Why there's triple trouble if you're nearing retirement . . .
There is ‘triple trouble' for anyone close to retirement around here - it's getting harder to grow old in this country.
Over the years in this esteemed column, as successive Tory governments have tinkered with the state pension scheme in a never-ending drive to save money, we have sent a consistent message to Downing Street: “Monday's Irish News is watching you.”
Despite this, they are still trying to save a few bob at the expense of three groups: the retired, the soon-to-be-retired, and anybody-who-will-ever-be-retired. (The rest of us are grand.)
Here's why we should have our minds fixed firmly on saving as much as we can for retirement today. Not all these changes directly affect pensions, but they show the spirit of current government thinking.
The House of Lords has produced a report “Tackling Intergenerational Unfairness” based on the idea that those who are retired have a better standard of life than those at the start of their career. They say younger workers are blighted by stagnant wage growth, difficulty buying a first house, and poor benefits.
So are the Lords making proposals to increase wages and lighten the burden of the young? Are they heck.
I would imagine Tory politicians have lovely gardens at home, because they're happier pruning and clipping, than building and growing. The conservative Lords are looking at pruning the top of the bush, looking for cuts for the elderly, rather than handouts for the young. I mean, it's all money in the bag, even if somebody has flogged themselves at the grindstone for 40 years – isn't it?
We'll get to pensions in a minute. First here's the other stuff.
They want to delay free bus passes - currently given to us all in Northern Ireland when we turn 60 - until five years after state pension age. They've already introduced a funny system in England, where only Londoners get their bus pass at 60 and the rest don't get it until they reach state pension age. The report questions why so many of us should have a free bus pass while still working. (Suggestion: To get to work?).
Next, they also want to delay the winter fuel payment, which applies for anyone born before November 1953. They say that some types of younger household are now in worse ‘fuel poverty' than those over 65. (“Not because of the policies we implemented, though”.)
Third, they want to abolish the free TV licence for over-75s, saying ‘why should the BBC have to subsidise retirees'? (Because we paid our licences for 40 years to watch repeats?)
They also want to consider treating any such benefits as taxable income.
But it's the so-called ‘pension triple lock' they're really after, a big cherry which, Theresa May said in 2017, would cost £45 billion over 15 years. The triple lock increases the state pension every year in order to offset the effects of inflation, raising its value in line with inflation, average earnings, or 2.5 per cent, whichever is the higher. This helps protect the spending power of your pension, making sure that you can purchase the same amount of goods as last year. That's their first pension target.
The second refers to the current rules on national insurance. At the moment, if you continue working past state pension age, you don't have to pay further national insurance contributions. They want to scrap that, and make us continue to pay our NI into the pension system for as long as we are working.
Doesn't our caring government just make you feel warm all over? That's because of your central heating. Enjoy your winter fuel payment while it lasts.
All this pruning in the conservative garden mean things might not be so rosy, when we come to retire. It's time to plan ahead. Why not call in and we can help you with your pension, which will help with all this mess described above?
:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information on Facebook at “Kennedy Independent Financial Advice Ltd” or at www.mkennedyfinancial.com