'Not got a pension? You will do in two years!' blog discussion

Rafter

Seems to me that everyone earning over a certain amount should be forced to make some provision for their retirement and that having that 'funded' rather than the black hole that is government with a horizon of no more than the next general election is a smart idea!

Otherwise someone who has been prudent and made private pension arrangements rather than living more exuberantly will end up subsidising those who haven't saved for a pension and require pension credits.

Pension credits should only be for those who have, for whatever reason, not been able to earn enough in their lifetime to make provision for themselves.

R.

treborg

I agree with ormus, these things come round regularly and always wind up being a long term con by government and pension companies. better by far to put the money in a high interest savings account and even though budgetting is required all the money goes to the surviving spouse if there is one and then to any surviving children. Retirement means being carefull anyway but the individual has the choice and control over their own money.
:think::A:coffee:
enjoy life, share it & give thanks!!

treborg

cliveoram wrote: »

NI contributions supposedly contribute to a State Pension, but people are living far longer than was anticipated when that was started so now we have a two pronged approach: 1) Everyone will retire at a later age and 2) they will have to pay more contributions while they work to provide enough to live on.
Let's get this clear; this is nothing more and nothing less than an additional tax, (we have no choice - so it's a tax); worse still it is not controlled by Government so someone will get rich at our expense. Is this democracy??

yes thats exactly how democracy works - someone unknown in a galaxy far away decides how people should use their money, time etc and we all comply!!
Now if only I can find that lost sheep!

madkitty

stebiz wrote: »

I thought I already paid a percentage of my wages into a Pension. It is called NI contributions. So when this is made compulsory the NI contributions will eventually never go near a pension pot!!

Thats what I was thinking too - so does that mean the last 20 years of my NI is worthless and I paid a certain percentage for nothing?

Cleany

hmm ...

ill reach retirement age in 2050 or something like that.

first of all i hope that by 2050 people will have learned that anything which people need to "opt out" of was not done for their benefit.

lets also hope that people will have learned that while money is important, its only the most important thing for people that want it. other things like responsibility and community are more important.

(come to think of it why dont people who manage massive funds of money have to tick a box to "opt out" of their responsibilites, just so it's clear to everone what they're about when it all goes wrong)

there'll be a ridiculous world population by 2050 when i reach retirement age, 30 billion or something. also the rich/poor divide will have grown to a massive size by then too.

if they haven't sorted out these (and other) problems by then, i dont think a pseudo-state supplementary pension is really going to make much difference.

however i could be wrong and there's a chance that by my "opting out" i am going to be living in a world where people who didnt "opt out" (perhaps by not even paying attention) are just getting by and i cant even afford food and am suffering horribly. would i be better off sitting in my nest watching old people starve to death on tv?

plumber2009

This will end the same way as the state pension. A FAILURE.

Anyways the state pension wont be around for much longer and no doubt the revenue raised by NEST will be squandered by the fat cats and the average joe will be robbed once more.

I pay into my own pension throgh my employer.

Labour Goverment, Please STOP!, just STOP! telling me what to do cos im sick of it. I can provide for my self thankyou.

jamesd

treborg wrote: »

better by far to put the money in a high interest savings account

I don't know about you but I don't expect to see many savings accounts that pay an average of 10.4% plus inflation. The poor returns from savings accounts mean you have to recon on doubling the amount of money you put away for retirement because of all the compounded gains you're missing.

Have a look at Appendix C of the First Report of the Pensions Commission, which contains the after-inflation returns of different types of investment over different time periods. There's a lot of variation over five year periods but it smooths out as you increase the number of five year periods and the time. Over five year periods the mean return after inflation of the UK equity market since 1977 was 10.4% with a median of 11.5%.

treborg wrote: »

all the money goes to the surviving spouse if there is one and then to any surviving children.

If you use a pension all the money, including all the tax relief, goes to the spouse or other nominated person if you haven't started taking pension benefits yet.

If you have started taking pension benefits then you can use income drawdown and again all of the money goes to the spouse, or to other people after a 35% tax charge. The tax charge increases above age 75.

Only if you choose to buy an annuity do you lose the chance to have someone inherit most of the money. Annuity buying is optional these days, not compulsory.

tylerjaffa

Just another post to clarify that NEST is aimed at low to medium earners with no pension provision. Employers can choose whether to enrol their employees into an already established qualifying scheme or NEST as long as they are meeting minimum contributions (and various other conditions such as providing a default fund). In some cases, where an employer meets the total minimum contribution set at the time (2% initially, then 5% and eventually rising to 8% of band earnings from October 2017), my understanding (I work for a private pension provider) is that employees may not need to contribute anything at all where the duty is wholly fulfilled by the employer. These schemes may be in the minority but I've seen some!

Exactly when this affects an employer/employee is determined by the number of PAYE staff they have - the Government announced the actual staging dates in January this year. Companies employing under 50 staff won't be asked to comply until sometime between Feb 2014 and March 2016.

It's also worth pointing out that if an employee opts out of NEST or their employer's qualifying scheme they will likely have to be re-enrolled in another 3 years time.

Harvest_Mouse

Rather than introduce yet another scheme to add to the confusion, I would like to see Pensions totally simpified. I doubt this will ever happen. I pay into a scheme at work, I don't really understand how it works. There is more than one scheme in operation at my workplace and the one I am in is soon to be closing to new members. We keep hearing that there is a a deficit and we will have to pay a greater percentage in to it. Whenever I read the info my brain 'glazes over'. There is no guarantee that a pension will pay out. If the company goes under and the pension pot goes to pay off the company debts. People have paid into Pensions for years and been told 'sorry all gone'. I can't remeber the name of the firm but it was in Cardiff. I think it it would be good if people could control their own Pension 'accounts'.

Happy Easter to everyone.

Honest_broker07

"That means people will be putting aside 8% of their salary to a pension – a pretty decent whack which should produce (if my memory from discussing this with pensions minister Angela Eagle a few months ago is right) an estimated 45% of final salary as a pension for most. My only problem with all this is the level of contribution is fixed for employees – either you put the whole 4% in or not at all."

so why the fuss about Local Government etc pensions Most staff are paying 6%-7% or more of salary in plus employer contributions ( so say 12% total ) to get 50%. yet people think a total payment of 8% to get 45% is OK for everyone else.

I for one having paid into a pension at 6% of salary for 32 years now will be pretty peed off if others can pay in 4% and get 90% of what I'll get