I have this letter in The Guardian this morning:
Gaby Hinsliff claims that “Every serious party needs billions of pounds to fund their promises, and everyone knows there's an obvious place to find the money, but nobody wants to be the first to say so. And so a deferential silence shrouds the pension triple lock.” The problem is that everybody might think they know this, but that does not mean it is right.
If we do need to find money, it is within the government's power to create it. And if it refuses to use that power, it can look elsewhere within the pension system for funds. For example, the pension tax relief given to the highest-earning people in this country, at rates above the basic level of income tax, costs at least £15bn a year – vastly more than costs attributed to the triple lock.
We have a cost of living crisis and a pension poverty crisis. So why is everyone looking at punishing some of the most vulnerable people in our society when the rich continue to have their ever-increasing wealth subsidised by the state at a cost of many billions of pounds a year?
Richard Murphy
Emeritus professor of accounting practice, Sheffield University
I think the letter speaks for itself.
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Many of us are dependednt upon this, especially women on their own, many who have taken time out to care for children and elderly parents, and/or worked part time to accommodate this. I have the great good fortune to no longer be paying rent or a mortgage but when working never had extra money to put into a private pension. Gaby Hinsliff needs to get out more and do her research!!
Agreed
Gaby Hinsliff couldn’t give a damn because she wants to spend the money on weapons to attack Russia with. She also makes clear in her article she doesn’t want to tax the very rich more.
John Pilger always said the Guardian was a fake Lefty newspaper and he was right.
Might there be at least one submerged factor beneath the pleadings of the wealthy to maintain/increase their wealth and advantaged situation in the obscure U. K tax set up by further depriving the seriously disadvantaged?
Might that factor be an obsession to prey on the weak?
Well said (and written) Richard.
Thank you
Thanks
It is bizarre that something so simple it’s ignored. This higher rate tax relief goes to people who need no incentive to save and probably have better pension provision than they need already. This money could be so much better spent elsewhere. I would argue all pension investment tax relief should be at base rate only and there should be an annual maximum payable. If people can afford to put more aside, they need no government funded incentive to do this.
I saw this last night and it does.
I’m still waiting for the Guardian to publish a letter by me.
Even my graduate son beat me to it!
But Hinsliff’s article was deeply disappointing in a so-called Left leaning newspaper.
Agreed, and good luck.
Gaby is talking B’shit. And I say that as a paid up Guardian reader. I live in Galicia , Spain. The average State Pension here is 1,186€. My UK pension is 860€. I am lucky, no mortgage etc, small investment too, but some years I actually get an actual PAYMENT back via the Spanish Tax Dept as my income is considered low. As Judith B says, Gaby Hinscliff needs to get out more, into the real world.
Thanks and agreed.
The finance industry is doing very nicely thank you by exploiting poorer pensioners – equity release and other kinds of loans, extended credit card debt, etc etc. Could this possibly be one of the key reasons for suppressing the state pension? Surely not. Surely we don’t live in such a country. Do we?
We do.
I used to think the slogan about “you’ll own nothing and you’ll be happy” was a conspiracy theory but I’m seriously starting to think that’s what they want.
I hope you don’t mind if I expand this a bit. The financial sector benefits from a doom loop. Its influence over the bond market keeps state spending restricted, including the State pension; its policy lobbying ensures retirement risk is passed away from institutions to individuals through for example (much more profitable) defined contribution schemes, and then its commercial products like equity release loans are ready to catch (and profit from) the resulting shortfalls. I think perhaps we should all be getting rather cross about this.
May I make one last additional comment? Then I promise to shut up. But I’m just thinking through the extent to which the finance sector is running our political agenda and gaining from it. And screwing all the less well off, not just pensioners. While the direct income tax system is progressive (higher earners pay a higher percentage on wages), the total tax burden, including indirect, flat, and wealth-related taxes, disproportionately squeezes low-to-middle income households. This structural drag directly hollows out disposable income, acting as a major catalyst forcing ordinary households to use credit just to survive. And the finance sector profits accordingly. They achieve this by lobbying intensively and, so far, very successfully to protect wealth from taxation, and by arguing loudly and constantly for reduced public spending. We really are being stitched up, aren’t we.
Not directly related but I was talking to my youngest son (he’s 42) earlier today about pensioner poverty, the cost of living, the wars and so on and how it is effecting his friends and what do they feel and think – what’s the vibe on the street, so to speak. His final comment really struck home with me “Dad, everyone knows something is very seriously wrong but just can’t put their finger on it”
It’s best summarised as “we’re all being screwed”
I subscribe to the printed edition of the Guardian so that my 90 year old mother – who herself subscribes to the Morning Star – can have the pleasure of attacking the puzzle pages, keeping her brain and wits sharp for her age.
