Viewing 40 posts - 161 through 200 (of 287 total)
  • Have we done the potential hike in N.I. payments?
  • Premier Icon squirrelking
    Free Member

    There is a big difference between a set of people who have done very well out of historical pension schemes, large house price rises and ‘earning’ more per month via their pension and then slamming every door possible behind them than people who are working than a set of disabled people.

    FTFY

    Premier Icon unulales
    Free Member

    As written here previously. The older generation had a different hand dealt to them. They are products of their environment – just as we are to ours.
    That they have generous pensions and were able to buy houses which are now worth lots of money is just the end results of the gamble they took all those years ago.

    There were others at that time who lost their pensions in various companys over the years, and there were others who lost their houses when interest rates were crippling during the 1980`s … I understand envy is one of the 7 deadly sins, but it does not always have to be a race to the bottom.

    Premier Icon kerley
    Free Member

    That they have generous pensions and were able to buy houses which are now worth lots of money is just the end results of the gamble they took all those years ago.

    There was no gamble in having a generous pension and no gamble in buying a house when they are cheap. Those hit by housing crash in the 1980’s (me!) recovered easily from it by just buying a house when they were at the bottom.
    No envy from me, I am sat in the the same fortunate position of having a very good pension and a house with a lot of equity in it. What did I have to do to be in that position – **** all.

    Premier Icon unulales
    Free Member

    From what I have read, home interest rates were between 16-10% during the 80’s and early 90’s, and nearly 1% of all mortgaged properties were repossessed. From what the older members in my team tell me it caught a lot of people out who initially stretched themselves too thin .. their gamble didn’t pay off.

    Of course paying into a pension was a gamble back then – that quite a few subsequently collapsed for various reasons proves this; if they’d opted out and just put the money to one side they’d have been better off.

    Premier Icon thegeneralist
    Full Member

    bonuses, share options etc being taxed the same as income and there’s a shed load of extra cash.

    Hate to break it to you but they already are, or at least mine are. Both are considered to be income and are taxed (and NI) accordingly.

    Surprised nobody has picked up on this. Surely share dividends are ( tax + NI)d less than income? That’s why contractors do it, no?

    Unulales. It quite worrying the way you’re trying to portray that the exceedinly rich and lucky portion of the current generation of oldies got there through some amazingly merititcious method which they thoroughly deserve..

    Premier Icon tjagain
    Full Member

    The obvious answer is to just removed the cap on NI – far fairer and more logical

    Premier Icon kerley
    Free Member

    From what I have read, home interest rates were between 16-10% during the 80’s and early 90’s, and nearly 1% of all mortgaged properties were repossessed. From what the older members in my team tell me it caught a lot of people out who initially stretched themselves too thin .. their gamble didn’t pay off.

    Of course paying into a pension was a gamble back then – that quite a few subsequently collapsed for various reasons proves this; if they’d opted out and just put the money to one side they’d have been better off.

    Nether of those things were a gamble.
    Mortgages were actually harder to get than now and much, much harder than in the 2000s. The rates weren’t that great even when they were lower so not like going from today’s rate to 10% plus. Yes the rates caught people out just as they would now but nobody was gambling the the rates wouldn’t go up, wasn’t really a consideration.

    And relatively speaking such a low number of people have been hit by pension collapses that it is insignificant and nobody who paid into a pension saw it as a gamble in any way whatsoever, it was just a method you used which was assumed safe.

    Premier Icon kerley
    Free Member

    The obvious answer is to just removed the cap on NI – far fairer and more logical

    But that would hit the tory voters the most, why would they ever do that?

    Premier Icon binners
    Full Member

    LOL. As if people will be allowed to retire in 30 years. The retirement age will be going up 2 years every year

    This.

    People need to ignore the reassuring noises they’re being told by the government and start facing up to the cold, harsh reality.

