Strike on 30th June

[Matty]

Just listening to Radio 5 live now.

I keep hearing union officials come on and say 'we didn't cause this crisis'.....

Well actually in a sense the public sector was inadvertently complicit in creating this situation. Whilst the money was rolling in (from the 'banks' by the way) in the noughties, rather than put some of that money to one side for a rainy day it was frittered away unnecessarily on whimsical, ideology fuelled follies.

We are paying the price for that now.

The Union are being disingenuous when they try and draw parallels between the current economic crisis/the bankers fiasco and the Public sector pension deficit.

It's an undeniable fact that people are living substantially longer now than they ever have. It's also undeniable that the cost of providing pensions for these people is also growing, they're in retirement for longer hence they receive more money from their pension without paying additional money in to cover it. None of these things has ANYTHING to do with the economic crisis, and none of it is anyone's fault, or was caused by anyone. It's down to medical breakthroughs, improved working conditions and a general improvement in the quality of life for all.

It's all pretty simple really, 20 years ago lets say the average age for a man was 73. If he retires at 60 then that's 13 years of pension he gets (discounting any lump sum), if his pension is £10k a year that's £130k his pension is costing. Now, lets say today a man will live until he's 80, he can still retire at 60, his pension is still £10k per year, that's 20 years pension, so £200k in total for the cost. If the man doesn't pay a penny extra into his pension where is the additional £70k coming from? I'll tell you, the tax payer.

Pensions HAVE to change, they were designed decades ago when circumstances were extremely different to today and, as such, they are completely unsustainable. Members need to pay more in, they need to work longer, and they need to accrue a lower total pension. It's the only way future generations are going to be able to have pensions at all. The changes being proposed to the Public sector pensions are still SUBSTANTIALLY better than those imposed on many private sector employees, they will still get a defined benefit scheme. I USED to have a defined benefit scheme with my private employer, it was then downgraded to a scheme similar to the one being offeed to the publci sector now, and then downgraded further still to the defined contribution scheme I now have.

I'm not saying I have no sympathy here, or that I can't understand how these changes are being viewed negatively. But the fact remains the changes HAVE to happen, the Unions are kidding their members if they say otherwise.

 

[SWP's back]

Matty if your defined contribution scheme is employee contribution only (ie your employer does not match your contributions) then you should definately look into transferring your pension pot into one of the better performing schemes such as THSP and the like.

The difference in growth can range between an annual growth rate of 6-12% which can double the size of your fund, when compounded, over the long term compared with a poor performing fund (6% etc)

 

[Matty]

Matty if your defined contribution scheme is employee contribution only (ie your employer does not match your contributions) then you should definately look into transferring your pension pot into one of the better performing schemes such as THSP and the like.

The difference in growth can range between an annual growth rate of 6-12% which can double the size of your fund, when compounded, over the long term compared with a poor performing fund (6% etc)

My employer actually pays a decent amount into my pension so I'd imagine it'll be better for me to stay put. The issue I have with it is my final pension is completely at the mercy of the economy at the time I retire. I'll need to purchase a pension with the pot of money I've built up and the level of that pension is completely unclear. When I was a defined benefit scheme member I knew what I was getting, X number of years / 60 or 80 * final pensionable salary (of average pensionable salary dependent upon the scheme type), that meant I knew what I was getting, for example:- 40 years / 80 * £30k = £15k a year pension, simple.

 

[SWP's back]

Matty if your defined contribution scheme is employee contribution only (ie your employer does not match your contributions) then you should definately look into transferring your pension pot into one of the better performing schemes such as THSP and the like.

The difference in growth can range between an annual growth rate of 6-12% which can double the size of your fund, when compounded, over the long term compared with a poor performing fund (6% etc)

My employer actually pays a decent amount into my pension so I'd imagine it'll be better for me to stay put. The issue I have with it is my final pension is completely at the mercy of the economy at the time I retire. I'll need to purchase a pension with the pot of money I've built up and the level of that pension is completely unclear. When I was a defined benefit scheme member I knew what I was getting, X number of years / 60 or 80 * final pensionable salary (of average pensionable salary dependent upon the scheme type), that meant I knew what I was getting, for example:- 40 years / 80 * £30k = £15k a year pension, simple.

Yep - if your employer contributes, or better, matches your contributions, then always stay with the employer scheme to maximum amount allowable under your company's rules.

As for your pension being at the mercy of the economy, contact your pension scheme administrator and ask if they have a "lifestyling option" - this is whereby the pension is automatically, and gradually, moved away away from equities and into fixed interest securities such as Gilts and Investment Grade Corporate Bonds in the 5 years before your stated retirement age.

Failing that and assuming that your pension doesn't include that option and you have no say in where your money is invested. If you get to retirement and the fund value has just taken a 30-40% hit, you can always choose not to crystalise the pension (and therefore loss), but taje the cash free lump sum and elect a "phased drawdown" to allow the fund to regain some the lost returns. This would generally take a period of 3-5 years but is well worth doing to avoid losses.

 

[Halfpenny]

<a class="postlink" href="http://www.dailymail.co.uk/news/article-2010193/Teachers-strike-Sophie-Howard-13-killed-falling-branch-school-closed.html" onclick="window.open(this.href);return false;">http://www.dailymail.co.uk/news/article ... losed.html</a>

No matter what your views on the strike itself, you must surely recognise that this story from the Fail is simply the lowest of the low.

 

[Indestructable]

This article was widely reported in the press and not just the Mail. Waiting for a Union leader to blame the coalition...

 

[Halfpenny]

This article was widely reported in the press and not just the Mail. Waiting for a Union leader to blame the coalition...

The perceived link between strike action and the incident was more prominent in the Mail article than anywhere else. Let's be honest, if the same incident happened on the Royal Wedding day they wouldn't have blamed the Royal Family would they?

 

[gordondaviesmoustache]

This article was widely reported in the press and not just the Mail. Waiting for a Union leader to blame the coalition...

The perceived link between strike action and the incident was more prominent in the Mail article than anywhere else. Let's be honest, if the same incident happened on the Royal Wedding day they wouldn't have blamed the Royal Family would they?

I agree. That article is piss poor, but not altogether surprising from The Mail.

 

[SWP's back]

This article was widely reported in the press and not just the Mail. Waiting for a Union leader to blame the coalition...

The perceived link between strike action and the incident was more prominent in the Mail article than anywhere else. Let's be honest, if the same incident happened on the Royal Wedding day they wouldn't have blamed the Royal Family would they?

No but the Express would have had a paragraph about Diana in the article, or Maddie

 

[Halfpenny]

This article was widely reported in the press and not just the Mail. Waiting for a Union leader to blame the coalition...

The perceived link between strike action and the incident was more prominent in the Mail article than anywhere else. Let's be honest, if the same incident happened on the Royal Wedding day they wouldn't have blamed the Royal Family would they?

No but the Express would have had a paragraph about Diana in the article, or Maddie

Hahaha, very true.