New Post Advanced Search
Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.

MSE News: Firms restrict pension choice

8 replies 1.4K views
MSE_GuyMSE_Guy MSE Staff
1.7K posts
I've been Money Tipped! Newshound! Chutzpah Haggler
This is the discussion thread for the following MSE News Story:

"One in four of the UK's biggest companies no longer offer staff access to final salary pension ..."
Read the full story:
Firms restrict pension choice


OfficialStamp.gif

Replies

  • casper_gcasper_g Forumite
    1.1K posts
    I'm absolutely astonished to learn that employees at 75% of FTSE 100 companies have access to a final salary scheme. Is that really true, or is it more complicated than this? My impression from the media was that final salary schemes were now almost exclusively the preserve of the "soft" public sector....
  • Old_SlapheadOld_Slaphead Forumite
    2.7K posts
    1,000 Posts Combo Breaker
    ✭✭✭✭
    casper_g wrote: »
    I'm absolutely astonished to learn that employees at 75% of FTSE 100 companies have access to a final salary scheme. Is that really true, or is it more complicated than this? My impression from the media was that final salary schemes were now almost exclusively the preserve of the "soft" public sector....

    Sounds rubbish dunnit?

    Allegedly only 16% of private sector have FS schemes and only 3 out of FTSE 100 offer them to new employees
  • hugheskevihugheskevi Forumite
    2.6K posts
    Tenth Anniversary 1,000 Posts Name Dropper Car Insurance Carver!
    ✭✭✭✭
    I'm absolutely astonished to learn that employees at 75% of FTSE 100 companies have access to a final salary scheme. Is that really true, or is it more complicated than this?
    The 75% includes all those which have schemes which closed to new members - often several years ago - but which allowed existing members to continue accruing DB benefits. Hence you may well have a very small proportion of the workforce in the DB scheme.
    My impression from the media was that final salary schemes were now almost exclusively the preserve of the "soft" public sector....
    About 5m members actively accruing benefits in public sector, about 2.4m in private sector. Of that 2.4m about 1.5m are in schemes closed to new members.
  • Sounds rubbish dunnit?

    Allegedly only 16% of private sector have FS schemes and only 3 out of FTSE 100 offer them to new employees

    The MSE data is correct but you would understand it better if you read the Towers Watson press release: http://www.towerswatson.com/united-kingdom/press/4072 rather than the Press Association garbage that MSE has reproduced in its entirety just to show what poor journalists they are.

    A quarter of FTSE100 companies have closed their DB schemes to future accrual. This fraction has risen from 15% last year. Most FTSE100 companies have a closed DB scheme and offer DC to new entrants. Just 10% offer some sort of DB scheme to new entrants.

    Can I have a job?
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • Doesn't make much difference to me, by the time I retire the retirement age will be 90 so I only have to save up for a coffin. Also I cannot afford any private pension contributions at the moment, like a lot of people, even through my company does offer it.
    If freedom is outlawed, only outlaws will have freedom.
  • dunstonhdunstonh Forumite
    103.2K posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    Doesn't make much difference to me, by the time I retire the retirement age will be 90 so I only have to save up for a coffin. Also I cannot afford any private pension contributions at the moment, like a lot of people, even through my company does offer it.

    Someone in their 20s can get away with paying a very small amount. Especially if they index link it and the company match contributions.

    The longer you leave it the more expensive it becomes. Eventually you get to the point where you will have to be resigned to the fact you will be living in poverty in retirement.

    You dont say how old you are but your comments suggest very young. So, don't be afraid to start a very small indexed contribution now. Just £50 from someone in their low 20s can result in 10k a year income (in todays terms) in retirement. Every 7 years delay will see you need to double the figure of the previous 7 years to make up for that delay (in real terms).
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Loughton_MonkeyLoughton_Monkey Forumite
    8.9K posts
    Hung up my suit!
    ✭✭✭✭
    Also I cannot afford any private pension contributions at the moment, like a lot of people, even through my company does offer it.

    This is a common cry.

    You can start preparing the inscription on your coffin - along with many others: "He lived his last 30 years in poverty because he was too mean to save money for retirement."

    There are basically only two scenarios:

    1. You earn minimum wage. You continue to earn minimum wage for the rest of your life.

    In this case, then your state pension [hopefully £140 a week in today's terms as being promised] will represent a reasonable proportion of the income you were used to. Hence you will live 'at the bottom of the pile' throughout working life and retirement as well.

    2. You earn more than minimum wage, and will continue to gain promotions, pay rises, and possibly move jobs in later life to earn a 'decent' wage.

    In this case, there is no such things as 'cannot afford'. If you are saying you cannot live on anything less than your full salary, that's a lie, because we could point to millions who do. What you are saying is that you choose to spend all your salary. There is no "afford" about it since it doesn't "cost" a penny. Pensions are simply taking your money and delaying the expenditure of it. In the meantime, it grows - alongside all the other money thrown in by HMRC and your employer.

    And rather perversely, because of the growth, the cheapest provisions are those you make early in life. It gets almost exponentially higher, as you go through working life, to provide the same income at, say, age 65.

    A public sector worker [or private company with FS scheme] might earn £25K. He lives his lifestyle accordingly. He has no choice. In reality, he earns [say] £31K, but is forced to have £6K going into the FS pension provision. This person will have a good retirement.

    Next door, there is a person (probably like you) who earns £31K and instead of the brainlessly obvious of investing £6K for retirement, chooses to live a lifestyle costing £31K. There is total 'freedom' to do so. But with that freedom comes the obligation to blame only oneself in retirement. Nobody else need feel any sympathy whatsoever.
This discussion has been closed.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support