The Labour Government

[Blue Maverick]

Ah, the politics of envy. Please explain if the deal is so good why councils are struggling to recruit accountants, planners etc from the private sector...

When I worked for 18 months in the early 2000s for oldham council they had 2 permanent architects the rest were contractors basically naming their price and when they got offered more just fucked off, they were on a damn sight more per day than their council counterparts.

 

[bluethrunthru]

Sorry to be making a political point but genuinely it is the case that Gordon Brown fucked over private pension schemes with his tax raid on them, effectively ending final salary schemes by rendering them unaffordable. Prior to this it was wonderful that you could usually expect n 40ths of you final salary where n was your years of service. It meant many people were able to retire at ages and with pensions most of us could only dream of.

A few years back it was reckoned that Brown's raid had cost private sector workers on average £200,000 each in lost pension growth over the period. It will be more than that now.

funny thing about these claims is he didn't. However you had to retain the benefits of a final salary pension which I did on two of mine hence have retired not wealthy but able to keep my head above water. To do that though your best hope is to be in an organised workforce - which thankfully I was - and which is how public sector pensions remain so good.

As I have always said if the pension of your jnr doctor or the firefighter saving you or your house is better than yours then ask your employer why they won't match it because thats who is depriving you of a decent retirement income

 

[Chippy_boy]

funny thing about these claims is he didn't.

Er, yes, Brown did fuck over private pensions. Take a look at the article I linked, although there are countless other similar articles. The tax changes he made to dividends received by pension funds is a matter of public record. As is the ensuing underperformance of pension funds, and the resulting unaffordability of companies funding final salary schemes.

Now you could argue that companies should just have paid more and more into those schemes and that would be a valid point of view.

However that would have significantly increased employment costs - typically the largest cost element on a p&l - thereby pushing up costs and limiting growth and employment. And resulting in everyone paying more for our goods and services. Increasing imports of more cheaper imported goods. In extremis, putting companies out of business.

There is no magic money tree.

 

[bluenova]

funny thing about these claims is he didn't. However you had to retain the benefits of a final salary pension which I did on two of mine hence have retired not wealthy but able to keep my head above water. To do that though your best hope is to be in an organised workforce - which thankfully I was - and which is how public sector pensions remain so good.

As I have always said if the pension of your jnr doctor or the firefighter saving you or your house is better than yours then ask your employer why they won't match it because thats who is depriving you of a decent retirement income

It's almost as if the state knows it's going to be picking up any shortfall, or paying the cost of poor health, if people retire with little or no pension. Makes sense to put as much of the money they have for staff costs into staff pensions.

I'd hope that auto-enrolment is gradually pushed up over time so that most employees retire with a reasonable pension.

 

[blueinsa]

Dear God, is this what it’s come to? How about they just shoot them and then they will cost even less.

FFS, how on earth can you suggest that shafting people because they don’t vote for you is OK? My mind is boggled that anyone without a lobotomy would say such a thing.

You pretend to be left wing whilst in opposition because promising the Earth is easy.

Once in power, reality hits home and it dawns that what the last lot did, you will also have to do because there really isn’t any other way. Then it slowly dawns on them that the very people they voted for are liars, nothing like the left wingers they thought they where but are in fact, friends of the rich, friends of big business and instead of the nirvana and change promised, it’s very much business as usual smattered with the odd very right wing policies like removing WFA etc, something you have spent years warning everyone the Tories would do if voted in.

So what do you do? Admit you voted for a turd or do you double down and every post and opinion you have had the last few years can go in the bin as you sound more like Braverman than you do Corbyn with each passing day?

Sadly we are still in the denial phase for many it seems.

 

[bluenova]

Sorry to be making a political point but genuinely it is the case that Gordon Brown fucked over private pension schemes with his tax raid on them, effectively ending final salary schemes by rendering them unaffordable. Prior to this it was wonderful that you could usually expect n 40ths of you final salary where n was your years of service. It meant many people were able to retire at ages and with pensions most of us could only dream of.

