Corcaigh_the_Cat
Well-known member
You're the type of person a government failing in their job relies on.
Your state pension may be at risk
- Thread starter Lemmy_kilmister
- Start date
You're the type of person a government failing in their job relies on.
Norfolkred1
Well-known member
As if the Government care. They would expect them to sell their houses and assets first.
Norfolkred1
Well-known member
Costs a lot of money to live in an Ivory Tower
truck
Well-known member
It is not saying they are scrapping pensions, just reviewing if the triple lock to calculate the rise each year is maintained. The state pension is a very basic income and I believe is already being calculated based on number of years you have contributed, but anyone retiring in the next 5-15 years thinking the state pension is going to give them an income that they can have a comfy retirement on is fooling themselves.
This is why the Government finally got around to making employers having to offer a pension scheme and contribute into it about 15 years ago. On the Martin Lewis money show the other night he quoted something I have heard before, when you first start to pay into a pension, pay half of your age into it if possible.
We need to get people thinking about taking steps to ensure they have funds for the lifestyle they want when they retire, and away from thinking the state scheme will see them OK. My state pension will be £9K a year according to the Government web site, and for the last 5 years I have been salary sacrificing in my work based scheme to build up a personal pension. That means I have to sacrifice income / lifestyle now, but that's my choice.
For 18-20 year old's the sooner they start to put money away and have it growing at typically 5% p.a. the better they will be in 50 years time when they retire, and they could build a fund it's a lot easier to save before it hits your bank account.
Simple illustration, saving £1,000 a year gross for 50 years you will have a pot over £200,000 at 5% growth. Obviously as you progress in career you earn more and can save more, that pot will be much larger and a decent retirement will be had (will there be any state pension in 50 years?).
It is something that is ignored far too much, and once 50 years old this is often is a time when there is more income available for the individual to save more into pension pot.
This is why the Government finally got around to making employers having to offer a pension scheme and contribute into it about 15 years ago. On the Martin Lewis money show the other night he quoted something I have heard before, when you first start to pay into a pension, pay half of your age into it if possible.
We need to get people thinking about taking steps to ensure they have funds for the lifestyle they want when they retire, and away from thinking the state scheme will see them OK. My state pension will be £9K a year according to the Government web site, and for the last 5 years I have been salary sacrificing in my work based scheme to build up a personal pension. That means I have to sacrifice income / lifestyle now, but that's my choice.
For 18-20 year old's the sooner they start to put money away and have it growing at typically 5% p.a. the better they will be in 50 years time when they retire, and they could build a fund it's a lot easier to save before it hits your bank account.
Simple illustration, saving £1,000 a year gross for 50 years you will have a pot over £200,000 at 5% growth. Obviously as you progress in career you earn more and can save more, that pot will be much larger and a decent retirement will be had (will there be any state pension in 50 years?).
It is something that is ignored far too much, and once 50 years old this is often is a time when there is more income available for the individual to save more into pension pot.
BaronSmoggie
Well-known member
BaronSmoggie
Well-known member
Then why not offer 40% to everyone, make it such an incentivised scheme and improve quality of life. I know a lot of people who opted out pensions because there isn't enough in it for them (apparently), and they can do better in other ways such as property. As per my other comment, close all the tax loopholes, recover that money and it goes a hell of a long way to paying for that improved incentivisation.
There is no reason for child poverty, homelessness, etc if we gathered every penny of the tax that is due. The fact we choose not to, is on all of us, not just the government, we don't want to change it enough to make it happen.
BaronSmoggie
Well-known member
Addressing specifically, this part of your comment. It makes you sound like the worst Trump supporter. If people choose not to work, that is their choice. We have a welfare, pay it forward system that caters to all. I'm an advocate for UBI, so maybe my view differs to yours. That UBI rate should be determined by an independent panel based on CPI, RPI and a host of other factors to determine cost of living. That is the minimum needed for a good quality of life. If you want more out of life, then you work hard to obtain that, you will always have people with that motivation.
We have to get out of the mindset that people who don't work aren't a benefit to society. We can't talk about people in a cost/benefit way. Think about all of those stay at home mums who raise happy healthy kids, as opposed to the hard working mum who never gets home before the kids go to bed and the kids never have that relationship, bond or guidance from a parent. Which has provided the greater benefit to a society?
Redwurzel
Well-known member
Billy H - You can contribute up to £40k per year at present if you have paid that amount in income tax and earn less than £150k per year. These are new contributions. I have just checked this on a couple of websites. There is a total maximum for Private Pensions to get tax relief of around £1.05m which is affected by rising value of the pot. For around 90% of the UK population a £1.05m pot is unrealistic.
Its much easier for HMRC to reduce the level of contributions rather than start giving 20% tax relief to 40% tax payers.
