Public sector wellcome to the real world

NAR

nb73 wrote: »

Haven't read the whole thing, but wondered if the OP was being ironic with use of "Wellcome" - the charitable trust dedicated to improvements in world health

suspect not

Nah, OP just can't spell - look at his other posts for confirmation. Probably why he ended up in the private sector!

2sides2everystory

jem16 wrote: »

£1,000pm for 40 years would give you £480,000 with no growth at all.

Yep in the public sector you don't have to worry about no growth over the 40 years. The fact that a nurse starting out 40 years ago might have been lucky to make £2000pa before tax but has a pension fund that in a climate of no investment growth that would require an investment of a fixed £1000pm from day one to fund the £16,000pa pension at the end of it is interesting, isn't it. Due to the wonders of compounding the real cost is of course somewhere in the middle and towards the cheaper end. We don't quite know exactly what it did cost - all we know in 2011 is that we just kept it running.

And in the private sector, surely it would have grown most years too? You would think so. But can you work out what it would give you if it went backwards for ten years out of the last twenty? Reducing perhaps by a third in one or two years? With no repairs, quickfix or otherwise and with parking charges with so called "pension providers" worse than any "noughties" hospital car park?

(Real world with real numbers, real private "pension" policies and real hospital car parks)


... we know what happens when public sector pension funds stopped growing - they were continuously topped up with everlasting supplies of Duckham's finest just like a government car pool British Leyland A series engine blowing blue smoke as standard :rotfl:

Thicko2

Just in case anyone missed Maude's perfromance yesterday, transcript here from guardian site.


ED: I want to just ask about your credibility. The prime minister said the other day [that the pension system is in danger of going broke]. Do you stand by that claim?
FM: Well, I'll just quote what Lord Hutton said, the former Labour pensions secretary, when he did his report. He said very clearly the status quo is not tenable.
ED: That's not a quote, is it. Because I did my little control f key search on the word tenable [ie, a word search] on his report [and] couldn't find it in his report.
FM: He has said that the system is not tenable.
ED: Did you say that it was going broke if nothing was done. Because I can only find that graph which shows the cost falling in terms of GDP. It has been repeated so often that it's unaffordable, it's out of control. I just can't see it in his report. He doesn't say it's unaffordable. He says it's not fair. And that's a very different justification for reforming pensions than it's unaffordable.
FM: And he said that if we want the system of defined benefit pensions, which few people elsewhere have, to be sustained into the future, long-term reform is needed.
ED: Is it unaffordable?
FM: It will be unless we make these changes.
ED: That's not what he says.
FM: Well it will be. The cost to taxpayers of supporting public sector pensions has gone up by a third. It's £32bn a year. What Lord Hutton said in his report is that the extra costs of people living longer – because the average 60-year-old today is living 10 years longer than they did in the 1960s.
ED: Have you read the report?
FM: Yes, of course I've read the report.
ED: Can you tell us why does it show the cost falling over the decades in terms of the proportion of GDP going to public sector pension recipients? Just explain why it's going down, because if you've read the report you will know the answer.
FM: The answer is that the expenditure on pensions by the taxpayer has increased by a third.
ED: Why is it going down? In his report, the big picture is it's going down. Why is that? Just explain to the public why the cost is going down.
FM: Well, the cost to the taxpayer is going up. That's the point.
ED: As a proportion of GDP?
FM: The cost of the increase, the cost of paying pensions to people who are living longer, which is obviously good news – you cannot continue to have more and more people in retirement being supported by fewer and fewer people in work. That's why it's so important that we're going to ask people, if you want to continue to have very good pension schemes which are a guaranteed level of pensions available to few others, that's got to be paid for by higher contributions by those who are going to have those pensions, and to ask them to draw those pensions later.
ED: I'm going to read you a line and ask you whether you think the account you've given is the same as the one he gives. "There have been significant reforms to public sector pension schemes over the last decade. Some of these changes have reduced projected benefit payments" - blah, blah, blah - "Projected benefit payments fall gradually to around 1.4% of GDP after peaking in 2010-11 at 1.9%." That's just saying it's not unaffordable, we don't want to afford it. It's cheaper. It's going to be 25% cheaper in the next few decades in terms of the burden on GDP than it is at the moment.
FM: What he's saying is that long-term reform is needed.
ED: Absolutely. For different reasons.
FM: The point is, there's been widespread pension reform across the economy. People in the private sector have seen old, defined benefit schemes disappear. What John Hutton has said - and we've totally agreed with - is we do not want to see a race to the bottom.

