Barmy!

Ouch! Chancellor won’t be thrilled that key average earnings number out this morning is +8.5% which will feed through to a rise in the new state pension of around £900 per year to £11,500. But we estimate well over half a million pensioners will pay income tax for first time..

— Steve Webb (@stevewebb1) September 12, 2023

Or Balmy?

Like Alistair, I am for a bigger and better state pension and am not frightened about paying more in tax for more later on.

I’m happy to be barmy!

Many of my friends and most of my “not-friends” are against the triple lock, Here’s what my Brighton Bestie wrote me on it.

Triple lock is a nonsense. The 2.5% is a complete nonsense. Now that new nBSP is over £200 a week, that means £5.

It was introduced in reaction to an increase below £1 but that would be 0.5%.

No need to say more. And obviously unfair in principle. It should be dropped now.

The IFS – where Steve Webb once worked – are not keen on the triple lock either. They think it creates uncertainty which they say is bad for financial planning. I think that if you plan for 2.5% and get more – you are happy, I like that kind of uncertainty. They also say it is bad for the Chancellor who likes to know cashflows in advance. I say that the Bank of England are supposed to keep inflation at 2% so Government should have confidence that the triple lock is manageable at 2.5% except when things go seriously wrong. So I say the triple lock is the kind of policy a Government uses to protect its citizens from it’s ineptitude.  You can read why the IFS think differently in this report published last week

I’ll say it once more. The triple lock is a way to lever the state pension back to a meaningful payment for ordinary people for whom private pensions are no more than AVCs.

If , to achieve this aim, we need to hang on to the triple lock- so be it.

I am quite sure that the triple lock is bad economics and my Bestie’s rant goes on to explode the rationale for the other locks, but that’s not the point.

Ouch? or  “OOOO!

Two pensioner households may now be retiring on £23,000 pa – before they take into account private pensions. That’s something to celebrate in my book!