Tax grab or 'fairer' system?
Or a nod at last that pension costs are the biggest single factor in our deficit, and we're paying out far more than current recipients ever paid in and this needs addressed for the future?
www.bbc.co.uk/news/uk-20996912
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Effectively its a 1p income tax rise for those in employment.
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>> Effectively its a 1p income tax rise for those in employment.
>>
Only for those 'contracted out', I'm already paying the extra in effect as when our pension scheme was changed back in 2009 we all had to change back to 'contracted in' status as part of the deal. To be honest as someone in the last few years of my contributing/working life and with membership retained in a viable pension scheme I, and just about everyone else involved, realised that what was on offer was well worth the extra NI contributions it required, on top of the extra pension fund contributions; hopefully the new state system will be worth the same sacrifice.
At the end of the day you get owt for nowt; many of my friends say that I'm lucky that I've got my pension to look forward to in a few years time. My view is that while they were busy having flash foreign holidays and new cars and looking down on me because I couldn't as a hefty percentage of my pay was going into my pension now we are all facing retirement age they are envious that I will still be able to carry on pretty much as I am without having to work if I don't want to but they are facing having to continue to work to maintain any form of, what they see as, an acceptable lifestyle. I conciously made those sacrifices earlier in my life, I started in my pension when I was 18 as I didn't want the sort of retirement that I saw my grandparents 'enjoying', watching my grandfather counting out his loose change to see whether he could afford his weekly Sunday lunchtime pint this week, or not, after having worked in all weathers on building sites as a plasterer and renderer for over 50 years focused my mind wonderfully and I was determined that was not going to be me in my older age. Thankfully, I appear to have done enough to avoid that.
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Why should your friends look down on you? You decided to live a certain way and saved for your retirement.When I was 18 I didn't think about old age to far away.I am lucky to recieve a company pension.I remember paying sky high interest rates on my morgage and it was a struggle to keep a decent standard of living with three children.Now I have a few savings in the bank and see very little return on it on my retirement.Remember the endowment fiasco people got promised it would pay for their house in most cases it never did.People in retirement shoud't have to live in poverty irrespective if they could save or not.I hope you enjoy you'r retirement and have a good holiday.
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Couldn't agree more Dutchie.
One thing couldn't be more certain is that the goal posts will be shifted enough in the coming years to make your head spin, and genuine people who've done the right thing and stood proudly, or stupidly, on their own two feet and paid their way throughout their lives will be the ones bent over.
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>> Now I have a few savings in the bank and see very little
>> return on it on my retirement.Remember the endowment fiasco people got promised it would pay
>> for their house in most cases it never did.
And that was during the boom period. Financial advisors should be avoided like the plague. Unfortunately you can't choose where your money is invested in a pension unless you go for a SIPP. At least then if it goes t*ts up you can only blame yourself. Not much consolation I know.
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As a self-employed person, I cannot complain, works for me. I havent the means to pay into a private scheme so what the state pension offers will matter a great deal to me, though I suspect it will be changed again in the next 40 years.
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>> As a self-employed person, I cannot complain, works for me. I havent the means to
>> pay into a private scheme so what the state pension offers will matter a great
>> deal to me,
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Same here, with five years to go and a private pension I cashed in and took the annuity from years ago because it was worth so little (the annuity pays the council tax) the state pensions will be all we have to live on.
Last edited by: Robin Regal on Sat 12 Jan 13 at 11:17
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40 yrs ago a couple could just about live in the SRP...............not now! Even allowing for the guaranteed minimum uplift.
Government determines what it pays and this could change for the better/worse many times over your life to Pension age and equally during the time you are on a pension.
My advice is to go for belts and braces approach and have alternative savings to call on - Private pension (if you cannot get a Company Pension), ISA's, Cash savings, Shares, Property.......
What may look OK when you retire can disappear with inflation, or your own increase in needs (someone to do gardening, repairs, shopping, housework etc) OR you might just live 20/30 years above the average life expectancy.
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I planned for a very decent pension plot, but circumstances (the last BIG recession in the early 1990s) put paid to that.
Consequently, I have two very small annuities amounting to less than £2500 p.a. , plus a work pension of £35 a month plus SWMBO's and my state pensions.
Luckily my better half mostly paid her NI even when not required, so has her own (95% of a standard) state pension. I have a bit of SERPS added to my state pension, minus the £35 deducted for the above work pension when contracted out.
We manage, with care, but would struggle if we did not own our house with no mortgage.
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>>Or a nod at last that pension costs are the biggest single factor in our deficit,
How can that be? Fastest growing cost perhaps? Pensions are funded out of general taxation, the link in NI between what you put in and what you get out went years ago. Or do you just mean they are a gigantic cost?
I've been trying to find some intelligible info on costs of public sector occupational pensions, specifically the RPI linked ones. Far too many public servants have been retired early on RPI linked enhanced pensions including my mother, two aunts, and a good friend of 86 who retired from teaching at 54.
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>> How can that be? Fastest growing cost perhaps? Pensions are funded out of general taxation, the link in NI between what you put in and what you get out went years ago. Or do you just mean they are a gigantic cost?
All of the above I guess. Government after government have buried their heads in the sand and refused to increase tax intake enough to cover pension costs, or change how they are calculated - now they're starting when there is a £500m per day deficit in government finances.
It's quite funny when an annual increase equal to the rise of the cost of living is seen as a perk rather than something that should be the norm.
Presumably pension tax credits and other benefits top up pensions to at least breadline levels - even in the 15 yrs I've been practicing I can say there are far less old folks living in utter squalour now than then - some of the anecdotes I heard from older colleagues about poverty make the UK of the 1970s and before sound like a third world country.
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>> I heard from older colleagues about poverty make the UK of the 1970s and before
>> sound like a third world country.
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No, it was the generation before the affluence on credit one you have now.
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some of the anecdotes
>> I heard from older colleagues about poverty make the UK of the 1970s and before
>> sound like a third world country.
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Some people's definition of poverty is not being able to have a holiday, etc.
Mine is not being able to afford heating, clothing or food.
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Pensions, associated benefits, standards of housing, and social support is better now than ever it was in the past.
Almost no pensioners need to live with younger generations due to lack of money.
I'm not saying life is great on the breadline, but it's better than it was in the past for the very elderly.
However, there is a very real possibility that the enormous cost of providing this support will lead to subsequent governements to start eroding it.
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>>Mine is not being able to afford heating, clothing or food.
Wait until you can't afford a holiday ;-)
Plenty of people in work struggle to afford 'luxuries' like holidays, and they must wonder what separates them from career idlers.
I'm going on holiday soon - I shall take care to enjoy it!
Last edited by: Manatee on Sun 13 Jan 13 at 22:19
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New state pension - Bromptonaut
