Sunak says he will look at quirk of potential pensions leap

[snoop1130]

Sunak says he will look at quirk of potential pensions leap

By William Schomberg

 

FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak reacts as he leaves Downing Street, in London, Britain July 8, 2020. REUTERS/Hannah Mckay/File Photo

 

LONDON (Reuters) - British finance minister Rishi Sunak said on Wednesday he would consider “the anomaly” of potentially huge increases in pensions because of calculation distortions caused by the coronavirus crisis.

 

Prime Minister Boris Johnson promised not to break the so-called “triple lock” for pensions before he won a national election last year.

 

Since June 2010, Britain’s state pension has risen by whichever is highest of consumer price inflation, average earnings growth or 2.5%.

 

Sunak told lawmakers on parliament’s Treasury Committee they had heard evidence from other speakers pointing out “the anomaly” in how the system might work over the next few years.

 

“I think your committee is very abreast of the particular mechanical issues which that causes and are appropriate for people to raise and appropriate for us to look at, at the right time,” he said.

 

Average earnings are likely to grow very strongly next year compared with 2020 because around one in three private sector employees have been furloughed under the government’s coronavirus job retention scheme, which pays most workers 80% of their salary.

 

Torsten Bell, chief executive of the Resolution Foundation think tank, told the Treasury Committee last month that average earnings in Britain might bounce back by 18% next year, which represented an unrealistic increase for pensioners.

 

Johnson’s spokesman said in June the government had no plans to break the triple lock after media reports that Sunak was considering the option.

 

-- © Copyright Reuters 2020-07-16

 

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[Rookiescot]

Vote for us we will keep the triple lock !!!!!

 

[DPKANKAN]

And, of course, if you live in Thailand you don't get an annual increase anyway!!!!????????????????????????????????

[nglodnig]

In less than three years I will be receiving this - but realistically, these increases can't go on forever, as boomers retire, the burden on public finances will become unbearable.

[Keesters]

24 minutes ago, nglodnig said:

In less than three years I will be receiving this - but realistically, these increases can't go on forever, as boomers retire, the burden on public finances will become unbearable.

Er, excuse me but didn't I pay for my pension in obligatory installments during my working life. That was a burden on my finances. 

[roquefort]

12 hours ago, Keesters said:

Er, excuse me but didn't I pay for my pension in obligatory installments during my working life. That was a burden on my finances. 

So who do you think pays your pension? Today's taxpayers, that's who.

 

More pensioners living longer, fewer people working and paying taxes. You do the maths.

[HauptmannUK]

15 hours ago, nglodnig said:

In less than three years I will be receiving this - but realistically, these increases can't go on forever, as boomers retire, the burden on public finances will become unbearable.

UK pension costs as a percentage of GDP actually peaked at about 8% in 2013 and in 2019 was 7.7%.  About 25% of that was sickness and disability pensions. You can get all the figures off the ONS website.

Germany spends about 10% of GDP and the EU average is around 12.8%

Given the rising retirement age the UK state pension, even with the triple lock, is a long way from being unsustainable. However I've no doubt we'll soon see a lot of propaganda claiming that it is.

[roquefort]

7 hours ago, HauptmannUK said:

UK pension costs as a percentage of GDP actually peaked at about 8% in 2013 and in 2019 was 7.7%.  About 25% of that was sickness and disability pensions. You can get all the figures off the ONS website.

Germany spends about 10% of GDP and the EU average is around 12.8%

Given the rising retirement age the UK state pension, even with the triple lock, is a long way from being unsustainable. However I've no doubt we'll soon see a lot of propaganda claiming that it is.

Most EU countries have entirely different pension systems from the UK. You pay into a fund and that provides your pension income.

 

In the UK there is no fund for state pension, it all comes from current taxes. So each generation pays for the retirement of the one before.

[Keesters]

On 7/18/2020 at 6:03 AM, roquefort said:

So who do you think pays your pension? Today's taxpayers, that's who.

 

More pensioners living longer, fewer people working and paying taxes. You do the maths.

I know the maths. The payments I made have been squandered by successive governments instead of being invested properly. Governments have known for decades that people would live longer but they ignore it hoping somebody else would take care of the problem. Complete government failure. 

[stevenl]

15 minutes ago, Keesters said:

I know the maths. The payments I made have been squandered by successive governments instead of being invested properly. Governments have known for decades that people would live longer but they ignore it hoping somebody else would take care of the problem. Complete government failure. 

Problem is really easy: the government that announces payments won't start until age 70 will be voted out right away, they won't even make it till the next election.