There is also a danger than 20% relief is not enough to persuade people to save significant amounts.
I am also trying to be realistic and a Tory Chancellor thinks more about the needs of 40% tax payers than 20% tax payers so more likely to change relief if part of the 40% is retained. A lot of core working age Tory voters are 40% tax payers.
Its much easier for HMRC to reduce the level of contributions rather than start giving 20% tax relief to 40% tax payers.
There is also a danger than 20% relief is not enough to persuade people to save significant amounts.
I am also trying to be realistic and a Tory Chancellor thinks more about the needs of 40% tax payers than 20% tax payers so more likely to change relief if part of the 40% is retained. A lot of core working age Tory voters are 40% tax payers.
Redwurzel
Well-known member
I would support Baron on this - there are many people who care for relatives and are not paid to do it (as paid employment) and it restricts their paid working opportunities. The care for relative can be children, grandchildren, aged parents, severely disabled relative etc. A lot of people still believe there are millions of people who decide not to work as a life choice and choose to live on benefits instead of working full time, there are far outnumbered by the opposite. There are also a lot of people with disabilities that are not given opportunities to work but would love to. Many of these groups also do unpaid voluntary work and contribute in non monetary ways to society. Most Government welfare spending is on state pensions and pension relief and its rising fast.
To me contributing to your own pension is very important, but I know I am not your average person. I started a private pension at 26 which I added to when not in a occupational one. I can understand its very difficult to contribute to it when on a low income, but I would sacrifice some things that others consider essential to put something in (e.g. takeaways, having a holiday every year, going out drinking several times a week). I knew 35 years ago the State Pension was going to be small.
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kuepper
Well-known member
From a state pensioner's perspective .......When I retired with 45 years of NI contributions I was shocked when I found out the state pension was counted as taxable income so I definitely don't want to have to pay NI as well. I'm not worried about the triple lock as that's a bit of a gimmick but the state pension shouldn't lose value in real terms. Until IDS wasted billions of £ and about 8 years allegedly simpifying the benefit system at least there was a sort of meritocratic relationship between the amount of pension you got and the number of years contributions you had made. IDS introduced a more generous pension amount but made it available to NEW pensioners only who also only need 35 years contributions to get the full amount. So maybe all the old and IDS criteria could be scrapped so everyone got the same amount and saving lots of needless bureaucracy and money. Increase in the pensionable age is a certainty I'd have thought.
Pablo Escobar
New member
Spot on totally agree
Cardiffdaffs
Well-known member
Giving up pensions to pay for furlough abuse? No. Won’t happen.
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BaronSmoggie
Well-known member
I do the same, but to my chagrin, I started a bit later than you at 33. I have a company pension with a 6% match. I'm pretty fortunate in that I have a good job and I do get 40% relief on my pension contributions. The state pension is worth less and less and will be by the time I retire in 28 years time, so I figure I needed to do something about it. The scary thing for me now is that maybe that won't be enough as pension schemes have heavy investment in property, which due to lockdown and severe changes to working practices, property may become less desirable as an investment vehicle.
Abel Tasman
Well-known member
It won’t. Property prices particularly commercial will have a bAd time over the next year or two. But there is a severe shortage of housing and as long as that is the case residential property sector will carry a premium. Property funds that make up private pensions will just change their sector coverage to refelect where the value will be.
Cardiffdaffs
Well-known member
Yep it’s a long term investment and prices will go down and then inevitable up again Resi property market is red hot and whilst this is result is partly as a result of the stamp duty holiday it’s also a drive from people moving out of city centre apartments and wanting properties with gardens.
Redwurzel
Well-known member
Baron S
Try and find out where your company scheme invests - it is not forced to invest in Property. Or property may be a small percentage. Government bonds were a big area of investment for private pensions and returns are now tiny which is affecting the value and returns of private pensions - evidence large pension deficits in schemes such as BHS employees
scheme.
You can also start your own private pension called a SIPP and avoid property, if you have any cash to invest. Nowadays people can have a company scheme and a SIPP, as long as they don't invest more than the income tax they have paid in each tax year. (hence what I said about the amount of money they are costing the Government).
Try and find out where your company scheme invests - it is not forced to invest in Property. Or property may be a small percentage. Government bonds were a big area of investment for private pensions and returns are now tiny which is affecting the value and returns of private pensions - evidence large pension deficits in schemes such as BHS employees
scheme.
You can also start your own private pension called a SIPP and avoid property, if you have any cash to invest. Nowadays people can have a company scheme and a SIPP, as long as they don't invest more than the income tax they have paid in each tax year. (hence what I said about the amount of money they are costing the Government).
r00fie1
Well-known member
"incentivise retirement for the older population" ?
Hows about:- [the older population] have paid all their lives to support comrades and country, now its the job of the younger generations to support them who brought them up!!!!