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So, if you've paid into a private pension, then when you come to retire, how does the state pension fit in?
Do you get the state pension, no matter what other income you do or don't have, or is it means tested?
Do you get the state pension AND your private pension?
If you get any work, do you still get to keep your pensions?
How come I don't know more about this sort of thing?
Do you get the state pension, no matter what other income you do or don't have, or is it means tested?
Do you get the state pension AND your private pension?
If you get any work, do you still get to keep your pensions?
How come I don't know more about this sort of thing?
In reply to andy:
It's just so strange - it's like you have to just wait and find out at the time. Why isn't this taught in schools?
Are we all going to be retiring at 75?
I did find this helpful stuff:
http://www.confused.com/annuities/articles/state-and-private-pensions-make-...
It's just so strange - it's like you have to just wait and find out at the time. Why isn't this taught in schools?
Are we all going to be retiring at 75?
I did find this helpful stuff:
http://www.confused.com/annuities/articles/state-and-private-pensions-make-...
In reply to tlm:
It's treated as a right you have paid for, regardless of other income
Yes (means tested? - No)
Yes
Yes Also if you get another post retirement job, you no longer need to pay National Insurance.
I don't know, but I was the same before I started getting it.
Other benefits include Free prescriptions*, free bus pass*, reduced rail fare pass, reduced entry to theatres, cinemas and similar. Also some pubs and restaurants do a discounted menu for pensioners which is actually a con because they serve you a smaller portion!
Also a Winter Fuel Allowance of £200 or £100 each if you are couple residing together.
* These benefits are valuable because since having had cancer I need quite expensive drugs,and the bus pass is valid everywhere in the country for public transport.
It's treated as a right you have paid for, regardless of other income
Yes (means tested? - No)
Yes
Yes Also if you get another post retirement job, you no longer need to pay National Insurance.
I don't know, but I was the same before I started getting it.
Other benefits include Free prescriptions*, free bus pass*, reduced rail fare pass, reduced entry to theatres, cinemas and similar. Also some pubs and restaurants do a discounted menu for pensioners which is actually a con because they serve you a smaller portion!
Also a Winter Fuel Allowance of £200 or £100 each if you are couple residing together.
* These benefits are valuable because since having had cancer I need quite expensive drugs,and the bus pass is valid everywhere in the country for public transport.
Post edited at 12:31
In reply to tlm: It's a tricky one, state pensions are not means tested, as this is unfair on people who have saved up, though it does mean some wealthy people get it.
What will probably happen is the age at which you can draw the state pension will carry on going up, so if you want to stop working before you are 70, make sure you can afford it.
What will probably happen is the age at which you can draw the state pension will carry on going up, so if you want to stop working before you are 70, make sure you can afford it.
In reply to tlm:
If you have paid your NI (or at least if your employer/accountant has and not pocketed it for themselves )then you will get your state pension.
This is the UK Financial Industry though, just assume you are going to be ripped off .
If you have paid your NI (or at least if your employer/accountant has and not pocketed it for themselves )then you will get your state pension.
This is the UK Financial Industry though, just assume you are going to be ripped off .
In reply to tlm:
I don't think 15 year olds will be interested in pensions and it will have changed by the time they retire anyway.
> Why isn't this taught in schools?
I don't think 15 year olds will be interested in pensions and it will have changed by the time they retire anyway.
Post edited at 12:16
In reply to tlm: You can, by contacting the DWP, get a forecast of what you will get in the way of your state pension. Depends on your NI contributions.
In reply to FesteringSore:
You can work it out here:
https://www.gov.uk/calculate-state-pension
However, I am not confident that it will stay at its current levels by the time I get to retirement age...
You can work it out here:
https://www.gov.uk/calculate-state-pension
However, I am not confident that it will stay at its current levels by the time I get to retirement age...
In reply to Papillon:
15 year olds might be interested and certainly might find it useful to know about things like basic budgeting, how bank accounts work, borrowing money, getting a mortgage, taking out insurance, how tax works etc. I think these things are considered part of the capitalist hegemony and best not taught.
> I don't think 15 year olds will be interested in pensions and it will have changed by the time they retire anyway.
15 year olds might be interested and certainly might find it useful to know about things like basic budgeting, how bank accounts work, borrowing money, getting a mortgage, taking out insurance, how tax works etc. I think these things are considered part of the capitalist hegemony and best not taught.
In reply to tlm:
The answer to the question in your title is "badly!"
There are quite a number of reasons for this, among the more important are the dramatically increasing length of pension years to working years both due to longer educational periods and longer lifetimes, the very poor investment returns due to exceptionally low interest rates and low stock market returns of recent years and last, the high charges/poor management/restrictive rules applied to the suppliers of private pensions, finally the uniquely (and most who do not get them think utterly unsustainable and unjustified) public sector pensions still set as a % of final salary and years worked (though this is gradually being reigned in as totally unaffordable even in the public sector, it has the population density of the dodo in the private sector).
