What will teachers pension increase by this year? 10% CPI?

hugheskevi

Exodi said:

Out of interest, why?

Because many will have paid National Insurance contributions on the income when originally received and put into a pension, so it would be unfair to them to have to pay it a second time when the pension is paid out. The lower income tax rate on pension payments would just be reflecting that.

Although the argument would not apply to employer contributions and salary sacrifice contributions, but I doubt record keeping, transfers, etc, would allow identification of source of funds to that level of detail even if there were to be a desire to differentiate.

horsewithnoname

Exodi said:

SouthCoastBoy said:

I think the next few years could highlight the massive difference between govt db, db and dc pensions
 The govt db pensions really are the gold standard when it comes to pensions.

My partner has a govt db pension, I work in the private sector and have a DC pension.

She hadn't really paid much attention to her pension (we're still relatively young) but we looked at it for the first time a couple of weeks ago and... I mean jesus wept, it is absolutely bonkers. I earn about 60% more than her (and contribute equivalently), yet her pension is likely to be 4x+ mine.

While we might be able to go on the odd holiday every other month on mine, her pension could easily see us on a cruise every month with spending money.

I heard the stereotypes about public sector pensions, but as a private sector worker, your eyes will water if you see the actual numbers behind them.

the average civil service pension is about £4,200 p.a. in fact. Not that eyewatering.

westv

Exodi said:

Silvertabby said:

MX5huggy said:

molerat said:

Ibrahim5 said:

Nothing for the workers. Everything for the pensioners.

Workers just got a £30 pm increase in their take home, pensioners got nothing.

Only because in April workers started paying 1.25% extra Tax on their income but pensioners didn’t (along with land lords, company owners etc). 

NI needs to be scrapped, basic rate of Income tax 30% with a higher threshold say £16000. 

Won’t happen, pensioners have this annoying  habit of voting. 

The idea of a universal rate of combined tax and NI was toyed with some years ago, but with the proviso that pension income would still be taxed at 20% (or 40% if applicable).

Don't know why it never happened.

Out of interest, why?

I know I'm going to be hated for saying this, but the stereotype that 'all pensioners are poor' is outdated in our modern day society. Free travel, tv licenses, fuel subsidies, consumer discounts, government schemes, etc  

What about those people drawing a pension who don't currently get all that?

hugheskevi

horsewithnoname said:

the average civil service pension is about £4,200 p.a. in fact. Not that eyewatering.

The latest Civil Service Pension Scheme Resource Accounts show total annual pension in payment of £5.8bn going to 706,000 pensioner members, an average payment of £8,200p/a.

It is a meaningless figure though, as it mixes in members with 2 years of service with those with 40, surviving dependents of original members, and so on. For example, the average pension of a male pensioner member (excl survivors) is £11,800 whilst the average female member pension is £6,600.

Linton

Exodi said:

Silvertabby said:

MX5huggy said:

molerat said:

Ibrahim5 said:

Nothing for the workers. Everything for the pensioners.

Workers just got a £30 pm increase in their take home, pensioners got nothing.

Only because in April workers started paying 1.25% extra Tax on their income but pensioners didn’t (along with land lords, company owners etc). 

NI needs to be scrapped, basic rate of Income tax 30% with a higher threshold say £16000. 

Won’t happen, pensioners have this annoying  habit of voting. 

The idea of a universal rate of combined tax and NI was toyed with some years ago, but with the proviso that pension income would still be taxed at 20% (or 40% if applicable).

Don't know why it never happened.

Out of interest, why?

I know I'm going to be hated for saying this, but the stereotype that 'all pensioners are poor' is outdated in our modern day society. Free travel, tv licenses, fuel subsidies, consumer discounts, government schemes, etc at the same time that housing values have had a once in a lifetime gazillion percent increase. Anecdotally, of the pensioners I know, most find it quite perplexing that despite having very little outgoings, they are given wheelbarrows of public cash. My stepdad puts his winter fuel allowance straight into savings every year, I doubt he's the only one. Obviously there will be also be people that are desperate for this cash.

Plus, in the past lucrative DB pensions were more prevelant. Since then employers have realised how costly they are to maintain and largely non-public employees are contributing to DC pensions... which usually are a sliver of an equivelant DB scheme. You have people that have double dipped on this - life expectancy has dramatically increased whereas they may not have necessarily 'paid their fair share' for the benefit (obviously the longer you live with a DB pension the better, because the amount you get is fixed, whereas with a DC it can poses challenges), at the same time they have been embraced by the public purse (or moreso, their voting power allows them to be ).

It just seems like overkill that people who have better pensions than the current workforce, living in houses that have 100x in value, while living longer than they contributed for, are subsidised by people currently working in a cost of living crisis.

Unfortunately, I'm very aware of this forums demographic, so I'm fully ready to be shot down for this!

As a moderately well-off pensioner I agree that people in my position should pay appropriate tax for the NHS etc.  The same also applies to people of any age living off investment returns.  An answer I would support is to transfer some of the NI payment to income tax and CGT. 