Uglymug

jem16 wrote: »

£1,000pm for 40 years would give you £480,000 with no growth at all.

According to HL's calculator a male, aged 20 with a retirement age of 60 would need to put aside £431.25pm increased each year in line with inflation, to get a lump sum of £108,469 and £15,190pa pension with spouse provision and index linking.

So why would you be putting aside £1000pm? As to a crash just before purchasing an annuity, you would presumably have lowered your risk in the years leading up to retirement.

A monthly payment of £431 going up each year by say 3% (for inflation) would mean a monthly payment of about £1,400 in the 40th year – sorry I miscalculated - this works out at an average of about £900pm.

Also, please don’t fall for forecasts from a financial institution (especially one that’s for a 40 year period),

I’ve got 2 years left on a 25 year endowment that promised to pay back big bucks, its latest forecast said it’s going to pay about half the outstanding interest on my mortgage (the good news is if I die it’ll pay it all back)

In the late 1980s I started a monthly pension plan with Equitable Life. Guess what happened to the £30,000 I managed to accumulate in it over a 10 year span?

An investment in the stock market has done nothing in the last 10 years (10 years ago the FTSE was about 6500 – today it’s around 6000). Any Stock market investment or FTSE fund will have gone down in this time - especially when you add in the fund managers fees. With all the financial problems we currently have the FTSE is only going to go one way in the next few years – and it’s not UP.

Life has taught me not to trust financial institutions. All my pension holdings are currently in a Sipp which I manage myself, as you’ve suggested I’ve tried to find investments with a low risk but their returns are minimal. I’m trying desperately to build up some kind of pension so one day I can retire without ending up on benefits.

jem16

Uglymug wrote: »

A monthly payment of £431 going up each year by say 3% (for inflation) would mean a monthly payment of about £1,400 in the 40th year – sorry I miscalculated - this works out at an average of about £900pm.

If you assume the same rate of inflation for your salary, then a £25,000 wage would be £81,500 so you are still looking at the same percentage contribution. I assume you would agree that wages 40 years ago have risen today?

I’ve got 2 years left on a 25 year endowment that promised to pay back big bucks, its latest forecast said it’s going to pay about half the outstanding interest on my mortgage (the good news is if I die it’ll pay it all back)

Projections ( not promises ) back in the 80s were much higher as the rate of inflation was much higher. My first mortgage was at a rate of over 15%. Projection figures are much lower nowadays with a much lower inflation rate. You have to take this into account and make changes - did you increase your level of contribution over the last 20 years or leave it as it was?

In the late 1980s I started a monthly pension plan with Equitable Life. Guess what happened to the £30,000 I managed to accumulate in it over a 10 year span?

Do tell us but I'll hazard a guess that it's down to the collapse of Equitable Life. What's to happen with that compensation?

An investment in the stock market has done nothing in the last 10 years (10 years ago the FTSE was about 6500 – today it’s around 6000). Any Stock market investment or FTSE fund will have gone down in this time - especially when you add in the fund managers fees.

You forget about the dividend payments which give the FTSE most of its growth.

With all the financial problems we currently have the FTSE is only going to go one way in the next few years – and it’s not UP.

Why would you only have pension funds in the FTSE? What about the rest of the world?

Life has taught me not to trust financial institutions. All my pension holdings are currently in a Sipp which I manage myself, as you’ve suggested I’ve tried to find investments with a low risk but their returns are minimal. I’m trying desperately to build up some kind of pension so one day I can retire without ending up on benefits.

