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Pensions

Discussion in 'Speaker's Corner' started by Sheff, Nov 18, 2016.

  1. Sheff

    Hitman

    Joined: Jun 16, 2008

    Posts: 941

    Location: Newton Abbot

    I've enjoyed reading the discussion of pensions in the brexit thread so as suggested by the mods:

    I agree with the majority of posters that pension provision and funding requires rectifying immediately; either by lowering the third part of the triple lock to 1% or removing it entirely, raising the retirement age on an incremental basis for people currently in their thirties fourties and fifties then evaluating the retirement age every five years, and increasing National Insurance contributions for both employees and employers.

    Are there any other methods that could be explored or do you have any differing opinions?
     
  2. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    I think you have covered the best ways and used as a combination wouldn't be too painful in conjunction with compulsorily workplace pensions and the amount of contribution increasing each year.

    The alternative is to cut spending in our areas like Education, Defence, NHS etc.
     
  3. Bantu

    Wise Guy

    Joined: Jan 21, 2010

    Posts: 1,146

    The compulsory workplace pensions is the single best decision made, it should at least help alleviate this issue for the next generation.

    Other than the options already listed the only other obvious one is to increase personal taxes and NI, which governments (especially conservatives) hate to even think.
     
  4. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    Bantu, although a good decision its not enough., It solves the problem occurring in 50 years time but does nothing for now until then.

    My biggest issue is that current governments wont want to tax people more or reduce the pension as pensioners can basically decide who is in government now so they will ignore it as it wont blow up for maybe another 20 years and they wont be an MP then so wont matter.
     
  5. Semple

    Soldato

    Joined: Mar 5, 2010

    Posts: 5,597

    I agree, but the 1% minimum contribution really isn't much.

    If someone is on minimum wage (£7.20) and does 40 hours a week, that means the employer is paying in £149.76 a year, add your own contributions plus some tax relief, that's maybe a little over £300 a year.

    Excluding any compound interest growth, and assuming you're working from 25 to 70 (45 years), your pension pot just from contributions will be £13,500.

    Even if we assume the pot has had good growth and assume for example sake it's now at £27,000. Lets assume you live till your 80, that means your private pension would give you £225 a month, added to the state pension which is currently £477.20, gives you a rough amount of £700 a month to live from. Which i think most people would struggle with.

    Obviously that example is most rock-bottom and has a lot of assumptions - for example assuming there's no pay increases, also the interest on the pension pot can vary too much over 40 years to make an accurate guess.

    But my point remains, that even at 1%, that's still not a great deal to build up over time. There is talk about increasing it to 3% over the next few years.
     
  6. Bantu

    Wise Guy

    Joined: Jan 21, 2010

    Posts: 1,146

    They've really made a mess for themselves..
    - Triple lock so they can't reduce the liability
    - No tax increase
    - Want to reduce immigration, so less increase in taxable base
    - Ideologically opposed to government borrowing
    - Not enough action on tax evasion
     
  7. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 9,618

    Location: Wilds of suffolk

    well its not so much talk but current plan

    How much you must pay

    The amount you must contribute to the pension scheme is determined by the scheme’s rules. However, if you’re using the scheme for automatic enrolment there are minimum contributions you must pay.

    The minimum contributions that you must pay into your staff’s pension scheme are shown in the table below – they’re currently a total contribution of 2% with at least 1% employer contribution.

    Minimum contributions are being introduced gradually over time. You will usually pay pension scheme contributions either as a fixed amount or based on a percentage of earnings.

    Date Employer minimum contribution Total minimum contribution
    Employer's staging date to 05/04/18 1% 2% (including 1% staff contribution)
    06/04/18 — 05/04/19 2% 5% (including 3% staff contribution)
    06/04/19 onwards 3% 8% (including 5% staff contribution)
     
    Last edited: Nov 18, 2016
  8. Bantu

    Wise Guy

    Joined: Jan 21, 2010

    Posts: 1,146

    but these go into a specific fund right? It's not like NI where those paying NI today are paying for the pensions.
     