The heating allowance is hardly "wheelbarrows" of cash.  It was introduced as an quick fix measure when OAPs dying of hypothermia started to become a regular headline every winter.  It could not practically be means tested, the admin load would be horrendous.  I agree that it is no longer justified now.  But it is slowly disappearing as it hasnt been increased with inflation for many years until this year's one-off which is justified as the poorer pensioners live hand to mouth and the increased prices would cause more "dying of cold" headlines. 

Any argument that is unfair that some pensioners are wealthier and on average may live in better housing than the young is hardly justifiable since they have been saving for much longer. Increased house prices hasnt really increased people's available wealth - they have to live somewhere.  In the old days granny would expect to live with her children.  The children are not so keen on the idea now.

Why the focus of your ire on DB pensions?  There was no requirement for a DB pension to be index linked until 1997. Many current pensioners including myself have never had one. Employer pension contributions of any type were not compulsory until recently and in some cases were only available as a management level perk.  Even when available people often chose not to contribute.  There are many people with little more than State Pension to live on - that's about half the full time Minimum Wage.

You will be old at some point. It will happen more quickly than you think.  At that time life expectancy is expected to be significantly higher than now and your grand children will be complaining that you and your generation are short-changing them.

nigelbb

Ibrahim5 said:

Nothing for the workers. Everything for the pensioners.

Current workers benefit too as pension is deferred salary.

Andy_L

horsewithnoname said:

Exodi said:

SouthCoastBoy said:

I think the next few years could highlight the massive difference between govt db, db and dc pensions
 The govt db pensions really are the gold standard when it comes to pensions.

My partner has a govt db pension, I work in the private sector and have a DC pension.

She hadn't really paid much attention to her pension (we're still relatively young) but we looked at it for the first time a couple of weeks ago and... I mean jesus wept, it is absolutely bonkers. I earn about 60% more than her (and contribute equivalently), yet her pension is likely to be 4x+ mine.

While we might be able to go on the odd holiday every other month on mine, her pension could easily see us on a cruise every month with spending money.

I heard the stereotypes about public sector pensions, but as a private sector worker, your eyes will water if you see the actual numbers behind them.

the average civil service pension is about £4,200 p.a. in fact. Not that eyewatering.

but that is becsue the average length of service/salary is quite low. 
It is what is got out compared to what was paid in by the employee that is "gold plated" not necessarily the raw amount

nigelbb

Exodi said:

SouthCoastBoy said:

I think the next few years could highlight the massive difference between govt db, db and dc pensions
 The govt db pensions really are the gold standard when it comes to pensions.

My partner has a govt db pension, I work in the private sector and have a DC pension.

She hadn't really paid much attention to her pension (we're still relatively young) but we looked at it for the first time a couple of weeks ago and... I mean jesus wept, it is absolutely bonkers. I earn about 60% more than her (and contribute equivalently), yet her pension is likely to be 4x+ mine.

While we might be able to go on the odd holiday every other month on mine, her pension could easily see us on a cruise every month with spending money.

I heard the stereotypes about public sector pensions, but as a private sector worker, your eyes will water if you see the actual numbers behind them.

You don't contribute equivalently. You have chosen to work for a higher salary & poorer pension. It's always been the way with public sector jobs. The old deal was that working in the public sector was a lower salary with a good pension plus secure employment but now even the jobs of nurses & teachers aren't safe from redundancy.

Linton

hugheskevi said:

horsewithnoname said:

the average civil service pension is about £4,200 p.a. in fact. Not that eyewatering.

The latest Civil Service Pension Scheme Resource Accounts show total annual pension in payment of £5.8bn going to 706,000 pensioner members, an average payment of £8,200p/a.

It is a meaningless figure though, as it mixes in members with 2 years of service with those with 40, surviving dependents of original members, and so on. For example, the average pension of a male pensioner member (excl survivors) is £11,800 whilst the average female member pension is £6,600.

Since the UK  over 65 poplulation is about 12M your figures would indicate that about 94% of pensioners aren't receiving a goldplated CIvil Service pension.

Prism

Exodi said:

SouthCoastBoy said:

I think the next few years could highlight the massive difference between govt db, db and dc pensions
 The govt db pensions really are the gold standard when it comes to pensions.

My partner has a govt db pension, I work in the private sector and have a DC pension.

She hadn't really paid much attention to her pension (we're still relatively young) but we looked at it for the first time a couple of weeks ago and... I mean jesus wept, it is absolutely bonkers. I earn about 60% more than her (and contribute equivalently), yet her pension is likely to be 4x+ mine.

While we might be able to go on the odd holiday every other month on mine, her pension could easily see us on a cruise every month with spending money.

I heard the stereotypes about public sector pensions, but as a private sector worker, your eyes will water if you see the actual numbers behind them.

When you say contribute equivalently I assume you mean that you contribute at around 30% of your salary as that is what typically happens for a government pension