Public Sector Strike(s)

Jimmy_31

Cleaver wrote: »

I think the average working man (I hate that phrase, but I know what you're getting at) is, in the main quite happy the government is doing something to ensure that public sector pensions become more affordable and sustainable. If the strikes last week showed anything it was that the majority of people don't seem to have that much sympathy with the people striking as they feel that the public sector get a pretty good deal as it is. I cannot stand all the public sector bashing I saw last week, but I think this is one issue where the 'average working man' is more on the side of the government than public sector workers who striked.

I dont think the average working man will now side with the government now they have changed the public sector pensions.

They might side with the government at some point if it wasnt riddled with corruption and idiots making it up as they go along.

thescouselander

Cleaver wrote: »

I think the average working man (I hate that phrase, but I know what you're getting at) is, in the main quite happy the government is doing something to ensure that public sector pensions become more affordable and sustainable. If the strikes last week showed anything it was that the majority of people don't seem to have that much sympathy with the people striking as they feel that the public sector get a pretty good deal as it is. I cannot stand all the public sector bashing I saw last week, but I think this is one issue where the 'average working man' is more on the side of the government than public sector workers who striked.

I'm not so sure about that. The reduction in peoples take home pay is going to mean they have to cut back and its not just the poorest workers that will be affected. That will have a knock on effect on private sector business. We're already working out what to cut back on and unfortunately its going to be things like the window cleaner who is a small local business. It's regrettable but what choice is there?

If pensions need to be made sustainable for the long term why ramp up contributions so quickly - couldn't this be done over a longer period to help people adjust? The reality of it is that the increase in pension contributions is nothing to do with pensions and everything to do with a cash raid to reduce the deficit.

DirtyDick

Leaving aside the fact that the PS pension will still be better than most (even a fake pearl shines in a barrel of !!!!!, as Stephen Fry wrote), there is a concern that pushing up contributions too far - or fear that that will be on the cards, dependent on the global economy - could compel many PS workers to opt-out of the pension scheme altogether. This would free up perhaps several hundred pounds each month, much needed with inflation, low savings interest rates and job insecurity in the PS.

Whilst in the longer term this would be a poor personal decision, it could be all the difference in the short term between living without getting into debt and living comfortably. It will also leave the government without this monthly income; and the prospect of many hundreds of thousands of additional people without adequate pension provision.

jem16

thescouselander wrote: »

If pensions need to be made sustainable for the long term why ramp up contributions so quickly - couldn't this be done over a longer period to help people adjust? The reality of it is that the increase in pension contributions is nothing to do with pensions and everything to do with a cash raid to reduce the deficit.

Seems Lord Hutton agrees with the contributions problem.

But he also said the unions had raised some genuine concerns, and he agreed with warnings that current plans could force large numbers of people on low or moderate incomes to opt out of their pensions altogether.

"I think there is a genuine issue between the unions and ministers about the pension contributions, which I hope is the subject of further discussion," he said.
'No concessions'

"I don't think you can build long-term reform on forcing people out of saving for pensions, that is a crazy way to do it."

He added: "I hope ministers can look again at some aspects of the way they're planning to increase pensions contributions."

http://www.bbc.co.uk/news/uk-16021345

leveller2911

One problem with the Pension system in this country is that the Government of the day can't be trusted not to raid Pension funds when they need to boost revenue.Until people have confidence in pensions they won't entertain investing in one. Many people ,myself included have stopped contributing into private pension schemes on the basis of dreadful annuity rates and the misturst in Government.

As an example of the lack of trust as a self employed person I pay class 2 NI which a few years ago Government cut the contributions ( no real reason to do so) at the same time raised Class 4 NI which is 8% of my profit and I receive no benefit at all from paying this. All I want is honesty and for me to pay £???? NI towards a pension and I would gladly pay extra if it meant I would recieve an better pension, but there is no reason for class 4 NI other than stealth tax.

I would further add that giving people tax relief on pension contributins and then taxing those same pensions when paying out after retirement is just plain wrong as its all smoke and mirrors as they give with one hand and take with the other.

" Honesty " would be a key factor in any Pension reform but we all know it won't happen and the burden on the taxpayers of the day will be ever increasing ,so i'm not optimistic for the future...............

Time for my tablets.................:D

jem16

leveller2911 wrote: »

Many people ,myself included have stopped contributing into private pension schemes on the basis of dreadful annuity rates

No need to buy an annuity now though as you can utilise drawdown.

I would further add that giving people tax relief on pension contributins and then taxing those same pensions when paying out after retirement is just plain wrong as its all smoke and mirrors as they give with one hand and take with the other.

You can work it to your favour though - ie higher rate taxpayer whilst working but basic rate in retirement.

leveller2911

jem16 wrote: »

No need to buy an annuity now though as you can utilise drawdown.



You can work it to your favour though - ie higher rate taxpayer whilst working but basic rate in retirement.

Agreed but with drawdown you need a decent pension pot to start with and also how do we know that any Government of the day won't manipulate and change the rules governing the pension funds?.

The principle of annuities is good in that you buy a pension for life so you know how much your going to get each month.I know there are downsides but many people like the idea of knowing what their fxied income will be.
I know very little about drawdown other than friends of mine use drawdown to invest in shares .

You need to remember Jem that most standard rate taxpayers have little or no knowledge of how many pension products work and just want a fixed income each month, very simple products that give a fixed income and I include myself in this group.We have had years of bad managment by Government along with poor regulation so who can we depend on?.

jem16

leveller2911 wrote: »

You need to remember Jem that most standard rate taxpayers have little or no knowledge of how many pension products work and just want a fixed income each month, very simple products that give a fixed income and I include myself in this group.

Totally agree with this which is why most go for an annuity.

What are you doing for your own retirement?

leveller2911

jem16 wrote: »

Totally agree with this which is why most go for an annuity.

What are you doing for your own retirement?

Well I stopped paying into my private pension about 10 yrs ago after having a chat with my accountant who is a personal friend, he couldn't advise me what to do but as he stopped paying into his it must tell you something,lol..

I now save into ISA'S (cash and shares) have about £20k in premium bonds as a bit of a gamble and have some knowledge of antiques so I invest in those.I also invest in my business which will hopefully be worth something if/when I retire .

jem16

leveller2911 wrote: »

Well I stopped paying into my private pension about 10 yrs ago after having a chat with my accountant who is a personal friend, he couldn't advise me what to do but as he stopped paying into his it must tell you something,lol..

My brother's a chartered accountant but would be the first to admit he wouldn't advise me on pensions or investments as it's not his field.

Basically you should look to have pension provision up to about £10kpa which is the personal allowance for over 65s. As you are self employed you will only get the basic state pension which is around £5.3k. So you still have around £4.7k of tax-free income which could come from the pension where you got 20% tax relief. This is after your 25% tax-free lump sum.

After that S&S ISAs would be the way to go which you say you are already using.