Pensions Minister: Get ready for the 2012 revolution

no_choice_now

These are all the same arguments many dictatorships have used for many things. There's always a good reason for everything.

There's a good reason for us all to drive round at a maximum of 10mph "for our own benefit" and it can clearly be proved that doing so would be safer. There's a good reason for us all to curb every civil liberty we have "for our own benefit".

It's just a personal choice that I don't buy in to the propaganda of dictatorships. It's a slippery road best avoided than chanced.

Aegis

no_choice_now wrote: »

These are all the same arguments many dictatorships have used for many things. There's always a good reason for everything.

Getting someone to save for their future reminds you of a dictatorship? How exactly?

And there are always good reasons to do things that make sense. That's why they make sense. Implying that being able to justify something as a good idea makes it somehow wrong is just baffling...

Did you get like this when the government took steps to ban lead in most consumables because it's better for the country in the long term if our citizens aren't dropping dead or being hospitalised due to lead poisoning?

I can't really understand how this is any form of legitimate slippery slope to dictatorship, it's simply putting in place a system which will see more people receiving higher income from their own investments in retirement rather than relying on the state.

There's a good reason for us all to drive round at a maximum of 10mph "for our own benefit" and it can clearly be proved that doing so would be safer. There's a good reason for us all to curb every civil liberty we have "for our own benefit".

Not really a very good example, as setting a maximum speed limit of 10 mph would actually be a significant negative impact on everyone who drives, which would further impact the economy in a pretty serious way.

I can see that you might not like having to put money aside for your future, but surely you can see the benefit of doing so? The legislation coming into effect is hardly arduous in terms of how much actually needs to be committed into a pension pot, but it has the potential to significantly reduce your reliance on handouts from the government during retirement.

It's just a personal choice that I don't buy in to the propaganda of dictatorships. It's a slippery road best avoided than chanced.

This isn't propaganda, we're not in a dictatorship, and "slippery slope" arguments are usually not demonstrated to have any causal link between the perceived injustice and the ultimate predicted consequence.

coupleuk

Lets face it, the reason this mandatory (with later opt-out) scheme has been introduced is that many millions of people are fed-up with scroungers being given everything from birth to grave.

They are now taking the view that they can spend their money and let the state look after them when the time comes.

A close relative of mine has just turned 65. She has just moved into a lovely warden controlled apartment complex fully paid by taxpayers (inc water/heating/maintenance). Out of her Pension and Guarantee Top-Up she now has £110 cash to spend on herself every week after a small contribution to service charge/tv/. She has always worked part-time and raised a family. Im thinking that many self-supporting pensioners cant manage £110 a week for themselves at present.

During their working years, private sector workers cannot hope to keep up with the over generous (taxpayer funded) pension contributions offered to public sector workers so in frustration have decided not to even try.

Until the 12%+ taxpayer funded public sector contributions are matched to something the rest of us can only dream about, this scheme won't actually change anything - you will have MASS opt-outs.

This scheme won't work.

System

What's the point of this new scheme if there is an opt-out.

A large majority of short minded people will opt-out and not take responsibility for their own future, hence the scheme will have failed.

What they should do is say that those who opt-out will not get additional benefits when they retire. They will only be entitled to the level of benefits in force at the time of their retirement based on if they had started paying into a pension from the date when they opted-out.

Why should everyone else pay to keep those scroungers who decide to opt-out.

Money_Saving_Dude

coupleuk wrote: »

...many millions of people are fed-up with scroungers...

Scroungers -- because they are just too lazy to work or because the wider society/economy is incapable of offering them reasonably paid employment (one that lets them enjoy a reasonable standard of living -- and so will be well above the minimum wage)?

Loughton_Monkey

BAA1 wrote: »

What's the point of this new scheme if there is an opt-out.

A large majority of short minded people will opt-out and not take responsibility for their own future, hence the scheme will have failed.

What they should do is say that those who opt-out will not get additional benefits when they retire. They will only be entitled to the level of benefits in force at the time of their retirement based on if they had started paying into a pension from the date when they opted-out.

Why should everyone else pay to keep those scroungers who decide to opt-out.

I tend to agree with this.

