Is there really a pension crisis?

[david and julie]

I was talking to someone the other day about the supposed pension crisis and I have my doubts if it exists.

I understand the demographic point but not the money.

Apparently some nurses are in for good rises next year with regrading. Lets presume a nurse is on a G grade on retirement. If next year the Gov gives 10% to G grade working nurses. The pensions go up the same because it is based on that grade.

Another example is, I presume, the firemen. They go on strike(rights and wrongs apart) and get good rises. Pensioner firemen pay is a percentage of the above and also rises in line.

Does the same happen with all the public sector?

Can anyone confirm if I have this right as I am confused because it is different with private pensions.

 

[2scoops0406]

Yes, sadly there is a massive problem i.e. about 56 Billion which equates to about 16p in the pound in the reasonable future. In some respects, I'm happy that mine is a private pension, in which the funds are legally ring fenced. This doesn't of course shield me from the prospect of paying much larger taxes in the short term.

 

[oilman]

........ I'm happy that mine is a private pension, in which the funds are legally ring fenced.

I'm glad you're happy. Mirror Group newspapers (Rupert Maxwell), Equitable Life, any number of recently bankrupted firms, still, I expect the people are similarly happy that it was legally ring fenced.

 

[2scoops0406]

........ I'm happy that mine is a private pension, in which the funds are legally ring fenced.

I'm glad you're happy. Mirror Group newspapers (Rupert Murdock), Equitable Life, any number of recently bankrupted firms, still, I expect the people are similarly happy that it was legally ring fenced.

Ring fencing was brought in specifically after the Mirror scandal. It is not possible for a company to use pension funds for anything other than providing pensions now. That is not to say however that your fund may still be hopelessly mismanaged, and you'll still end up with F**k all but at least you can sleep easy in the knowledge that you lost your money through sheer incompetance, rather than fradulent activity !!

 

[pipme]

D&J
No, generally once in receipt of pension, it is if you are lucky or Govn backed, increased annually with inflation (index linked) ...

Look out, the 'new' (CPI) euro inflation index gives a lower value than the trusty old 'RPI' or 'RPIX' the latter does not take mortgages into account.
Surprise, surprise ... the 'new' index does not take local or council tax increases into account as well as mortgages !!!
http://www.statistics.gov.uk/cci/nugget.asp?id=19

Currently stnd OAP is increased by RPI .... but do not hold your breath !!
Used to be linked to average wage increases (historically beats inflation) ... much nicer !!

The main upward influences on CPI inflation came from increases this September in the price of foreign holidays and furniture. In contrast, the cost of holidays to a range of destinations fell a year ago, as did the price of some furniture goods.

So what has that to do with the price of fish ?? Wot abaht the council tax then ?? Bladdy furniture and holidays .. who eats that then ?

Not much sense ring fencing nowt ...
You young guys should take an interest in your company schemes and get into the calcs .. Know how to calc examples... this forces you to ask the right questions .. demand answers .. then you will understand what is happening with your scheme, get involved, tis your future ... wether director or doorman ... suddenly it arrives.

You are getting me at it Davo-Ju !! Biting well, too !!
P

 

[kendor]

Ring fencing was brought in specifically after the Mirror scandal. It is not possible for a company to use pension funds for anything other than providing pensions now. That is not to say however that your fund may still be hopelessly mismanaged, and you'll still end up with F**k all but at least you can sleep easy in the knowledge that you lost your money through sheer incompetance, rather than fradulent activity !!

Even with the changes corruption goes on, with our and i stress OUR pension the governors decided to award a Director who'd been employed for less than 6 months to receive a golden handshake of £500,000 plus a fully paid up enhanced pension to which he'd contributed nothing all out of our funds!! so much for fair play.

 

[pipme]

These things happen because we allow them !!

What is better .. Watch the 'fools lantern' with likes of Becks prancing about on grass, making HIS fortune .. or getting knowledgeable about your own pension scheme ... company appointed trustees .. who are they ? Who nominates ? How to calc a pension? etc.

If you just wanna sit back and not get involved 'They'll take care of me, I am important' Well, then that is probably why you are employed and not in business ...

It is not just me having a go about pensions ... a recent Govn hymn too, but they know how little real interest there is among their compliant nation, I mean, no real media screaming thus far .. so who cares ? Feathers will be plucked .. with little hissing I am afraid.
P

 

[AdamW]

I am in a company pension scheme, I work for a very large bluechip company. So hopefully that will do alright.

However, I am not planning on staying there for the next 40 years. So what happens if you up sticks and move to another company after say 3 or 4 years? Do they transfer your contributions into the pension scheme of your new company? Or are these things all very communist, do they treat you the same if you have worked at the company for 1 year or 40 years when it comes to retirement?

