Private pensions popular in UK but not in France, Germany, Spain
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I thought that private pensions were popular all across Europe but read something on the OECD website and I was completely wrong. It seems in Germany, France Spain and Italy, they have very little in private pensions.
Why would this be the case?
Why would this be the case?
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newbinvestor wrote: »I thought that private pensions were popular all across Europe but read something on the OECD website and I was completely wrong. It seems in Germany, France Spain and Italy, they have very little in private pensions.
Why would this be the case?
Because their pensions are hybrid - part State and part private, with both employees and employers paying in a lot more than we do in just NI. Possibly not much call for totally private pensions on top.
The constant complaints about European State pensions being so much more than the UK State pension are largely unfounded, as a proper comparison would be the European pension versus the UK State pension plus all occupational/private pensions the pensioner did pay into/could have paid into.0 -
Its because state pensions are much more generous (and therefore less requirement for private pensions).
UK has by far the worst state pensions of any OECD country.
https://www.weforum.org/agenda/2018/02/retirees-in-these-countries-receive-100-of-a-working-salary/Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
Marine_life wrote: »Its because state pensions are much more generous (and therefore less requirement for private pensions).
UK has by far the worst state pensions of any OECD country.
https://www.weforum.org/agenda/2018/02/retirees-in-these-countries-receive-100-of-a-working-salary/
That is misleading due to the differences in the systems.
If you consider only state pension the UK is lower but if you consider benefits as well as pensions, Framce and Germany provide around £150 a week minimum, the UK £155, and Spain £80. Germany's pensions are income related with no maximum so the state pension is higher for the rich. The UK provides a similar level of support for poor pensioners but lets the rich manage their own.
https://fullfact.org/europe/pensioners-eu-uk/0 -
Thes figures never included SERPs and the Second State Pension that could put the total pension of some higher earners at around £15k per year in the UK and those on near that amount retiring in the next few years will still get that.0
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From personal experience working in France in general for employees the state pensions are vastly better & there is very little need for occupational or private pensions. There are multiple pensions firstly a basic state pension plus earnings related pensions. The aim is for pension to be 50-70% of salary.
My French pensions from working 15 years in a well paid job amount to more than my UK DB occupational pension (also 15 years in a well paid job) plus near full UK state pension. I am benefiting from the favourable exchange rate since the pound plummeted against the Euro after the 2016 referendum.
It’s far better to have universal state provision of a decent pension rather than leaving it to the whim of private employers. Auto enrolment is a start but the contribution level is far too low. The social charges deducted from my French salary were much higher than in the UK but I’m very grateful to now have the pension. Ultimately you get what you pay for.0 -
From personal experience working in France in general for employees the state pensions are vastly better & there is very little need for occupational or private pensions. There are multiple pensions firstly a basic state pension plus earnings related pensions. The aim is for pension to be 50-70% of salary.
My French pensions from working 15 years in a well paid job amount to more than my UK DB occupational pension (also 15 years in a well paid job) plus near full UK state pension. I am benefiting from the favourable exchange rate since the pound plummeted against the Euro after the 2016 referendum.
It’s far better to have universal state provision of a decent pension rather than leaving it to the whim of private employers. Auto enrolment is a start but the contribution level is far too low. The social charges deducted from my French salary were much higher than in the UK but I’m very grateful to now have the pension. Ultimately you get what you pay for.
Does France and the rest of Europe have a NHS system like the UK? also do they have a benifit system for people to fall back on.ITS NOT EASY TO GET EVERYTHING WRONG ,I HAVE TO WORK HARD TO DO IT!0 -
Yes. France has a superior health service basically because they are prepared to spend more on it. There are also comprehensive benefits for unemployed etc As with pensions you get what you pay for & the French government & people are prepared to spend what it costs. Higher government spending on health & social security is the norm for other EU countries.Does France and the rest of Europe have a NHS system like the UK? also do they have a benifit system for people to fall back on.0 -
It’s far better to have universal state provision of a decent pension rather than leaving it to the whim of private employers.
France does not have a "unversal state provision of a decent pension". It has different systems for the public and private sectors. The current strikes are against Macron's attempt to move to a universal system.
The basic state pension is capped - 1,609 euro in 2016. Beyond that there are compulsary but private schemes.
The French government is trying to cut the amoung they spend on pensions from over 14% to 12%.
As I stated before French, Germany, and the UK all provide similar support up to similar income levels (£150 to £155 pw)0 -
Doesn't this mean that demographics are much harder for the European countries than for the UK?
The state system (and govt pensions) are payg, funded by current contributions but other DB (including local Govt) and DC are prefunded.
Thus whilst we probably need to keep the dependency ratio pretty constant to afford our pensions theirs may well need an ever increasing number of workers per retiree.I think....0 -
On your figures the basic state pension in France is well over double that of the UK (€1609 vs £730).France does not have a "unversal state provision of a decent pension". It has different systems for the public and private sectors. The current strikes are against Macron's attempt to move to a universal system.
The basic state pension is capped - 1,609 euro in 2016. Beyond that there are compulsary but private schemes.
The French government is trying to cut the amoung they spend on pensions from over 14% to 12%.
As I stated before French, Germany, and the UK all provide similar support up to similar income levels (£150 to £155 pw)
There are dozens of different compulsory earnings related supplementary pensions but the crucial difference versus the UK is that they are industry wide rather than each employer having a different pension scheme thus achieving economies of scale. The predominant schemes (AGIRC-ARRCO) which are the pensions I get are CARE schemes.
RSA (social security benefit level) is :-
€559,74/month for a single person
€839,62/month for a couple or a single person with one child
€1007,55/month for a couple with one child or a single person with two children
€1 175,47/month for a couple with two children
€223,89/month for each additional child
ASPA (social security benefit level for over 65s) is €868,20/month for a single person & 1 347,88/month for a couple)
Unemployment benefit (ARE ) is paid for up to three years at a level of 57-75% of previous salary. You need six months contributions to be entitled to ARE.0
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