If you know what you are doing DIY can be great. However if you don't know what you are doing you could lose a lot more than you gain. For example a SIPP with HL is just as expensive, if not more so, than a fully advised pension organised through an IFA with servicing included.

Don't get me wrong - a defined contribution scheme/private pension in no way compares to a final salary scheme with no risk, but there are steps that can be taken to try and maximise what you can make out of it. One of those is to keep it constantly under review and not just start it and forget about it for 40 years.

Uglymug

jem16 wrote: »

If you assume the same rate of inflation for your salary, then a £25,000 wage would be £81,500 so you are still looking at the same percentage contribution. I assume you would agree that wages 40 years ago have risen today?

I said I had a career average salary of circa £25,000 per annum - I earned less when I started, I earn more now.

jem16 wrote: »

Projections ( not promises ) back in the 80s were much higher as the rate of inflation was much higher. My first mortgage was at a rate of over 15%. Projection figures are much lower nowadays with a much lower inflation rate. You have to take this into account and make changes - did you increase your level of contribution over the last 20 years or leave it as it was?

Left it as it was, changed mortgage to repayment.

jem16 wrote: »

Do tell us but I'll hazard a guess that it's down to the collapse of Equitable Life. What's to happen with that compensation?

What compensation ? - they're still talking about giving pensioners who were drawing an income some recompense - a lot of them have died - those who had not retired got nothing - I got out with hugh 24% penalty.

jem16 wrote: »

You forget about the dividend payments which give the FTSE most of its growth.

Yes, during the last few years income generating funds have become very popular - a lot of my investments are targeted towards high dividend paying FTSE 100 shares.

jem16 wrote: »

Why would you only have pension funds in the FTSE? What about the rest of the world?

Some of my investments are non UK, also got some in Gold, also got some money in an absolute fund (it should go up when markets go down).

jem16 wrote: »

If you know what you are doing DIY can be great. However if you don't know what you are doing you could lose a lot more than you gain. For example a SIPP with HL is just as expensive, if not more so, than a fully advised pension organised through an IFA with servicing included.

Like I said I don't trust financial institutions or IFAs - do it all myself, if it goes wrong it's my fault.

jem16 wrote: »

Don't get me wrong - a defined contribution scheme/private pension in no way compares to a final salary scheme with no risk, but there are steps that can be taken to try and maximise what you can make out of it. One of those is to keep it constantly under review and not just start it and forget about it for 40 years.

Usually spend an hour or two at the weekend on internet reviewing it - do about 8 or 10 deals a year.

jem16

2sides2everystory wrote: »

The fact that a nurse starting out 40 years ago might have been lucky to make £2000pa before tax but has a pension fund that in a climate of no investment growth that would require an investment of a fixed £1000pm from day one to fund the £16,000pa pension at the end of it is interesting, isn't it.

A climate of no investment growth over 40 years - doubtful.

Even the FTSE100 has a historic yield of around 3%pa.

The_White_Horse

i think, having read this thread, that we can all agree that the public sector workers are greedy grasping filth who have no idea how anything works - having never created anything in their miserable insulated lives. they have no idea what the value of money is. they are the lowest of the low. they should all have a 30% pay cut across the board and be forced to make larger pension contributions into defined contribution pensions. if they don't like it, they can work in the private sector. they would last all of 3 minutes. bunch of mardy jokers.

jem16

Uglymug wrote: »

What compensation ? - they're still talking about giving pensioners who were drawing an income some recompense - those who had not retired got nothing.

I don't know - I was only going by this.

http://www.bbc.co.uk/news/business-13966118

Perhaps it doesn't apply to you.

PS. You're missing a [ before your /quote] in your last post which I see you have tried to fix to make it easier to read.

Moby

2sides2everystory wrote: »

Well I do appreciate the responses to my marathon middle of the night post, because I think insiders and outsiders understand each other better that way. So on that score, here's another heap of what's on my mind ... can't promise it is pretty:

Of course I do think those of you who dismiss my take on life outside as bitterness are barking up the wrong tree, but my guess about jackyann's reward in retirement for half a lifetime of serving the public in the most consistent and selfless manner was almost spot on wasn't it? So there we have it. Some pensions are handed on a plate if you are in. If you are out you get insulted about having made the wrong choices and being ripped off was your fault for not watching your own back.

