Kona TC – Member

Kryton57 – Member
Private sector here – sought financial advice last week re pensions and it was thus:

a) Best investment today would be a Stock and Shares ISA – might lose short term but would undoubtedly gain in the 20 years before I retire, and the money is instantly accessible.

Not a personal dig in anyway, more point of principle, pension are a long term investment; start work at 16 retire at 65, contribute to a pension and/or accept lower salary to ensure a poverty free retirement.

The race for jam today by the private sector will result in pensioners living in poverty during their retirement solely reliant on benefits. I am sure my children will look back and think why ho why…

I should point out I have 3 pensions already, 1 of which is work based (contribution matched by employer)

My next investment is diversification perhaps, I don’t wnat all my eggs in one basket. GearFreak – no ixdea what SIPPS is I’ll look it up cheers – I havent opened an investment ISA yet.

@Gear Freak.

Aha! Well thats interesting – I have one already. The reason I got some advice is that I have an amount stuck in a stakeholder pension from an old company which depreciated this year – becuase of the stock market fall. It was THERE (Legal & General) advisor which said I might be better with the S&S ISA instead of restarting payments into the Stakeholder (which is effectively a SIPP).

You think not then?

boblo

I suggest you go and look into the NHS pension scheme – I gave you some links are there is plenty more on the net.

the NHS pension scheme is what is known as “revenue funded” ie benefits come from the revenue ie the employer and employee contributions

Nhs scheme is ‘unfunded’

Is the scheme funded or unfunded?

Unfunded. It is paid for out of general taxation, not an underlying investment fund.

See: http://www.bbc.co.uk/news/business-11446832

Wrong Gusmac – go read up on it. It is revenue funded.

Tandem Jeremy
there is plenty more on the net.

LIke this you mean (same linky as previous poster)

Is the scheme funded or unfunded?
Unfunded. It is paid for out of general taxation, not an underlying investment fund.

What is the value of the scheme’s assets (if any) and its liabilities?
There are no assets.

The scheme liability, which is estimated by the Government Actuary’s Department (GAD), is £287.6bn as of 31 March 2010.

Source: NHS Pensions

http://www.bbc.co.uk/news/business-11446832

http://www.sppa.gov.uk/index.php?option=com_content&view=article&id=189&Itemid=758

The NHS Superannuation Scheme (Scotland) does not have a real pension fund but, as a statutory scheme, benefits are fully guaranteed by the Government. Contributions from both members and employers are paid to the Exchequer which meets the cost of scheme benefits.

Whether it comes from a fund or not is irrelevant. The employer is funded via taxation… it’s the same outcome (favourite NHS word) in the end just semantics.

So it’s not really a “pension scheme” as most of us understand the phrase,
more like a giant piggy bank which the taxpayer fills up and the government looks after.
😆

Ok – think of it like that if you want – actually I pay 8% of my salary towards it and my employer 14%.

So actually then I pay a greater % of tax than you do – is this what yo are claiming?

boblo – there’s a massive difference

a fund limits liability (*except in the public sector where the shortcomings of the fund are made up direct out of tax – ie unlimited liability), in the real world people only get the money in the fund (*or not if you were with Equitable Life – which is worth searching on)

What about the Police; lets have a go at them whilst we are at it.
They have NO pension fund whatsoever so perhaps none of them deserve a pension at all???

The truth is this goverment and many subsequent goverments spent all the money coming in to them in the form of member contributions, some of the money went to pay those actually collecting their pensions. However as the Police forces of this country have only just started to shrink in size there must have been millions or billions coming in to the government and yet virtually no money was paid out as most members were working their 30 years in order to collect their pension.

So having spent all of these contributions the government are now struggling and want to go back on deals put into place decades ago.

Also bear in mind that currently Police are entitled to claim their pension after 30 years service; this is for the priviledge of paying the government 11% of their salary (for those on the old scheme). The government are to increase this to 15% and appear to be offering no guarantees as to what each contributing member will receive.

Compare teachers, nurses and police with MPs who are still NOT contributing to their pension and judges who only have to work for 15 years (I think) to receive their non contributory final salary pension. Fair!!

<Elfinsafety>
WHATTT??? You don’t even need pensions, they’re just for the disgusting lazy nation that is the UK. Why should you be allowed the right to stop working at a certain age? My mum didn’t stop working, ever – in fact she’s still working now and has been dead ten years. She never needed a pension and neither do you. you useless intolerant lazy scum… Hazzunt/wuzzent/cuzzent to be inserted as appropriate </Elfinsafety>

as a private sector worker, can I invest in a public sector pension scheme?
if not, then isn’t that discrimination? I bet brother Crow would fight for my cause.

