Pensions in Scotland After independence

jem16

Albermarle said:

Seems unlikely it is something to worry about in the short term. Current betting is that there will not be a referendum in the next three years ( 1/5 on )  and even if there is one down the line, it is about even money the result will be No.

Personally I would not be worried if my DC pot was with a provider with a HQ in Scotland, but state and public sector pensions for Scottish residents could be a nightmare to untangle.

Public Sector pensions have been devolved to Scotland for quite some time now. It’s all handled at the Scottish Public Pensions Agency. 

biscan25

Not something I'd really considered before.
As jem16 says, state pension are funded on a PAYG basis (current taxpayers are funding the current pensioner population), so GAD or the Scottish equivalent will have to come up with some other formula to work out an acceptable level, retirement age, and escalation rate of the state pension. Given it would be political suicide to reduce the state pension, future increases would probably be tinkered with get the cost to balance.
It's not a given that Scottish pensions would be more expensive though. Longevity and inflation would be the key determinants, and longevity is particular is more favourable in Scotland, with life expectancy at 65 a mere 18.6 years vs 19.8 in England.

ewaste

The UK would patently still exist albeit minus Scotland although it's certainly an opportunity for a rebrand 😂 no need to go through a proper tendering process 😉

As you say in practice pensions are ostensibly paid from taxation or rather debt issuance on a PAYG basis. However it's a UK 'contributory benefit' ergo does that contribution just get expunged.

If the UK no longer exists who then pays the state pension to Pensioners in England, Wales and Northern Ireland? especially considering previous internal mobility, born in one part of the UK, worked / working in another and retiring in another. Who pays the state pension to expats? do we set up a exUK shell company/pension fund for former member nations to contribute into?

Which honestly seems a pragmatic way forward with each former member nation setting up their own local scheme for ongoing accrual. 

As you say State Pensions would be part of negotiations it'd apparently be well worth getting rid of the burdensome Scots.

cobson

jem16 said:

If Scotland were to become independent then the UK would no longer exist...

I think it is more likely that the UK would continue to exist, and that Scotland would leave the UK, which would just be restyled as the 'United Kingdom of England, Wales and NI' or some such.  Westminster would want to maintain all of the current UK international agreements etc.  The fact that the UK was created by combining the kingdoms of England and Scotland doesn't necessarily require it to be destroyed if one kingdom wishes to leave.  The remaining kingdom would become the successor state and could maintain the name.

dunstonh

Personally I would not be worried if my DC pot was with a provider with a HQ in Scotland, 

I wouldn't be either.   The worth of a DC pot belongs to the individual regardless of their residency.

Virtually all financial services companies operating in Scotland will move to England.  They will create small subsidiaries for operating in Scotland for Scottish policyholders but the bulk of their business is in rUK and regulation will require them to be located in rUK.

The loss of offshore oil & gas and financial services income, along with no more Barnett formula subsidy is something that SNP has not addressed. i.e. what cuts will occur and how much taxation will need to go up.  How that filters through to post-independence state pension qualification is unknown.       

LHW99

cobson said:

jem16 said:

If Scotland were to become independent then the UK would no longer exist...

I think it is more likely that the UK would continue to exist, and that Scotland would leave the UK, which would just be restyled as the 'United Kingdom of England, Wales and NI' or some such.  Westminster would want to maintain all of the current UK international agreements etc.  The fact that the UK was created by combining the kingdoms of England and Scotland doesn't necessarily require it to be destroyed if one kingdom wishes to leave.  The remaining kingdom would become the successor state and could maintain the name.

Can Scotland still be regarded as a "kingdom" in its own right - they gave James 1st / 6th to England, and I don't think they've had their own since then?

cobson

LHW99 said:

Can Scotland still be regarded as a "kingdom" in its own right - they gave James 1st / 6th to England, and I don't think they've had their own since then?

I don't think that either England or Scotland are currently kingdoms in their own right, there is just the United Kingdom. If Scotland leave then I guess it would be up to them whether they want to be one.  If they do then I think that Billy Connolly would make a popular monarch....

bostonerimus

jem16 said:

bostonerimus said:

The UK pays state pension to people resident in foreign countries already so it would be strange if they did not pay SP to residents of an independent Scotland if they had UK NI contributions. 

If Independence happens then the UK ceases to exist so it would be strange to expect England, Wales and NI to continue to pay Scottish pensions whist simultaneously losing the revenue from Scottish NICs which actually funds it on a PAYG basis. 

I fully expect it to be the responsibility of the Scottish Government with an appropriate split of the NI Fund’s working balance. 

The UK would still exist, but in a different form without Scotland, The full name would have to change as the whole island of Great Britain would no longer be part of the UK so maybe it would become the "United Kingdom of England, Wales and Northern Island"

JoeCrystal

bostonerimus said:

jem16 said:

bostonerimus said:

The UK pays state pension to people resident in foreign countries already so it would be strange if they did not pay SP to residents of an independent Scotland if they had UK NI contributions. 

If Independence happens then the UK ceases to exist so it would be strange to expect England, Wales and NI to continue to pay Scottish pensions whist simultaneously losing the revenue from Scottish NICs which actually funds it on a PAYG basis. 

I fully expect it to be the responsibility of the Scottish Government with an appropriate split of the NI Fund’s working balance. 

The UK would still exist, but in a different form without Scotland, The full name would have to change as the whole island of Great Britain would no longer be part of the UK so maybe it would become the "United Kingdom of England, Wales and Northern Island"

More likely, it would be just Kingdom of England, Wales and Northern Ireland. Although if Northern Ireland does join Ireland in a border poll, then it is just Kingdom of England.

cobson

JoeCrystal said:

More likely, it would be just Kingdom of England, Wales and Northern Ireland. Although if Northern Ireland does join Ireland in a border poll, then it is just Kingdom of England.

Can't see them losing the United bit. They will want continuity, no change to existing agreements and institutions etc. To counter the critics they can just claim that England is made up of the kingdoms of Wessex, Mercia, Northumbria etc. which have been united.