How old will you be when you can retire?

CLAPTON

MFW_ASAP wrote: »

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.

indeed so, 1.9% currently but the OBR forecast was after all the recent changes (cuts ) have taken full effect in 10 years or more.


I fully agree with you that the size of GDP (per capita) is of more concern than the way it is distributed and that clearly demographics are very important here.

I've no idea why you call the issue of the changing demographics as my 'soap box' as it is frequently discussed in parliament, newspapers, discussion programs, OBR etc.

I'm sure you are a capable as me of finding out what 1% of GDP is but that spend must be related to what it's being spent on:
which brings me to the obvious point that if there are more pensioners as percentage of population one would reasonably expect more of GDP to be consumed by them.

CLAPTON

N1AK wrote: »

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.

we can both agree that more needs to be spent on infrastructure that will bring dividend in the future : with the rising population much of it will be essential.

I am more relaxed about debt than yourself because the evidence about low debts level is mixed. Plus the issue (very real in my mind)
of all the off balance sheet items like PFI, green taxes and other future liabilities.

It would seem that lenders are happy to lend to countries with a history of debt repayments and potential economic growth.

My view about the long term is that if debt becomes a problem then the government of the day will have to deal with in: today I want more investment over debt reduction.

MFW_ASAP

grizzly1911 wrote: »

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

Indeed, and that abuse is one of the largest nails in the coffin of Final Salary pensions in the private sector. It's a shame that they didn't introduce Career Average pensions right from the start.

grizzly1911 wrote: »

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

STRAWMAN ALERT!!!

No one is saying that 'senior nurses and health professionals don't deserve a pension'. LOL at you raising such an emotive employee grouping. The issue is how generous these pensions are, whether they are fully funded and whether the employee package (including pension) is similar to a comparable job in the private sector.

grizzly1911 wrote: »

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

Perhaps you weren't aware of this, but most final salary schemes have been closed in the private sector because they were too expensive.

N1AK

CLAPTON wrote: »

I am more relaxed about debt than yourself because the evidence about low debts level is mixed. Plus the issue (very real in my mind)
of all the off balance sheet items like PFI, green taxes and other future liabilities.

It would seem that lenders are happy to lend to countries with a history of debt repayments and potential economic growth.

I would suggest that PFI etc are debt regardless of how the government chooses to classify them, which if anything makes our current figures look worse.

Green taxes regardless of whether you agree with them are not debts. They are taxes just like stamp duty isn't debt and nor is inheritance tax or anything else.

Lenders aren't happy to lend to countries with very high levels of debt and no viable plan to repay it. Anyone lending to the UK at the moment will be lending for considerably less than 50 years so doesn't care about the long term viability of our budget. They also know that the budget isn't viable and we will make cuts or increase taxes at some point to resolve or delay it further.

If 100% GDP debt and a 1.8% deficit wasn't an issue then there's no way we'd be going through austerity at the moment is there

All our political parties think the debt is too high. The governments own measure is that 40% GDP debt is sustainable. We would have to cut government spending by over 1% of GDP for 50 years to reach that level of debt!

Neither of us will see the level of investment if the government can't control spending in other areas. The cost of providing the current state pension plan isn't sustainable, the chance of providing more is nil.

N1AK

grizzly1911 wrote: »

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

I don't think anyone is suggesting that they shouldn't so your point is pretty unclear.

Public sector pensions should be roughly comparable to private sector ones. I'd be in favour of changing job salary adverts to default to salary+pension contribution by default. The amount of people in the public sector I know who complain about pay by directly comparing salary against private sector jobs without even considering benefits is depressing. The policemen I know (only 3 admittedly) are terrible for this.

CLAPTON

N1AK wrote: »

I would suggest that PFI etc are debt regardless of how the government chooses to classify them, which if anything makes our current figures look worse.

Green taxes regardless of whether you agree with them are not debts. They are taxes just like stamp duty isn't debt and nor is inheritance tax or anything else.

Lenders aren't happy to lend to countries with very high levels of debt and no viable plan to repay it. Anyone lending to the UK at the moment will be lending for considerably less than 50 years so doesn't care about the long term viability of our budget. They also know that the budget isn't viable and we will make cuts or increase taxes at some point to resolve or delay it further.

If 100% GDP debt and a 1.8% deficit wasn't an issue then there's no way we'd be going through austerity at the moment is there

All our political parties think the debt is too high. The governments own measure is that 40% GDP debt is sustainable. We would have to cut government spending by over 1% of GDP for 50 years to reach that level of debt!

Neither of us will see the level of investment if the government can't control spending in other areas. The cost of providing the current state pension plan isn't sustainable, the chance of providing more is nil.

The point I was trying to make is that 'nominal' debt clearly isn't 'real' debt.
Green taxes (levied on utilities) clearly aren't debt but have the 'happy' result that the nominal deficit is less than otherwise would be the case so affects debt increase/reduction.

This leads me to question what level of debt is acceptable and however does you compare one country with another.

If making a rational choice many would have preferred to have increase government debt to fund all those PFI schemes but that would have broken Brown's 40% rule.
What value is the rule if we are worse off as a consequence?

So I less concerned about nominal debt levels that other things; like our ability to pay the interest, the cost of energy in the future, our growth prospects, the effects of the changing demographics.

Most government debt is owed to UK citizens (70% I think) who would happily lend more if indexed linked and UK has no problem borrowing money abroad on relatively low fixed rates over 10 or more years.

CLAPTON

N1AK wrote: »

I don't think anyone is suggesting that they shouldn't so your point is pretty unclear.

Public sector pensions should be roughly comparable to private sector ones. I'd be in favour of changing job salary adverts to default to salary+pension contribution by default. The amount of people in the public sector I know who complain about pay by directly comparing salary against private sector jobs without even considering benefits is depressing. The policemen I know (only 3 admittedly) are terrible for this.

I have long felt that all jobs should show the value of the salary 'package' which should comprise pay, pension contribution (value), plus something for holidays and car and benefits etc.

AndyGuil

MFW_ASAP wrote: »

Perhaps you weren't aware of this, but most final salary schemes have been closed in the private sector because they were too expensive.

Closed to new people joining, not to people already in them.

N1AK

AndyGuil wrote: »

Closed to new people joining, not to people already in them.

I know of two examples of private final salary schemes being ended for current members as well. You got what you were entitled to up to that point and any new contributions would be to a different scheme. I've only worked for two firms so it can't be that uncommon.

coastline

MFW_ASAP wrote: »

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.

A link to the NHS...the pension plan was changed from 2008...I believe it changes again in 2015..

http://www.nhsbsa.nhs.uk/Documents/Pensions/SD_guide_-_Online_(V11)_09.2013.pdf

an example in the old scheme..

A midwife retires after 28 years and 173 days pensionable membership with the best of the last three year’s pensionable pay of £25,650.
Her pension is

£25,650.00 x 28 years 173 days x 1/80 = £9,129.48 per year

Her retirement lump sum is 3 x pension, or
£25,650.00 x 28 years 173 days x 3/80 = £27,388.44