I have read the Guardian since before the Sixth Form, which is now over 50 years ago.
However nowadays my relationship is purely transactional since a so-called progressive paper with some good progressive writers is now just a peddler of mainstream Establishment narratives on virtually all the main issues we are faced with.
My top three gripes against the Guardian in modern times are:
1) The betrayal and abandonment of Julian Assange.
2) the Guardian’s role in the media assault on and dissemination of false narratives about Jeremy Corbyn’s leadership of the Labour Party – and Gaby certainly played a major roll in this.
3) The slavish adherence to the official narratives which frame the reporting of the majority issues of the day which currently confront us.
It would be marvelous if the Guardian began to live up to the claims it is all too ready to make for itself.
Much to agree with
I used to take the Guardian, but have now shunned it in favour of The National. It helps that I live in Scotland as I don’t think it is widely distributed. It has some good columnists, including Richard Murphy and it supports Scottish Independence, unlike any other paper. It has condemned the Genocide in Gaza, also unlike any other paper, most of which cannot yet bring themselves to use the word.
I also do the puzzles to try and keep the brain in tune
Thank you
Me too!
Funny how we always find money for nuclear warheads or fancy jet planes costing a million each when required..but no money for the poor, disabled , young, vulnerable…not really funny…..vicious…..attack the weakest…but it should be borne in mind these people vote…..
I get it online, having been tipped off by one Richard Murphy.
🙂
Too many journalists write about ‘the’state pension whereas there are 2 state pensions – the basic ‘old’ state pension, and the ‘new’ state pension.Frequently only the weekly amount of the ‘new’ state pension is quoted. There is an ever growing divide between the two state pensions – now £56-40 per week. Yes – there was the graduated pension scheme for some, but for the lower paid, no. For many older pensioners there was no workplace pension scheme, these became compulsory (for eligible employees and other factors) in 2012 and 2018 – if anyone wants the actual details, look them up online! Many older people had a low wage and had nothing to spare for savings, and many of these pensioners have huge pride and do not like to ask for help.
Agreed, entirely.
And I accept; I am also guilty of this.
At least they’ve got George Monbiot, who always seems to hit the mark with me. I invariably find myself in agreement with him.
I’m fed on a diet of George, Richard Murphy and James O’Brien. If the country could follow just 50% of the ideas of these three, George on climate, Richard’s economics and James on the morality of the media, we’d move swiftly into broad sunlit uplands.
I know a lot who wouldn’t care to be in the uplands I envisage, but I don’t mind leaving them back in the swamps they inhabit.
I like George.
James O’Brien has said he likes me. But he does nit invite me very often.
O’Brien is getting some full-page pieces in The i Paper recently, I’m pleased to say.
The triple lock means that the state pension rises by the higher of the rate of inflation, average earnings or 2.5%. What opponents of the triple lock really want is to return to increasing it by the annual rate of inflation. The basic state pension was introduced in 1948. A single person received £1.30 per week (around 18.5% of average earnings). If it had increased by the annual rate of inflation from 1948, the state pension would have been worth around £57.50 per week in 2025 (around 7.4% of average earnings). The basic state pension (full rate for those who reached state pension age before April 2016) was £176.45 per week in 2025.
And? What is your argument?
Hi Richard. Thanks for your reply. My point is that some want to abolish the triple lock. They would be quite happy for an increase in pensioner poverty. The return of indexation only increases would take us back to Michael Portillo’s prediction of “nugatory” state pensions when he was Chief Secretary to the Treasury in the 1990s. Others would like to go further and privatise the state pension (see your Reform poll). To reach the current level of the new state pension (and using, cough, Hargreaves Lansdown’s “best annuity rates”), someone would have needed to have saved over £224,000 across their working lifetime. I think the only country that has ever tried this was Pinochet’s Chile, with the help of the “Chicago Boys”. Of course that would never happen in the UK…
You got one in Richard! Well done. The Guardian’s economics coverage is depressing to say the least. I’m a digital subscriber but often wonder why…
I think there is a good argument for abolishing the state pension triple lock, albeit not for any reason Hinsliff suggests. At the moment, the triple lock is a horrible example of economic redistribution, paying out to retirees regardless of their wealth and then taxing anyone of working age regardless of theirs.
I think age is an awful reason to redistribute. It should always be based on need.
So you would abandon the old-age pensions then?
Why?