You do get the state pension as well as private pension, it is based on the number of years that you have contributed to it, up to a current maximum of 30. But there is (or maybe, this is not clear), a catch about the number 30, due to a change that is proposed very soon, it is not clear if the number of qualifying years will effectively rise, as they need to do.
If you work you still keep all your pension, but both your earnings and pensions are taxable.
Why don't you know more about it?
Very few people do, because it is :
1) boring
2) incredibly complicated
3) has layers and layers and layers of complication due to different generations of politicians/economists trying to alternately fix/ignore the problems
4) involves huge amounts of money, but is very poor value for the punter, despite being widely portrayed as the "prudent" thing to do
5) is an incredibly intractable, possibly unsolvable problem, so it is easier to ignore it and pretend that it doesn't exist
6) not many people do know much about it, a lot of those that do have vested interests and axes to grind about it
The answer to the question in your title is "badly!"
There are quite a number of reasons for this, among the more important are the dramatically increasing length of pension years to working years both due to longer educational periods and longer lifetimes, the very poor investment returns due to exceptionally low interest rates and low stock market returns of recent years and last, the high charges/poor management/restrictive rules applied to the suppliers of private pensions, finally the uniquely (and most who do not get them think utterly unsustainable and unjustified) public sector pensions still set as a % of final salary and years worked (though this is gradually being reigned in as totally unaffordable even in the public sector, it has the population density of the dodo in the private sector).
You do get the state pension as well as private pension, it is based on the number of years that you have contributed to it, up to a current maximum of 30. But there is (or maybe, this is not clear), a catch about the number 30, due to a change that is proposed very soon, it is not clear if the number of qualifying years will effectively rise, as they need to do.
If you work you still keep all your pension, but both your earnings and pensions are taxable.
Why don't you know more about it?
Very few people do, because it is :
1) boring
2) incredibly complicated
3) has layers and layers and layers of complication due to different generations of politicians/economists trying to alternately fix/ignore the problems
4) involves huge amounts of money, but is very poor value for the punter, despite being widely portrayed as the "prudent" thing to do
5) is an incredibly intractable, possibly unsolvable problem, so it is easier to ignore it and pretend that it doesn't exist
6) not many people do know much about it, a lot of those that do have vested interests and axes to grind about it
Post edited at 12:22
In reply to tlm:
I retired at 55 on a final salary pension, which was taxed at the going rate for salary taxation. Last year I was contacted by the pensions authority to say that I would be recieving a state pension of X after my 65th birthday. I have to say they were brilliant and I recieved my pension from the very day I turned 65.
I was worried about this so I phoned them up and said what happens about tax? They said the state pension was not taxed and it would not be taxed at source. I have since recieved a notification from the IR that I owe tax to the tune of £600. This is ok as I got a tax rebate last year of £5,000, so the end result is that they know exactly what I get in my state and work pension and having phoned the IR up I am not in trouble and they will adjust my WP payments accordingly for my taxation at source. Hope this helps, the guys in the two departments seem to be really on the ball.
I retired at 55 on a final salary pension, which was taxed at the going rate for salary taxation. Last year I was contacted by the pensions authority to say that I would be recieving a state pension of X after my 65th birthday. I have to say they were brilliant and I recieved my pension from the very day I turned 65.
I was worried about this so I phoned them up and said what happens about tax? They said the state pension was not taxed and it would not be taxed at source. I have since recieved a notification from the IR that I owe tax to the tune of £600. This is ok as I got a tax rebate last year of £5,000, so the end result is that they know exactly what I get in my state and work pension and having phoned the IR up I am not in trouble and they will adjust my WP payments accordingly for my taxation at source. Hope this helps, the guys in the two departments seem to be really on the ball.
In reply to Postmanpat: Good point... I think we had some special lessons on things like that, but I think the syllabus is less flexible now.
In reply to Simon4:
but it is still quite surprising to me as I pay quite a lot of my money into pensions. I usually find it quite interesting finding out what I am spending my money on, and most people understand a reasonable amount about things like mortgages or isas, which are no more interesting than pensions!
I think it is partially the unpredictable nature of pensions - you can find out a lot about what they do today, but not much about how they will work in 20 years time...
> Why don't you know more about it?
> Very few people do, because it is :
but it is still quite surprising to me as I pay quite a lot of my money into pensions. I usually find it quite interesting finding out what I am spending my money on, and most people understand a reasonable amount about things like mortgages or isas, which are no more interesting than pensions!
I think it is partially the unpredictable nature of pensions - you can find out a lot about what they do today, but not much about how they will work in 20 years time...
