their working lives supporting the previous generation of pensioners with the expectation that the next generation will support them when it is their turn. It would be morally wrong to backtrack on this social contract just before they retire. It will also be too late for most to make alternative arrangements to make up the shortfall.

[@gileschalk212]

The current generation of 30-40 year olds is doing the same with the expectation that they won’t get a state pension though….

[@clarkeysam]

Yes, they should receive the state pension. There should always be a state pension, despite people in their 20/30s are probably paying for something that they'll never benefit from. But you need to understand that increases above inflation can NEVER be sustainable and that the Boomer generation is the richest there has ever been, so you want the poorest generation to pay more so that the richest generation gets more money? That's immoral.

[@russellwild8329]

I think to be sustainable and to allow people to access the benefit still in their 60s, these people after all have worked for the majority of their lives, then the triple lock will have to go and aligning it to inflation for future increases would make sense. Especially as you said now the balance has been restored and going forward people know to save something to their future via the auto enrolment

[@PrinciplesPersonalFinance]

Thanks for watching and taking the time to comment Russell. I think you're right about sustainability. It needs to be something people can plan for effectively with confidence.

[@richardfoster6494]

I think in the future it will be there, however a lot less than it is now forcing people to look fund their own private pension. When the govenment introduced the opt out work place pension scheme this was the first seed sown also known as the the first "we told you about this ages ago" plot. The only people unaffected are the cant be bothered to work types who completly mess the system up!

[@PrinciplesPersonalFinance]

Thanks for watching. I think auto-enrolment certainly may be seen as the first step towards an expectation of self-sufficiency going forward.

[@richardfoster6494]

@@PrinciplesPersonalFinance Totally agree. The end is nigh and what next we ask ourselfs......

[@stuartregan1627]

We already look after ourselves paying national insurance for 35 plus years

[@petearmstrong2778]

This raises a question far bigger than the triple lock but a fundamental question to reflect the country (and world) today. You need to start with a blank piece of paper to build an income (taxes) and expenditure for the country taking into account factors that did not exist when the statute was written. Aging demographics is the big one plus alternative energies, technology, AI etc. The UK has a welfare system which complicates many changes proposed. Lower pensions = more State reliance which means the State is no better off and a shrinking workforce is having to contribute ever more. NHS is also a similar drain - funded by ever fewer workers for a larger aging society as medical advances cost even more. All very tricky issues and no politician wants to touch the subject.

[@Eb3nez3r]

Unfortunately the benefits system rewards the feckless and lazy :( On the upside being mort free makes tax/ni optional with pension sal sac :)

[@johndoh539]

I thought that the whole point of the pension changes a few years ago, ending the farce where anyone who had saved into a private pension the first £30000 of that was a waste because you got that as a minimum income guarantee anyway. Also getting rid of the second state pension whereby those who paid more in, got a bit more out.Also moving full state pension to 35 years from 30 years and upping the state pension age from 65 to 66, 67, and 68 years old. All this was done to ensure that if you worked and paid NI you knew you were getting a basic income in retirement. But if you wanted to save more into a private pension you would not be penalised for doing so as in the past. Its no wonder people do not look after themselves financially as the politicions just cannot stop meddling with pensions etc. LEAVE THEM ALONE !

[@franki7]

Its not a benefit, we have all paid into it during our working lives. I couldnt care less about the age going up Ive done my lifes work, no one worried about me when the age went up from 65 to 66 to 67

[@gileschalk212]

As I understand you don’t actually pay into it….it’s not a pot of money you draw on later.

[@grahamlees4394]

@@gileschalk212 why is it called NI contributions then and the State pension based on the number of contributions made?

[@gileschalk212]

@@grahamlees4394 where is this pot of money you intend to draw from kept?

[@dabe1971]

It is a benefit and always has been. Retirement was identified as one of several 'needs' that required a State benefit as far back as the Beveridge Report in 1942 ! You say you paid into it - so who paid for the first generation of pensioners in 1948 ? The taxes of the working population at the time did, just as it is today. You built up an *entitlement* to a pension, not a pension pot of money.

[@clarkeysam]

​@@dabe1971perfectly put.

[@precociousdeathdealer202]

Bro can you please explan why the full pension is so low that you can't even survive on it. How is it fair on high rate tax payer like me when the pension is flat.

[@yevpt]

Uk must keep state pension at least in line with inflation. Such a low level compared to other equivalent economies . Reducing further would cause huge suffering and poverty. It’s a safety net and the bare minimum someone can survive on.

[@PrinciplesPersonalFinance]

Thanks for watching and taking the time to comment. Appreciate your views.

[@Banthah]

Great video, as always. Quite provocative. Thanks for posting. First of all, I think the pension is here to stay, I just can’t see either political party scrapping the pension. That’s hardly a vote winner… So the question becomes in what guise does it stay? Clearly there’s no bottomless pit of money. One can look at the queues within the NHS, state of our schools, under-funded public services and third world pot-holed roads to see that. Increasing the state pension age to 70+ in the future is not out of the question. And/or lowering it’s value in real terms by not keeping up with inflation. I can see both parties implementing both these changes. Whilst the pension is here to stay, the amount it costs to fund it will significantly decrease - we’ll get it for less time, and we won’t get as much. Problem solved. Another alternative would be for it to be means tested, perhaps on a sliding scale. Again, not out of the question at all. Now this introduces further political discussions of course about how best to spend what money the government does have, and I’m sure there’s many changes we’d all like to see here, on both sides…

[@PrinciplesPersonalFinance]

Thanks for your thoughtful insights here Chris, appreciate you taking the time to comment. I agree with all of your points here. I can see the changes typically starting with 'path of least resistance which is slowly increasing the State Pension Age over time, then also watering down the inflation protection. The end game is probably some sort of means testing. Although I think that may not be an appealing policy for any party.