It would not take much additional administration. We all tend to get annual 'statements' of some kind - P60's, Tax Returns/self assessment - and state pension forecasts are computerised....

What I envisage is a co-ordinated compulsory annual statement that sets out every person's earnings, the tax/NI they have paid, and their projected state pension entitlement. But importantly, I would add a standard statement that says "We calculate that the minimum recommended private pension of [say] 5% of your lifetime earnings to date would produce additional pension of £X per week. This amount (irrespective of whether you have invested this ir not) will be used as your retirement income for calculation of any benefits entitlement.

This approach would couple 'fairness' with 'freedom'. It is basically saying that you have total freedom not to insure your house or contents. But if you spend the premiums on something else, do not expect fellow taxpayers to make good any loss if your house burns down.

atush

Jules_ wrote: »

Is it just me that suspects that mandatory work pensions for all allows the government to find a good excuse to reduce the state pension? It's already mandatory to pay into that one with NI etc!

It possibly isn't just you, but it certainly isn't me. For a start there is anew govt every so often. And the last one spent the family silver and never saved for the bad days during the good. The plain facts are that most can't survive on the basic state pension alone, and the govt is trying to get people to save instead of frittering their cash away on booze, cigs, gambling and florida holidays.

Because if you do, they may end up having to pay you more than the basic state pension. That is what they are trying to avoid happening.

Scroungers -- because they are just too lazy to work or because the wider society/economy is incapable of offering them reasonably paid employment (one that lets them enjoy a reasonable standard of living -- and so will be well above the minimum wage)?

No, they are just scroungers. There is plenty of work out there for the educated and hard working eastern european immigrants who are hired because the locals weither can't or won't work the jobs offered. You don't have a right to be picky about the sort of work you take. The ones not working today are mainly lazy scroungers really. Case in point:

A close relative of mine has just turned 65. She has just moved into a lovely warden controlled apartment complex fully paid by taxpayers (inc water/heating/maintenance). Out of her Pension and Guarantee Top-Up she now has £110 cash to spend on herself every week after a small contribution to service charge/tv/. She has always worked part-time and raised a family. Im thinking that many self-supporting pensioners cant manage £110 a week for themselves at present.

Well I agree that is truly a shame if people choose not to take personal responsibility but I would rather let them burn that bridge when they come to it.

The problem is they won't burn. Your pockets will burn from the increase in tax it will take to fund the irresponsible. As there will be less people pying in and more pensioners to pay for.

dtsazza

no_choice_now wrote: »

Absolute claptrap.

Wait by any post office in the morning for the queue of old ladies to get their meager pension allowance out each week and try and tell them this. You won't make it out the post office alive.

The whole point of saving into "a pension", i.e. a personal pension, is so that you have your own provision for old age and don't have to rely on the state pension.

If you consider the state pension meagre, then you're making an argument for contributing to a personal pension scheme. A personal pension is essentially the savings account you were talking about earlier, but with much more beneficial tax treatment.

dtsazza

Jules_ wrote: »

Is it just me that suspects that mandatory work pensions for all allows the government to find a good excuse to reduce the state pension? It's already mandatory to pay into that one with NI etc!

I don't know what people suspect, but I hope this is the case. If I had the option I would fully opt out of the state pension in exchange for paying lower tax/N.I. to an equivalent amount that I could invest in my own pension.

As mentioned above this seems like a much more reasonable approach; let people take responsibility for their own savings with no "bail-outs" for imprudence.

With things as they are, I suspect this could only realistically be achieved by some sort of compulsory pension saving. NEST seems like a poor scheme, but the concept of employers making a minimum offer is fair enough. It'll just be a matter of transitioning over time; e.g. a £40k job would become a £37k job with a £3k pension contribution (which to sensible people is essentially equivalent - I currently consider employer pension contributions as salary).

So yes, hopefully this scheme can be seen as an acceptable way to reduce the moral hazard of state pensions and give people back the reins of their own retirement provision.

atush

Personally (and no I am not a small business owner) I think this is the wrong time to pile on extra cost to small employers. They cannot afford the new scheme, esp if the banks aren't lending. This will just restrict the number of new jobs in the economy from smaller employers- UNLESS the new scheme co exists with a reduction in business rates to pay for it.