A few years back it was reckoned that Brown's raid had cost private sector workers on average £200,000 each in lost pension growth over the period. It will be more than that now.

Strange that Osborne hasn't got the same reputation. Brown's pension changes occurred at a time when most pension schemes were in credit and the economy buoyant. Osborne started his raids when the economy was already struggling.

This is one proposed pension raid on the rich that isn’t justified

Politicians are a cynical breed. They have most likely targeted pension contributions relief in recent years because relatively few grasp how the system actually works

www.independent.co.uk

Osborne’s pension raid ‘double’ that of Brown

George Osborne’s attack on the pension entitlement of millions of workers is double that of Gordon Brown’s much-criticised raid on private sector pension funds, Prospect said.

members.prospect.org.uk

 

[Kompany Car]

Ah, the politics of envy. Please explain if the deal is so good why councils are struggling to recruit accountants, planners etc from the private sector...

To be honest Vic the private sector can't get accountants, planners etc because they cant allegedly afford to pay the wages as employed staff and satisfy their shareholders.

Most go independent or contracting where they are self employed. Even though they earn substantially more in doing this they effectively cost businesses less money than having payroll employees on a much lower wage. Obviously for those contracting they have to stand their own sick pay, holidays, pensions etc and can be let go once a contract is finished.

Local government procurement restrictions make it difficult for them to take on individuals on a contracting basis and IR35 has made this even more difficult.

Salaries in the UK have been a race to the bottom for some time. Its getting to the extent where its significantly cheaper in some sectors for Canada and the US to offshore work to the UK rather than do it in their country.

 

[metalblue]

23% employer contrubution in the NHS and that is "not so generous"!

This is exactly my point. Between 1/4 and 1/3rd of your pay paid into your pension every year, without tax. It's an absolutely enormous perk that is unheard of at this level in the private sector.

Related I am sick and tired of hearing how poorly paid junior doctors are. Sure the starting salaries are not huge (£32k before the latest pay rise taking it to £36k) is hardly terrible. But add on to that the pension, AND the fact that it's a stepping stone on the career path of ever higher earnings. Doctors end up on £100k or more (plus the generous pension) and most on A LOT more since they often only work 3 days a week for the NHS and earn even more with private work. It's not uncommon for them to be earning £200k in total.

So starting on a "low??" salary is all part of the deal. Just the same as accountants and lawyers, for example. My mate was dismally paid as a trainee accountant (£4k per year in the early 80's when I was on like £16k) after doing a business studies degree. So much so that he had to live with his mum and dad until he was 30! But he knew it would be worth it and now he's a chief accountant/company secretary on around £120k per year.

But when was the last time you heard of a junior accountants' strike?

You’re actually right. I must admit I didn’t pay too much attention to Mrs MBs pension I thought the career average was divided by 80 but it’s 54 and I didn’t realise the NHS contributions were that high - I thought it was the total. She’s worth more than I thought ;)

It doesn’t make a lot of sense though as they don’t pay out basis a specific pot value like you and I will have in our private pots it’s a defined benefits one - maybe it’s because they don’t invest it even at draw down like you would do a private scheme. Anyroad it is what it is, so your point stands.

 

[Chippy_boy]

Strange that Osborne hasn't got the same reputation. Brown's pension changes occurred at a time when most pension schemes were in credit and the economy buoyant. Osborne started his raids when the economy was already struggling.

This is one proposed pension raid on the rich that isn’t justified

Politicians are a cynical breed. They have most likely targeted pension contributions relief in recent years because relatively few grasp how the system actually works

www.independent.co.uk

Osborne’s pension raid ‘double’ that of Brown

George Osborne’s attack on the pension entitlement of millions of workers is double that of Gordon Brown’s much-criticised raid on private sector pension funds, Prospect said.

members.prospect.org.uk

I am not sure you actually thought about this before posting. My guess is you were just desperate to try to find some suggestion that what Brown did was not that bad, and that the Tories did worse.

