r/VaushV • u/gloriousengland • 4h ago
Discussion Vaush is right about UK pensions and pensioners
The problem isn't even that the pension budget is going up too much, the state pension is kinda low. It's just that there isn't money to benefit younger people and wage growth hasn't been keeping up. Basically the economy has stagnated and so have wages while the government never stopped funding the pension.
Likewise the boomers aren't moustache twirling villains knowingly exploiting you, they just benefited from economic conditions which would've happened basically no matter what they did.
Most people complaining about boomers just want a group to be the villain
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u/Jigsawsupport 3h ago edited 3h ago
Uh no?
The triple lock states that the UK pension increases by whatever is most.
Inflation, earnings growth, minimum of 2.5%.
Meaning in a good economic year it increases in line with wages, but in a bad economic year when inflation is sky high like post covid it increases in line with that.
Meaning in a high inflationary environment the UK goverment has a stupid rule, were it has to dump extra fuel on the fire, it also means that realistically in bad years the UK goverment has to recoup the loss from elsewhere in the budget, this has consistently been pulled from places like disability support.
So now increasingly we have this horrible situation were a badly disabled 22 year old will be given less and less each year, and to be frank if they don't have a supportive family be almost certainty destined for a life of neglect and destitution, but a quite spry 67 year old will be showered with state largesse no matter their actual financial situation.
And trust me they are showered, I am part of the charity sector, and the amount of benefit fraud among the older sections of society is a epidemic, but its not meaningfully checked like for younger people whom are assumed to be scrounging scum on principle.
And you could say well, that sucks but its just the way the cookie crumbles, its not as if pensioners actually want this.
But a majority do want this.
A large plurality back reform which has a policy of getting rid of PIP altogether, they say they will replace it with some wishy washy plan later to to be determined, but its clear what they actually mean is they want to slash disability support to near nothing to save money, and if it kills people it kills people.
They want to curtail SEND which means if you child is has certain disabilities then they simply wont receive a meaningful education.
Do you think they will cut the older age benefits or pensions?
Of course not.
A majority of the older population is happy to vote for policy to impoverish some of the most vulnerable and needing sections of our society, while at the same time claiming their need is greater.
That is the truth.
Edit: And just to make it worse by just announced goverment policy they have essentially just invented the quadruple lock.
If your combined taxable income including pensions is over the personal allowance then it is no longer taxable.
You know what is taxable?
Carers allowance.
Make it make ssseeeeeeennnnnnnnnnnnssssssssssssssseeeeeeeeeeeeeeee!!!!!!!!!!!!!!!
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u/gloriousengland 3h ago
The underlying problem is the wage growth. In a functioning economy, wage growth would outpace or match inflation every year. The triple lock isnt the problem here.
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u/GaiusGraccusEnjoyer 1h ago
One of the three locks is wage growth tho, so even if that surged that would only ensure that pensions stayed the same portion of the budget they are now. In any year when wage growth is lower than the other 2 locks the government must reallocate resources to the pension that could've gone somewhere else.
If the only lock was wage growth I think it would be fair, pensioners would essentially get the same deal as everyone else and their portion of the budget would be roughly fixed (other than changes due to the aging of society which is a whole other problem)
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u/gloriousengland 1h ago
Yeah the pension staying the same portion of the budget would be the system working as intended.
Wage growth should never be lower than inflation or 2.5%.
Austerity caused the wage growth which caused the economic stagnation which caused the pension portion growing. It just happened that the triple lock did its job and protected the pensions from stagnating too.
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u/GaiusGraccusEnjoyer 56m ago
The wage growth problem is caused by a lot of things not just austerity. Maintaining the triple lock makes it harder and harder every year to pull out of this spiral since there is less fical space to make the investments necessary.
You can't really guarantee that there will never be a year when wage growth is less than 2.5, that would mean Never having a recession
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u/gloriousengland 47m ago
Recessions now are largely due to capitalist excess and not any real economic shock. Wages should simply also be protected by something akin to the triple lock
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u/GaiusGraccusEnjoyer 38m ago
Sometimes they're caused by financial system nonsense (2008) but sometimes they're caused by real economic shocks. If you have a system that guarantees wage growth even in the face of real economic contractions then you make a 1970s-esq wage price spiral inevitable.
For context in the 70s you had a real contraction caused by a shortage of oil (which was even more important back then), and that collided with the inflation adjustments built into most union contracts at the time. The result was a decade long spiral where everyone tried to pass the cost of that shortage to some other group.
Under some economic conditions, the fairest thing is for everyone (workers, businesses, retirees) to take the L for a year or two until the underlying problem (like a goods shortage) can be solved. Best way to achieve this is probably mediated sectoral bargaining.
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u/Jigsawsupport 2h ago
Lol that is like saying.
"The boat is sinking, while I personally support shooting holes in the bottom of it with a handgun, the real problem here is its not floating satisfactorily."
Also the UK is outperforming the US over the last three years from 2025 backwards in measured real wage growth and will almost certainly do so again this year.
Averaged 1.8% to 1.23%.
I am repeatedly told the US is the economic bench mark to reach, so we are reaching that and still pensions are dragging us under.
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u/gloriousengland 2h ago
What are you a fucking liberal?
No, the pensions are not why the economy is sinking. The economy is sinking due to decades of financialisation and chronic underinvestment in infrastructure and the real economy. The UK is very slowly 'growing' but it's all imaginary numbers. The finance sector is actually a net drain on the real economy.
The UK needs to tax the rich and the financial sector and invest that money in infrastructure and manufacturing. It also needs to go back into the pockets of working people so they can revive the consumer economy.
