| Pensions 10:14 - May 28 with 4702 views | chicoazul |
In an idle moment I reviewed my pensions.
According to my calculations if I retire at 67 per the current rules, with my work public sector pension and my old age pension I will retire with an income of 85% of what I earn now. I’ll be retired all being well for at least 15 years. I don’t earn much now but it’s enough and I’m happy.
My point is, this is surely unsustainable. Is this country completely screwed economically forever? |  |
| |  |
| Pensions on 17:59 - May 28 with 674 views | Pinewoodblue |
| Pensions on 17:55 - May 28 by Radlett_blue |
You are playing with numbers. Most of the income of the NHS Pension Fund is in the form of Employers' Contributions - which comes from the government. If the Employers' and Employees' contributions are more than the payouts to pensioners , then there is an accounting surplus, which is returned to the Treasury. But this doesn't mean that there is a real surplus as the Government has contributed all the employer#s contributions. The scheme is defined benefit and unfunded, which means there is not a huge pot of invested assets to fund future liabilities. The government has simply underwritten the liabilities, which stand at over £800bn. |
So nothing in the pot to cover future liabilities, apart from a 'guarantee' from Government. |  |
| |
| Pensions on 18:02 - May 28 with 668 views | mellowblue |
| Pensions on 17:54 - May 28 by OldFart71 |
But maybe if we didn't support/allow so many capable of work to just doss around we would have enough people paying tax to pay for pensions.
I agree that maybe we are taxed less. Against that many things such as energy costs more.
But at the same time as people saying pensions are unsustainable the money can be found to pay MP's £90,000 plus and various other perks. The money can be found to pay each outgoing PM an allowance of £115,000. Even Liz Truss got that for her two months in office.
Councillors on over a quarter of a million per annum.
Someone needs to lead a major task force looking at pensions and how they can be sustained or replaced. But as others have said "The can is always kicked down the road" leaving it to the next lot in power. Too much in this Country is shortermism. The Country should be governed by a party looking at everything that is and will be required for the future. That means not selling everything to the highest buyer allowing vital parts of this Country to be sold to foreign interests. |
I doubt it. Those that "doss" around are not likely to be achievers and will be part of the lower wage levels. The lowest paid 40% of earners to do not contribute any income tax. |  | | |
| Pensions on 18:11 - May 28 with 646 views | OldFart71 |
| Pensions on 14:57 - May 28 by Pinewoodblue |
I would question the wisdom of still paying a mortgage in your 70’s, presumably a lifestyle choice. |
The answer to your question about myself having a mortgage is two fold. I suppose the main one was getting divorce at 40 years of age. Remarrying and starting another mortgage. I also made a financial error that cost me several thousands.
There is a certain amount of lifestyle choices as well.
I don't pretend I am poor, then again I'm not rich either. But taking out the cost of my mortgage would of course make me financially better off. Nonetheless I still try to help my children and grandchildren.
Holidays since I retired are becoming less. I would if capable still be working. I worked from my teenage years though to 71 and in the main loved working. | | | |
| Pensions on 18:14 - May 28 with 636 views | Churchman |
| Pensions on 17:59 - May 28 by Pinewoodblue |
So nothing in the pot to cover future liabilities, apart from a 'guarantee' from Government. |
That was the deal struck by the government of the day with some public sector workers. For example, HMRC employees. There’s no pension fund at all, unlike say Lloyds bank pensioners. The benefit to the government and the public was that they could use people’s contributions to pay for day to day stuff. Jam today, worry about payout time, should it be necessary tomorrow.
Pretty stupid idea, if you ask me, but it’s hardly the CS staff and others fault and neither should they be held accountable for the cries of ‘we can’t afford it’. Essentially, govt took the money so pay up.
The public sector pensions crisis ended 20 years ago when final salary schemes as they were basically ended and contributions were upped. Death would deal with the rest.
Lord Hutton warned at the time against a race to the bottom, pension provision wise. Governments of course ignored that and have been beating up on the public sector and pension provision in general ever since. The old crusties like me = easy target. |  | | |
| Pensions on 18:20 - May 28 with 625 views | Swansea_Blue |
| Pensions on 12:01 - May 28 by SaleAway |
or keep pushing back the retirement age |
Or a cull !   |  |
| |
| Pensions on 18:30 - May 28 with 610 views | OldFart71 |
| Pensions on 18:02 - May 28 by mellowblue |
I doubt it. Those that "doss" around are not likely to be achievers and will be part of the lower wage levels. The lowest paid 40% of earners to do not contribute any income tax. |
Maybe I was lucky. A time when jobs of all types were available and from teenage years doing potato , bean and any other sort of picking, through hotel work, being a weaver in a mill, warehousings and factory work i managed to never be out of work until my early seventies, paying tax and N.I. all the way through.