Unfortunately that argument fails. Principally because Osborne did not raid private pensions at all. All he did was limit the maximum contribution you get tax relief on to £40k per year, and limit the amount you could have in your pension whilst still getting tax relief, to £1m. I would have thought as a lefty, you’d be in favour of both of these moves. But he didn’t actually take money out of the system.

Then with respect to the state pension, he limited the rate at which it was increased. Nothing to do with private pensions funds.

You said, “Brown's pension changes occurred at a time when most pension schemes were in credit” Well exactly. Now look at them. That’s on him. His dreadful raid has cost people’s private pensions something in the region of £250bn yes billion, since it was introduced.

 

[The perfect fumble]

If it all goes tits up there's always the Lib Dems....

 

[Blue Maverick]

I am not sure you actually thought about this before posting. My guess is you were just desperate to try to find some suggestion that what Brown did was not that bad, and that the Tories did worse.

Unfortunately that argument fails. Principally because Osborne did not raid private pensions at all. All he did was limit the maximum contribution you get tax relief on to £40k per year, and limit the amount you could have in your pension whilst still getting tax relief, to £1m. I would have thought as a lefty, you’d be in favour of both of these moves. But he didn’t actually take money out of the system.

Then with respect to the state pension, he limited the rate at which it was increased. Nothing to do with private pensions funds.

You said, “Brown's pension changes occurred at a time when most pension schemes were in credit” Well exactly. Now look at them. That’s on him. His dreadful raid has cost people’s private pensions something in the region of £250bn yes billion, since it was introduced.

Then why didn’t the tories in 14 years change it like the article says it should?

 

[Kompany Car]

You’re actually right. I must admit I didn’t pay too much attention to Mrs MBs pension I thought the career average was divided by 80 but it’s 54 and I didn’t realise the NHS contributions were that high - I thought it was the total. She’s worth more than I thought ;)

It doesn’t make a lot of sense though as they don’t pay out basis a specific pot value like you and I will have in our private pots it’s a defined benefits one - maybe it’s because they don’t invest it even at draw down like you would do a private scheme. Anyroad it is what it is, so your point stands.

I would assume its to do with investment risk. Stock markets are volatile, yes you can make a lot if you invest in the right funds but you can also lose a lot. The government are more likely to put the funds (assuming there really is a fund !) in the international bond markets or gold, where returns are much lower but the volatility is lower. This in essence is why people refer to them as gold plated by comparison to defined contribution (DC) pensions as there is no risk or uncertainty when it comes to the value when drawing the pension.

To obtain an annuity which pays around 20k (40/60ths of a 30k salary) per year from the age of 67 at todays rates, which have improved due to interest rates being higher, you would need a pot of around £380k. Go back a few years and you were looking to £500k for the same amount. Someone earning 30k wouldn't stand a chance in a DC pension of reaching 380k after 40 plus years working unless they took an exceptionally high risk approach.

In terms of typical employer contribution in the private sector...

Tesco (one of the UKs largest private employers) - match up to 7.5% of salary of employees contributions

Barclays - pay a flat 8% on top assuming employees pay a minimum of 3% capped at 5%

Balfour Beatty (One of the UK's largest construction companies) - match employees up to 5% and pay 2% on top.

The business I work for pay double contributions up to 5% of salary.

As for shares and significant bonuses, unless you are in senior management in most companies, shares are off the table and bonuses are low single digit percentages of salary if the board decide you can have one.

You could say that the private sector should pay more into pensions and they should, but there would need to be more support for small businesses as they would be unable to do it.

Whether people are better off working in the private sector or public sector financially is really dependent on where you end up. Manage to climb the greasy pole to the top table of a private company and the money pours in but if you're just another employee then you'd have been better off in the long run working in the public sector.

