Huge row over pensions report

Dora_the_Explorer_5

Oh dear, tin hats all round as I suspect war is about to break out everywhere on this. Just read the Times front page which suggest Brown wants to break the deal cut by Johnson on the public sector retirement age = strikes, blackouts, dead bodies in streets - your worst scenario here.
I do agree with Margaret but many women were not as financially educated as we are now and a difficulty was weekly wage £2.8.0d - NI contribution 4s 8d - bit of a no brainer if married women were given the option to reduce this outgoing (my personal experience).
Changing the retirement age to 67: many of today's 70 and 80 year old men left school at 14 and retired at 65. Many of the people moaning about working until 67 will have been in education until 18 so they will still work 2 years less before retirement than previous generations. I exclude Glaswegian men from this as their current life expectancy is 67.
I think Brown is in a serious fix and wonder if he'll try a trade off; public sector retirement age raised to 65 and decent increase in SRP now. Looking forward to his pre budget statement with bated breath. You know there's something tacky and disgusting about considering retired people a burden on the state. Those retired now ensured we have a labour government rather than a national socialist one. Dora

djohn2002uk

I'll make another contribution to this thread when I can get this damned helmut to stay above my eyes long enough.

CIS

At the end of the day, due to the mess Gordon Brown has got in to with the finances, there's no way he'd allow conversion of MWRRE to full NI, it would cost too much money, and then you bring the question of those already retired, do you ignore them or backpay ?
MWRRE is coming to an end soon. in the next decade or so those who paid will be over pension age and will at least have pension credit or similar to back them up, more so than those who retired pre MIG/PC.

Gordon will do anything to bridge the gap in the finances, and the excuse of people living longer gives him the ideal way to save money on two parts; pay less pension after retirement before people die, and an extra 2 yrs of tax and NI.
It may just be me but if this happens its probably the 1st step towards a pension of 70 or so within the next few decades, regardless of life expectancy.

The changing of civil service pensions is an easy move for him apart from the civil servant she has the support of the general public.

Most of those are in the postition where they are uneducated as to the actual value of civil service wages and pensions and believe that massive savings are to be made by cutting them. In reality cutting the pension of someone on £4-5K per year is only going to force them to rely on more expensive state schemes such as pension credit.

caveat_emptor

CIS wrote:

At the end of the day, due to the mess Gordon Brown has got in to with the finances, there's no way he'd allow conversion of MWRRE to full NI, it would cost too much money, and then you bring the question of those already retired, do you ignore them or backpay ?.

You can bet that Gordon Brown will be planning to make a saving NOT higher expenditure after the Turner Report. Increasing the state pension for all is not an option, I believe he will be aiming to reduce increases to all but the means tested cases AND increasing the pension age for the private sector AND increasing the pension age for the public sector (doing a deal between the existing 60 years and private 67 years).
Unless, that is, he is prepared to further increase taxes by 2% or 3% and I can't see many people voting for that.

CIS

AND increasing the pension age for the public sector (doing a deal between the existing 60 years and private 67 years).

Theres no need to do a deal between the 60yrs and 67 yrs figure, they're two different figures.

At the momemt civil servants get theit occupational pension at 60 and their state pension at 65 (ignorning women who retire at 60). Most private sector workers can take their occupational pensionat 60 at then their state pension at 65.

In the main there's no difference at all in the ages that they can take a pension. Okay, you can argue that as the civil service pension is backed by the state thats its in a good enough shape to allow people to draw it at 60, but a lot of private sectors schemes are the same.

People need to differentiate between occupational and state pensions and they'll realise that as far as retirement age goes civil servants are no better than anyone else.


As far as taxes go, he wont need to increase as I can see that there will be a slightly higher pension, offset therough the loss of 2 years worth, so a saving their, and then two extra years of NI and Tax in , so an increase ther.

What will happen is that they'll do away with the higher tax code for peole who carry on working after SPA and ensure they carry on paying NI, probably by a paying a reduced rate towards healthcare etc.

caveat_emptor

CIS wrote:

Theres no need to do a deal between the 60yrs and 67 yrs figure, they're two different figures.

Mmmmm don't understand that logic. I would have thought that if civil servants have to work on after 60 before drawing their occupational pension it saves the exchequer pension payments.

cheerfulcat

CIS wrote:

Okay, you can argue that as the civil service pension is backed by the state thats its in a good enough shape to allow people to draw it at 60, but a lot of private sectors schemes are the same.

The civil service pension is not "backed by the state"; it is paid by the taxpayer. It is not " in a good enough shape ", either, as unlike with private sector pensions there is no fund.

CIS

The logic is that people are comparing the occupational age of 60 with the SPA age of 67 as though there's a benefit to being a civil servant, in that can retire up to 7 years early. They can, but only with an occupational pension, not a state pension, exactly the same postition as millions of others.

By all means raise the occupational scheme age from 60 to 62 for everyone, leave it 5 yrs earlier than pension age as it now, at the end of the day civil servants are tax payers like everyone else and would like to see the savings, but if another industry had forced changes to their scheme just because the exchequer see easy pickings there would be an uproar.

If its going to be changed at least keep a level playing field for all schemes.

Dora_the_Explorer_5

The difficulty is that public sector pensions are funded from the public purse and private sector pensions aren't and I think that's the cause of resentment.
Other industries are forcing changes to their schemes by closing down final salary schemes, doubt if HMG will get away with doing that for public sector workers.

deemy2004

Public sector pensions (including LA shortfalls form LA pension funds), are paid from current taxation.

The current gap is £10 billion a year...which is the same amount as the black hole in Gorden Browns finances.

This gap is likely to grow to £40 billion a year... yes so far times have been good and we have been able to cope with a £10 billion gap through year on year increasing tax revenues ... but if tax reciepts fail to grow or even decline then the gap could very well be much higher than the estimated £40 billions.