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JR
John Roberts
@johnactuary.bsky.social
Worn out and retired actuary after 40 years in the profession.
346 followers52 following89 posts
JRjohnactuary.bsky.social

This year's increase will still have an effect though, as it sets a higher level baseline for all future increases, whereas the WFA withdrawal is a one time effect in reducing pensioner income. 9/

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JRjohnactuary.bsky.social

Note though, this year the above inflation element of the increase will be completely offset (and more) by the withdrawal for most of the Winter Fuel Allowance. Although those on pensions credit will still get the full benefit of the increase. 8/

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JRjohnactuary.bsky.social

Another argument is that BSP level is far below average earnings, and barely offers a subsistence level of retirement. However, we need to regard the BSP as just part of our pension provision, with occupational and other pension arrangements providing for a better lifestyle. 7/

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JRjohnactuary.bsky.social

Much better to target any increase at those who really need it, although I'm very mindful that take up of pension credit is much lower than it should be - maybe the daunting 24 page application form doesn't help in that regard? 6/

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JRjohnactuary.bsky.social

"But some pensioners reliant on the BSP need more income now" I hear you cry. Well, in that regard, the TL is a very poor way of solving pensioner poverty - people in that situation need more money now, not a promise of a gradually increasing amount paid to all over decades. 5/

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JRjohnactuary.bsky.social

Why is increasing the TL over both prices and earnings a problem? Over time, it will burden then current taxpayers with an ever increasing cost as a proportion of GDP. 4/

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JRjohnactuary.bsky.social

Here we see how the link to price increases only in the 80s eroded the state pension in relation to earnings, but has since recovered to some extent since the TL was introduced. (Note that the lower (pre 16) SP is often accompanied by second state pension income.) 3/

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JRjohnactuary.bsky.social

Even before next year's increase, this table shows how the cherry-picking aspect of the #TripleLock means the BSP inevitably increases faster than both prices and earnings over time. 2/

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JRjohnactuary.bsky.social

Today's earnings figures means the #BasicStatePension increase next April will likely be 4%, almost twice the current CPI inflation rate, continuing the pattern whereby it increases faster than both prices and earnings over time. 1/

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JRjohnactuary.bsky.social

It doesnā€™t more than offset it in real terms, but it certainly helps cushion the blow in a way that wouldnā€™t have happened if the TL had been set this year based on CPI.

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JR
John Roberts
@johnactuary.bsky.social
Worn out and retired actuary after 40 years in the profession.
346 followers52 following89 posts