Maybe it's me , but I can't understand why so many that are capable don't work. Is it our benefits system ?
A few months ago I was listening to the radio. A guy came on and said he did pizza delivery, but had been told he could claim PIP and I presume other benefits which would give him £2,400 a month. A person who shall remain nameless who I know also gets PIP and other benefits. That person get's some free dental work. Has just been given two pairs of spectacles. Myself and my daughter estimate with all the freebies thrown in that this person's income amounts to £30,000 a year. They have also had catalogue debts of £2000 written off twice. They are single and spend more on food in a week than I do for myself and my wife. | | | |
| Pensions on 18:36 - May 28 with 606 views | J2BLUE |
| Pensions on 18:30 - May 28 by OldFart71 |
Maybe I was lucky. A time when jobs of all types were available and from teenage years doing potato , bean and any other sort of picking, through hotel work, being a weaver in a mill, warehousings and factory work i managed to never be out of work until my early seventies, paying tax and N.I. all the way through.
Maybe it's me , but I can't understand why so many that are capable don't work. Is it our benefits system ?
A few months ago I was listening to the radio. A guy came on and said he did pizza delivery, but had been told he could claim PIP and I presume other benefits which would give him £2,400 a month. A person who shall remain nameless who I know also gets PIP and other benefits. That person get's some free dental work. Has just been given two pairs of spectacles. Myself and my daughter estimate with all the freebies thrown in that this person's income amounts to £30,000 a year. They have also had catalogue debts of £2000 written off twice. They are single and spend more on food in a week than I do for myself and my wife. |
My grandad always said that in this country you need to have loads of money or no money. |  |
| |
| Pensions on 18:43 - May 28 with 599 views | Pinewoodblue |
| Pensions on 18:11 - May 28 by OldFart71 |
The answer to your question about myself having a mortgage is two fold. I suppose the main one was getting divorce at 40 years of age. Remarrying and starting another mortgage. I also made a financial error that cost me several thousands.
There is a certain amount of lifestyle choices as well.
I don't pretend I am poor, then again I'm not rich either. But taking out the cost of my mortgage would of course make me financially better off. Nonetheless I still try to help my children and grandchildren.
Holidays since I retired are becoming less. I would if capable still be working. I worked from my teenage years though to 71 and in the main loved working. |
Same as far as divorce & starting again with a mortgages moved again in 1989 but set a target of paying off mortgage by retirement which succeeded to do, also helped kids with deposited on their first house purchase.
Retired at 65 and have spent more on travelling since. Giving up cruising after this autumn as 80 next year see too many ambulances waiting on quayside / helicopter evacuations.
We all make lifestyle choices and hopefully make the right ones.
Lost too many friends close to, or soon after retirement. One thing I would like to see is a guaranteed pension for 5 years, die before then and balance paid to widow, or estate. Not going to happen though. | |
| |
Login to get fewer ads
| Pensions on 18:55 - May 28 with 573 views | SuperKieranMcKenna |
| Pensions on 18:14 - May 28 by Churchman |
That was the deal struck by the government of the day with some public sector workers. For example, HMRC employees. There’s no pension fund at all, unlike say Lloyds bank pensioners. The benefit to the government and the public was that they could use people’s contributions to pay for day to day stuff. Jam today, worry about payout time, should it be necessary tomorrow.
Pretty stupid idea, if you ask me, but it’s hardly the CS staff and others fault and neither should they be held accountable for the cries of ‘we can’t afford it’. Essentially, govt took the money so pay up.
The public sector pensions crisis ended 20 years ago when final salary schemes as they were basically ended and contributions were upped. Death would deal with the rest.
Lord Hutton warned at the time against a race to the bottom, pension provision wise. Governments of course ignored that and have been beating up on the public sector and pension provision in general ever since. The old crusties like me = easy target. |
“ The public sector pensions crisis ended 20 years ago when final salary schemes as they were basically ended and contributions were upped”
Not strictly true - the public sector pensions deficit is estimated to be over 1.2trn (over 40pc of GDP). Technically the money doesn’t exist to pay them, it’s just a huge liability on the government’s balance sheet.