  9. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    This all helps down the line but nobody is saying how we fund the current triple locked pensions which is currently 7% GDP and will soon be 9% GDP.,

    That's an extra 2% GDP we need to find under the current changes. Thats 42 billion a year btw.

    More than the whole cost of Trident.
     
  10. Billies Bangers

    Banned

    Joined: Sep 18, 2014

    Posts: 961

    Location: Planet Earth

    You are talking about cost - what is the take? I do love a balanced debate.

    To the original poster, the reason the government added a ten year buffer for altering someones pension age is this is the bare minimum they could get away with, which would allow for someone to alter their pension planning.
     
  11. nkata

    Soldato

    Joined: Mar 1, 2010

    Posts: 7,038

    Location: Cheshire / Staffordshire

  12. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    Last stats I saw was that it was one extra year for every two years!!!!!!!!

    Atm the average lifespan is 81. In two years time that will be 82. In 2020 it will be 83.

    Hence my previous point that the state pension was never made to deal with paying 16 years of pension out which is increasing by one year every two years.

    In 1960 its was only 71 so we only had to pay for 6 years of pension. Thats 10 years more now.

    https://www.google.co.uk/publicdata...try:GBR&ifdim=region&hl=en_US&dl=en&ind=false
     
    Last edited: Dec 5, 2016
  13. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    And a pension is meant to be a fall back like income support so they would be covered.

    Best solution is just just bring back means testing like it used to be.
     
  14. dlite

    Gangster

    Joined: Jul 5, 2015

    Posts: 252

    Location: Reading, UK

    When people talk of pensions in UK, do they talk of the social security payment or the self funded private pension payment on top?

    Isn't the normal social security pension already laughably low considering the living costs in UK?

    Or is there some other form of pension aside of these two?

    Edit: I suppose it is this?:
    https://www.gov.uk/state-pension/overview

    The most you can currently get is £119.30 per week.

    The basic State Pension increases every year by whichever is the highest of the following:
    *earnings - the average percentage growth in wages (in Great Britain)
    *prices - the percentage growth in prices in the UK as measured by the Consumer Prices Index (CPI)
    *2.5%
     
    Last edited: Dec 5, 2016
  15. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    Laughable low per person but still costs 9% of our gdp and set to become 11% next year.

    The problem is there are too many pensioners and they are living for 16 years after retirement and that increases one year every two years.

    What you need is massive immiegration to boost the annual gdp growth and increase tax revenues to fund pensions........oh wait, nobody wants that in the uk.....
     
    Last edited: Dec 5, 2016
  16. Jokester

    Don

    Joined: Aug 7, 2003

    Posts: 38,840

    Location: Aberdeenshire

    It's unsustainable.
     
  17. Vonhelmet

    Caporegime

    Joined: Jun 28, 2005

    Posts: 48,109

    Location: On the hoods

    The take? Do you mean the tax take? Already insufficient to meet our current levels of spending, hence the huge budget deficit. Increasing pension costs is only going to make that worse.
     
  18. danlightbulb

    Wise Guy

    Joined: Jul 14, 2005

    Posts: 2,172

    Absolutely I have a different opinion and would vote against any government that increased NI contributions or taxes. I want my own money please thankyou very much.

    Now, why not offer more incentives for me to put more money into my own pension. That's something I could work with.
     
  19. Billies Bangers

    Banned

    Joined: Sep 18, 2014

    Posts: 961

    Location: Planet Earth

    I'm not sure why you would want to stop there. I mean let's face it you don't believe there should be a pension at all. I'm only surprised you haven't quoted from Scrooge - let them die and decrease the surplus population.

    It had already been mentioned on a similar thread to this (not saying it was you BTW) that what has been missing are a few cold winters in order to sort things out.
     
  20. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,183

    Location: Co Durham

    they do, tax breaks.