The UK Chancellor recently announced that the return of the treble lock policy for UK pensions.
The Treble Lock guarantees that UK Pensions rise by the highest of the increase in inflation from last September, earnings growth or 2.5%.
The Treble Lock had been put on hold temporarily during The Pandemic but now it's back and because inflation is currently at around 10%, that's how much the UK State Pension increases by next year.
The argument is that 20% of Pensioners live in relative poverty and it is these that will struggle most to pay for the rapidly increasing food and energy prices.
I mean helping out the poor elderly is absolutely fair enough - no doubt many of these people worked in crap jobs for most of their lives and were unable to save, or many of them will be women who were unable to generate wealth during their lifetimes due to having lived through a more patriarchal age.
HOWEVER, many pensioners are NOT poor, many are very wealthy, and EVERYONE over the age of 65 - that's over 10 million people are now getting a 10% increase in their pension.
8 million of them don't need it!
The Middle Aged have to Pay for This...
Working families are the ones who are going to have to shoulder this burden of increased expense - the proportion of working families in relative poverty is basically the same as that of pensioners - meaning there are just as many (proportionally) working families who can't afford to both eat and heat their houses now.
OK maybe private sector wages will increase to offset the rising cost of living, but public sector workers are subject to a way below inflation increase - showing that the government is happy to distribute money away from the ordinary middle class workers to the probably wealthier middle class pensioners.
And you know what's coming...
It's going to be very difficult for the government to CUT pensions, the best they can do is lower the rate of increase - but the faster they increase NOW compared to wages, the more of a burden this puts on the middle aged - and we are getting older...
The dependency ratio is increasing - there are more old people to workers - and OK the government has moved the pension age back to 68, but that is years off...
This kind of move - rapidly increasing the pensions payouts in the context of squeezed tax revenue - that says to me there's going to be a pushing back of the retirement age sometime VERY soon rather than in a couple of decades time which is the case now.
So if you're British and you're approaching your 50s like I am, don't expect to be claiming your pension at 67 - it will most likely be 70.
If at all.
This system isn't sustainable, after all.
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