How old will you be when you can retire?

grizzly1911

MFW_ASAP wrote: »

I've been putting money into pensions all my life and I have been a high rate taxpayer for about 15 years and I have a paltry £10k so far. Contrast this with someone in a public sector scheme, who pay a small amount in and have the public guarantee their retirement. Also totally unsustainable.

Don't disagree with your comments.

IIRC the average public sector pension is some where around 7K after majority full service so you are doing to bad.

There will be some silly money floating about for the execs but I am sure similar examples dwarf them in private schemes.

Quite why the public sector persist in offering "lucrative", if progressively watered down schemes, to new entrants is beyond me. Presumably as the government don't have the cash flow to contribute to DC schemes.

N1AK

CLAPTON wrote: »

It is completely reasonable that the percentage consumed of GDP is broadly related to the number of people in that category; so I see nothing surprising that the %age of GDP consumed by state pension would rise with the rising (%age ) of pensioners.

surely you agree with that?

I'll answer another of your questions when you finally answer the one I've asked you two or three times already:

As you stated you thought our current pension plans are affordable. Do you think that the current government plan of 1.8% deficit and a debt of 100% of GDP is viable? If not, what would you think they should do (cuts or taxes) to create a viable plan.

thick_tom

never retire!

N1AK

DevilsAdvocate1 wrote: »

When I started work the retirement age for a woman was 60. I am now 44 and believe it is now 67. I guess I'll never get the chance to retire as I'm sure that it will increase many more times between now and then.

Think a little further out and a little more widely. The countries 50 year budget including all those changes isn't sustainable. You could need this country to still be functioning in 50+ years. Given that even on top of all the austerity we're seeing now we'll need considerably more already where do you think the huge amount of money needed to keep retirement ages that low is going to come from?

If you still want to retire at 60 then put aside another £4,000 a year in savings or pension contributions until then. That should be enough to be able to pay yourself an income of £12,000 a year during that period :j

Now you might think £3,000 a year is a lot to have to save and you'd be right but that's what the country would have to save for every single person if they didn't delay retirement.

N1AK

grizzly1911 wrote: »

Don't disagree with your comments.

IIRC the average public sector pension is some where around 7K after majority full service so you are doing to bad.

There will be some silly money floating about for the execs but I am sure similar examples dwarf them in private schemes.

Quite why the public sector persist in offering "lucrative", if progressively watered down schemes, to new entrants is beyond me. Presumably as the government don't have the cash flow to contribute to DC schemes.

Many have gotten much more reasonable, though some are still oddly antiquated. My partner works for a Quango and everyone who has joined there in the last ~7+ years (inc her) can pay in 5% and get a 10% employer contribution.

That's still a good scheme but it's hardly lucrative. I actually had the same pension at my previous, private, employer.

What frustrates me, more than it really should, is the complete lack of awareness from people on final or average salary schemes or with an early retirement about how much that is worth :mad:

CLAPTON

N1AK wrote: »

I'll answer another of your questions when you finally answer the one I've asked you two or three times already:

As you stated you thought our current pension plans are affordable. Do you think that the current government plan of 1.8% deficit and a debt of 100% of GDP is viable? If not, what would you think they should do (cuts or taxes) to create a viable plan.

Japan has a debt of 250% of GDP
The UK debt after the WW2 was similar
so although I would 'like' our debt to be zero I wouldn't say 100% was unsustainable or will lead to Armageddon

A budget deficit of 1.8% of GDP is consistent with a debt.

I absolutely believe the OBRs assumption are incorrect;
as, of course does every single living soul, as the period at issue covers several changes of government, several unpredictable events, a few wars, changes in technology, maybe major change in population etc.

So, clearly 100% of GDP is obviously viable as we won't cease to have a decent standard of living because of it.

As always, whether debt is good or bad depends upon the alternatives: broadly speaking I believe the increase in debt since 2007 was a sensible step as it avoided a more drastic recession with higher unemployment and lower GDP.

