A Pensions good news story for once!

agarnett

I thought it might be interesting to share good news which an elderly relative has been given recently, following the death of her husband:

It is twofold, and both came as a pleasant surprise to me as I have been handling affairs.

First a little background:

Husband's state pension was around £8,600pa
Wife's SP was around £3,700pa
Both were in late 80s
Husband received around £7,000pa from approx 27 years service in a Final Salary Scheme.
Wife had no additional private pension despite being a 15 hr per week working in the education system for very many years before retirement.

1. Upon husband's death wife "inherited" part of husband's SP meaning her SP is now around £9,500
2. Widows Pension from the final salary scheme was based not on the £7,000pa but on what that pension would have been if no tax free lump sum had been taken (which it had been before the £7,000pa - or earlier equivalent before routine inflation protection increases - started)

Net result FS scheme Widows pension is now over 75% of what husband had been receiving. Yes, not 50% which would be the sign of a good FS scheme, but over 75%!

So overall the household income is still over 70% of what it was before the husband's death.

Things are so very different now, aren't they?

I was very pleased to receive the news, but sad for subsequent generations, especially millennials, who have to think so hard now about how they will survive in old age.

I consider this type of story another reason why higher education should be completely free and even further encouraged by non-means tested maintenance grants. Millennials need that higher education in order to cleverly and wisely plot their own survival.

The usual comparison between graduate career incomes and non-graduate career incomes designed to make higher education look like a luxury choice, and the old defence of tuition fees that says 5% of us went to university in the 70s versus over 50% now so the country can't afford it, surely takes no account of the massive differences between generations of expected retirement incomes.

Two or three generations back, you could leave school at 14, never study anything except the Sun or the Daily Mirror, and still find yourself living in relative clover in retirement without thinking much about it

AnotherJoe

agarnett wrote: »

I consider this type of story another reason why higher education should be completely free and even encouraged by non-means tested maintenance grants. Millennials need that higher education in order to cleverly and wisely plot their own survival. Two or three generations back, you could leave school at 14, never study anything except the Sun or the Daily Mirror, and still find yourself living in relative clover in retirement without thinking much about it

I think you are operating under the misunderstanding that higher education teaches "life skills". It doesn't. You could leave with a pHD and still be utterly clueless about basic finance such as loans, pensions, tax, and whilst I'm on a rant, other day to day stuff like wiring a plug, changing a car tire and simple cooking.

agarnett

AnotherJoe wrote: »

I think you are operating under the misunderstanding that higher education teaches "life skills". It doesn't. You could leave with a pHD and still be utterly clueless about basic finance such as loans, pensions, tax, and whilst I'm on a rant, other day to day stuff like wiring a plug, changing a car tire and simple cooking.

I don't know if you are a PhD, or just another Joe, but the suggestion that the oldies who enjoy adequate pensions somehow exhibited special life skills in order to assure their security is somewhat laughable. The only life skills they exhibited which members of modern society generally don't anymore were much stronger ingrained resistance to corruption and resistance to inculcating dubious morals in business, voting for the right sort of government, and standing together to ensure continuous improvement in working conditions and collectively bargained welfare.

Now it is everyman and woman for him or herself, and for that, your PhD or your Masters in Data Science might actually give you the edge in dog eat dog as well as being able to correct your own tax code without weeks of waiting for someone to look at it for you, and whilst I'm on a rant too, being inherently able to follow and assimilate at a glance the gist of a decent recipe to create something almost worthy of a Michelin menu without ever needing to be known as a good cook!

But if you are right, and I am wrong, AnotherJoe, then it means most people still need the support that most people used to get, because most people then and now couldn't change a plug or a car tyre. We are of the same DNA as our grandparents. Our brains work individually just as well, but on this subject we seem to have faffed it up collectively, and royally!

Our present Pensions systems (both state and "private") have fallen into complete disrepair in respect of protecting future senior citizens. That's a governmental problem, not an individual one unless you want to make it so? If you are Alright Jack, then you probably do?

Malthusian

If university education was correlated with financial skills then universities wouldn't run one of the biggest final salary schemes in the country for the benefit of the UK's professors and lecturers (and their admin staff). The profs would have actively demanded that the universities pay the contributions necessary to maintain the USS into a defined contribution scheme, which they could invest using their superior financial knowledge to deliver better income in retirement with greater flexibility.

A large number of graduates will leave university with a five-figure debt and less earning potential than their peers from the same school year who now have 3-4 years employment experience and no such debt. So if we ask ourselves who has the best modern survival skills and financial knowledge between these graduates and their non-graduate peers, the graduates are losing by a street on every single benchmark. This is why we need someone to do for the university sector what Henry VIII did for the monasteries.

bostonerimus

I find that financial literacy is not strongly correlated with someone's level of education. However, if you are able to understand some statistics and probability it helps in financial planning.

atush

bostonerimus wrote: »

I find that financial literacy is not strongly correlated with someone's level of education. However, if you are able to understand some statistics and probability it helps in financial planning.

You can say that again, given the number of teachers nurses and the like who who post here and dont understand their DB pensions.

AnotherJoe

agarnett wrote: »

I don't know if you are a PhD, or just another Joe, but the suggestion that the oldies who enjoy adequate pensions somehow exhibited special life skills in order to assure their security is somewhat laughable.

Where on earth do you think I claimed that?