    The kind of (triple-locked/final salary) retirement presently being enjoyed by this generation of pensioners is just a totally unsustainable anomaly which has now been rectified. A brief window of luck. Nothing even remotely similar will be on offer to anyone who follows them, other than a tiny well-remunerated minority. What’s happening at the moment is just the necessary readjustment

    If you haven’t already accepted that then you’re absolutely delusional. It’s simply unaffordable in the long term. It’s unaffordable now. Unless younger generations are to be saddled with truly eye-watering levels of taxation to support it.

    I’m 50 and have already made my peace with the fact that I will never retire. It’s just a pipe dream, so you better accept it as such. I’ve a few private pensions that I’ve paid into through my life, but looking at them its obvious they would only ever provide a subsistence level of abject poverty.

    The state pension age will be like the amount of missions they have to fly in Catch 22 before they get rotated. With the same results.

    It will be raised and raised as people approach it, and each time its raised, less and less people will make it to the new finish line

    There you go… a happy thought for you on a Sunday 🙂

    Premier Icon footflaps
    Full Member

    and no gamble in buying a house when they are cheap

    It was quite hard to buy a house in the 70s. My parents had to wait to borrow money from a Building Society as the BS had to wait for someone to pay off a morgage before they had the money to lend to them. So houses were cheap but mortgages were scarce.

    Of course paying into a pension was a gamble back then – that quite a few subsequently collapsed for various reasons proves this; if they’d opted out and just put the money to one side they’d have been better off.

    It wasn’t a gamble at all, they were extremely generous final salary schemes eg my one only required a 5% employee contribution but after 40 years I would get an index linked pension at 2/3 final salary with 50% widow pension in the event I died first.

    A very small number of schemes were the subject of fraud but on the whole they were excellent (my parents are currently enjoying the fruits of their schemes). Mine collapsed when the company liquidated, but I still got an amazing payout from the scheme, best investment I ever made (paid in less than £7k, got £200k out 1520 years later).

    Premier Icon Del
    Full Member

    Paying in to a pension now is more of a gamble imo. The government of the day may change the rules at any time and the organisation you’ve trusted your money to might fold leaving you with nothing. See BHS. Also colleagues I have who paid in to a pension scheme with their previous employer that went aot. Not much left from that. It’s the only game in town though so what are you going to do?

    Premier Icon kerley
    Free Member

    It was quite hard to buy a house in the 70s. My parents had to wait to borrow money from a Building Society as the BS had to wait for someone to pay off a morgage before they had the money to lend to them. So houses were cheap but mortgages were scarce.

    Very true, but still not a gamble. Sounds like unaleles has been talking to some old and entitled workmates who are telling them the they are in a good position housing/pension wise because they gambled and it was down to them and their big risks rather than just being around at the right time and actually doing nothing special at all.

    Premier Icon intheborders
    Free Member

    Very true, but still not a gamble. Sounds like unaleles has been talking to some old and entitled workmates who are telling them the they are in a good position housing/pension wise because they gambled and it was down to them and their big risks rather than just being around at the right time and actually doing nothing special at all.

    +1

    I’ve a final salary pension from the mid 80’s, worked there for 2.5 years and was earning £14k. The pension is currently worth £6k pa (and £4k to my OH if I die) and a minimum of 5% rise per annum, or inflation if higher.

    No gamble, you were just ‘enrolled’ on your first day.

    Premier Icon big_n_daft
    Free Member

    I’ve a final salary pension from the mid 80’s, worked there for 2.5 years and was earning £14k. The pension is currently worth £6k pa (and £4k to my OH if I die) and a minimum of 5% rise per annum, or inflation if higher.

    No gamble, you were just ‘enrolled’ on your first day.

    Really??

    Which scheme was this?

    Premier Icon unulales
    Free Member

    Unulales. It quite worrying the way you’re trying to portray that the exceedinly rich and lucky portion of the current generation of oldies got there through some amazingly merititcious method which they thoroughly deserve..

    Not all older people who own their houses and have a pension are exceedingly rich .. some aren’t rich at all.
    To place all of them in the same group of the very small group who now own million pound property and receive Police/Firemen like pensions is unfair.

    No doubt we in our thirties will have some sort of luck/advantage over those in their 30’s in 30 years time .. it’s how it is.

