Pension and old people

Old_Slaphead

mark5 wrote: »

I dont understand why the government reduced the number of contribution years to qualify for a full state pension?

Last government trying to buy votes ???

Radiantsoul

ILW wrote: »

The BoE have just announced that they want everyone to spend all their savings to help the economy. Seems they are not in favour of people putting something away for their retirement. and will probably aim to just inflate them away, whilst keeping IRs at well below inflation. So not a lot of point really.

It also seems that defined contribution pensions are quite risky as governments can change legislation, markets might collapse and insurers can go bust.

RenovationMan

mark5 wrote: »

I dont understand why the government reduced the number of contribution years to qualify for a full state pension?

A lot of women were missing out on a full state pension because of taking time out of work to raise their children and all that happened was they had to create Pensions Credit (formerly the Minimum Income Guarantee) to make up the difference. This actually costs more than simply making the full state pension available to a wider section of the public. The reduction from 30 years instead of 44 means that far more people will receive the full state pension and so they will eventually be able to scrap Pensions Credit (plus all the additional benefits this gives, such as Council tax rebates, etc).

I personally think its a much better approach to have virtually every pensioner on the basic state pension and with a minimum state pension than the madness of recent years where those who saved nothing received more than those who had put a little away in a personal pension.

Those people who think they can save nothing for their own retirement and yet live comfortably are in a for a rude awakening. The Labour government and now the Tories are moving towards a basic state pension for all without penalising those who have the sense to put money away for their old age. Frankly, it's about time.

RenovationMan

Radiantsoul wrote: »

It also seems that defined contribution pensions are quite risky as governments can change legislation, markets might collapse and insurers can go bust.

Due to the Maxwell and Equitable life fiasco's, the rules were tightened up and now the government covers something like 90% of a failed pension, which is far more than they're prepared to cover for cash savings in the bank, which is capped at something like £50k.

If you are risk adverse you could put your entire pension into government bonds.

Batchy

RenovationMan wrote: »

Due to the Maxwell and Equitable life fiasco's, the rules were tightened up and now the government covers something like 90% of a failed pension, which is far more than they're prepared to cover for cash savings in the bank, which is capped at something like £50k.

If you are risk adverse you could put your entire pension into government bonds.

Its capped at 50k per institution, which hold a seperate registration.

So as long as your smart with the way the money is split, then you could still get 100% protection as long as you dont have many millions. But then if thats the case a £1.8m pension fund is the max anyway for tax breaks.