I was merely responding to your claim that if everyone went to university (or higher education anyway) they would be aware about financial matters such as pensions. That was all. No idea where the rest of your curious rant came from or why it was aimed at me when i merely pointed out the bleedin' obvious..

If I had a proposal to make, it would be a "life skills" course at GCSE level which was mandatory and would cover basic finance, APR, interest, pensions.

Anonymous101

Malthusian wrote: »

If university education was correlated with financial skills then universities wouldn't run one of the biggest final salary schemes in the country for the benefit of the UK's professors and lecturers (and their admin staff). The profs would have actively demanded that the universities pay the contributions necessary to maintain the USS into a defined contribution scheme, which they could invest using their superior financial knowledge to deliver better income in retirement with greater flexibility.

A large number of graduates will leave university with a five-figure debt and less earning potential than their peers from the same school year who now have 3-4 years employment experience and no such debt. So if we ask ourselves who has the best modern survival skills and financial knowledge between these graduates and their non-graduate peers, the graduates are losing by a street on every single benchmark. This is why we need someone to do for the university sector what Henry VIII did for the monasteries.

Going off on a slight tangent from the thread i completely agree with your Henry VIII analogy. Its something I feel very strongly about. Studying at University is sold as some great dream to our youngsters and its completely wrong. Education for educations sake doesn't equal the best path in a lot of situations. It does however create an economy in Undergraduate degree's for the institutions and also very conveniently keeps the employment figures up.

Having attended a good University and gained a strong Science degree, so not one of your lower typically discussed nonesense subjects, I'm suitably qualified to comment that I would not recommend attending University unless there was a very clear vocational need to.

Getting back to the subject I think that financial awareness should be on the national curriculum for all 11-16 year olds. Again this is probably not in the Government's interest however as independent critical thinkers are really what they want. Perhaps lessons in how to be good consumers might be more likely to feature?

agarnett

AnotherJoe wrote:

me wrote:

I consider this type of story another reason why higher education should be completely free and even encouraged by non-means tested maintenance grants. Millennials need that higher education in order to cleverly and wisely plot their own survival. Two or three generations back, you could leave school at 14, never study anything except the Sun or the Daily Mirror, and still find yourself living in relative clover in retirement without thinking much about it

I think you are operating under the misunderstanding that higher education teaches "life skills". It doesn't. You could leave with a pHD and still be utterly clueless about basic finance such as loans, pensions, tax, and whilst I'm on a rant, other day to day stuff like wiring a plug, changing a car tire and simple cooking.

AnotherJoe wrote:

me wrote:

I don't know if you are a PhD, or just another Joe, but the suggestion that the oldies who enjoy adequate pensions somehow exhibited special life skills in order to assure their security is somewhat laughable.

Where on earth do you think I claimed that?

I was merely responding to your claim that if everyone went to university (or higher education anyway) they would be aware about financial matters such as pensions. That was all.

Oh well, that was your misunderstanding. I was claiming that people who get a higher education are better equipped in developing wisdom in a great many things other than in any narrow field of their subject choice.

I detect from your spelling that you are indeed another Joe rather than the man on the Clapham Omnibus, but I fully accept that you could be a wise transplanted hybrid

No idea where the rest of your curious rant came from or why it was aimed at me when i merely pointed out the bleedin' obvious.

Well that makes two of us ranters who haven't yet quite got it together then :rotfl:

If I had a proposal to make, it would be a "life skills" course at GCSE level which was mandatory and would cover basic finance, APR, interest, pensions.

I don't disagree, but first we need free and government supported university education for all our youngsters so they have a comfortable cabin from which to start to navigate us out of the mess we have left them without worrying about the Erudios and other pirates of this world knocking on their door.

The main subject of this thread is Good News for a few of those who remain who truly remember what it means to live in a country governed for the benefit of the many not the few, and who can still smile today when good news emanating from back then surfaces again and reminds them how good it was to be ordinary and implicitly honorable, and beholden to no pirated culture. They were in fact once part of the hard-manual working part of the many, and not of the few, and hopefully by Friday morning we will start getting a lot more good news for the many with Mr Corbyn at the helm please

I will graciously overlook that the lady in the OP who got the good news voted for Brexit!

JoeCrystal

agarnett wrote: »

I was very pleased to receive the news, but sad for subsequent generations, especially millennials, who have to think so hard now about how they will survive in old age.

I personally thought very hard indeed and put aside about 25% of my salary as best as I can into a DC pension pot when I starts lurking here and still, I feel a sense of self-reproach that it is not enough for my old age. It seems to me that most generations do rely heavily on the state pension and with each successive generation, the reliance on state pension will only grow greater in the future, especially if they do not have enough retirement provisions themselves. The auto-enrolment will helps for millennials, but it is not enough, I think for now.

agarnett

JoeCrystal wrote: »

I personally thought very hard indeed and put aside about 25% of my salary as best as I can into a DC pension pot when I starts lurking here and still, I feel a sense of self-reproach that it is not enough for my old age. It seems to me that most generations do rely heavily on the state pension and with each successive generation, the reliance on state pension will only grow greater in the future, especially if they do not have enough retirement provisions themselves. The auto-enrolment will helps for millennials, but it is not enough, I think for now.

Good for you Joe, but not so good for the many who aren't as adept at thinking hard. I just hope those turkeys think hard today and get out and vote for the many instead of laying themselves belly up for a Tory's Christmas!