Pensions Commission First Report

Milarky · 18 October 2004 at 2:14AM

This Pensions board has 'lit up' in the last week - no doubt in reaction to the coverage surrounding the subject with the arrival of the Pensions Commssion's First Report.

http://www.pensionscommission.org.uk/index.asp

Has anybody had a chance to look at the Report itself, or have any comments on its outlook or its 'stance'? I've been working through it. It is an analysis of ''where we are'' but contains no overt prescriptions for change.

There will be a Second Report in about a year's time which will contain specific recommendations...

dunstonh · 18 October 2004 at 4:27AM

I have only followed the financial press comments on it and it appears it has said nothing that is not already known.

The next paper will be the interesting one. (at least I hope so ;D )

deemy2004 · 18 October 2004 at 4:39AM

There saving the bad news until after the election.

Taxes up
Compulsory saving ?

Only good bit of good, may be the abandonment of the cut in ISA limits from April 2006 ;D

dunstonh · 18 October 2004 at 12:42PM

Only good bit of good, may be the abandonment of the cut in ISA limits from April 2006 ;D

There was nothing in the report saying that. It is unlikley to see any reference to ISAs in this or the next report as ISAs are not classed as a retirement product currently.

Pal · 18 October 2004 at 12:48PM

I think ISAs are seen as completely opposed to retirement savings. It would not surprise me if ISA limits were reduced anyway in order to force people to save for retirement if they want to take advantage of the tax breaks that are available.

This report was designed purely to outline the scale of the issues and avoid the spin that had been put on situation by the current and past governments.

As for the conclusions, pick from the following: taxes up, compulsory savings (both employer and employee), later retirement, slightly improved tax incentives (paid for by higher taxes elsewhere).

Milarky · 18 October 2004 at 1:28PM

On 'later retirement', the Report does explain how this need not imply an increase in 'SRA' [state retirement age - currently 60 women/65 men] as a large number of previous retirements [in the 80s and 90s] were as a result of redundancies. This was a 'one off' effect and in future people can be expected to retire much nearer (on average) to their 'normal' retirement ages. This will move up the national average very slightly.

But this 'work till you drop' outcry gets me, because a few years ago it was a case the work not being there for people to do. 'Full employment' is a recent phenomemon. It seems to we now worry about our pensions prospects because we have largely been able to stop worrying about our employment prospects.

deemy2004 · 18 October 2004 at 5:32PM

Yep whatever you can say about labour, at least theyve delivered full employment.

Pal · 19 October 2004 at 6:16PM

Labour have not delivered full employment, they have simply caught the back end of a good period of economic growth. I think even the liberal democrates would have had a difficult job creating unemployment in the current environment, although no doubt they would have tried their best.

I don't believe for one moment that redundancies of people in their 50s is a thing of the past. Redundancies will still be a part of working for companies, and it is the older people who can claim their company pensions who are more likely to volunteer to go or, dare I say it, be pushed. The companies I work with are still making lots of older (and younger) people redundant. The only difference is that the younger ones can get new jobs fairly easily.

deemy2004 · 19 October 2004 at 6:52PM

LOL

The rest of the world has been through a recession with 10% unemployment in Germany, France etc. even USA has sufferered a recession.

Whereas in the past Britain would be hit harder than most, its completely sailed over our heads. We have not even been touched instead continued booming at approx 3% per year.

Now I am not saying it is goign to last, as the future is unknown, but to dismiss the facts is not fair, especially when you compare us against 'superior' economies such as the USA, Germany, Japan and how we have outperformed against them.

Labours done an excellant job on the economy and jobs, especially since they have a track record of usually making a dogs dinner of the economy i.e. 70's

Pal · 19 October 2004 at 7:30PM

I don't disagree that the economy has done well. But you suggest that it is thanks to a Labour government.

Personally I think that Gordon Brown has made one good decision, BoE independence. Everything else he has done has damaged the economy, mainly due to the higher taxes and enormous amount of red tape he has created. It is just that the good economic climate we have enjoyed has outweighted the negative effect his policies have had.

Don't get me wrong, I am not claiming that the Tories, UKIP or monster raving looneys would have done any better. I just dispute any suggestion that this Labour government has been anything other than lucky with their timing.

As the Mod on these boards I guess I should tell us both off for going off-topic. I am happy to discuss this further on the discussion board if you want to start a thread up, otherwise we should get back to the Adair Turner report, assuming of course that you have all read it.

Milarky · 20 October 2004 at 4:35PM

Pal,

Getting back to Report, and the work of the Commission then, what are your views on the merits or demerits of 'compulsion' given they have to come down to a firm view on this - and it the principal question they are required to examine?

'Compulsion' already exists of course in the form of the second tier pensions [formerly 'SERPS', and now 'S2P'] as the Report makes plain.

In Australia they started compulsory contributions back in 1988 [is that right, or did it not start until the 1990s?] and have worked up to a level of 9 percent. However...

1) It's agreed this is not sufficient if the purpose is 'security' in old age,
2) There may be no consensus there to push it up to the 'next' stage - 15 percent,
3) They did not bring in compulsion to buy an annuity, I understand, just to make deferred savings [the 'lump sum']
4) Only some of the 9 percent is in any case 'new' savings - as the availability of a lump sum makes it easier to displace savings activity [e.g. from repaying part of the mortgage]

Although it brands the UK system as 'the most complex in the world' I can't see Turner going for compelled savings into a straight account therefore. More likely, surely that he will recommend something partly or wholly annuity-based.

If annuities, then, can they make them any more ‘accepted’ d’you think?

Pensions Commission First Report

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