Why do posters here have disproportionately higher than average pension funds...

Malthusian

Mistermeaner said:

How can any one think that sacrificing 5% of their pay to get a matched 5% from their employer is going to fund a retirement of equal standards to their working life ?

By not being as rich as you?

If you save 10% of your income into a pension from age 21-68, with conservative assumptions of 4% withdrawal rate and 2% growth above inflation, and including the State Pension...

• Someone on income of £15,000pa (full-time minimum wage) will have pension income of £14,000pa, or 93% of working income*
• Someone on income of £26,000pa (median UK income) will have pension income of £17,500pa, or 67% of working income (funnily enough the classic rule of thumb for how much income you need as a % of salary)
• Someone on income of £50,000pa (higher rate tax threshold) will have pension income of £25,000pa, or 50% of working income

*albeit there is a high risk of their pension being means-tested away under future governments

Bobziz

robadger said:

doris540 said:

https://www.thisismoney.co.uk/money/markets/article-8093327/Public-sector-workers-pensions-aristocrats.html
I think this puts our point forward in The Private sector 

The Daily Mail is of course famously even-handed in its attitude to the public sector. 

Ok, I'm confused now. I thought we'd had enough of experts, but the ever reliable and balanced DM says "Meanwhile, experts point out that the number of public sector 'pensions aristocrats' has increased, and taxpayer contributions to prop them up has soared.". Perhaps it's a day of the week thing, and it's only every other day that we've had enough of experts ?

antdon

Many Thanks to all the  posters....
17k views....and lots of opinions...
Probably very true that people with small pensions, or people with no interest in their finances, would generally have very little interest in the details here......
Some fascinating comments though....

Mistermeaner

Malthusian said:

Mistermeaner said:

How can any one think that sacrificing 5% of their pay to get a matched 5% from their employer is going to fund a retirement of equal standards to their working life ?

By not being as rich as you?

If you save 10% of your income into a pension from age 21-68, with conservative assumptions of 4% withdrawal rate and 2% growth above inflation, and including the State Pension...

• Someone on income of £15,000pa (full-time minimum wage) will have pension income of £14,000pa, or 93% of working income*
• Someone on income of £26,000pa (median UK income) will have pension income of £17,500pa, or 67% of working income (funnily enough the classic rule of thumb for how much income you need as a % of salary)
• Someone on income of £50,000pa (higher rate tax threshold) will have pension income of £25,000pa, or 50% of working income

*albeit there is a high risk of their pension being means-tested away under future governments

Thanks : some interesting numbers 
A very long working life though and arguably high with drawal rate 
How's it look if we do age 24 (we went uni and travelling) while finishing at 60 (who wants to work) past that age. Plus safe withdrawal at 3% ?

michaels

Bravepants said:

I guess the answer to the problem of public sector pensions is that the UK Gov could outsource, or privatise, everything. People can hang on to their tax but pay for everything they currently take for granted, like defense, refuse collection, schooling, street lighting, roads (with modern camera technology and image recognition it's easy to establish a network of road tolling), medicine (we have a prospective buyer for the NHS after all) perhaps DOnald Trump,  Elon Musk, or Amazon, or Google, or Facebook can help develop all of that? I'm sure that above-inflation price increases won't occur and everything will be a lot fairer. These companies won't have to pay any tax so they can re-invest and reduce prices for us punters. In another example, during future pandemics punters would take advantage of their "Pandemic Income Insurance", running alongside a variety of other insurances for which they pay premiums, for example, health. The Pandemic Insurance can provide an equivalent to their monthly income, up to perhaps 80% of their pay, for a fixed period. Those who elect NOT to pay for the insurance (it's a free world afterall, and we don't need the nanny state to tell us what to do) of course won't be eligible, but hey at least there will be no complaints made towards the Government for every little thing that goes wrong and they can get on with ..... running ... the.., err, ... country. Hmm!

So then if people have less tax to pay they can pay more into their pensions right?

There then would be no such thing as public sector pensions, we would ALL be responsible for our own future pension provision equally. And there would be no inequality or anything because everyone will have spent their money on all of these fantastic, high quality, services while saving towards their future pension provision.

As for those on benefits, well, they would have to be provided again based on the level of insurance premiums that people have paid. Those who are on long term sick, have learning difficulties, or are unable to work in general can apply for funding from a benevolent fund established by the private sector, a kind of "giving back to society" if you will. So a portion of the profits made by these companies based on services that have been paid for by their subscribers can be set aside to help the poor and needy. The Government of course would have no input in any of this and would have no recourse to ensure fair play or consistency, or adherence to standards.

My GP is a private sector worker providing a public service, as is my refuse collector, the company who clean the local library, etc, etc.  IE no need for the state to employ someone for the state to provide a service.

shinytop

michaels said:

Bravepants said:

I guess the answer to the problem of public sector pensions is that the UK Gov could outsource, or privatise, everything. People can hang on to their tax but pay for everything they currently take for granted, like defense, refuse collection, schooling, street lighting, roads (with modern camera technology and image recognition it's easy to establish a network of road tolling), medicine (we have a prospective buyer for the NHS after all) perhaps DOnald Trump,  Elon Musk, or Amazon, or Google, or Facebook can help develop all of that? I'm sure that above-inflation price increases won't occur and everything will be a lot fairer. These companies won't have to pay any tax so they can re-invest and reduce prices for us punters. In another example, during future pandemics punters would take advantage of their "Pandemic Income Insurance", running alongside a variety of other insurances for which they pay premiums, for example, health. The Pandemic Insurance can provide an equivalent to their monthly income, up to perhaps 80% of their pay, for a fixed period. Those who elect NOT to pay for the insurance (it's a free world afterall, and we don't need the nanny state to tell us what to do) of course won't be eligible, but hey at least there will be no complaints made towards the Government for every little thing that goes wrong and they can get on with ..... running ... the.., err, ... country. Hmm!