In reply to tlm:
I think another problem with pensions is the perception of what you will get compared with the sacrifice today, mainly due to people not being able to imagine a) how long they will live for once retired and b) how their lifestyle will be different to today.
i.e. being told at 25 that you will need to put away £500 a month for the rest of your working life to get a £10k a year pension (numbers made up for point of argument, but give jist) seems like a huge sacrifice for not much reward for most people. Especially if you are earning £25k a year (take home circa £1600pm), have rent, bills,social life and a desire to get a mortgage, have kids etc.
I think another problem with pensions is the perception of what you will get compared with the sacrifice today, mainly due to people not being able to imagine a) how long they will live for once retired and b) how their lifestyle will be different to today.
i.e. being told at 25 that you will need to put away £500 a month for the rest of your working life to get a £10k a year pension (numbers made up for point of argument, but give jist) seems like a huge sacrifice for not much reward for most people. Especially if you are earning £25k a year (take home circa £1600pm), have rent, bills,social life and a desire to get a mortgage, have kids etc.
In reply to tlm:
Do your NI contributions stop after 30 years then?
If I pay in NI for all my working life, say 50 years and someone else only pays for 30 years do we still both ge the sam eamount
Do your NI contributions stop after 30 years then?
If I pay in NI for all my working life, say 50 years and someone else only pays for 30 years do we still both ge the sam eamount
In reply to cfer:
I don't know! I'm hoping for answers here, I don't know the answers already! I think you just keep on paying NI - after all, it goes for more stuff than just your pension, doesn't it, such as the NHS, and unemployment and sickness benefits
http://www.bbc.co.uk/newsbeat/10078062
I don't know! I'm hoping for answers here, I don't know the answers already! I think you just keep on paying NI - after all, it goes for more stuff than just your pension, doesn't it, such as the NHS, and unemployment and sickness benefits
http://www.bbc.co.uk/newsbeat/10078062
In reply to cfer:
and I think that is a bit of a narrow way of seeing working as a society. We all pay in, we all get different benefits, but what benefits another person may benefit you indirectly through a more stable society.
and I think that is a bit of a narrow way of seeing working as a society. We all pay in, we all get different benefits, but what benefits another person may benefit you indirectly through a more stable society.
In reply to Papillon:
Citizenship classes were brought in but then are being rather curtailed in recent times.
In response to the OP, Pensions are not so hard to understand as a concept its just the details can be complicated. Its a form of protected savings for when you retire. You build entitlement to a state pension as you work by paying National Insurance to get state benefits and you make additional formal pension payments to get a personal pension (which can take many forms). Once you reach retirement age you can still work and pay for and build a bigger personal pension but you can't build a bigger state benefit, as NI is no longer due. You can retire early but you can't claim state pension until you reach the formal retirement age and the personal pension that for some forms you can take earlier will then get 'actuarially reduced' (only fair as you are spreading the pot you have saved over a longer period).
Pensions are very tax efficient as they are often tax benefits (some are tax exempt) when you pay into them (but all are still taxed as income when you receive the pension back at the end); working pensions often have an employers contribution at a fixed proportion to what you save giving an added bonus to your contribution. In recent times pensions have had a lot of trouble due to the world economic problems, government changes on tax arrangements and methods of calculating liabilities for those running the funds. there have been especially poor returns on private pensions (often as much to do with exorbitant fees as poor performance of the investments they are based on) and pressure on public pensions (requiring increased payments and reduced benefits due to the way the liabilities have changed).
Most young people in the UK have a massive deficit in terms of normal pension requirements and are heading for a tough retirement unless they are due to inherit family wealth. Its mainly their fault as they are intelligent and should be investigating this for themselves but the state should help educate them more. More info here:
https://www.gov.uk/browse/working/state-pension
https://www.gov.uk/browse/working/workplace-personal-pensions
Citizenship classes were brought in but then are being rather curtailed in recent times.
In response to the OP, Pensions are not so hard to understand as a concept its just the details can be complicated. Its a form of protected savings for when you retire. You build entitlement to a state pension as you work by paying National Insurance to get state benefits and you make additional formal pension payments to get a personal pension (which can take many forms). Once you reach retirement age you can still work and pay for and build a bigger personal pension but you can't build a bigger state benefit, as NI is no longer due. You can retire early but you can't claim state pension until you reach the formal retirement age and the personal pension that for some forms you can take earlier will then get 'actuarially reduced' (only fair as you are spreading the pot you have saved over a longer period).
Pensions are very tax efficient as they are often tax benefits (some are tax exempt) when you pay into them (but all are still taxed as income when you receive the pension back at the end); working pensions often have an employers contribution at a fixed proportion to what you save giving an added bonus to your contribution. In recent times pensions have had a lot of trouble due to the world economic problems, government changes on tax arrangements and methods of calculating liabilities for those running the funds. there have been especially poor returns on private pensions (often as much to do with exorbitant fees as poor performance of the investments they are based on) and pressure on public pensions (requiring increased payments and reduced benefits due to the way the liabilities have changed).