I am actually one of life's more contented players - money is nice, but as jackyann will surely tell us, it is not everything. A family is a normal route to contentedness, so don't knock that choice please. A selfless vocation like jackyann's of course provides huge contentedness in having been able to help the most vulnerable in society at the time they need it most when they have suffered in bad health. I am sure those thoughts sustained the nurses and others when indeed the private sector looked for a few of the maddest years of Thatcherism to be way outstripping the public sector in the income stakes. But it was just a passing phase. The balance swung way back long ago.

I have used the health service from time to time and of course visited friends and family who have been inpatients, but I am sure I cannot even begin to understand what it really means to selflessly care for the sick, seriously. I have touchwood always had excellent health.

My career journey in the private sector running parallel to jackann's is pretty typical I think, ups and downs but general decline for the last ten years at least. It would be easy to say ha, yes that was ten years under a Labour government, but private sector careers had become generally very shallow-rooted long before Tony Blair came along.

Many MSE readers, including some of those on the edge of being "in" (failed minor quangos and spurious private initiatives perhaps, or otherwise outsourced pseudo public servants) and who are perhaps 15 years younger than jackyann and I, might look at my £250,000 and may even say "Well I also earn £32,000 right now, but my pension funds have only made it to low tens of thousands and are growing really slowly - they are not projected to ever get to that kind of sum in my wildest dreams. Get over it!".

Also they may not know if there is a job for them from one year to the next. So never mind jackyann's pot whatever it is (and I suspect it is actually significantly higher than £500,000 because it is index-linked), they might be looking at my £250,000 and be very envious of that.

There's a lot of relativism in this in and out business, isn't there?

Spare a thought for those even further outside who have been paying their taxes this last 40 years and have no non-state pension provision whatsoever. And don't think that such people never thought about private pensions. They have been infested from time to time by all manner of parasitic financial adviser who long ago dropped off and and disappeared or metamorphosed eventually into something they want us to believe is halfway respectable compared to banking :rotfl:

The more I think about it, I contend that pension provision comparison above all other wealth factors maps out the gross inequalities in our society.

Public sector employees of long standing have hardly had to give it a second thought (jackyann has confirmed it - she doesn't know how big her pot is - she doesn't need to know - all she needs to know is that her cup overfloweth by the promised index-lnked amount each year!). Many have been totally ring-fenced from contribution, from inflation over the longer term, from job insecurity and from parasites (no IFA has dared "advise" someone with a gold-plate public sector pension like jackyann's because those that tried it in previous decades had their asses sued for bad advice!).

Public sector employees of more recent vintage are less ring-fenced and we private sector types will no doubt eventually meet hoards of them at the bottom.

The growing range of net worth displayed between individuals in our communities is splitting our society. Without another windfall like North Sea oil that cannot possibly be reversed in what remains of the lifetimes of us late mark baby-boomers. Our country is as we now know as failed as Greece by some measures. But somehow we are different and apparently our constantly floating paper isn't junk yet. We kid ourselves that we can keep this up with our hot air international standing, but as the hot air machine has told us, we can't afford public sector pensions to go forward unchanged.

BTW, I should have joined a Union, should I? Hmmm ... that would be the one I joined when I started work and which is the UK's largest Union and to which for some reason I am still paying a subscription today?

And as for me not posting balanced two sided arguments like some of you think my username requires well you might have a point, but generally you will find me posting the missing side of the argument on threads which have been skewed far too far in one direction for too long.

2sides2everystory Actually I think you'll see may 'like minded individuals' bitters on this thread. As for being one of life's more 'contented players'......ah yes that's why you spend your early hours of the morning writing long missives about the injustices of the world on this forum! You say you are a member of Unison and are still paying a subscription. My advice to you then is get off your backside and get on the picket lines when the rest of us go out in the autumn. I'll see you there!:beer: