Storing up a problem for the future.

Bob

Correct me if I am wrong, but your pension is similar to mine.

You get either

a) 1/80th for each year as a pension and 3/80th for each year as a lump sum.

or

b) 1/60th for each year but no lump sum.

You can elect to take a mixture of the two.

Most people opt for a) because the lump sum is tax free.

Regards

Mick

I didn't have the option of sixtieths.
I have just checked the T&Cs and since 2007 the option of 60ths with an enhanced lump sum has been available to new entrants. I went in 2001.

quote:

Originally posted by Mick Parry:

The problem is some people would rather buy beer and fags instead of a pension.

Regards

Mick

If they buy that many fags and drink that much booze then surely there's a reasonable chance they won't live long enough to have to worry about a pension.

But to get back on topic: I'm in my forties now, and, like many of my contemporaries, can see myself working into my 70s or even later. I don't mind that especially, I'm not sure I'd want to retire, I like to keep really active - and there's a good chance most of us will still be sprightly. Good job, because there isn't really another option for me or many others my age - I contribute what I can to a private pension but my living costs have soared in the last couple of years. It's difficult to save for the future when you're worried about today's bills, or whether you're going to be out of a job next week.

The problems facing those in their teens and 20s now are even worse.

The unspoken problem of course is, that there's a huge amount of money sloshing around in this country (which would probably be enough to give people a decent state pension), but it's unevenly distributed. Some people are very wealthy, yet so greedy, so small-minded and so lacking in respect for their elders that they object to paying for them to have a decent retirement. The fact that successive governments (Tory and New Labour, there's no difference) have spinelessly rolled over to the plutocrats only adds to the problem.

Rant over.

Kevin

Ten years ago I was a workaholic and would have been more than happy to have worked till I dropped. That was the case until about a year ago and now I am counting the days when I finally quit later in the year. You do change your mind, believe me.

The main point is that I can afford to quit thanks to a decent pension. Having to work out of financial necessity is not much fun and not very smart.

I have the choice and thats the choice everyone should have.

Regards

Mick

It's kind of off-putting when you see the Government screwing savers in favour of those in debt.

Remember the days of overfunded schemes/ contributions holidays . . .

Cheers,
OW

Chaps

So what is the cure.

Do we allow the present system to continue where a large chunk of pensioners are going to be living from hand to mouth or do we force them to do something about it.

Regards

Mick

Isn't the compulsory scheme about to be introduced known as NEST an attempt to start to address the problem? Probably totally inadequate but a start to changing the mindset.

Bob

I think the present OAP is around £130pw.

The contributions will need to be significantly increased to make the pensions worthwhile.

Either we tackle the problem or we face massive social problems.

Regards

Mick

quote:

the present OAP is around £130pw

Mick, its aprx £105pw per person who has qualified for a full pension, that is depending on some minor detail adjustments.

Mike

No one can survive on that, so something needs to be done. We should be aiming at the 30 somethings to compell them to invest for their future.

Regards

Mick

quote:

Originally posted by Mike Dudley:
I plan to win the lottery.

And spend it all on booze and fags...

Since you ain't going to live long any chance of a sub.

quote:

Originally posted by Officer DBL:
If employers are / were partrician by nature, would not more have weathered the MFR storm and continued with FS Schemes for example? The fact is that this requirement upset the apple cart and in no small way led to the current plight many are in with pensions.

MFR was not the killer, FRS 17 was; the requirement for pension liabilities to be shown in the balance sheet. Also, on wind up of a DB scheme, any shortfall is now a debt on the employer.

You then get inconsiderate pensioners living longer - so more funding required to pay for their pensions; annuity rates fall through the floor so the amount of capital required for a £ of pension increases, and the over optimistic ( in hindsight ) presumptions made by scheme Actuaries, leading to increased costs. When you then consider the Trustee Knowledge and Understanding requirements from the Pensions Regulator ( = get it wrong, go to jail ) you might see wht Trust - based schemes are pretty much dead.

quote:

Originally posted by Officer DBL:
Similarly, if employers were so focused on providing employee benefits, why were there so many FS schemes out there that provided minimal benefits? We are going back a while, but I do recall a FS scheme for example that provided no more that Death in Service of 2 times salary - and no pension. OK, this was an extreme case,

It was not a final salary scheme, it was a death in service plan.

quote:

Originally posted by Officer DBL:
but the point remains that the extent of pension benefits provided to employees was a function of how much the company was willing to pay.

Cost is one issue, of course; liability as described above now has a far greater impact.

quote:

Originally posted by Officer DBL:I stick to my view that FS Schemes in particular were more about corporate tax planning than employee benefits. I am too much of a cynic to believe in global employer altruism, although I do accept that there may have been exceptions over the years.
B

Fine, you have your pov, I have mine.

quote:

Originally posted by Mike-B:

With that in hand I strongly advise you get advise from a professional specialist or your banks financial advisor.

Avoid the Banks at all costs.

They are under HUGE pressure simply to sell, not advise.

Mick

Bring back an elemnt of Compulsion.

M

Dear All,

My Dad worked for the hong kong govt 1961-1980.

He retired at 55 after 20 years service

He is now 84-85 and still happily drawing his Index linked pension. Which is very handsome.

His only grumble is that he gets paid in HK dollars and is succeptible to currency fluctuations.

How can this be funded??

When i was at school there was a utopia promised of retirement at 55 and having a fabulous pension.

This was based on most dying early and not receiving the pension.

reality is nobody dies today they crumble on indefinitely and Pensions have gone tits up as everybody gets their pension for FAR TOO LONG.

So reality is Govts all over the world seeking to raise retirement ages to 105 years thereby reducing the number of pensioners to a manageable level.

the other problem is medical advances ensuring that you mutter on like a dodgy car for years after your sell by date so you also bankrupt the NHS with your increasing health care needs for ever longer years.

The world will fail due to the ALARMING NUMBER OF DEPENDENT FRAIL ELDERLY.

The youth who will work will not be able to fund the health care and pension needs of this elderly population.

So what do we do???

bring back the good old 3 Score and Ten!!!!!

Soylent Green ????

Logans Run ????

When i joined the NHS in 1986 it was stated at that time that the NHS needed every female between the ages of 16 and 55 to work in the health and social care professions.

Women have much more choice now and have not gone down that route.

regards david

ps i have a problem.

I came to aus at 48 years young and have left 30 years state pension and 20 years NHS pension in UK and only have 3 years super annuation here.

So do i return to UK to ensure my pension rights or stay here and be broke in the warmth and sunshine.

Mike

I agree some sort of compulsion is the only answer. The plain truth is that most people just prefer to forget the problem.

I cringe when someone says to me, I am going to use my house for a pension, when all they have is a 3 bed semi. It seems a bit daft working all your life to buy a house just to resell it to survive as a pensioner.

Also these people are just going to be freeloading off the taxpayers of the future.

I agree, compulsion is the answer.

Regards

Mick

quote:

Also these people are just going to be freeloading off the taxpayers of the future.

How do you freeload when you have paid into the system ?????

quote:

Originally posted by DAVOhorn:

So do i return to UK to ensure my pension rights or stay here and be broke in the warmth and sunshine.

Ask an IFA.

quote:

Originally posted by deadlifter:

quote:

Also these people are just going to be freeloading off the taxpayers of the future.

How do you freeload when you have paid into the system ?????

Deadlifter

None of us have paid enough into the state system to fund our lengthy period of retirement. What we have done is paid for pensions being paid to todays pensioners.

If you expect your children to fund your 20 year retirement, then they will have to heavily subsidise you.

You need to increase your payments considerably and fast.

Regards

Mick

quote:

Originally posted by Mike Lacey:

quote:

Originally posted by Mike-B:

With that in hand I strongly advise you get advise from a professional specialist or your banks financial advisor.

Avoid the Banks at all costs.

They are under HUGE pressure simply to sell, not advise.

The same could be said for IFAs, Mike.

Just because an IFA may have access to a greater number of product providers does not automatically mean that their advice is any more sound than that provided by an advisor working for a bank or that their motivation in seeing a customer is purely altruistic with no pressure to sell.

If the argument is that IFAs are a safer bet due to qualifications and access to the market place, how is that reconciled with the fact that HSBC and First Direct for example, provide independent financial advice e.g. they are not tied to the products of any single provider, and that many of their advisors are holders of AFPC G60 qualifications or the current equivalent, the Advanced Diploma.

In any event under the proposals of the Retail Distribution Review, there will be consistent levels of professional qualifications and professionalism applicable across the whole FS industry - IFA and Tied alike.

Overall I do not think that your assertions are either reasonable or accurate. However as you say, we each have a point of view to which we are entitled.

I do agree that funding pension provision should be made compulsory.

B

Based on -

Capital Gains, National Insurance and Income Tax becoming an Earnings Tax of 25% - Corporation Tax set at the same level,

For individuals - tax paid on the first penny over GBP 20,000, but

No Tax Credits and,

No Child Benefit, except for children who have mental and/or physical disability - home help should be provided where it is needed.


Then a compulsory savings scheme, say -

Age 18 to 25; 20% of earnings before tax,

26 to 30; 15%,

31 to 45; 10%,

45 to retirement; 15%

Throw in some employer contributions.

Cheers,
OW

quote:

Avoid the Banks at all costs.
They are under HUGE pressure simply to sell, not advise.
The same could be said for IFAs

Lets get realistic. When it comes to money - and pensions are money - everyone is looking for a slice of the action.
Banks have a vested interest in selling you their products in the the form of an annuity provided or linked to that bank
IFA have a bigger portfolio to offer, but commissions are all part of the plan
Ditto a pension service, or independent specialist.
Even an advisor appointed by your company pension scheme - and who should be provided as part of a well managed company plan - are linked to something that gives them a cut of the action.

But Mr Joe Average does need this professional advise on the many options & plans especially relating to tax avoidance
I have just retired, been there & done the pain but got a damn good deal over & above.

quote:

Originally posted by Officer DBL:

If the argument is that IFAs are a safer bet due to qualifications and access to the market place, how is that reconciled with the fact that HSBC and First Direct for example, provide independent financial advice e.g. they are not tied to the products of any single provider, and that many of their advisors are holders of AFPC G60 qualifications or the current equivalent, the Advanced Diploma.

Have you spoken to a member of the sales staff of a Bancassurer in the last few years? They are under HUGE pressure to meet targets in terms of people seen, etc. They also tend to have a rather large %age of their business going to a very few numbers of providers. You MIGHT think that those providers happen to pay the largest commissions, I could not comment. I've advised this week on tax planning via Enterprise Zones; try talking to somebody from HSBC about those.

If I don't sell - and we are a fee-based practice - I don't make any money. Actually, I don't need to seel at all; we charge for advice, with no need to place a product.

If a Bancassurer ( try talking to them about paying a fee, by the way ) does not sell or reach targets, he gets sacked.

quote:

In any event under the proposals of the Retail Distribution Review, there will be consistent levels of professional qualifications and professionalism applicable across the whole FS industry - IFA and Tied alike.

The RDR has been seen as a Bancassurers' charter; I recall reading in the RDR the phrase "sub optimal outcomes", ie, some poor advise being better than no advice. IIRC only IFAs will need the full Diploma. The concept of "basic advice" - with lower professional standards - is still in the 2009 RDR.

quote:

Overall I do not think that your assertions are either reasonable or accurate. However as you say, we each have a point of view to which we are entitled.

Well, I'm pretty sure I'm right.

quote:

Originally posted by Mike-B:
[Banks have a vested interest in selling you their products in the the form of an annuity provided or linked to that bank
IFA have a bigger portfolio to offer,

IFAs can talk about Alternatively Secured Pension, aka drawdown. May be a far better bet than annuities. Bancassurers often do not have the time to talk about ASP, plus their Head Shed hates the ongoing advice liability.

quote:

but commissions are all part of the plan
Ditto a pension service, or independent specialist.
Even an advisor appointed by your company pension scheme - and who should be provided as part of a well managed company plan - are linked to something that gives them a cut of the action.

Mike, everyone works for something. You do not work for free, in general.

Client I saw on monday paid some £400k of Income Tax last year; I may well be able to help him recalim all of that with existing, legal and non-contentious vehicles. If I do, I'll earn about £8k. I think both he and I would be happy. Or HMRC could keep his £, and I'll earn zip.

quote:

But Mr Joe Average does need this professional advise on the many options & plans especially relating to tax avoidance
I have just retired, been there & done the pain but got a damn good deal over & above.

Good for you - you took advice. Just hope it was from an IFA!

M

Mick
You seem to be confusing my last post about occupational pension compulsion with the state pension.
From 2012 a compulsory occupational scheme is about to start above and beyond state pension contributions. Woefully low contributions but it is a start.
See here
http://www.direct.gov.uk/en/Pe...ntplanning/DG_183783