The Labour Government

[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.