The Budget

[Bryn]

Back at the time of the Autumn Statement there was talk a a new facility to be introduced in this budget for those deferring their State Pension to be able to top it up via additional payments (details to be given in The Budget). I wonder what became of that one? Anyone the know?

[Richard Tarleton]

No. But we witnessed the most positive move on behalf of pensioners since - well as that lady from Kings College said, in the last 50 years. A sharp contrast to Gordon Brown's demolition job on final salary pension schemes in 1997, one of his, and the Labour government's, most disgraceful acts. The effect of that on people in those schemes, and of 0% interest rates on those forced to buy annuities, has meant that pensioners have had a pretty grim time.

[jean]

Well, people aren't going to have to buy annuities any more, and they're even going to be able to withdraw as much money as they like from their pension pot at any time. So what's the point in calling it a pension, I wonder?

[jean]

http://www.youtube.com/watch?v=AiNDh_dXXbY&feature=player

[Eine Alpensinfonie]

No. But we witnessed the most positive move on behalf of pensioners since - well as that lady from Kings College said, in the last 50 years. A sharp contrast to Gordon Brown's demolition job on final salary pension schemes in 1997, one of his, and the Labour government's, most disgraceful acts. The effect of that on people in those schemes, and of 0% interest rates on those forced to buy annuities, has meant that pensioners have had a pretty grim time.

Why are we blaming Gordon Brown? It's Osborne, Cameron, Gove and their sidekick turncoat Danny Alexander who have worked so hard to destroy pensions, particularly in the public sector, where they have used lies, damned lies and NO statistics to back their case. They simply kept repeating the same lies, while refusing to produce the evidence, knowing it would show the opposite - certainly in the case of teachers pensions which are massively (£45 bn) in surplus. The Labour government did a review/consultation on teachers' pensions and made a large number of changes, and it was agreed then that higher contributions would be required only if the figures showed it to be necessary. That was fair. Lord Hutton then became Osborne's stooge and said everything his new paymaster wanted, including moving to dump final pension schemes.

[Richard Tarleton]

Alpen, Gordon Brown destroyed final salary pension schemes back in 1997, long before the present lot. I'm not talking about public sector pensions. It was one of his first acts. As Ros Altman says,

Before 1997, our pension schemes were the envy of other countries. The gold standard final salary pension funds, which are the most generous company pensions you can have, used to be the norm in the UK. In the past, millions of people were building up pension entitlements from their employer, so that when they retired they would know what pension they would have and could plan for their retirement. These pensions are dying out and data just released suggests the trend away from final salary schemes is accelerating......

....In particular, one of Gordon Brown's first policy decisions, in 1997, was to take huge sums of money out of final salary schemes. He increased taxation on pension funds significantly. In fact, estimates suggest that over the last 12 years this decision has removed well over £100billion from final salary pensions.

This may have passed you by if you weren't in one.

[Eine Alpensinfonie]

Fair comment.

[ardcarp]

Just to correct Jean upthread, contributors cannot get at their pension pot at any time, only after age 55. However this will just be a massive tax avoidance scheme. All contributions will be net of tax, and so a wealthy person will be able to amass a huge 'pot' of savings and get the whole lot at 55.

I find this particularly galling, As a self-employed musician, my modest pension pot had to be used to buy an annuity (I chose age 65) which was at rock bottom levels. My monthly pension is a shadow of what was promised at the outset, and the pathetic amount...which does not keep up with inflation and is taxed....will probably keep us in cat-food and maybe toilet rolls if we are lucky. We calculate that I will have to live another 20 years just to get back what I paid in. Fortunately I am still able to work, otherwise I'd be in deep doo-doo.

IMO, private pension plans are a rip-off, and there is nothing to stop another government changing the rules again. Best to stuff notes under your mattress really.

[teamsaint]

quite right Ards, private pensions for most are just a way to help insurance companies.
I hope this change will help those of modest means get at their own money, to use while they can as they see fit.
But it is more likely a handy tax avoidance scheme for the top few per cent.

So it goes.......