Most young people in the UK have a massive deficit in terms of normal pension requirements and are heading for a tough retirement unless they are due to inherit family wealth. Its mainly their fault as they are intelligent and should be investigating this for themselves but the state should help educate them more. More info here:
https://www.gov.uk/browse/working/state-pension
https://www.gov.uk/browse/working/workplace-personal-pensions
Post edited at 13:19
In reply to tlm:
The state pension is benefits for old(ish) people. The working population pay for it out of general taxation just like they do all the other benefits like jobseekers and child benefit. Unfortunately, because of the quaint idea of national insurance, many pensioners think they have an unquestionable right to the money when in reality they are taking out much more than they put in. They are taking more because successive governments failed to respond to rapidly rising life expectancies and they've been protected from all the recent cuts because they hide behind a sense of outrage, and they're the only ones who vote. Instead of being a safety net like all other benefits, many pensioners use the money to go on cruises, shop at Waitrose on a Saturday and tut at the current generation for not working hard enough and spending all their money on smart phones.
Nobody knows about them because anyone under 30 can't ever see themselves having one and anyone older than that just sort of 'got one.' Under 30's know that they are paying for their parents and grandparents generations who retired at 55 (see above) and they also know that they won't get theirs until 70 at least. They aren't interested because they're too busy trying to keep their heads above water paying off debt. With any luck, they'll have cleared their student debt, managed to save a deposit and have children by 45. That will still give them 25-30 years to save for a pension.
Why should schools teach this stuff? Why can't people take resonsibility for their own education?
Furthermore, whoever had a dig at public sector pensions should realise the final salary schemes have been closed to new entrants since 2007 or so and are closed to existing members next year. Therefore, they are more prevalent in the private sector than the public even if they are rarer than hens teeth. They are most prevalent however amongst existing pensioners who are also in receipt of non means tested state benefits, benefited from buying council housing at knock down prices and are generally sitting in houses worth more than they ever earned in their life, normally with 3-4 bedrooms which would suit a family down to the ground. Only they like having the extra rooms to heat with their heating allowance.
HTH
The state pension is benefits for old(ish) people. The working population pay for it out of general taxation just like they do all the other benefits like jobseekers and child benefit. Unfortunately, because of the quaint idea of national insurance, many pensioners think they have an unquestionable right to the money when in reality they are taking out much more than they put in. They are taking more because successive governments failed to respond to rapidly rising life expectancies and they've been protected from all the recent cuts because they hide behind a sense of outrage, and they're the only ones who vote. Instead of being a safety net like all other benefits, many pensioners use the money to go on cruises, shop at Waitrose on a Saturday and tut at the current generation for not working hard enough and spending all their money on smart phones.
Nobody knows about them because anyone under 30 can't ever see themselves having one and anyone older than that just sort of 'got one.' Under 30's know that they are paying for their parents and grandparents generations who retired at 55 (see above) and they also know that they won't get theirs until 70 at least. They aren't interested because they're too busy trying to keep their heads above water paying off debt. With any luck, they'll have cleared their student debt, managed to save a deposit and have children by 45. That will still give them 25-30 years to save for a pension.
Why should schools teach this stuff? Why can't people take resonsibility for their own education?
Furthermore, whoever had a dig at public sector pensions should realise the final salary schemes have been closed to new entrants since 2007 or so and are closed to existing members next year. Therefore, they are more prevalent in the private sector than the public even if they are rarer than hens teeth. They are most prevalent however amongst existing pensioners who are also in receipt of non means tested state benefits, benefited from buying council housing at knock down prices and are generally sitting in houses worth more than they ever earned in their life, normally with 3-4 bedrooms which would suit a family down to the ground. Only they like having the extra rooms to heat with their heating allowance.
HTH
In reply to cfer:
Once you retire you stop paying NI, even if you retire at 55, you still pay tax on your pension though. I think there is some index link on how much NI you have paid but there is , I think, a minimum pension.
> Do your NI contributions stop after 30 years then?
> If I pay in NI for all my working life, say 50 years and someone else only pays for 30 years do we still both ge the sam eamount
Once you retire you stop paying NI, even if you retire at 55, you still pay tax on your pension though. I think there is some index link on how much NI you have paid but there is , I think, a minimum pension.
In reply to XXXX:
Blimy Irk! The younger folk I know have all types of goodies that the older folk could never afford at that age (cars, phones, holidays, new clothes, central heating, showers, freezers, microwaves, tellies, music listening systems etc). You make it sound as though this hasn't made them very happy?
Blimy Irk! The younger folk I know have all types of goodies that the older folk could never afford at that age (cars, phones, holidays, new clothes, central heating, showers, freezers, microwaves, tellies, music listening systems etc). You make it sound as though this hasn't made them very happy?
In reply to XXXX:
"Nobody knows about them because anyone under 30 can't ever see themselves having one and anyone older than that just sort of 'got one.' They aren't interested because they're too busy trying to keep their heads above water paying off debt. With any luck, they'll have cleared their student debt, managed to save a deposit and have children by 45. That will still give them 25-30 years to save for a pension."
Lazy defeatist thinking. It was always and remains a life choice. I agree things are harder than they were recently but things were also even more tricky than now if you go further back: there was genuine poverty around before I was born and in some places remained when I was very young. Also for people at the very top, life has never been so good in the UK.
"Nobody knows about them because anyone under 30 can't ever see themselves having one and anyone older than that just sort of 'got one.' They aren't interested because they're too busy trying to keep their heads above water paying off debt. With any luck, they'll have cleared their student debt, managed to save a deposit and have children by 45. That will still give them 25-30 years to save for a pension."
Lazy defeatist thinking. It was always and remains a life choice. I agree things are harder than they were recently but things were also even more tricky than now if you go further back: there was genuine poverty around before I was born and in some places remained when I was very young. Also for people at the very top, life has never been so good in the UK.
In reply to tlm:
We went to a financial advisor about a completely unrelated something-or-other and he introduced us to the concept of planning for retirement, even though we were in our early thirties. It is a minefield but I feel more in control than I did.
We went to a financial advisor about a completely unrelated something-or-other and he introduced us to the concept of planning for retirement, even though we were in our early thirties. It is a minefield but I feel more in control than I did.
In reply to XXXX:
Typical of your blinkered rant.... not everybody has been a 'student'.
> With any luck, they'll have cleared their student debt, managed to save a deposit and have children by 45. That will still give them 25-30 years to save for a pension.
Typical of your blinkered rant.... not everybody has been a 'student'.
In reply to Postmanpat:
I'm very sure if you are being serious with all this left wing conspiracy bollocks, I remember doing some stuff around budgeting and managing money at school, I am also aware of much younger siblings and other teenagers doing stuff on the subject, so I am sure there has been at least some of it over the last few decades.
I'm very sure if you are being serious with all this left wing conspiracy bollocks, I remember doing some stuff around budgeting and managing money at school, I am also aware of much younger siblings and other teenagers doing stuff on the subject, so I am sure there has been at least some of it over the last few decades.
In reply to Papillon:
About 50% have been a student. About the same proportion as say 'men' or 'women' so fairly significant I reckon.
About 50% have been a student. About the same proportion as say 'men' or 'women' so fairly significant I reckon.
In reply to tlm:
I dont care how much I pay in tbh was just curious if my NI would stop after 30 years or not?
I like yourself know absolutely nothing about pensions.
The only advice I got was pay in the same % of your salary as your age....So at 20yrs old you should be looking to pay 20% at 40 you should pay 40%
Currently I pay around 10%into a work pension
I dont care how much I pay in tbh was just curious if my NI would stop after 30 years or not?
I like yourself know absolutely nothing about pensions.
The only advice I got was pay in the same % of your salary as your age....So at 20yrs old you should be looking to pay 20% at 40 you should pay 40%
Currently I pay around 10%into a work pension
In reply to tlm:
No my username is a shortened version of my old username on here which I changed a while back to stop an ex partner looking at my online profiles
Its not difficult to work out my older name, as a few have already
> Is your name like people who call their cats peefer? (p for pussey)?
No my username is a shortened version of my old username on here which I changed a while back to stop an ex partner looking at my online profiles
Its not difficult to work out my older name, as a few have already
In reply to XXXX:
You're way off
http://www.theguardian.com/higher-education-network/blog/2013/jun/04/higher...
> About 50% have been a student. About the same proportion as say 'men' or 'women' so fairly significant I reckon.
You're way off
http://www.theguardian.com/higher-education-network/blog/2013/jun/04/higher...
In reply to cfer:
Who would have thought living beyond 100 could be so financially problematic in respect of pensions
Who would have thought living beyond 100 could be so financially problematic in respect of pensions
In reply to cfer:
Well no, because the NI doesn't just fund pensions, it also funds the NHS.
> I dont care how much I pay in tbh was just curious if my NI would stop after 30 years or not?
Well no, because the NI doesn't just fund pensions, it also funds the NHS.
In reply to Al Evans:
I had no idea what it went towards, the NHS alone is worth the money I pay in NI
I hope to win the euromillions and forgo any pension anyway
I had no idea what it went towards, the NHS alone is worth the money I pay in NI
I hope to win the euromillions and forgo any pension anyway
In reply to Papillon:
Well now I'm well and truly found out. Would you care to put error bounds on the rest of my polemic? Next time I auto-generate a wide-sweeping, stereotype ridden rant I'll be sure to include references and check my figures.
Well now I'm well and truly found out. Would you care to put error bounds on the rest of my polemic? Next time I auto-generate a wide-sweeping, stereotype ridden rant I'll be sure to include references and check my figures.
In reply to Al Evans:
Actually NI doesn't EVEN fund pensions. It doesn't fund the NHS either, it's just part of general taxation. Which begs the question, why do you stop paying it when you're a pensioner? It's yet another tax break, higher personal allowances, free this, free that and a lower overall tax rate.
Welcome to grey UK.
Actually NI doesn't EVEN fund pensions. It doesn't fund the NHS either, it's just part of general taxation. Which begs the question, why do you stop paying it when you're a pensioner? It's yet another tax break, higher personal allowances, free this, free that and a lower overall tax rate.
Welcome to grey UK.
In reply to tlm:
Because you'd be teaching 15-yr-olds about something that will kick in when they're about 75, and the chances of the rules having stayed the same over those 60 years are not high.
> Why isn't this taught in schools?
Because you'd be teaching 15-yr-olds about something that will kick in when they're about 75, and the chances of the rules having stayed the same over those 60 years are not high.
In reply to XXXX:
If you live long enough you might be old yourself one day. Who do you think will be paying for your pension?
If you live long enough you might be old yourself one day. Who do you think will be paying for your pension?
In reply to cfer:
They keep changing the number of years required to qualify for the full state pension, I forget how many it is now.
> If I pay in NI for all my working life, say 50 years and someone else only pays for 30 years do we still both get the same amount
They keep changing the number of years required to qualify for the full state pension, I forget how many it is now.
In reply to FesteringSore:
Was that a threat?
I'll be paying for it, I doubt very much I will make it to state retirement age and am making arrangements so I won't have to, privately. I fully expect state pension to be means tested by then. Ours will be the generation that pays the most and gets the least. Current generations are taking more than they paid in, we pay for them, the next generation will be paying for what they get as pensions will almost certainly all be private. The state pension will be thought of as any other benefit - a safety net.
In my opinion anyway.
Was that a threat?
I'll be paying for it, I doubt very much I will make it to state retirement age and am making arrangements so I won't have to, privately. I fully expect state pension to be means tested by then. Ours will be the generation that pays the most and gets the least. Current generations are taking more than they paid in, we pay for them, the next generation will be paying for what they get as pensions will almost certainly all be private. The state pension will be thought of as any other benefit - a safety net.
In my opinion anyway.
In reply to XXXX:
If you're very quiet, and listen really hard, you might just hear the worlds smallest violin being played
> Ours will be the generation that pays the most and gets the least.
If you're very quiet, and listen really hard, you might just hear the worlds smallest violin being played
In reply to XXXX:
>Ours will be the generation that moans the most and contributes the least.
Fixed that for you.
>Ours will be the generation that moans the most and contributes the least.
Fixed that for you.
In reply to XXXX:
"Ours will be the generation that pays the most and gets the least." That remains to be seen as we can't predict the future. Your "generation" has also been up with the least so far in engagement with politics. Its easier to ignore votors who vote and comlain to MPs and protest less.
"Ours will be the generation that pays the most and gets the least." That remains to be seen as we can't predict the future. Your "generation" has also been up with the least so far in engagement with politics. Its easier to ignore votors who vote and comlain to MPs and protest less.
In reply to Al Evans:
Nope, it doesn't.
LD
> Well no, because the NI doesn't just fund pensions, it also funds the NHS.
Nope, it doesn't.
LD
In reply to Lurking Dave:
State benefits linked to your National Insurance contributions
State benefits that are linked to your National Insurance contributions are known as 'contributory benefits'.
The contributory benefits
National Insurance contributions count towards the following state benefits:
the basic State Pension
the additional State Pension, sometimes called the State Second Pension
Jobseeker's Allowance - the 'contribution-based' element
Employment and Support Allowance - the 'contribution-based' element
Maternity Allowance
bereavement benefits - Bereavement Allowance, Bereavement Payment and Widowed Parent's Allowance
Incapacity Benefit
> Nope, it doesn't.
> LD
From HMwebsite if it helps State benefits linked to your National Insurance contributions
State benefits that are linked to your National Insurance contributions are known as 'contributory benefits'.
The contributory benefits
National Insurance contributions count towards the following state benefits:
the basic State Pension
the additional State Pension, sometimes called the State Second Pension
Jobseeker's Allowance - the 'contribution-based' element
Employment and Support Allowance - the 'contribution-based' element
Maternity Allowance
bereavement benefits - Bereavement Allowance, Bereavement Payment and Widowed Parent's Allowance
Incapacity Benefit
In reply to Jim C:
Read what you have posted, yes NI count towards/are linked/contribute etc. they do not fund the state pension and certainly not the NHS. To say that they do is quite ridiculous.
From the HMRC webiste... NI contributes 21% to total tax revenue. Note that (currently) the UK spends more than 100% of income
Per publicspending.co.uk ...
Pensions = 20% of expenditure
Health = 18% of expenditure
Maybe I miss interpreted the figures?
Cheers
LD
Read what you have posted, yes NI count towards/are linked/contribute etc. they do not fund the state pension and certainly not the NHS. To say that they do is quite ridiculous.
From the HMRC webiste... NI contributes 21% to total tax revenue. Note that (currently) the UK spends more than 100% of income
Per publicspending.co.uk ...
Pensions = 20% of expenditure
Health = 18% of expenditure
Maybe I miss interpreted the figures?
Cheers
LD
In reply to Coel Hellier:
It would be prudent to ask students what they want as a retirement income and do the calculations to work out how much they would have to save/invest to give them the income they want. That would help them focus their minds!
It would be prudent to ask students what they want as a retirement income and do the calculations to work out how much they would have to save/invest to give them the income they want. That would help them focus their minds!
In reply to Toerag:
Agreed. The calculation is actually a lot simpler that I imagined.
What do you want to retired on per anum * 25ish. So if you want to live on £10k, you need a pot of about £250k at retirement.
Of course this doesn't take into account inflation.
The other easy rule I quite like is that if you want to retire on 2/3 salary, you need to put away half the percentage of the age you start every year until retirement.
So if you start saving at 20, you need to save 10% a year. If you start at 30, 15% and so on, so the longer you leave it, the more you have to save. I think I also heard that £1 added to your pension pot when you are 25 is worth £50 at the age of 50.
This could all be bollocks of course, but all these complaining civil servants who pay £50 a month into a pension fund that will pay 2/3 salary when they retire at 55 are in cloud cuckoo land. It simply does not add up.
Agreed. The calculation is actually a lot simpler that I imagined.
What do you want to retired on per anum * 25ish. So if you want to live on £10k, you need a pot of about £250k at retirement.
Of course this doesn't take into account inflation.
The other easy rule I quite like is that if you want to retire on 2/3 salary, you need to put away half the percentage of the age you start every year until retirement.
So if you start saving at 20, you need to save 10% a year. If you start at 30, 15% and so on, so the longer you leave it, the more you have to save. I think I also heard that £1 added to your pension pot when you are 25 is worth £50 at the age of 50.
This could all be bollocks of course, but all these complaining civil servants who pay £50 a month into a pension fund that will pay 2/3 salary when they retire at 55 are in cloud cuckoo land. It simply does not add up.
Post edited at 10:43
In reply to XXXX:
A couple of my mates who are teachers were grumbling about the £80 they pay in each month.
A couple of my mates who are teachers were grumbling about the £80 they pay in each month.
In reply to ByEek:
I have a Local Government Pension and I consider myself lucky to have it, retiring at 55 is an option, but it won't be automatically granted and would be subject to penalties. I have just worked out that if I did retire at 55 I would get less than a third of my salary as pension, jointly between me and my employer, my pension contributions are about 20% of salary. I treat this employer contribution as deferred pay, so when looking at alternative employment I have a full picture of the financial package.
I have a Local Government Pension and I consider myself lucky to have it, retiring at 55 is an option, but it won't be automatically granted and would be subject to penalties. I have just worked out that if I did retire at 55 I would get less than a third of my salary as pension, jointly between me and my employer, my pension contributions are about 20% of salary. I treat this employer contribution as deferred pay, so when looking at alternative employment I have a full picture of the financial package.
In reply to ByEek:
Teachers pay between 6.4 and 11%, a typical teacher on £30k will be paying nearer £200 a month.
Teachers pay between 6.4 and 11%, a typical teacher on £30k will be paying nearer £200 a month.
In reply to ByEek:
No, they'll be paying more like £200 - it's all available online.
So who pays £50? Who gets to retire on 2/3 salary at 55?
No, they'll be paying more like £200 - it's all available online.
So who pays £50? Who gets to retire on 2/3 salary at 55?
In reply to XXXX:
Fire brigade is 2/3 at 55 if you started at 25. 1/60th for the first 20 years then 2/60ths.
Fire brigade is 2/3 at 55 if you started at 25. 1/60th for the first 20 years then 2/60ths.
In reply to Offwidth:
Closed to new members since 2006. New pension is retirement age 60 and 1/60ths so 1/2 pay after 30 years. Still pretty generous granted but currently under review.