My major concern about the budget deficit is how the money is being used: I'm happy if the money is being spent on essential infrastructure improvements but less so on just living expenses.

In any event government debt is a poorly defined concept: PFI was a way of avoiding nominal debt but I was totally against it and would much preferred debt to have risen rather than the PFI contracts.
Similarly I strongly object to loading 'green levies and taxes' on utility bills (non government expense) whereas they should be a government expense.


So to say 100% of GDP is too high is far too simplistic : many other factors matter at least as much like employment and growth.

MFW_ASAP

CLAPTON wrote: »

The OBR estimate is that the cost of index linked gold plated public sector pensions will be just over 1% of GDP.
Whilst they may be totally unfair and far too generous it doesn't seem reasonable to say they are 'unsustainable'.

How does this 1% fit into your soapbox about reduced GDP due to a reduced (young) workforce?

Out of interest, what is 1% of UK GDP in £'s?

Edit: Actually public sector pensions were 1.9% of GDP this year.

N1AK

CLAPTON wrote: »

So, clearly 100% of GDP is obviously viable as we won't cease to have a decent standard of living because of it.

As always, whether debt is good or bad depends upon the alternatives: broadly speaking I believe the increase in debt since 2007 was a sensible step as it avoided a more drastic recession with higher unemployment and lower GDP.

My major concern about the budget deficit is how the money is being used: I'm happy if the money is being spent on essential infrastructure improvements but less so on just living expenses.

You clearly either don't get the point of economic forecasts or do and are just trying to obfuscate them because it suits your position. Obviously the chance of the OBRs projection matching reality is slim at best, the point of a projection is to provide the best reasonable estimate. If they have done that correctly then the chance that we have more to spend than expected is the same as the chance that we have less to spend.

We're not talking about increasing debt through a recession (as we have just done) but increasing the debt over half a century of average economic growth.

How exactly do you expect we'd deal with another financial crash if we were already running a 1.8% deficit with 100% GDP? Where are we going to find the money for the major infrastructure projects you'd like when we're already building up to a 100% GDP debt, just pile more debt on top?

But you did answer my question so thank you :beer:

So, yes I do accept that spending on the elderly increasing as a proportion of GDP when the number of the elderly as a proportion of the population is a reasonable assumption.

I'm not against spending relatively more on the elderly in itself. It's the bigger picture that concerns me, if we're spending more on pensions then we will be spending less on something else or taxing more and no one wants to talk about what.

I'd like to see the government spending billions on the infrastructure we need and research that will benefit us long term but we can't even balance the books without it at the moment.

MFW_ASAP

Disregarding cleaners incomes and others who work short term in the public sector (and therefore do not build a large pension pot), but looking at real-worl examples of people who spend a lifetime working in the public sector:

"A local government middle manager who retires on £60,000 a year can expect a pension of £30,000 a year. And the lower paid? A more junior worker at a council who retires on £25,000 a year can expect a pension of £12,500 a year. These are based on 30 year careers, too. You can add more to these figures if someone spends their entire working life in the public sector.

What about the NHS? A worker in the NHS who retires on £40,000 a year could expect a pension of £15,000 a year and a lump sum of £45,000, again based on a career of 30 years."

To put that £30k a year pension in perspective, I would have to have a pension pot of £600,000. We already know you need a £240k for a junior worker's pension - Equivalent to what I have built up in the private sector after a lot of sacrifice and earning a LOT more than £25k a year. Completely bonkers.

Even more annoying is that middle manager could have been working as a junior clerk until the last few years of his career.

grizzly1911

MFW_ASAP wrote: »

Even more annoying is that middle manager could have been working as a junior clerk until the last few years of his career.

That is annoying but has happened in large blue chips too.

Shouldn't senior nurses and health professionals on £40K get a pension? perhaps you think they don't deserve one?

Many in the private sector would have been getting £20k pa in final salary schemes.