How big should my pension pot be ?

chewmylegoff

marklv wrote: »

"nb - reducing pension benefits will not lead to a mass exodus from public service....there's no jobs available in private sector !"

I really don't think that any new government will want to crush the pensions of existing public sector workers - the hassle is more than it's worth and would cause widespread strikes for long periods and considerable anger and bitterness. For new joiners there may be more changes in pensions - this is the most likely option, although still not as drastic as what many posters in this thread believe. I don't believe that even Cameron would remove the link between salary and pension.

there are three very simple options, at least one of which is going to have to be taken, as the money to pay the increasing public sector pension liabilities is not going to fall out of thin air:

(i) reduce public sector pension entitlements.

(ii) increase employee contributions - i.e. reduce public sector salaries to fund the pension liabilities.

(iii) increase direct taxation.

whichever combination of these is used, you'll be paying for it somehow in that your net income (now, or that derived from your pension) will be lower.

Old_Slaphead

chewmylegoff,

Can't see option (iii).

Chancellor at next budget..... "I'm increasing standard rate of tax by 2p in £ to help provide for the overly generous pensions of the public sector" - I don't think so.

It'll be, average wages, lower accruals, longer working and increased contribs.

marklv

Old_Slaphead wrote: »

chewmylegoff,

Can't see option (iii).

Chancellor at next budget..... "I'm increasing standard rate of tax by 2p in £ to help provide for the overly generous pensions of the public sector" - I don't think so.

It'll be, average wages, lower accruals, longer working and increased contribs.

These measures have already happened. And there is no need to increase taxation, either. One easy and effective cost cutting measure would be to remove the widow's 50% lifetime pension and replace it with lump sum payment upon death.

Old_Slaphead

marklv wrote: »

These measures have already happened. And there is no need to increase taxation, either. One easy and effective cost cutting measure would be to remove the widow's 50% lifetime pension and replace it with lump sum payment upon death.

What ??? Chancellor has put 2p on tax ???

Measures have happened (only for new starters though).....well there's much more to come marklv because private sector cannot continue to support bloated public sector.

I'll be interested to hear what Ali has to say about it all, later today.

chewmylegoff

marklv wrote: »

These measures have already happened. And there is no need to increase taxation, either. One easy and effective cost cutting measure would be to remove the widow's 50% lifetime pension and replace it with lump sum payment upon death.

if you believe that the status quo can be preserved, and that, with no erosion of pension entitlements as they stand, we can afford to pay the pension liabilities that are being racked up, when they crystallise, without an increase in direct taxation, you are either assuming that public spending will be slashed in all other areas (scrapping the NHS maybe?), or burying your head in the sand. which one is it?

chewmylegoff

Old_Slaphead wrote: »

chewmylegoff,

Can't see option (iii).

Chancellor at next budget..... "I'm increasing standard rate of tax by 2p in £ to help provide for the overly generous pensions of the public sector" - I don't think so.

It'll be, average wages, lower accruals, longer working and increased contribs.

i'm sure no-one would put it like that - but that really is the option - if we want to pay for these pensions then only direct taxation has the revenue raising scope necessary (as we can't ramp VAT up beyond 20%, as i understand it, under EU rules). doubt increased taxes will be needed in the next government (at least, not to cover the unfunded and unaccounted for pensions black hole, not yet, a while to go before it crystallises - tax rises for other matters is a different story).

marklv

No need to bury any heads in the sand. Public sector pensions are perfectly sustainable and there is no need for any drastic changes. All that is needed is some action to keep costs under control, and that is already in process. All this scaremongering is pure tabloid drivel.

Old_Slaphead

marklv wrote: »

No need to bury any heads in the sand. Public sector pensions are perfectly sustainable and there is no need for any drastic changes. All that is needed is some action to keep costs under control, and that is already in process. All this scaremongering is pure tabloid drivel.

So presumably it's now just you and Gordon Brown who still think this then ?

In case you hadn't noticed, budget deficit is going to be around £175bn and rising.

Chancellor committed to halving that in next 2 or 3 years ie £87bn 'savings'.

Increase standard rate tax by 2p brings £10bn, VAT could bring another £10bn (hopefully it won't choke off 'recovery"). Other stealthies say £5bn.

Public sector will need to find savings of around £60bn pa.

Current cost of public sector pensions - around £25-30bn pa. I would have thought chancellor would have looked there to find the odd £5-10bn to help him on his way. Won't save a penny on cashflow in short-term but at least it'll take a bit of pressure of national debt and send out the right signals to IMF.

Even if these saving weren't needed (which I very much doubt), the disparity in pension provision with the private sector, which GB has single handedly caused, is generating so much bad feeling that it's political suicide not to at least 'share the pain' around.

Maybe Clown will get the 6million public sector votes but the rest of us want him out.

bendix

marklv wrote: »

No need to bury any heads in the sand. .

How ironic.

Paul_Herring

Public sector will need to find savings of around £60bn pa.

There's always the bureaucracy, red-tape and excessive amounts of (middle)managers they could remove from the public service. (Thinking NHS and local councils here.)

That last could double up in savings on pensions.