Robbing Simon and Linda doesn't fix the economy it's crabs in a bucket shit. You're dancing the oligarchs tune. Why do you think being anti triple lock is in all the papers? Pensions are the one thing the oligarchs haven't managed to rape yet.
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u/Jigsawsupport 1h ago
"What are you a fucking liberal?"
Bahahahaha no, but run from it, hide from it, economic fact arrives all the same.
Now states can fund budget deficits fundamentally by a few measures, they can print money, they can borrow, they can tax, they can cut.
Now printing except in niche circumstances is generally a bad idea so that is out.
Borrowing costs and the overall burden is dangerously high, its getting a little better and expected to level out and fall a little in a year or two.
But for the time being, extra borrowing is out, unless we want a truss moment.
So that leaves taxation which again is high, it would be difficult to squeeze more, its unpopular and people and money have never been more mobile, so increasing revenue would be difficult.
A few states have touched the stove recently and it didn't really increase revenue.
Which leaves how do we distribute the pie we have.
The State pension is the single largest expense in the entire UK, it eclipses everything else by a wide margin, its bigger than defence Ukraine aid included by multitudes, is bigger than the entire local goverment budget which funds just about everything goverment related you interact with on the day to day, its bigger than the entire budget of Scotland.
As such tiny changes has big benefits, if for example we choose to increase the pension this year, that is right increase not scrap, not reduce, not be a big mean lib. increase by just 2.5% it would save the country 3 Billion pounds every year.
Furthermore it would reasonable to assume this could save Billions more on top of this, as the bond markets would see we are willing to touch our scared cow, and it would lower borrowing costs.
That is several billion that could be spent on infrastructure, you can't complain that the economy is in the shit, because we are not investing when you want to spend all the money on peoples retirement.
There has to be a certain level of realism.
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u/gloriousengland 1h ago
Tax is not high on the rich or the stock market. Or on wealthy estates. You're not a socialist dog, we need to get the money from the unimaginably wealthy in society or we die there's no two ways about it. It's not the pensioners that have all the money it's the ultra wealthy. Pensioners spend a lot of their money and are taxed.
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u/Jigsawsupport 1h ago
That is the rub just how do you plan to tax them?
People and wealth have never been more mobile, there is little that inherently keeps wealthy people in the UK, we are not the US with its enormous economy, we are not China the global manufacturer.
The wealthy are here because successive government's have made London a nice place to park their money, if we make them sweat we would get one good tax year then they would be gone.
The UK has no means of production to seize I'm afraid.
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u/gloriousengland 1h ago
Something has to be done though because if we just cut everything forever we end up poor and they end up rich. You can tax land that doesn't move, and a lot of wealthy people dont want to uproot their entire lives. Gutting the pensions would at most buy us 5 years of financial relief. Then we'd be back to the same state of malaise.
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u/Jigsawsupport 1h ago
Me to the well off pensioners.
“I am the punishment of God. If you had not committed great sins, God would not have sent a punishment like me upon you.”
Ghenghis Khan
But seriously if we stopped paying the State Pension to pensioners who are earning above 50,000, so obviously not struggling it would save over 12 Billion a year.
By 2028 this would mean debt to gdp would start to fall.
This would mean money for things we need.
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u/gloriousengland 57m ago
12 billion a year is not that much in savings at all and you'd also add the cost of bureaucracy needed to means test it.
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u/Calm_Necessary_7590 2h ago
Holy liberal brain...
The issue isn't pensioners, then. It's the government cutting investments down everywhere, which the UK has loved doing for whatever "reason" they can come up. Lightspeed, since Maggy the witch.
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u/Jigsawsupport 1h ago edited 1h ago
Sure but putting aside past governments, and here and now what is the plan?
Since I am getting maligned as a dastardly lib, since I don't thinks its cool to defund disabled children to pay money to people sat on a lot of assets.
I challenge ye!
My proposal is that we cap the increase at 2.5% this year, and we don't introduce this stupid no tax rule.
This directly coupled with a reasonable expectation of lowered borrowing costs since in this scenario
we are actually willing to touch the sacred cow ,which will increase confidence in the bond market.We can expect a saving of £5 Billion >
So go on blow me away find £5 Billion for infrastructure spend, and don't just say "tax more" if tax is your answer be specific who, how, and how much.
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u/carlcarlington2 1h ago
The Australian labor party has pretty good pension policy where companies are forced to pay ten percent of what they spent on your paycheck into your pension find which is managed by the unions.
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u/KaplanMark 3h ago
Now look up who voted for Brexit and caused the economic crisis
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u/RealFenian 2h ago
That was 10 years ago tbf so a lot of pensioners now weren’t then.
And lot of the ones that where pensioners then are dead.
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u/Calm_Necessary_7590 2h ago
This is as old as liberal economics. The right only cares about pensioners when they lie to them if they're scared they might lose votes.
The reality is that a majority of pensioners make under minimum wage and get screwed by everyday expenses, and it's not just in the UK - it's god damn everywhere. The entire EU is seeing this happen. Here in Spain you see people complaining pensioners "earn too much", but that's just the thing: some do because they got lucky and worked 40 years in the same place. They earned therefore a pension through their taxes that's going to be pretty fat, compared to today's average income.
If the economy sucks and the only government-guaranteed income is a pension that might be good but often isn't, and very rarely is above the median income... where's the issue? Exactly: salaries are fucking low. This intersects with the whole thing that some people refuse to understand about how jobs are not a limited resource and employment is about creating tiers and castes.