@jam bo; no, not like any other mp. Corbyn's length of 'service' generates the 'entitlement' and it's perfectly ok to use him as a reference point.
I have spent a lot of time over the last 3 months with my financial adviser sorting out my affairs and it's frightening to know how little understanding most people have of financial planning and pensions.
As for public service pensions - i have read some dubious comments but ^^^ takes some beating. Working in the public sector is a career choice; it has nothing to do with any 'trade off' for lower salaries in exchange for higher final salary pensions.
The truth is that public sector salaries now exceed those into private sector for comparable roles.
I can see this thread turning into another p*s*ing contest.
[quote=frankconway ]As for public service pensions - i have read some dubious comments but ^^^ takes some beating. Working in the public sector is a career choice; it has nothing to do with any 'trade off' for lower salaries in exchange for higher final salary pensions.
That has long been the accepted position. In fact there was a thread earlier this week referring to relatively low NHS salaries being "worth more" because of the pension provision. It's true that some Public Sector jobs are now very handsomely paid but I've a feeling that they're mainly at the very top of the pyramid. Having said that, Retail, Catering and Tourism are all full of minimum wage and zero hours contracts so it's not as clear as it once was.
Re salaries [url= https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/publicandprivatesectorearnings/2014-03-10 ]https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/publicandprivatesectorearnings/2014-03-10[/url]
1. Key points
Average pay levels vary between the public and private sectors because of the different jobs and characteristics of the people within each sector
In April 2013 it is estimated that on average the pay of the public sector was between 2.2% and 3.1% higher after adjusting for the different jobs and personal characteristics of the workers
The average pay difference in favour of the public sector has narrowed since the year 2010, which in part reflects the restraints on public sector pay over this period
On average large organisations tend to earn more than small organisations and the public sector generally consists of large organisations (over 500 employees) whereas the private sector is more evenly split between large and smaller organisations
After further adjusting for the different organisation sizes between the public and private sector, in April 2013 it is estimated that on average the pay of the public sector was between 1.3% and 2.4% lower than the private sector
Looking at those who are among the lowest earners in each sector, using the bottom 5% as a cut off point, public sector workers earned on average around 13% more than private sector workers in 2013 when adjusting for the different jobs and personal characteristics of the workers. When further adjusting for the different organisational sizes the estimate was around 8% more
For the higher earners, using the top 5% as a cut off point, public sector workers earned on average around 6% less than private sector workers in 2013 when adjusting for the different jobs and personal characteristics of the workers. When further adjusting for the different organisational sizes the estimate was around 11% less
Looking more locally across the UK in 2013, when adjusting for the different jobs and personal characteristics of the workers, on average, Northern Ireland had the largest pay difference in favour of the public sector at 15% (7% when adjusting for organisation size). Public sector workers, on average, earned 8% less (11% less when adjusting for organisation size) than private sector workers in London.
Comparing low and high earners, London had the largest variation between public and private sector in April 2013. Among the lowest earners in each sector, using the bottom 5% as a cut off point, public sector workers earned 20% more (15% more when adjusting for organisation size) than private sector workers. For the higher earners, using the top 5% as a cut off point, public sector workers earned 24% less (28% less when adjusting for organisation size) than private sector workers
[url= http://www.rosaltmann.com/public_sector_pensions.htm ]http://www.rosaltmann.com/public_sector_pensions.htm[/url]
The truly worrying thing is the fact that members of pyramid/ponzi schemes don't realise it until its too late...despite many warnings
Great analysis. Thanks towzer
Fwiw ifs this year
Figure 3 shows how the difference between public sector and private sector pay has changed since 1997. The dark green line compares average hourly pay in the public sector to that in the private sector. It shows that in 2016–17, average public sector pay was 13% higher than private sector pay. The grey line makes some adjustments for the types of workers in each sector. Primarily because the public sector is mainly staffed by highly educated professionals, once adjusting for observed differences in a set of workers’ characteristics, the estimated pay differential is much smaller.[4]The Figure shows that public sector pay rose relative to private sector pay after the recession, as private sector pay fell sharply in real terms. The public sector pay restraint imposed since 2011 has returned the difference between public and private pay to around its pre-crisis level.