 

[bluenova]

I am not sure you actually thought about this before posting. My guess is you were just desperate to try to find some suggestion that what Brown did was not that bad, and that the Tories did worse.

Unfortunately that argument fails. Principally because Osborne did not raid private pensions at all. All he did was limit the maximum contribution you get tax relief on to £40k per year, and limit the amount you could have in your pension whilst still getting tax relief, to £1m. I would have thought as a lefty, you’d be in favour of both of these moves. But he didn’t actually take money out of the system.

Then with respect to the state pension, he limited the rate at which it was increased. Nothing to do with private pensions funds.

You said, “Brown's pension changes occurred at a time when most pension schemes were in credit” Well exactly. Now look at them. That’s on him. His dreadful raid has cost people’s private pensions something in the region of £250bn yes billion, since it was introduced.

I'm not sure you've read those articles I posted ;)

Brown and Osborne both changed the tax reliefs around pensions, and both resulted in similar yearly amounts of tax savings. You can argue semantics about what stage of the pension process the tax relief changed, but it still amounts to money that would have gone into pension schemes, not going into pension schemes.

The other article isn't about the state pension.

The much bigger change after Brown's change to tax reliefs, was the dotcom crash, which followed shortly after. There's a Channel 4 FactCheck which gives more detail: https://www.channel4.com/news/artic...k+did+gordon+destroy+our+pensions/171020.html

I don't doubt that Brown's changes cost pension schemes money, but if you only get your news from the Daily Mail then you only get one side of the story.

 

[Chippy_boy]

Then why didn’t the tories in 14 years change it like the article says it should?

Because they are imperfect.

 

[Chippy_boy]

I'm not sure you've read those articles I posted ;)

Brown and Osborne both changed the tax reliefs around pensions, and both resulted in similar yearly amounts of tax savings. You can argue semantics about what stage of the pension process the tax relief changed, but it still amounts to money that would have gone into pension schemes, not going into pension schemes.

The other article isn't about the state pension.

The much bigger change after Brown's change to tax reliefs, was the dotcom crash, which followed shortly after. There's a Channel 4 FactCheck which gives more detail: https://www.channel4.com/news/artic...k+did+gordon+destroy+our+pensions/171020.html

I don't doubt that Brown's changes cost pension schemes money, but if you only get your news from the Daily Mail then you only get one side of the story.

Fair enough :-)

 

[PPT]

You pretend to be left wing whilst in opposition because promising the Earth is easy.

Once in power, reality hits home and it dawns that what the last lot did, you will also have to do because there really isn’t any other way. Then it slowly dawns on them that the very people they voted for are liars, nothing like the left wingers they thought they where but are in fact, friends of the rich, friends of big business and instead of the nirvana and change promised, it’s very much business as usual smattered with the odd very right wing policies like removing WFA etc, something you have spent years warning everyone the Tories would do if voted in.

So what do you do? Admit you voted for a turd or do you double down and every post and opinion you have had the last few years can go in the bin as you sound more like Braverman than you do Corbyn with each passing day?

Sadly we are still in the denial phase for many it seems.

Great post.

 

[PPT]

I would assume its to do with investment risk. Stock markets are volatile, yes you can make a lot if you invest in the right funds but you can also lose a lot. The government are more likely to put the funds (assuming there really is a fund !) in the international bond markets or gold, where returns are much lower but the volatility is lower. This in essence is why people refer to them as gold plated by comparison to defined contribution (DC) pensions as there is no risk or uncertainty when it comes to the value when drawing the pension.

To obtain an annuity which pays around 20k (40/60ths of a 30k salary) per year from the age of 67 at todays rates, which have improved due to interest rates being higher, you would need a pot of around £380k. Go back a few years and you were looking to £500k for the same amount. Somone earning 30k wouldn't stand a chance in a DC pension of reaching 380k after 40 plus years working unless they took an exceptionally high risk approach.