Old scheme is 13%, new one is around 10%.
Google is wonderful.
Closed to new members since 2006. New pension is retirement age 60 and 1/60ths so 1/2 pay after 30 years. Still pretty generous granted but currently under review.
Old scheme is 13%, new one is around 10%.
Google is wonderful.
In reply to XXXX:
Apologies. Perhaps it shrank in my mind. £200 a month is still a bargain. I think I put away £350 at present, expect to retire the wrong side of 70 and don't have too high expectations about how much that will yield.
Apologies. Perhaps it shrank in my mind. £200 a month is still a bargain. I think I put away £350 at present, expect to retire the wrong side of 70 and don't have too high expectations about how much that will yield.
In reply to tlm:
True. I am on a comparable wage to a teacher of similar professional experience. My financial advisor has also added an escalator so I pay 5% a year more each year. Not sure how much longer I can afford to do that. I am pretty terrified about my retirement, or lack of it especially my wife has hear financial head firmly buried in the sand.
There is a going to be an almighty sound of sh1t hitting the fan when my generation start to hit retirement age.
True. I am on a comparable wage to a teacher of similar professional experience. My financial advisor has also added an escalator so I pay 5% a year more each year. Not sure how much longer I can afford to do that. I am pretty terrified about my retirement, or lack of it especially my wife has hear financial head firmly buried in the sand.
There is a going to be an almighty sound of sh1t hitting the fan when my generation start to hit retirement age.
In reply to ByEek:
Maybe we can make our children pay for it like the current generation of retirees?
Maybe we can make our children pay for it like the current generation of retirees?
In reply to XXXX:
Are they the same children that will be saddled with debt from university, who have no tangible assets because they can't get on the housing market and who can't get a job because we can't afford to retire?
My apologies. I am having a doom-and-gloom day today!
Are they the same children that will be saddled with debt from university, who have no tangible assets because they can't get on the housing market and who can't get a job because we can't afford to retire?
My apologies. I am having a doom-and-gloom day today!
Post edited at 14:36
In reply to XXXX:
Do you think we should scrap the state pension?
> Maybe we can make our children pay for it like the current generation of retirees?
Do you think we should scrap the state pension?
In reply to ByEek:
The purist and I discussed this yesterday... don't confuse your own demographic with the general population.
> Are they the same children that will be saddled with debt from university,
The purist and I discussed this yesterday... don't confuse your own demographic with the general population.
In reply to Papillon:
Good point. I seem to recall that it isn't just graduates who are struggling to get any sort of a job.
> The purist and I discussed this yesterday... don't confuse your own demographic with the general population.
Good point. I seem to recall that it isn't just graduates who are struggling to get any sort of a job.
In reply to XXXX:
OK it wasnt clear you were talking about who will get this when entering now. Current members get this and will continue to do so for some time.
For those entering now AFPS 05 will give not far off an equivalent of 2/3 benefits if you go in at 18 as it rates at 1/70th and gives a 3x pension lump sum.
OK it wasnt clear you were talking about who will get this when entering now. Current members get this and will continue to do so for some time.
For those entering now AFPS 05 will give not far off an equivalent of 2/3 benefits if you go in at 18 as it rates at 1/70th and gives a 3x pension lump sum.
In reply to XXXX:
Exactly the only way it can ever work because it's a generational thing.
No private pension system can work if you don't have younger working people paying in to buy the shares etc that must be sold to pay pensions to retirees.
A state pension is a bit more direct as it omits the buying & selling of shares stage when transferring money from those paying in (eg taxes on younger working population) to those getting paid (retired people).
> Maybe we can make our children pay for it like the current generation of retirees?
Exactly the only way it can ever work because it's a generational thing.
No private pension system can work if you don't have younger working people paying in to buy the shares etc that must be sold to pay pensions to retirees.
A state pension is a bit more direct as it omits the buying & selling of shares stage when transferring money from those paying in (eg taxes on younger working population) to those getting paid (retired people).
Post edited at 15:25
In reply to elsewhere:
It also has enabled the state to do all sorts of things (including investment) as most unfunded schemes have been in nominal 'profit' most of the time. The reason the calculated liabilities have grown so large recently are some rather pessemistic and politicised accounting methodologies (similar systems on private pensions in the the past allowed huge growth in funds in good years with companies taking pension holidays or even raids, only to complain later in a downturn that the funds were too expensive).
It also has enabled the state to do all sorts of things (including investment) as most unfunded schemes have been in nominal 'profit' most of the time. The reason the calculated liabilities have grown so large recently are some rather pessemistic and politicised accounting methodologies (similar systems on private pensions in the the past allowed huge growth in funds in good years with companies taking pension holidays or even raids, only to complain later in a downturn that the funds were too expensive).
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