Pay As You Go is a more accurate description than Ponzi. Government can either invest contributions as TJ suggested, or use the money to fund the current account. The downside of investing contributions is the government then has to increase borrowing to make good on the shortfall. Swings and roundabouts.
It's not PAYG and doesn't fund the current account - so hard to comment. It is a pyramid scheme though, that is clear. Hence the current angst. If you depend on the state for your pension you need to know these things - its important, be prepared....
frankconway - Member
@jam bo; no, not like any other mp. Corbyn's length of 'service' generates the 'entitlement' and it's perfectly ok to use him as a reference point.
So Ken Clark, the father of the house wouldn't have been a better example.
The truth is that public sector salaries now exceed those into private sector for comparable roles.
Really? Actually really?
Just short of 500,000 teachers in state schools in England and Scotland. significantly fewer in independent schools. In Scotland all teachers contribute to the same pension pot at the same rate. Independent schools pay 6%+ over state schools so not more.
Policing, which private police force pays less?
Nursing? Show me the figures.
Fire service.
Military.
Let's see some numbers.
shinton - Member
Pay As You Go is a more accurate description than Ponzi. Government can either invest contributions as TJ suggested, or use the money to fund the current account. The downside of investing contributions is the government then has to increase borrowing to make good on the shortfall. Swings and roundabouts.
The bigger problem is an increased life expectancy, those taking money out now and in the next 10 years won't have put in enough to cover them to start with. Couple that with an aging population and there isn't enough going in to cover the gaps. whatever people in their 20's/30's put in won't be enough. NI etc. is in reality nothing more than taxation and the bills are going up.
It's also the reason final salary schemes were all shut down as they simply didn't take in enough to deliver the pay outs when people lived a bit longer.
...for comparable roles
You've picked one role, teaching. The ONS have picked thousands.
Those are the numbers in the ONS survey.
THe real problem is that the private sector has been allowed to get away with making the pensions it offers worse and worse over time so directors and shareholders can take more profit.
Personally I think pensions should be treated as deferred income, as thats what they are really, and accounted for in that way. This would mean that companies would be forced to properly fund pension schemes before any profit is declared and returned to shareholders. To my mind it is scandalous that companies can pay dividends and declare profits when they havent accounted for the true cost of the pensions they have agreed to incur
The triple lock makes the whole thing worse too - more unsustainable and more volatile. Madness.
Local government scheme is funded by invested money that comes from employee and employer contributions.
The authority I work for fund is in surplus at the moment.
It's all other teacher, civil service, fire, police etc schemes that are payg
I picked one that I know and have personal experience of and so have "fact" for.
Let's see the comparable numbers.
The institute for fiscal studies finds no evidence of a pay differential in the hourly rate for men. (2014)
Public sector and state pensions are benefits. Employer and employee contributions, NI creates the sense there is a fund where there isn't. In the National Accounts they are classified as benefits ( or certainly were last time I looked a couple of years ago). So they are no more a Ponzi scheme than other public spending, it's the language around it that creates that sense.
Once it is understood as a benefit paid from the overall tax pot ( including public sector pension contributions) then problem is easier to define. Recent govts are changing the rules on when and how much the benefit pays and increasing the payments in. Is it enough, time will tell, depends s lot in life expectancy increases growing or tailing off.
Btw do the pay comparisons quoted above take account of increase public sector pension contributions which are basically a pay cut as defined as cut it take home pay?
@footflaps thise charts are meaningles s(based on total guesswork of future variables), how about if inflation is 10% and the economy shrinks ? How about Greece ?
What you actually mean is they don't support your childish assertion that it's a Ponzi scheme.
What they do show (and the research behind them), is that given current demographics, the current state pension scheme is quite affordable with only a modest increase required to fund it. Obviously, they haven't considered that we suddenly turn into Greece, but then that's not a very likely solution.
Surely you should be arguing that now we have your utopian Brexit, the economy will surge to as yet unseen highs and we can double or treble state pensions will all the extra revenue from the huge boost to GDP which Brexit has unleeshed?
