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The Great Pension Scandal

Discussion in 'Speaker's Corner' started by Stretch, Apr 6, 2015.

  1. Darujhistan

    Mobster

    Joined: Oct 28, 2011

    Posts: 3,418


    We'll talk when the next pensions scandal arises, it won't be long.
     
  2. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 8,222

    Location: Wilds of suffolk

  3. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,850

    Location: Rhône-Alpes+Cambridge

    Yeah the pension scandals tend to arise from final salary pension schemes - eg ones that aren't actually properly funded. Rather than DCs.
     
  4. Darujhistan

    Mobster

    Joined: Oct 28, 2011

    Posts: 3,418

  5. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 8,222

    Location: Wilds of suffolk

    Yeah but I get the impression he doesn't understand the difference between any of the scheme types and how they are operated
    He quoted that personal pensions are not ring fenced, when anyone who knows about them knows that they are, you know, being personal

    Sure its possible for there to be a scandal around these, but thats from people having direct fraud that they agree to committed against them as opposed to the type of BD fraud (ala Maxwell type scenarios)
     
  6. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,850

    Location: Rhône-Alpes+Cambridge

    Yet more evidence that the retired generations have not paid enough for the lifestyle we are funding: http://www.bbc.co.uk/news/business-44029808. This sort of sense I never thought I'd see from a leading Tory.

    Whilst there is no easy answer, at least someone in a reasonably public position has made this sort of announcement. I do not agree with a windfall at 25, and scrapping council tax is quite a radical departure from mainstream politics. The idea certainly has its merits though.

    His quote
    resonated with me. It doesn't feel like the older generations is keeping its contract, whilst we - admittedly begrudgingly! - are forced to keep our end. We can't avoid increased taxes and NI after all.

    But it was this
    That was refreshing to see, I don't think I've seen anyone in that sort of position admit that publicly before.

    No its not fair that retirees get out less than they paid in, but as I've said before I don't see why they should be immune to the problems everyone else is. The following generations are also highly likely to get out less than paid in, unfortunately in that sense we are all in it together, in one fashion or another.

    I can only imagine the feathers people like Faustus would be spitting reading that.
     
  7. nkata

    Soldato

    Joined: Mar 1, 2010

    Posts: 6,882

    Location: Cheshire / Staffordshire

    I have been on record as saying that the older generations should provide a larger amount towards social care. I am now retired after 47 years earning and paying tax. I do think that continuing to pay NI alongside tax after retirement on earnings over a threshold would be a reasonable proposal. This would allow another several billion to be earmarked for this purpose without extending the addditional taxation down the generations.

    To have additional taxation bands based on age alone to me seems unworkable, likewise a reduced tax threshold, now that previous age related thresholds are discontinued.

    A tax on land or property requires that the person has enough disposable income or liquidity to pay the tax.

    But as above, I do not believe that providing a windfall benefit of 10k at age 25 is a practical solution or would provide a substantive difference to intergenerational wealth, what about the 26 year olds who just missed out?

    As for me keeping my contract, I have always paid tax as PAYE on every penny I earned, rising to 20k per annum at the end of my career. I still pay tax on income, I would be prepared to pay NI if that was considered needful and would be used properly to avoid additional tax rises elsewhere in the system.
     
  8. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,314

    What this old chestnut again - David Willetts was considered a maverick when he was an M.P. and he's gone more of piste since. He comes out with these mad schemes at least once a year.

    What contract? Tell me what help my generation received when we were starting out in life. I will tell you - a big fat nothing. There was none of these schemes we see today e.g. help to buy, preferential ISAs etc. etc. rock bottom interest rates funded by fleecing 'savers', free child care etc. etc. etc. etc.

    Why do you assume we are immune. I pay tax like most other people and for the last 9 years of my working life I received not one penny pay rise, so it's not just the young who haven't seen their pay increase.

    What Willetts did say the other day which should also 'resonate' is that the millennial's have a totally different lifestyle than the previous generation. Their expectations are often unrealistically high, they want things 'today' and are often unwilling to wait and they are 'spenders' not 'savers'.

    If I was asked for an honest answer re: do I feel in anyway guilty regarding owning my own home and receiving a pension I would answer without hesitation - absolutely not. I worked hard for what I have and have saved money not spent it throughout my life. In the event my health becomes an issue I don't intend to let my estate be sucked dry on adult social care either. Both the wife and I have made 'living wills'.
     
  9. Stretch

    Capodecina

    Joined: Feb 14, 2004

    Posts: 11,250

    Location: Cambridge

    There's now a very strong indication that the government will cut pension tax relief in the up coming budget. Either by lowering the cap to £30k or cutting relief too a flat rate of 18/28% depending on your tax bracket. All this is so we can pump more money into the NHS, when older home owning voters refused to even entertain the idea of using their asset wealth to help support their own care at the last election.

    Spend it while you can, or risk it being spent for you.

    Many now work hard for what other people have.

    Ha.
     
    Last edited: Oct 13, 2018
  10. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,850

    Location: Rhône-Alpes+Cambridge

    A refreshingly reasonable opinion from someone of your age in this debate. If only other posters in this thread, and country at large felt the same.

    I think tax on land is something that hasn't really ever worked fairly (or properly given that anyone wealthy enough obviously is able to avoid paying large amounts of it).

    The 10k windfall doesn't address the problem of an over-priced housing market; like the tax payer funded crutch that is help to buy, it just tries to ignore the problem by funnelling more money into the market.

    Still banging his "I'm alright Jack" self-centred drum I see. Two contrasting opinions in this thread from people of that generation. I know which one I'm glad to have on ignore.
     