[@Mikey_NoCap]

All those with skin in the game (yrs of NI) will say no way, not in my backyard. I have 35+ yrs NI, have a good private pension, but why should I sacrifice my state dues. They need a line in the sand moment where they say from here on you find your own, but they rely on the tax revs from future to pay the pension bills, so difficult to turn that tap off to allow people to redirect to private savings. So the can just gets kicked down the road again for another government to procrastinate over it.

[@PrinciplesPersonalFinance]

I agree with your insight here. It's a very thorny subject. With the demographics of voters (who typically skew older), it's hard to see how the political decision will be anything but defer! Thanks for watching 🙏

[@Kalarandir]

Given that the UK has currency sovereignty, the idea that the UK government cannot pay the state pension is absolute nonsense. Therefore, it is the government that is choosing to push pensioners into poverty to please people who either don't know better, or do know better, but see a personal benefit to pushing pensioners into poverty.

[@clarkeysam]

Young pensioners are the richest generation in this country. The younger generations are the poorest. In order to increase the state pension, you need to tax the workers more. So that means you want to tax the poorest in order for the richest to receive more money. That's immoral and unjustifiable.

[@Kalarandir]

@@clarkeysam Why do you need to tax to pay for the pension? That is just thinking for 100 years ago. It does not apply in modern economics to a country that has currency sovereignty. Also, just because of averages, does not mean nothing to the millions of pensioners whose only source of income is the state pension. Yes, they are wealthier than a typical young person, but only because they receive the state pension.

[@clarkeysam]

@@Kalarandir because if we don't pay for it via taxes then inflation goes through the roof and we cannot afford that. And because the state pension is inflation linked it would be a chasing the tail scenario or a downward spiral, as politicians would word it. Averages do mean (excuse the pun) a lot. Not everything, but a lot. The reality is that most pensioners have benefited from house price rises, young people have to pay this cost. Pensioners have trashed the environment whilst making themselves wealthy, the young are picking up this bill too. And now you want the poorest generations to be even poorer to benefit the richest. It's unjustifiable.

[@Kalarandir]

@@clarkeysam I can walk out of my front door and everything you have said about house price rises would be totally meaningless. As for your point on taxes. No, just no, and if you don't understand why there is no point in me and my limited ability try to explain it to you.

[@clarkeysam]

@@Kalarandir I have no idea what you're trying to say. You could walk out your front door and it would be meaningless? Try posting in English. The money has to come from either taxes or QE. We can't afford a tax rise and QE = inflation, which we also can't afford. What do you not understand about this?

[@Jeffybonbon]

This can has been kicked down the road for a very long time I attended a presentation from Norwich Union when i was an IFA and in 1988 they predicted the future of a time when more would be paid a pension than were paying into it they also said the NHS would have major problems what should have happened is a choice should have been made and encourage workers who were under 30 to jump out of the state system and invest in there own private pension but would see a saving on NI which would fund the private arrangement and at the same time compulsory pension from employer its too late now to do anything that window closed The age time bomb is now close to going bang and who is going to carry the burden its simple its the workers of today who if they have more than 50k a year pay 40% tax with thresholds being frozen more and more will pay 40% to pay for NHS and pensions VAT is at 20% it was 8% when basic rate was 33% so we have missed the boat and the workers of today will pay the cost I get my state pension in less then a year and i think i am very lucky to have it unless we have major growth in the UK I cant see taxation coming down which ever govt we have in power we could even see a time where the state pension is higher than the Tax free allowance

[@mrlover4310]

A bucket full of money for war but no money for our pensioners.

[@gileschalk212]

Yes absolutely scrap it.

[@clarkeysam]

The reality is that the Boomer generation is by far the richest generation there has ever been, whilst Millennials and younger generations are poor. Increasing the state pension will increase the tax burden on the poorest for the benefit of the richest. This is immoral. Then consider other costs of living. Boomers have benefitted from property price rises, whilst the youngest are stuck with higher costs. Boomers have benefitted from cheap hydrocarbons, whilst the younger generations have to pay to clean it up. I could go on. The state pension should just increase with inflation. An increase above inflation is not sustainable, especially with an aging population.

[@mrdan7740]

The gov should stop wasting money on funding the benefits of illegal immigrants arriving on the dinghy’s, reduce the overseas aid and stop funding needless wars, and start looking after the country’s own elderly. Protect the triple lock.

[@philipmills798]

Stop hs2 save a 78 billion

[@clarkeysam]

What a load of rubbish from you two. We have an aging population. The only way we can maintain state benefits at their current level (with 0% increase, never mind the triple lock) is by increasing taxes or those who pay the taxes. Taxes are currently the highest they have ever been, so cannot increase, so we're reliant on more people coming into our country. HS2 is a benefit not a cost.