    I don’t agree with the whole race to the bottom thinking. We need to stop looking for problems and start looking for solutions.

    Premier Icon scotroutes
    Full Member

    Paying in to a pension now is more of a gamble imo. The government of the day may change the rules at any time and the organisation you’ve trusted your money to might fold leaving you with nothing. See BHS.

    The Pension Protection Fund has only existed since 2005 so it was actually more of a gamble previously.

    Premier Icon thegeneralist
    Full Member

    We need to stop looking for problems and start looking for solutions.

    🙄

    Premier Icon tjagain
    Full Member

    I’ve a final salary pension from the mid 80’s, worked there for 2.5 years and was earning £14k. The pension is currently worth £6k pa (and £4k to my OH if I die) and a minimum of 5% rise per annum, or inflation if higher.

    Thats a fabulous scheme – far better than any public service one

    I paid in to the nhs for 18 years. Earning from £22000 to £32000. My pension is under £8000 pa. Still a damn good deal but nothing like that.

    What is needed to be understood about public service pensions is its effectively deferred salary and is a part of the reason why many of us went into public service and put up with the low wages in exchange for job security and good pensions

    Also that all the schemes have been radically changed to make them much less valuable

    Premier Icon Kryton57
    Full Member

    I’m 50 and have already made my peace with the fact that I will never retire. It’s just a pipe dream, so you better accept it as such. I’ve a few private pensions that I’ve paid into through my life, but looking at them its obvious they would only ever provide a subsistence level of abject poverty.

    Well, there’s a lesson for everybody. Perhaps stop relying on the state/politicians to pay for your retirement and invest some self interest in saving for yourself.

    Its all very well complaining, but rarely does anything good come from drumming your fingers and expecting someone else to selflessly provide for you.

    Premier Icon scotroutes
    Full Member

    What is needed to be understood about public service pensions is its effectively deferred salary and is a part of the reason why many of us went into public service and put up with the low wages in exchange for job security and good pensions

    Many folk working in the private sector made/make the same decision. It’s not exclusive to the public sector. Neither are low wages.

    Premier Icon intheborders
    Free Member

    What is needed to be understood about public service pensions is its effectively deferred salary and is a part of the reason why many of us went into public service and put up with the low wages in exchange for job security and good pensions

    Pensions are deferred salary whether you’re in private or public.

    Really??

    Which scheme was this?

    At the time a FTSE100 supermarket chain. I’ve other deferred DB pensions, not as generous but still far better than any of my DC pensions. Most older DB schemes had elements of above x% inflation built in, and all mine have widow/widower benefits.

    I remember when my Dad passed and I worked out his annual pension from an ex-employer was greater than all his contributions (for 20 years).

    Premier Icon 5lab
    Free Member

    I paid in to the nhs for 18 years. Earning from £22000 to £32000. My pension is under £8000 pa. Still a damn good deal but nothing like that.

    whilst that might not sound great – that’s a £250,000 annuity (possibly more if you retired early). that’s pretty much a £10,000 a year saving into a fund – assuming a generous empoloyer might be putting in 10% of your salary, its still the employee putting in £7k a year (~30% of your salary) in the private sector

    I remember when my Dad passed and I worked out his annual pension from an ex-employer was greater than all his contributions (for 20 years).

    my grandfather died at 98. He had been retired for as many years as he worked, on an 85% final salary (public sector) pension – which due to inflation meant the raw pounds he got during retirement was over double what he got whilst employed. That kinda thing is obviously not terribly sustainable

    Premier Icon tjagain
    Full Member

    5lab – its a great deal ( and one no longer available since the tories decided to include public service pensions in their culture wars)- I acknowledge that. But – its a significant part of the reason I went down that road and earned much less than I could have if I had taken a different path.

    Premier Icon tjagain
    Full Member

    on an 85% final salary (public sector) pension

    What area of work because non of the schemes I know of can you get more than 65% of salary even if you have the maximum allowed contributions

    Premier Icon 5lab
    Free Member

    What area of work because non of the schemes I know of can you get more than 65% of salary even if you have the maximum allowed contributions

    ex-mod but bare in mind he retired in the late 70s, the rules were a bit different then

    Premier Icon tjagain
    Full Member

    Ta

    Premier Icon matt_outandabout
    Full Member

    I am struggling with this one.

