Pensions | Vital Football

Pensions

BobHatton

Vital Champions League
#1
Talking to Pete about pensions got me thinking; what is the 'norm' now in the UK with regards to pensions?

I know that people who worked in the health service, police, civil service etc get automatically placed in a pension scheme but what about other working folk? Do they rely on the aged pension? When I was last in the UK (mid 90's), people were encouraged to take out 'private pensions' as ultimately there wouldn't be an aged pension. The UK also started to raise the pension age (like other countries) up to the age of 70. What do people do now? Do many of you have private pensions to supplement the aged pension?

In Australia, since 1992, every employee gets paid 9% of their salary into a superannuation scheme (this is on top of their salary) by their employer by law. You can choose which superannuation scheme you go in and this has a 'preservation age' i.e. an age which you can take it out and this depends on when you were born (my preservation age is 59 at present) and the funds are all invested into the share market. The performance is usually pretty good (averaging 9% growth per year) and is definitely needed as the aged pension is very low (around $400 a week). Trouble is, if you accrue too much wealth in your funds, then it is 'means-tested' and your government pensions are reduced. You simply can't win.

Interested to know what happens in UK now and what do most people do/prepare for?
 

SeasideEssexXile

Vital Football Legend
#2
For me personally the recent changes to my terms and conditions have cost be a chunk.
I was on a final sslry pension but in 2014 they brought in an average wage pension for new starters.
If you were 50 on 1st April that year you retained your terms. They had a 3yr drag for those aged 47 and above. The nearer to 50 you stayed on the old pension you are graduated across on to the new average scheme. Your old pension froze at that time. Reality is yourpension is no less however you contribute more and don't get the latter until 67 (state pension age).
Of course if you get promoted as I have your final salary pension would have reflected that.
They have done something similar to the fire service who have challenged and won their case.
Government are appealing but its a yard stick most civil servants are waiting on.

Outside the public sector - workplace pension means anyone employing anyone has to have a contributory pension inplace
 

bfcpete

Vital Football Hero
#3
In the last couple of years the Government has forced all employers to auto-enrol people onto company or employer pension schemes (with the emp.oyer contributing as well , as many were making no provision for their old age and were relying on the state pension alone and which is inadequate in its itself. Auto enrolment has greatly increased the number putting into a second pension scheme, including g part-timer workers.
As Dave has said the number of final salary schemes has greatly reduced (none exist even in the public sector now) as the costs to employers have increased with life expectancy increasing. 30 years ago the average male would draw their pension for 6 or 7 years, now it is about 20 years. So the schemes have changed, with retirement ages before pension increasing and benefits being somewhat reduced from what they were. Dave also refers to a recent judgement where the Government were found to have discriminated against many workers in their application of changes to public pension schemes. Yhat is likely to cost them £4billion per year to correct those changes and could affect those who may have already retired ss well.
As I mentioned above the state retirement age is gradually being raised from 66 to 70 and could go further. You need 35 years full NI contributions to qualify for the full pension (non-working mothers also get credit for those years raising children and claiming child benefit). I also mentioned that the state pension alone would not really be sufficient without other income.
I am lucky that I have contributed to a pension scheme for 39 years and have made additional voluntary contributions for the last 25 years as well, to give a decent pension on retirement. I have been penalised in the last 10 years though. Firstly, I have voluntarily frozen my pay for ten years because if I had taken an annual pay increase it would have less to a sizeable tax charge on an annual basis (far in excess of any pay ward). Secondly, and one of tbe reasons I am retiring now is that if I continue I could face very big lifetime tax charge on my pension. That is affecting many in thd public sector as is one of the main reasons that doctors are retiring early or going part time. The Government need to look at this because very few in the private sector are facing it because they have more flexibility to get around it.
It is the young people of today I feel sorry for, as most of tbe better pension schemes have gone and also many do not have the culture to save for the long term
 

SeasideEssexXile

Vital Football Legend
#4
My final salary oension froze last Oct Pete.
Ironically I was the last remaining person in post of my rank as I had not signed across to the new terms and conditions. Cost me about £40/month take home pay but I enjoyed being stubborn. Compulsory transferred me '- I saved £150 / month in petrol.
My mate reckons they only promoted me to get the rank closed. Ironic that new rank sees pay increments yearly which would have boosted my final salary pension. I"m hoping the Gov lose their case and I'm back to quids in.

I should mention Paul we can boost our gratuity (golden handshake) by commuting up to £4k off your pension. For each 1k you get a 12k boost up to 4k (+48k) max.
As Pete mentions they are expecting people to draw their salaries for longer than 12yrs at least..
I hope we all have a healthy long retirement - we have earned it...
 

BobHatton

Vital Champions League
#5
We certainly have earned it Dave! Here in Australia, as it's all means-tested, you can't really carry on working as anything you earn over $150 a week then get's taken off your pension. Also, whatever your partner earns gets taken into account also. You don't get a pension in your own right like you did in the UK.
This really stuffs us up as my wife is 9 years older than me. When she retires at 66 (only a year or two away!) I, only being 57, still have to work but whatever I earn gets taken off her pension. How unfair is that?
 

BobHatton

Vital Champions League
#6
PS Who'd have thought we'd now be talking about pensions after the halcyon days of booting a ball around in Greaves Park? A lifetime ago now....
 

SeasideEssexXile

Vital Football Legend
#7
It is Paul.
Life has flown by.
I have spent 90% of my time here on holiday sleeping by the pool. I'm knackered.
On the +side I left the work phone at home this year - after the mrs almost threw it in to the sea last year when I answered it on the beach!!
When I left Ripley I went to sea working 12hrs a day every day up to 6months straight.
Worth just over £40k for me the fire brigade challenge.
On the +side my mrs is 9yrs younger than me so can keep my xbox subscription up when I retire - other than a bit of voluntary work I am looking to relax.
 

bfcpete

Vital Football Hero
#10
Just went into the office to sign the final forms for my pension. They asked me to take in both my birth certificate and my marriage certificate. On the latter, they said it so my wife has less to do to get a widow's pension when I snuff it. I wouldn't mind but she is only a month younger than me. I haven't told her. ;)
 

BobHatton

Vital Champions League
#17
I've just had a read of that Prem and it's correct. However, the new state pension is based on NI contributions and not everyone would get the maximum of £168 whereas the original base pension wasn't based on NI contributions. Therefore a lady who'd never worked and was born before 1951 could get full basic pension but after that they would get very little pension as the minimum requirements are 10 years of NI contributions.
Swings and roundabouts....
 

Hastings

Vital Football Hero
#18
thats right Bobby many opted out or were encouraged to do so also retirement age is now higher. not much to moan about really Prem