In terms of typical employer contribution in the private sector...

Tesco (one of the UKs largest private employers) - match up to 7.5% of salary of employees contributions

Barclays - pay a flat 8% on top assuming employees pay a minimum of 3%

Balfour Beatty (One of the UK's larges construction companies) - match employees up to 5% and pay 2% on top.

The business I work for pay double contributions up to 5% of salary.

As for shares and significant bonuses, unless you are in senior management in most companies, shares are off the table and bonuses are low single digit percentages of salary if the board decide you can have one.

You could say that the private sector should pay more into pensions and they should, but there would need to be more support for small businesses as they would be unable to do it.

Whether people are better off working in the private sector or public sector financially is really dependent on where you end up. Manage to climb the greasy pole to the top table of a private company and the money pours in but if you're just another employee then you'd have been better off in the long run working in the public sector.

And let’s not forget, working in the private sector you can get sacked or made redundant in the blink of an eye. Much more jeopardy than the public sector. Amazingly I have three mates who have all been made redundant in recent weeks. Two of them have 30 years service and the other 20 years service.

 

[Vic]

I am not sure you actually thought about this before posting. My guess is you were just desperate to try to find some suggestion that what Brown did was not that bad, and that the Tories did worse.

Unfortunately that argument fails. Principally because Osborne did not raid private pensions at all. All he did was limit the maximum contribution you get tax relief on to £40k per year, and limit the amount you could have in your pension whilst still getting tax relief, to £1m. I would have thought as a lefty, you’d be in favour of both of these moves. But he didn’t actually take money out of the system.

Then with respect to the state pension, he limited the rate at which it was increased. Nothing to do with private pensions funds.

You said, “Brown's pension changes occurred at a time when most pension schemes were in credit” Well exactly. Now look at them. That’s on him. His dreadful raid has cost people’s private pensions something in the region of £250bn yes billion, since it was introduced.

Well, if that £250bn is money that wasn't given as a tax credit to pensions, then as one of 37m taxpayers that must have saved me about £7,000.

 

[inbetween]

Pathetic. Defending the indefensible, just because the indefensible is from the party you support.

Just how shallow are you.

Here’s what OBJECTIVITY is like, for your reference. I am devout Tory supporter and freely admit that the last lot got a lot wrong and were a shambles. Many things they did were disgraceful.

See, it doesn’t hurt to not be a tosser. You cannot POSSIBLY defend taking up to £300 off people on £10k per year. No-one can. It’s outrageous and everyone knows it. Defending it, or trying to deflect the conversation away to criticism of the last lot, just makes anyone doing so look, well, words fail me.

I'm not defending it, I just think in the grand scheme of things it's a drop in the ocean compared to what has happened to pensioner wellbeing over many years. It's as though pensioners shouldn't care about their health, wellbeing and social care being taken away but god forbid you ever take away that £300. Yeah Labour have done it but the Tories did far worse and so we now have a Labour government, let's see where the next 5 years takes us?

Labour should be criticised but they should also be given time. We're talking about a winter benefit that is payable in winter, it's barely autumn and it's sunny and 20°c out, it won't become an issue for months and there may yet be a remedy. I don't believe that Labour will just decide to permanently degrade pensioner benefits and see them become worse than the Tories.

Labour are working in a difficult inherited fiscal climate and a governmental system built around 15 years of Tory policy. I'll reserve my judgement and things do often get worse before they get better. Were you one of those calling for Pep's head after 2 months?

 

[denislawsbackheel]

And let’s not forget, working in the private sector you can get sacked or made redundant in the blink of an eye. Much more jeopardy than the public sector. Amazingly I have three mates who have all been made redundant in recent weeks. Two of them have 30 years service and the other 20 years service.

What packages did they get?
I bet it wasn’t the statutory minimum you’d get in the public sector.