State pension age rise needed to balance books

StevieJ

Procrastinator333 wrote: »

Does your employer offer a pension scheme?

Whate are the employer / employee rates?

I'm not asking to be difficult or confrontational. Many people just don't get understand what is on offer. And many also don't get how much even small contributions are actually worth because of a) tax, b) employer rates and c) salary sacrifice.

The longer you leave it, the more you end up having to put in. Ignoring the fact money doesn't have time to grow, if your employer has say a 4% employer for 3% employee scheme.

If you do that for 20 years, it costs you 2.4% per year out of net pay for 20 years.

If you wait 10 years to join that scheme, to end up with the same contributions you have to put in your 3% you missed, plus the 4% employer you missed. So 10% for 10 years. Which in net pay terms is then 8%.

So for 20 years you can pay 2.4% net pay. Or for 10 years you can pay 8% out of net pay.

And now it sounds like you are falling in to the category of Oh well, it is too late so forget it.

You still don't get it do you? a large number of people do not have an employer feather bedding their retirement, I am lucky as I guess you are but many are not

Graham_Devon

Procrastinator333 wrote: »

Does your employer offer a pension scheme?

Whate are the employer / employee rates?

I'm not asking to be difficult or confrontational. Many people just don't get understand what is on offer. And many also don't get how much even small contributions are actually worth because of a) tax, b) employer rates and c) salary sacrifice.

The longer you leave it, the more you end up having to put in. Ignoring the fact money doesn't have time to grow, if your employer has say a 4% employer for 3% employee scheme.

If you do that for 20 years, it costs you 2.4% per year out of net pay for 20 years.

If you wait 10 years to join that scheme, to end up with the same contributions you have to put in your 3% you missed, plus the 4% employer you missed. So 10% for 10 years. Which in net pay terms is then 8%.

So for 20 years you can pay 2.4% net pay. Or for 10 years you can pay 8% out of net pay.

And now it sounds like you are falling in to the category of Oh well, it is too late so forget it.

I'm self employed. My pension scheme is my ISA, which, unfortunately, can't even keep pace with inflation.

Let me put this to you. I live in Devon. Most companies are small. Haven't got departments such as HR etc, let alone decent pension schemes.

People work in cafes, they clean, they sell ice creams out of vans, the rent pedal boats and canoes out to tourists, they work in bespoke candle and art gallery shops, they work in, or run guest houses.

There isn't many big companies outside of the 2 cities here.

All of these people I mention probably will not have pension schemes, as they are small companies. The UK is not made up of large companies all throwing money at your pension pot.

Reading this thread I was seriously starting to think "god, it must only be me". But it's not. This is life. People work in small business's with no pension schemes, selling candles in shops. It's what happens outside of London and the major cities. Not everyone is in a high rise building, which is signed up to Investors in People with a trade union to join.

olly300

StevieJ wrote: »

You still don't get it do you? a large number of people do not have an employer feather bedding their retirement, I am lucky as I guess you are but many are not

As far as he is concerned all employers offer pension contributions.

He refuses to believe both myself and PN that this is not the case particularly with small employers.

He also presumes that everyone on here is employed as a permanent employee and not as a temp, short term contract, sole trader, freelancer or on some other employment contract.

chucknorris

Graham_Devon wrote: »

I'm self employed. My pension scheme is my ISA, which, unfortunately, can't even keep pace with inflation.

I think this period will be short lived and within 3-4 years we will return to the 6% (ish) Isa's

Graham_Devon

chucknorris wrote: »

I think this period will be short lived and within 3-4 years we will return to the 6% (ish) Isa's

Well thats good, cus my ISA is also my house deposit

Unfortunately it's also everything else that may crop up that the monthly wage doesn't cover

StevieJ

chucknorris wrote: »

I think this period will be short lived and within 3-4 years we will return to the 6% (ish) Isa's

But will that be in response to 8% inflation?

Elaine_Wilson

Just to add an extra point into the argument there has not been much mention of the length of the working life.

I appreciate that my national insurance contributions have not been ring-fenced for payment of my pension but have been used to pay the pensions of those already retired.

But when I start to take my state pension I will have paid into the system for fifty years. Many of those younger than will me will pay for a lesser period, even with the current proposals to increase the retirement age.

olly300

Graham_Devon wrote: »

All of these people I mention probably will not have pension schemes, as they are small companies. The UK is not made up of large companies all throwing money at your pension pot.

Agreed.

Graham_Devon wrote: »

Reading this thread I was seriously starting to think "god, it must only be me". But it's not. This is life. People work in small business's with no pension schemes, selling candles in shops. It's what happens outside of London and the major cities. Not everyone is in a high rise building, which is signed up to Investors in People with a trade union to join.

There are loads of small businesses in cities as well including London.

It's just that if your life is dominated by working for large enterprises you don't tend to see them. Particularly if the small businesses providing services to your large employer make it look like they are larger by doing things like having a good website, using virtual office services and using lots of temps/freelancers.

olly300

Elaine_Wilson wrote: »

Just to add an extra point into the argument there has not been much mention of the length of the working life.

I appreciate that my national insurance contributions have not been ring-fenced for payment of my pension but have been used to pay the pensions of those already retired.

But when I start to take my state pension I will have paid into the system for fifty years. Many of those younger than will me will pay for a lesser period, even with the current proposals to increase the retirement age.

The reason the government changed it is to favour women who have and will have had career breaks. Not fair on those who have worked longer but life isn't fair.

For example I've met people who work in "normal" jobs i.e. those without a designated lower pension age who have been able to take their pension at 50. No one now is allowed to do that.

ILW

Elaine_Wilson wrote: »

Just to add an extra point into the argument there has not been much mention of the length of the working life.

I appreciate that my national insurance contributions have not been ring-fenced for payment of my pension but have been used to pay the pensions of those already retired.

But when I start to take my state pension I will have paid into the system for fifty years. Many of those younger than will me will pay for a lesser period, even with the current proposals to increase the retirement age.

A point I made earlier regarding many young people not expecting to enter the workplace until in their twenties. The reply from Marklv was, "will I didn't fancy starting work at 18"