[MrGongGong]

Just to correct Jean upthread, contributors cannot get at their pension pot at any time, only after age 55. However this will just be a massive tax avoidance scheme. All contributions will be net of tax, and so a wealthy person will be able to amass a huge 'pot' of savings and get the whole lot at 55.

I find this particularly galling, As a self-employed musician, my modest pension pot had to be used to buy an annuity (I chose age 65) which was at rock bottom levels. My monthly pension is a shadow of what was promised at the outset, and the pathetic amount...which does not keep up with inflation and is taxed....will probably keep us in cat-food and maybe toilet rolls if we are lucky. We calculate that I will have to live another 20 years just to get back what I paid in. Fortunately I am still able to work, otherwise I'd be in deep doo-doo.

IMO, private pension plans are a rip-off, and there is nothing to stop another government changing the rules again. Best to stuff notes under your mattress really.

"Fuck pensions, buy art" ? : Germaine Greer

As someone in a similar position to you I find the whole thing ridiculous.
Equally ridiculous is the idea that somehow "more choice" coupled with "financial education" will mean that people are able to make "good choices" :LAUGH:
Yeah right, that's the choice between being stabbed in the arse with a sharp stick or thrown into a freezing lake.

There is (sorry for the repeat) a hidden (or not so?) "script" here. That people are able, given the right "skills" and "education" to make "good" decisions about these things. The implication is that people who make what turn out to be "bad" decisions are feckless and stupid and deserve all they get.
The truth lies somewhere else.

I wonder why pension companies are able to sponsor motor racing ?

It's all based on the assumption that wealth will increase for ever. What do those in Tirana say about that ?

If those of us who are self employed put the amount of money we are "supposed" to into pension funds there would be very few of us left.
But you would be able to recognise the children of freelance musicians easily, as they would be the ones without any shoes !


This is (maybe?) a good comment ?

http://longtermplan.org.uk/

[Serial_Apologist]

This is (maybe?) a good comment ?

http://longtermplan.org.uk/

I thought that was serious at first, then I realised it was. <erm>

[eighthobstruction]

The number of rip off merchants and downright criminal fraudsters that we hear about via radio and TV and web consumers programmes and services ....they must be rubbing their hands with glee at the probable influx of vague and gullible pension pot holders....just right for high annual agency fees, and dodgy share deals, and ambiguous small print....

[amateur51]

Leaving aside gullibility, rip-off merchant potential, etc, this is another example of how this government, like others before it, is hell-bent on facilitating the lives of its older citizens while making the lives of its younger adults more & more negatively complex.

I just hope that if they do go ahead with HS2, there will be built into it schemes for apprenticeships and post-apprenticeship students so tht it can increase the jobs on offer to the generation that will have to work longer while still living with parents for far longer than previous genweratyions while they 'save' for a housing-buying deposit. We must ensure that this potential for investment in young people is not snuffed out by the whole bang-shoot being sucked up by EU nationals.

[Serial_Apologist]

The number of rip off merchants and downright criminal fraudsters that we hear about via radio and TV and web consumers programmes and services ....they must be rubbing their hands with glee at the probable influx of vague and gullible pension pot holders....just right for high annual agency fees, and dodgy share deals, and ambiguous small print....

And it's being going on for quite a while. Made redundant in 1993, we were proffered better return pensions if we contracted out of the company scheme, an "independent" financial adviser being brought in for a 3-day lecture on the purported benefits, then allocated by them to "appropriate providers" - all as I was to realise 12 years down the road a scheme for offloading the employer's long-term costs. By a clerical omission my membership of the latter was not deleted; I received a company letter informing me as to what I was due for, which would have been twice the rapidly shrinking amount I am now getting. The one consolation I can think of is that, had I stayed, it would probably have placed me in a higher tax bracket.

While Ams is right to draw attention to the bleak future facing the young, many of us now retired were conned.

[teamsaint]

I have to agree with gongers.
Actually, amongst a myriad other things, we spectacularly fail to equip people for the world of everyday finance.

Most people I know dont have any idea how their tax code is worked out or operates.
What hope for those who have a pension pot to deal with?