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The Great Pension Scandal

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

  1. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 9,696

    Location: Wilds of suffolk

    Income tax (I have highlighted the key for you there) places no emphasis on being economically active, as you know the key was in the title, Income
    So now you also want to shirk your responsibility to pay for everything else you consume, like defence?

    You are not paying NI so you are paying less tax than someone who is working with the same level of income as you. They are paying for the social element, as well as their future pension. You are paying nothing for the social element.
    TBH your getting a very good deal right now.

    They should get on and roll NI into income tax, that would cheer a few up ;)

    being pretty disingenious with teh no one complained about paying for previous generations. They havent gone back that far, and in real terms they are far more valuable now.

    I dont even see people complaining now they need to pay, all I see is people who have been great net beneficiaries complaining that there may need to be some redress
     
  2. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,971

    Location: Rhône-Alpes+Cambridge

    Except in some cases it's not even as if younger people can get the same level of retirement rewards.
     
  3. Rroff

    Man of Honour

    Joined: Oct 13, 2006

    Posts: 64,291

    An interesting one as the maths still works pretty well if you start early enough - unfortunately before most people will have got their heads around how important it is and it doesn't take many years later for the picture to change significantly. I have to say I'm starting to think work pension contributions should be as compulsory as paying NI, etc.
     
  4. D.P.

    Caporegime

    Joined: Oct 18, 2002

    Posts: 30,140


    Did this change in the UK recently?

    Yes, a pension contribution should be compulsory. It is here in Switzerland, apart from the state pension you have to pay in to a private pension scheme through work who have to least least match a certain percentage based on age. Starts off at like 2% but increases to around 10% that gets matched, with most good explorers going above the federal minimum. There is then an option 3rd pension pot you can contribute to.
     
  5. Rroff

    Man of Honour

    Joined: Oct 13, 2006

    Posts: 64,291

    The only recent change as far as I know is that you get auto-enrolled now when earning above a certain threshold somewhere around £800/m not sure exactly.
     
  6. Freakbro

    Capodecina

    Joined: Jul 29, 2010

    Posts: 15,562

    Location: Lincs

    Yea, Automatic enrolment is at the equivalent of £10,000 pa and the top rate statutory minimums (from Apr 19) is 5% employee and 3% employer.

    The employee has the option to Opt out within 30 days, but then they get re-assessed and auto enrolled again every 3 years.
     
  7. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,971

    Location: Rhône-Alpes+Cambridge

    They are compulsory now above a certain threshold as above. How do poorer people afford that?

    I agree that in an ideal world everyone would start early enough - I was fortunate enough to start a private pension at 18. The reality though is that if you want to save for a deposit on an [overpriced] box on the housing ladder... well most aren't going to have anything left over for a pension.
     
  8. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,341

    I was discussing 'state pension' not 'final salary schemes'. I don't discuss my previous career though it did include FS pension.
     
  9. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,341

    Hmm! I seem to remember already being taxed on this income and savings throughout my working life. Now I'm getting some of my own money back I have to pay tax on it again? BTW not all pensioners pay tax. It depends if you exceed your personal allowance.

    You need 35 years of NI to qualify for full SP I paid 48 years, so again the government well up on the deal, I'm not. [/QUOTE]
     
  10. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 9,696

    Location: Wilds of suffolk

    Ooo look more deceit. You will have had reduced contributions when making those payments.
    The majority of pensions are built up pre-tax.
    There has been consultation into changing this and taxing it now, but making the proceeds tax free, the feeling is that will reduce saving into pensions however.

    We have no concept of things only being taxed once in the UK. Its not, nor has it ever been a provision anyone has attempted to put in place.
    We all get taxed multiple times on the same income, thats just how it works. If we didn't then the basic rate would probably have to be more like 50%.

    But yet again, its not just a pension payment, its for other things as well, but... The point made and argued for getting rid of NI is that its put into general taxation basically its not ring fenced either in income or expenditure to the government.
    (IE if they have a surplus they don't reduce NI/increase services and if they have a shortfall they don't increase NI/cut services)

    Basically NI is treated as a short term income source and has never been invested.