    Speak to my father and I understand his point – he has paid in to both NI and private pensions, worked hard, contributed his lot, now expects the system he bought into to pay back out, and classes himself and other pensioners at the needier end of things. He lives pretty frugally and has given a lot of money and time to charity.

    I sit here looking at my father who has used his wealth in retirement (house capital included) to travel the world. He had / still has, a reasonable standard of living, certainly a warm home, food, clothes, car and UK travel. He is still saving and still owns a small property. He benefitted from early retirement with a payout and superannuation payments – and then went back to work as a consultant in the same job, for the same employer.

    I look at neighbours, three of the four retired on final salary schemes from local authorities, with 5 bed £500k houses they bought for £20k (which I cannot hope to own) and are open about the fact that they travel the world, give to their children regularly and drive new cars every three years.

    It strikes me it isn’t ‘me vs them’ – none of us can sustain the lifestyle and payout in old age we were promised/suckered into. [EDIT] It is based on property wealth as well. [/EDIT] The system is broken, it is too generous and too low in contributions, it costs too much to administer, and still isn’t progressive enough for those who really need it.

    Premier Icon tjagain
    Full Member

    Matt – public sector pensions are totally affordable – they really are. NHS pension fund generates a surplus every year ( Ie pays out less than it takes in) and has done since day one. Its not our fault the government spent what we paid in rather than investing it. If it had been invested it would have been the largest investment fund in the world.

    the issue here is not high public sector pensions – its the pathetic options if you are not public sector and not earning big sums and its our low tax low wage economy

    Look to the rest of europe and see how high their pensions are compared to the UK

    What we need is proper pensions for all. Not to cut down the few folk left who have decent pension schemes. Puvblic sector schemes have also been massivly cut. My £8000 ish a year under the pre 96 scheme would only be half that under the new scheme

    Premier Icon BillMC
    Full Member

    People need to realise that the only way forward is to fight their corner not set the old against the young or rearrange the sofas in Westminster. British pensions are woeful in comparison with eg France, Spain, Germany and people pay high taxes in eg Finland but look at what they get in return.

    Premier Icon wzzzz
    Free Member

    When I started my job I accepted a low wage for a final salary pension “deferred salary”

    They then changed it so a career average scheme with no increase in salary.

    Now they are changing it to reduce the benefits and increase contributions. A pay cut.

    At no point were the benefits to those receiving their final salary pensions cut. Why do I get a pay cut so they can continue to pay benefits to retired folk without the promise of the same benefits?!!?

    I’m leaving to join the private sector on a substantially higher salary and will take my chances with a SIPP.

    I look at neighbours, three of the four retired on final salary schemes from local authorities, with 5 bed £500k houses they bought for £20k (which I cannot hope to own) and are open about the fact that they travel the world, give to their children regularly and drive new cars every three years.

    The flip side is that they are SPENDING that money. All those people involved in the supply chain of their new cars and the new kitchens they put in get paid. That house value will go towards their care if they need it paying peoples wages. Anything left will go to their children to spend.

    I’m sure some of my own pension is invested in car manufacturers and care homes so I get some of it.

    So the money doesn’t just disappear. It is clawed back in tax revenues and circles around the economy.

    However there was a shift to personal wealth that that generation enjoyed; now we are seeing a shift back to “the wealthy” or shareholders form your average worker.

    Premier Icon poly
    Free Member

    Speak to my father and I understand his point – he has paid in to both NI and private pensions, worked hard, contributed his lot, now expects the system he bought into to pay back out, and classes himself and other pensioners at the needier end of things. He lives pretty frugally and has given a lot of money and time to charity.

    I sit here looking at my father who has used his wealth in retirement (house capital included) to travel the world. He had / still has, a reasonable standard of living, certainly a warm home, food, clothes, car and UK travel. He is still saving and still owns a small property.