Ok – think of it like that if you want – actually I pay 8% of my salary towards it and my employer 14%.

So actually then I pay a greater % of tax than you do – is this what yo are claiming?

Yo, yo yo not claiming anything bro’ 😆

In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover. Some companies receive revenue from interest, dividends or royalties paid to them by other companies

from Wiki

Can’t see how the NHS generates revenue, using the standard description of the term, so both the employers contribution and the employees contribution are tax funded aren’t they ?

@Kryton

Disclaimer – I’m not an IFA, I’m not qualified! (I’ve had bad experiences of qualified IFA’s before, they cost my in laws a LOT of money, so I would always speak to 2 or 3 and then make your own mind up)

With a SIPP, you can choose how to invest your money, normally through unit trusts. You can buy units in any number of investments, with different levels of risk and potential return. You could just invest in a FTSE tracker, which would roughly follow the london FTSE market, or you could invest in say a renewable energy fund, which would then be invested in a range of renewable energy companies. Or you could invest in the shares of a single company, if you think M+S is good, you can buy shares in M+S.

With a stakeholder pension, you have no control over the investment, so you are at the whims of a ‘professional’ who is investing the money for you.

The difference between having the money in an ISA rather than a pension is that with a pension you get tax relief, so if you pay in £80 from your salary, you would get £100 in your pension pot, but only £80 in your ISA. (If you pay tax at 40 or 50%, the savings are greater.)

You should be able to transfer your current stakeholder pension into either another stakeholder pension, or into a SIPP.

Over the life of the pension you will expect the value to rise and fall on the markets, unless your crystal ball is very good and you predict the fall first and get your money out. It’s best not to look at it too much, all that matters is what it is worth when you retire. Typically the younger you are the more risky the investments you would look at (more change of growth), but as you get closer to retirement you would look to invest in less risky investments with a lower chance of growth (typically bonds such as government bonds, which is why greece defauilting is causing so much of a hoo haa as govt bonds are meant to be pretty much no-risk investments).

Both have advantages and disadvantages depending on how involved you want to be.

thats a bs argument imagine the NHS magically turns private right – say view your tax as going ot a private company for an inusrance policy then they claim when I use the NHS
Even though nothing has actually changed in terms of income or expenditure it would magically make money – it is a disengenous argument of right wing
Ps healthy people make money

as a private sector worker, can I invest in a public sector pension scheme?

Possibly, depends on what company you work for.

@gusamc I know the difference between a ‘pension fund’ and funding pension liability… that’s the whole point of my dull posts. I’m obviously not very good at that Engrish 🙂

@TJ I wasn’t actually having a go at the Public sector or your own position. I was just trying to illustrate the flawed concept of ‘revenue’ in public healthcare and how it funds pension liability. I.e. there is no such thing as revenue when a body is wholly funded by the taxpayer.

I was also pretty certain ther Govt pays public sector pensions directly rather than through a fund. It looks like that is the case as you have gone a bit quiet on it… (uncharacteristically).

Didn’t really want to get involved in this, but I can argue semantics for hours: For the NHS, there is no pot of money/pension fund, so you could say it is paid directly out of taxation.

However, it is also true that pension contributions paid by employees and employers are greater than what is paid out, and those contributions also go directly to the tax man, hence the statement that it isn’t funded by taxation.

You could argue, correctly, that the employer contributions are the same thing as taxation paying pensions, but in that case it’s not really an argument about pensions, it’s an argument about public sector pay being too high (employer pension contributions being just another part of the remuneration package, for both private and public workers). Maybe it is, maybe it isn’t, but that seems like a more honest way of framing the discussion (or argument, seeing as this is STW)

Well that didn’t last long..
http://union-news.co.uk/2011/12/breaking-news-unison-unite-and-gmb-withdraw-from-pensions-deal/

This surplus investment comes from tax. IIRC it’s only recently that public sector pensions became contributory (when was it for the NHS?) which tends to suggest, the decades old surplus is actually ‘missappropriated’ tax.

+1 Probably the best wording I’ve seen so far – my money, badly spent – what a surprise…

Let’s face it; no-one took a job because it had or did not have a good pension, they just took a job. Those with wopping pensions declare they knew it and signed up for it, and those without are now bitter because we wish we had.