  11. nkata

    Soldato

    Joined: Mar 1, 2010

    Posts: 6,882

    Location: Cheshire / Staffordshire

    In case people are not sure how taxation is collected on pensions, although it may be obvious to some or most, I will clarify.

    I have three pots, one the state pension, two my larger pension from working, three a smaller pension which I have taken an annuity on.

    Essentially all three added together form my gross income which is above the personal allowance so I am subject to income tax.

    The state pension is paid to me without a tax deduction so my tax is taken from the remaining income.

    The larger pension fund is taxed at BR (basic rate) meaning I pay 20% of that income in tax.

    There is a small amount still owing after that deduction and therefore I have a different tax code on the annuity which collects the last monies owed to the taxman. I thought that this might be useful to show how it all works.

    If I decided to take on paid work for instance, as long as I pay basic rate on all the additional income (up to the higher rate threshold) it will always be above board. I think that paying NI on additional income would be appropriate for those of pensionable age if they continue to work past normal retirement as it is then not a pecuniary advantage on those below normal retirement age.
     
  12. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,314

    I'm absolutely aware of how it works as I too pay tax from my pension. As for N.I. - well I paid that for far more years than is the requirement to receive full pension. Sorry, but I've paid more than enough of either during my lifetime.
     
  13. Mr Badger

    Soldato

    Joined: Dec 27, 2009

    Posts: 6,004

    Oh dear, you're back on this again. Clearly retired people haven't paid in enough to fund their own pensions or there wouldn't be a massive funding problem now. Means testing or increased taxation (which seems a far more sensible solution) of pensions is inevitable unless you are hoping for a magic money tree solution, or you think it's fair that a shrinking population of workers should face an ever increasing burden and not be able to retire themselves so they can keep paying for your benefits?

    And where will the money come from then? The same workers who are currently also paying for your state pension?
     
  14. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,314

    I don't have one pang of conscience regarding my pensions. I've paid in substantial amounts to the state throughout my career and I'm still paying income tax now. I doubt anything much will change for those of us who are already retired anyway. There's always been a funding issue because of the way the system works. I think your wrath would be best directed to those who sponge off the state from cradle to grave and contribute little to nothing.
     
  15. Mr Badger

    Soldato

    Joined: Dec 27, 2009

    Posts: 6,004

    It's not wrath, it's despair that you can't see how self centred and unreasonable you appear to be on this topic.
     
  16. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,850

    Location: Rhône-Alpes+Cambridge

    This is exactly how he thinks. He has demonstrated a singular opinion on this matter through out his posting history: he doesn't care about the generations following his. And he's certainly not alone.

    There will be a redress in a few decades, because there will have to be because it's the only way that the generations following his that can't afford to retire or enjoy the same luxuries that many of his generation are now able to enjoy - because we pay for them - will be able to retire.

    Until the current crop of selfish pensioners who have not funded the retirement they are enjoying die off, this won't change. The biggest likely redress is when the millenials - the first generation to be poorer than their parents - come to retirement age.

    Maybe something drastic will happen with leaving the EU and the potentially disastrous effects that will have on the housing market and thus in turn the pension markets. Maybe it won't.
     
    Last edited: Oct 24, 2018
  17. krooton

    Capodecina

    Joined: May 9, 2004

    Posts: 24,631

    Location: Leafy outskirts of London

    Interesting though on this, if all these 'millenial spenders' instead started saving every penny they could to afford an over-priced property, many businesses would be in trouble due to falling sales, then we would see knock-on effects such as job losses and reduced business taxation, so even less government money. Quite the catch-22 situation.

    Separately, my personal pension has taken a battering this year. With an average 22% growth between 2014-2017, this is the first year when I am seeing shrinkage, the stock market taking such a hit with Brexit hurts. Thankfully matched employer contribution means I have a sizeable buffer before I start losing any of my own money :D
     
  18. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 8,222

    Location: Wilds of suffolk

    I really struggle with this whole area. Whilst I think pensions need to be attractive, probably overly so in order to get people to forgo now in order to benefit later, I do feel however that for some they have benefited too much and there needs to be some sort of redress.

    Maybe a reduced tax free allowance for those receiving a pension would be a start in order to balance it off.
    In theory their living costs are lower, but soon you will get far more poorer pensions becoming the norm, and those are going to need all they can get
     
  19. Rroff

    Man of Honour

    Joined: Oct 13, 2006

    Posts: 61,479

    As someone who is kind of spanning the two generations age wise I find it curious - I'm not at all saying older generations had it easy, they decidedly didn't - but older generations had a much more feasible path where you could scrape, make sacrifices and save up and reap the rewards in the long term and if you didn't the short term wasn't that great. For younger generations in a lot of cases the same level of sacrifice does NOT get the same kind of rewards and they'd have to dig far deeper and sacrifice far more to get to where their parents did via that path on the other hand with the easy access to credit, etc. aside from things like houses they can live relatively well with many modern conveniences and flashy toys being relatively accessible to them sometimes even well within their means and forgoing those things doesn't mean they could be saving to attain the kind of things older generations grumble about them not saving for.

    One thing that hasn't helped is wage stagnation in many areas - for instance some of the supervisors that work under my dad were interested in a management job that came up where I'm working - only to find that at best they'd be matching their current salary and in many cases taking a 1-5K hit.
     
    Last edited: Oct 24, 2018
  20. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,314

    2.6% will be the increase for 2019. This again has triggered the triple lock because earnings are rising faster than the pension increase would have been without TL.

    It could be argued that today’s workforce are being self-centred as no other generation has complained about paying for the previous generations pensions. I’m still paying income tax even though I’m no longer economically active, so I ask myself what have I to feel guilty about, answer - nothing.

    Perhaps too many are all to willing to listen to anti-pensions propaganda.