    MOAB – I’m struggling to reconcile the bits in bold.
    My own parents are definitely not living a flamboyant lifestyle travelling the world, but as far as I can tell are still bringing in at least as much in pensions as they actually spend. They are sitting on cash they inherited* that they don’t really know what to do with. None of the next generation actually need it and we would encourage them to enjoy it because they had a very frugal working life so should enjoy it now, but they are so ingrained to not spend I expect it will still be there when their life is over (be that literally or metaphorically when they go to a care home!). I don’t think they would object to increased taxation on wealthy pensioners (e.g. adding NI to pensions – especially if you excluded the state pension from that, plenty would fall into it, but no poor pensioner would), they would actively support a reduction in inheritance tax and tightening of rules for those who want to avoid it.

    The greatest inequality in the UK comes from the fortune you have in who your parents are – and we should be doing more to address that.

    *we aren’t talking anywhere near the Inheritance Tax threshold, but I believe more than the value of their small home.

    Premier Icon nickjb
    Free Member

    Not all older people who own their houses and have a pension are exceedingly rich .. some aren’t rich at all.

    22% are millionaires (or in a household with over a £1 million in assets to be precise) so no, not all, but there is a big pot of money there that could be taxed a little more.

    Premier Icon poly
    Free Member

    22% are millionaires (or in a household with over a £1 million in assets to be precise) so no, not all, but there is a big pot of money there that could be taxed a little more.

    Wow, is that true? [Edit: just reread it – perhaps some clever headline stats – there do you mean House Value + Pension Posts for both people in a couple + Cash assets for couple + Other assets > £1M. ? That just about seems more feasible?]

    Premier Icon scotroutes
    Full Member

    If you were to do that same sum for the population as a whole, and taking into account projected house values and pension pots, would the percentage of “millionaire” households be greater or smaller in future? I suspect greater as there would be more working women in each couple.

    Premier Icon gonefishin
    Free Member

    If you were to do that same sum for the population as a whole, and taking into account projected house values and pension pots, would the percentage of “millionaire”

    Talking about “projected” wealth is meaningless. The fact is that on a population level retirees are the wealthiest sector of the population which also pays the lowest rates of tax. (No NI and we don’t really tax asset wealth in this country). We should have a tax system that discriminates based on age. It should be income and wealth only.

    Premier Icon thegeneralist
    Full Member

    some clever headline stats – there do you mean House Value + Pension Posts for both people in a couple + Cash assets for couple + Other assets > £1M. ? That just about seems more feasible?]

    That seems a pretty dodgy definition of a millionaire TBH. I imagine a lot more than 22% are in that category.

    < edit. Just realised I don’t have a clue what that 22% refers so. So I’m clearly talking shite. But that’s a rubbish definition of millionaire imho>

    Premier Icon BillMC
    Full Member

    Houses are questionable in a definition of ‘wealth’ since you do not, if you only own one, derive an income from it. Home ownership doesn’t make you a landlord it’s more of a long-term consumer durable.

    Premier Icon matt_outandabout
    Full Member

    @poly – I am with you on it.

    It seems there is an expectation to much higher standard of living among many – my father included – than I see as ‘necessary’.

    But then wouldn’t we all aspire to and vote for a higher standard of living in our retirement?

    As I said though, without drastic changes to our welfare, health, social and pension provision, and a huge change in how we ‘do’ tax (mostly unpopular things, so no votes) I just don’t think we can afford it ongoing.

    Premier Icon gonefishin
    Free Member

    That seems a pretty dodgy definition of a millionaire TBH. I imagine a lot more than 22% are in that category

    Total value of all assets seems like a pretty good definition to me. What else would you propose?

    Houses are questionable in a definition of ‘wealth’ since you do not, if you only own one, derive an income from it

    The same lack of income argument could be made about gold or almost any other commodity. It still has value.

    Premier Icon thegeneralist
    Full Member

    Total value of all assets seems like a pretty good definition to me. What else would you propose?

    Well, for starters I’d propose that the term apply to an individual rather than a couple.😝

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