I agree the sentiment about MP pay rises - I think most of them are a waste of space, however it’s a largely irrelevant when compared to the >£130bn annual pensions bill. Again it’s not pensioners fault they’ve not paid enough into the system, but the young are paying for current pensioners to have a much better deal. Everyone wants nice stuff - but nobody wants to pay for it. If we continue borrowing with rising yields and our compounding debt we’ll need tax rises any way, so we may as well raise taxes and pay for things directly through tax receipts. | | | |
| Pensions on 18:57 - May 28 with 576 views | mutters |
Logan's Run-esque |  |
| |
| Pensions on 19:21 - May 28 with 553 views | mellowblue |
Covid called and says it tried and those pesky scientists ruined it all. | | | |
| Pensions on 19:49 - May 28 with 523 views | Pendejo |
Time for "The Carousel"? |  |
| |
| Pensions on 19:52 - May 28 with 520 views | Churchman |
| Pensions on 18:55 - May 28 by SuperKieranMcKenna |
“ The public sector pensions crisis ended 20 years ago when final salary schemes as they were basically ended and contributions were upped”
Not strictly true - the public sector pensions deficit is estimated to be over 1.2trn (over 40pc of GDP). Technically the money doesn’t exist to pay them, it’s just a huge liability on the government’s balance sheet.
I agree the sentiment about MP pay rises - I think most of them are a waste of space, however it’s a largely irrelevant when compared to the >£130bn annual pensions bill. Again it’s not pensioners fault they’ve not paid enough into the system, but the young are paying for current pensioners to have a much better deal. Everyone wants nice stuff - but nobody wants to pay for it. If we continue borrowing with rising yields and our compounding debt we’ll need tax rises any way, so we may as well raise taxes and pay for things directly through tax receipts. |
But the point is that if final salary schemes end, which they have, the problem literally dies over time. GDP is 3.5 tn a year. You cannot equate that to pension commitment that takes place over say twenty years and is ever reducing.
It is also true that if the taxpayer pays its commitment to a pensioner, that pensioner buys things, mostly necessities. So that money goes back to into the economy. The average Civil Service pension in payment is approximately £9,874 a year. Gold plated? Hardly.
Lastly, part of the deal with pension provision was poorer salaries for the staff against private sector equivalents. | | | |
| Pensions on 20:00 - May 28 with 500 views | Pendejo |
| Pensions on 18:57 - May 28 by mutters |
Logan's Run-esque |
A little bit after you posted, and hadn't read this thread yet
What age? | |
| |
| Pensions on 20:02 - May 28 with 492 views | Keno |
| Pensions on 19:49 - May 28 by Pendejo |
Time for "The Carousel"? |
Yes if I can live with a young Jenny Agutter |  |
| |
| Pensions on 20:03 - May 28 with 487 views | SuperKieranMcKenna |
| Pensions on 19:52 - May 28 by Churchman |
But the point is that if final salary schemes end, which they have, the problem literally dies over time. GDP is 3.5 tn a year. You cannot equate that to pension commitment that takes place over say twenty years and is ever reducing.
It is also true that if the taxpayer pays its commitment to a pensioner, that pensioner buys things, mostly necessities. So that money goes back to into the economy. The average Civil Service pension in payment is approximately £9,874 a year. Gold plated? Hardly.
Lastly, part of the deal with pension provision was poorer salaries for the staff against private sector equivalents. |
But that deficit isn’t related to final salary schemes - just ongoing public sector pensions deficit liabilities. Private sector pensions are tangible and the funds exist.
My issue is not with those getting pensions in the public sector (I have family that work for the NHS). It’s that the government have allowed so much to be unfunded. The original question was around the sustainability of state pensions, to me the answer is clearly not in their current form. | | | |
| Pensions on 20:04 - May 28 with 481 views | Pendejo |
| Pensions on 14:59 - May 28 by mellowblue |
and probably too late to sue someone too. |
Not necessarily, if the guilty party / environment can be traced there will be some sort of liability policy in force at the time. Even if the insurer no longer exists there will be provision for it.
(At least there used to be, but I can no longer remember the specifics - long time since leaving Underwriting) | |
| |
| Pensions on 20:34 - May 28 with 461 views | flykickingbybgunn |
| Pensions on 20:02 - May 28 by Keno |
Yes if I can live with a young Jenny Agutter |
I would take a current Jenny Agutter. |  | | |
| Pensions on 20:45 - May 28 with 445 views | Swansea_Blue |
| Pensions on 19:21 - May 28 by mellowblue |
Covid called and says it tried and those pesky scientists ruined it all. |
Ah yes. Maybe I shouldn’t joke as we’ve been a bit too close for comfort on that front.