Was reading something the other day about the proposed increase in retirement age: a manual-workers' union pointed out that the average age at which their former members die is 71... more than a bit rough if people have to start retiring at 70.

 

[pipme]

You have the option of moving your accrued contributions or 'pot' to the next company's scheme. If that should be a more generous scheme then, for example your 4 yrs may 'buy' less years in the new scheme ... Most go for that and usually 'buy' the short fallen years back in the new scheme. ... Like for example joining the Police .. low retirement age so each year of contribution buys more pension.
The problem with leaving the pension 'pot' with the old company .. which would normally be an option, is that of keeping in touch ... having knowledge of the 'pot' value ... the 30yr 'pot' brings home the bacon!! long term growth etc.
Heard the radio interview ... Manufacturing engineering and metal working .. more the latter .. for a short life .. Another reason for early exit !!!
-----------------
I have now 'been there and have the tee shirt' ... The guys who took interest and took up AVC's etc were the leavers walking at 60 with tens of £ks lump sums and good pension income ..... Their colleagues who had just 'gone with the flow' Were quite jealous with £20k less lump and half the income ... the old pension story, when it is too late .. it really is too late !!
Aother known fact .. working beyond 60, on the average, shortens your expected life.
P

 

[IanDB]

I've been trying to work out where the problem lies. As usual there are loads of headlines and sound bites but little knowledgable debate about the issues.

As far as I've been able to fathom it, the concern surrounds those who haven't been saving enough through pension schemes either by not joining them or putting too little into personal pension plans. This all stems from the fact that options exist for people not to join company schemes (and now no longer have a choice anyway) or that small companies never had a scheme in the first place.

Anybody who's in a reasonable scheme should be OK (unless the chairman is Robert Maxwell). As far as government employees are concerned, I believe that the fire service, for example, doesn't have a pension scheme as most people understand them. Today's pensions are paid out of today's pension contributions - there is no savings scheme. This has given the service all sorts of funding problems and I don't believe they've sorted it out yet.

So the upshot is that all of us in the private sector who have been good kids by diligently putting money away subsidise the (in places index linked) government sector pensions through tax contributions and those of us who haven't are likely to be s**fted by future governments.

Having said all that, I hear of pensioner poverty on TV etc, but I've yet to meet any who are really on the breadline.

 

[big-all]

heeelllooo iandb.

Having said all that, I hear of pensioner poverty on TV etc, but I've yet to meet any who are really on the breadline.

pensioners are proud people
there are of course lots of well off pensioners
there is also a lot in abject poverty but are to proud to let you know so or ask for help APEARENCES CAN BE DECEPTIVE

 

[pipme]

I'll keep moaning as long as we have one Brit OAP ... at or near the breadline .. and one non-Brit on handouts.
I know who should be near the back of the queue ... charity starts at home ... When one's home is in order one looks to help the local community .. Not before !!

P

 

[ban-all-sheds]

I am in a company pension scheme, I work for a very large bluechip company. So hopefully that will do alright.

I did too, and I thought that, and I had quite a reasonable final-salary pension built up.

The the company was taken over by another one, and they closed the pension scheme down while it was in an underfunded state and paid us all pitiful lump sums (about 1/3rd of what was needed to buy annuities that would pay the same pension to which we had been entitled).

 

[IanDB]

there is also a lot in abject poverty but are to proud to let you know

Big-all, I agree totally with the sentiments but as a proportion, how many are in abject poverty? As a society we have put great store in looking after elderly people through benefits, heating allowances etc. However, in my fairly broad experience I have yet to come across any pensioner suffering real hardship. There are undoubtedly some but I don't believe there are that many.

Just to add another dimension to the debate, I think that we have probably skewed the system too far to the elderly amongst us to the detriment of the younger generation who cannot afford places to live let alone contribute to a pension scheme that may never pay out.

BTW, my dad was in Mirror Group, my father-in-law with a Maxwell subsiduary. my dad got most of his pension, my father-in-law lost half of his. The name M*****l is not mentioned in our respective households.

 

[kendor]

This may sound harsh and it's said in a loose sort of general terms as some people may fall under it and others not but i feel that pensioners should have mostly paid off mortgages and have a nest egg to fall back on whereas a big majority of young couples are struggling to bring up children with big outlays apart from the mortgages etc and therefore more should be done to help them at a time when they need the money not after the house has been paid off!
so in the tax cuts more money should be put aside to help the ones struggling, there are a lot of "pensioners" around places like bournemouth who really dont need any assistance but will make a big noise to the contrary That really gets up my nose, when there are others who are genuinely on the breadline.
so just because you have reached 65ish shouldn't entitle you to any special treatment.
it looks like the generation thats struggling now will also struggle in the future when they reach that age,no special treatment will be on offer for them i'm sure