So then if people have less tax to pay they can pay more into their pensions right?

There then would be no such thing as public sector pensions, we would ALL be responsible for our own future pension provision equally. And there would be no inequality or anything because everyone will have spent their money on all of these fantastic, high quality, services while saving towards their future pension provision.

As for those on benefits, well, they would have to be provided again based on the level of insurance premiums that people have paid. Those who are on long term sick, have learning difficulties, or are unable to work in general can apply for funding from a benevolent fund established by the private sector, a kind of "giving back to society" if you will. So a portion of the profits made by these companies based on services that have been paid for by their subscribers can be set aside to help the poor and needy. The Government of course would have no input in any of this and would have no recourse to ensure fair play or consistency, or adherence to standards.

My GP is a private sector worker providing a public service, as is my refuse collector, the company who clean the local library, etc, etc.  IE no need for the state to employ someone for the state to provide a service.

But doesn't s/he get a public sector pension?  

Suseka97

doris540 said:

I never said you were parasites its the system it just annoys alot of us in the private sector that our pensions are worth five times less on average .Everything ive contributed to my company pension in last 12 months has been lost due to the markets Public sector ones totally untouched. The public sector say their salaries are lower and the pension is a form of compensation. So if thats the case our wages should be five times more than the public sector wages...................never in a month of sundays . Parasites no , milk the system yes. One example large government dept many staff were claiming first class travel on the train for meetings in London it got to a point that it was cheaper for them to have their own coaches which they do now all kitted out tables the lot and go by road. Friend of mine husband in the FCO all their kids went to private school from day one till they went to uni all their fees paid by the taxpayer and all the travel etc. Can the average man in the street afford to pay Private school fees ...............exactly.. 

Gosh.. now I'm starting to get really peed off with your posts... please stop lumping all public sector workers into your version of the truth... We do not ALL benefit from your version of it!!  I've worked in the public sector for 40 years and have never travelled first class, nor have I been able to send my children to private school. At times I struggled to put food on the table.  I've also been working my !!!!!! off at home since the lockdown. I deal with email correspondence well into the late evening and across the weekend, just to stay on top of my workload!

I do have a DB pension on the horizon and I've worked my socks off for it, its by no means the figure you think it is and it won't. buy me a luxury lifestyle.  So please... get that god damn chip off your shoulder.

bigadaj

GPs are an anomaly, self employed but get a public sector pension.
One thing that isn't focused on enough in my opinion is the effect of outsourcing. So the lower paid jobs that used to benefit from db pensions are now outsourced with reductions in pensions and other benefits, whilst the higher paid management jobs are retained, with far more costly pensions. Lower paid jobs also cost less in total pension costs and those costs are offset by the fact there is a reduction in other means tested benefits etc

michaels

bigadaj said:

GPs are an anomaly, self employed but get a public sector pension.
One thing that isn't focused on enough in my opinion is the effect of outsourcing. So the lower paid jobs that used to benefit from db pensions are now outsourced with reductions in pensions and other benefits, whilst the higher paid management jobs are retained, with far more costly pensions. Lower paid jobs also cost less in total pension costs and those costs are offset by the fact there is a reduction in other means tested benefits etc

In general those on higher salaries pay a higher proportion of their incomes in taxes and the same probably applies to their pensions.  However they are also more likely to see increasing salaries over their career making final salary particularly valuable compared to contributions.

It also means that if you also include pension costs it is easy for private sector cleaners to be cheaper than their public sector counterparts even if salaries are the same.  Undoubtedly most workers do not realise how valuable a public sector pension is / put much more value on immediate income over future pension otherwise many more would seek public sector employment.

I wonder if the govt offered their employees a chance to opt out of some of their pension entitlement in return for a higher salary worth much less how many would take them up on the offer.  Probably won't happen as I bet it would show up as a cost in the national accounts even though it would actually save the taxpayer money in the long term.

snowqueen555

Malthusian said:

Mistermeaner said:

How can any one think that sacrificing 5% of their pay to get a matched 5% from their employer is going to fund a retirement of equal standards to their working life ?

By not being as rich as you?

If you save 10% of your income into a pension from age 21-68, with conservative assumptions of 4% withdrawal rate and 2% growth above inflation, and including the State Pension...

• Someone on income of £15,000pa (full-time minimum wage) will have pension income of £14,000pa, or 93% of working income*

^ This

Honestly, without the state pension, a lot of low earners like myself will be screwed. A lot of people say to not take the state pension into account, but it would be impossible to get a livable salary without it for low income earners.

I am 35 and currently have a DB pension worth around £4500 a year. I am on target to get a full 35 years NI state pension, so the minimum I will get is hopefully £13k a year, which is probably enough to survive on. I currently earn 20k a year but live on £15k I think. It's not a good lifestyle, but it is livable.

Anything for the next 20 years is a bonus.

I also have no house, so that is a major bummer.