    There isn't, nor has there ever been a deal. Its taxation and the government decide who pays what and when, bar massive civil discord (eg polltax) then you just pay what you are told, with no guarantees or anything.
    A deal infers a contract, there isn't one. If the government tomorrow scrapped the BSP, there would be no legal grounds for a challenge. For sure there would be some significant issues, but legally they could change it or do away with it.

    The below table shows how low the rate was based on expectations at the time. If you were paying at the top of this table you were basically underpaying compared to what we understand today :)

    1975 - 1976 the contribution was at 5.50% up to the upper limit.
    1976 - 1978 the contribution was at 5.75% up to the upper limit.
    1978 - 1979 the contribution was at 6.50% up to the upper limit.
    1979 - 1980 the contribution was at 6.75% up to the upper limit.
    1980 - 1981 the contribution was at 7.75% up to the upper limit.
    1981 - 1982 the contribution was at 8.75% up to the upper limit.
    1982 - 1989 the contribution was at 9.00% up to the upper limit.
    1989 - 1994 the contribution was at 2.00% on the lower band of earnings and then at 9.00% up to the upper limit.
    1995 - 1999 the contribution was at 2.00% on the lower band of earnings and then at 10.00% up to the upper limit.
    1999 - 2003 the contribution was at 0.00% on the lower band of earnings and then at 10.00% up to the upper limit.
    2003 - 2011 the contribution was at 0.00% on the lower band of earnings and then at 11.00% up to the upper limit and 1% on earnings over the upper limit.
    2011 - the contribution is at 0.00% on the lower band of earnings and then at 12.00% up to the upper limit and 2% on earnings over the upper limit.
     
  11. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,341

    Are you quoting figures for 'state pension' or private because as said previously I'm talking about SP and NI.
     
  12. Mercenary Keyboard Warrior

    Sgarrista

    Joined: Aug 4, 2007

    Posts: 9,696

    Location: Wilds of suffolk

    Well a combination of both as you said you had already been taxed on it. As we generally tax income whether its state or private is pretty irrelevant as its basically untaxed at source and taxed when it becomes income.

    The table above is for NI, showing how the rate has had to go up as the amount being taken out to pay for these benefits has exceeded the income. I believe it still runs at quite a deficit although I haven't seen recent figures and cant be bothered to go look them up.
     
  13. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,341

    The fact remains whatever the level of take I still paid far in excess of what is required for the SP.
     
  14. d_brennen

    Capodecina

    Joined: Jan 30, 2009

    Posts: 15,370

    Location: Aquilonem Londinensi

    Listen, while you're working you pay tax. That's how it is, lucky you for working so long. You're also likely to live longer than previous generations and cost the state for maintaining your failing body. Shall we reanimate your ancestors so they can pay more tax to support that?

    Got to love it when millennial entitlement spreads to pensioners.
     
  15. FishFluff

    Soldato

    Joined: Nov 7, 2003

    Posts: 5,138

    Location: Deepest, darkest Leeds

    Pensioners are far more entitled than millennials, with a side helping of 'it was better in my day'. Unfunded state and final salary pensions, winter fuel allowance, free bus passes, OAP discounts. The list goes on.
     
  16. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,341

    I've no problem with that so long as others don't have a problem with me drawing my legal entitlements?
     
  17. Faustus

    Soldato

    Joined: Mar 20, 2007

    Posts: 5,341

    Yep all legal entitlements.
     
  18. platypus

    Caporegime

    Joined: Jul 25, 2003

    Posts: 38,971

    Location: Rhône-Alpes+Cambridge

    Sorry got to pull you up on this. The current crop of retirees act far more entitled than the millennials. They also have, on average, a lot more, and don't forget they're going to be the first generation poorer than their parents.
     
  19. robfosters

    Caporegime

    Joined: Dec 1, 2010

    Posts: 31,017

    Location: Welling, London

    Bit of a bump, but the WASPI women have lost their case. :(
     
  20. Greebo

    Caporegime

    Joined: Jan 20, 2005

    Posts: 32,198

    Location: Co Durham

    Good job for the govt as the £181bn would have put a massive hole in their budgets on top of the £50bn they have already committed to which all assumes we get a deal before 31st oct.

    Although if the govt had lost, HS2 would have been dropped like a stone.