The big problem with pensions is the contributions made in the past have long gone. So it’s no good people saying ‘I’ve paid in all my life..’. It means nothing as far as government budgets go. The workers now are paying the pensions, hence the need for overseas workers to top up the pot. | |
| |
| Pensions on 22:31 - May 28 with 370 views | Churchman |
| Pensions on 20:03 - May 28 by SuperKieranMcKenna |
But that deficit isn’t related to final salary schemes - just ongoing public sector pensions deficit liabilities. Private sector pensions are tangible and the funds exist.
My issue is not with those getting pensions in the public sector (I have family that work for the NHS). It’s that the government have allowed so much to be unfunded. The original question was around the sustainability of state pensions, to me the answer is clearly not in their current form. |
The government didn’t allow it. The government made a choice. Reuse pension contributions for public sector use there and then, pay what people have saved for when and if they make retirement. Stupid idea, but the government of the day made that choice. Nobody else.
Of course the money people and employer pay in should have gone into a fund. But short termism is a default setting for all governments, just as tinkering, plundering, destroying a mixed and comprehensive pension provision has been something all governments have done all the way back to I think Lawson and his ignorant pension holidays.
https://researchbriefings.files.parliament.uk/documents/CBP-8478/CBP-8478.pdf
New public sector schemes are either average schemes payable in line with ever rising state pension age (hardly a model of generosity) or money purchase schemes.
The policy has been let’s disincentive employers from providing pensions for their employees including defined benefit schemes that have mostly gone and stick the boot in on public sector schemes to match. The race to the bottom.
What it should have been doing in my view was incentivising or even mandating private sector employers and employees to save for their retirement as they once did. [Post edited 28 May 22:36]
| | | |
| Pensions on 01:03 - May 29 with 320 views | mutters |
| Pensions on 20:00 - May 28 by Pendejo |
A little bit after you posted, and hadn't read this thread yet
What age? |
Cracking film, remember seeing it on TV as a kid, it was made around the time I was born, so it used to get played quite a lot i seem to remember.
You got culled at 30 iirc. | |
| |
| Pensions on 08:01 - May 29 with 230 views | springfield |
| Pensions on 15:44 - May 28 by Radlett_blue |
The NHS pension scheme is unfunded i.e. there is no pot of assets. Pension payouts are largely funded by the government (i.e. the taxpayer) and it costs over £33bn a year, over 20% of the NHS budget. |
Not sure on your figures
In 22/23 the NHS pension paid out 14.1 billion
Yet the government collected £18.8 billion pension contributions
Hence the surplus [Post edited 29 May 8:36]
|  | | |
| Pensions on 08:08 - May 29 with 222 views | BanksterDebtSlave |
| Pensions on 20:03 - May 28 by SuperKieranMcKenna |
But that deficit isn’t related to final salary schemes - just ongoing public sector pensions deficit liabilities. Private sector pensions are tangible and the funds exist.
My issue is not with those getting pensions in the public sector (I have family that work for the NHS). It’s that the government have allowed so much to be unfunded. The original question was around the sustainability of state pensions, to me the answer is clearly not in their current form. |
If only we'd had heaps of a globally needed commodity and a sovereign wealth fund rather than creaming off dividends to those playing the markets. |  |
| |
| Pensions on 08:25 - May 29 with 202 views | springfield |
| Pensions on 17:55 - May 28 by Radlett_blue |
You are playing with numbers. Most of the income of the NHS Pension Fund is in the form of Employers' Contributions - which comes from the government. If the Employers' and Employees' contributions are more than the payouts to pensioners , then there is an accounting surplus, which is returned to the Treasury. But this doesn't mean that there is a real surplus as the Government has contributed all the employer#s contributions. The scheme is defined benefit and unfunded, which means there is not a huge pot of invested assets to fund future liabilities. The government has simply underwritten the liabilities, which stand at over £800bn. |
I disagree. Employer contributions are considered part of an employees overall remuneration package, and are a tax efficient way for employers to remunerate their staff.
The big difference here is the the Employer is the Government, so unlike any other employer, they immediately receive back these employer contributions (which in effect is part of the employees overall remuneration; the pension always boosted an NHS salary lagging behind the private sector).
So absolutely right these are included in the “surplus” imo. | | | |
| Pensions on 08:57 - May 29 with 167 views | CoachRob |
No, it is not unsustainable for a government to fund pensions of public sector workers. Whether there will be a functioning economy to buy goods and services from in the medium to long term is debatable. I will link to a basic definition of why governments can always fund these type of liabilities.
https://theconversation.com/what-is-modern-monetary-theory-an-economist-explains
The private pension industry, however, is quite the problem. The latest report by the pension regulator states,
"Our recent survey indicates that there is still a long tail of schemes where the trustees' knowledge of the scale of financial risks posed by climate change is limited. Where schemes cannot compete on value or governance, we have been clear that the trustees should consider consolidating and exiting the market."
Why is their knowledge so poor on financial risk of climate change? They believed the fantasy modelling by economists on climate impacts. I think the regulator here is putting a certain gloss of the understanding of climate change in the industry as whole. In the insurance industry they use physics-based modelling to understand processes and from that you can apply your risk analysis. I'm not aware of this happening in the pensions industry at all and many are still using the unscientific drivel from economists.
The regulator breaks down risk into three main areas;
"Physical risks relate to the impacts of a changing climate as a result of global average temperature rises and changing weather patterns. These can be divided into acute and chronic physical risks, both of which could impact asset values:
Acute physical risks – include storms and wildfires that cause immediate damage to physical infrastructure and assets together with real-time disruption to supply chains.
Chronic physical risks – these are associated with sustained changes such as increases in the severity and frequency of droughts and flooding. Such changes can cause permanent degradation of agricultural land and supply changes and lead to stranded assets.
Transition risks arise from structural changes in the economy as the UK and other jurisdictions shift towards a low-carbon economy in line with global climate policy goals. The magnitude of risk will be dependent on how quickly and effectively a scheme can adapt and the extent to which there is an orderly or disorderly transition.
Legal and litigation risks may also arise when businesses and investors fail to account for the physical or transition risks of climate change. Risks arise not just for pension schemes with sponsor companies that do not plan and adapt adequately, but also for the pension funds that hold companies’ equity and debt."
The regulator then goes on to discuss some of barriers to progress;
"Physical Risks: Many TCFD reports have previously focused on transition risks in the short to medium term and physical risks in the longer term but have done so in a combined and generic way. However, concerns that physical risks are underestimated have started to increase focus on physical risks, their likely impacts and their potential to arise in the short to medium term.
Stranded Assets: Generally, other than in the context of outline, generic, narratives for qualitative scenarios, the potential for assets to be stranded and the impacts that might have, would benefit from greater consideration.
Nature / Biodiversity: Currently there is no formal mandated requirement for trustees to report on nature related financial risks (TNFD aligned reporting). However, the potential for nature and biodiversity risks to be financially material, the interconnection between nature and climate and the potential for nature to be part of the solution is increasingly being recognised.
Climate Repricing Risk: Apart from some generic references in the context of scenario analysis very few schemes appear to consider the potential for market re-rating of climate risk. Further consideration needs to be given to what the triggers for re-pricing might be and what impacts that re-pricing might have across scheme assets.
Double materiality: The concept that climate-related impacts on a company can be material and requires disclosure is widely accepted. However, the impacts of a company on the climate or wider sustainability issues can also be material. The concept of double materiality has started to become embedded in some sustainable finance disclosure standards but hasn’t generally been reflected in disclosures to date.
Scenario Analysis: The limitations of the initial quantitative scenario analyses carried out by schemes have been recognised and debated within the sector. In response a more qualitative narrative based approach has evolved and is gaining traction. In parallel the approaches to quantitative scenario analysis continue to develop as does the science.
Transition Plans: Government intentions for transition plans for UK regulated financial institutions, including pension schemes are not yet known. However, transition plans, by their forward looking, strategic nature have the potential to catalyse change and help shape investment decisions. Although there is likely to be some lead time before implementation, raising trustee awareness of transition plans and their benefits is an area of ongoing focus for TPR.
Climate related systemic risks: The potential for climate-related systemic risks to build up is an area of interest to the Bank of England’s Financial Policy Committee. There is significant uncertainty around the magnitude of future climate-related financial loses and how and when they might crystallise. Raising trustee awareness of the potential for (climate-related) systemic risks and their potential impacts is also an area of ongoing focus."
Again the stuff on physical risks stems from the belief from economists that damages will be trivial and we can just adapt. The pensions industry is way behind the curve on this and needs to dump the economists and bring onboard climate scientists who can actually inform from a position of reality. I'm not sure growing this industry further in its current state is very logical, and like the insurance industry does now, I think the need for partnership with government is essential to keep these funds viable.
https://www.thepensionsregulator.gov.uk/en/document-library/corporate-informatio |  | | |
| |
By continuing to use the site, you agree to our use of cookies and to abide by our Terms and Conditions.
