Pensions how much do you pay? Is yours under Threat?

[JohnH]

I dont have a pension plan. I doubt I'll ever be able to afford one. However, I do have a few things stored away for later use but thats no guarantee, a bit like pensions.

The arithmetic is quite complicated. No-one can foresee what growth percentage you can actually expect from your fund -- it's all guesswork. Even if you could predict the rate of growth with some accuracy, there's inflation to take into account which has to be subtracted from any annual growth figure. Then there's the occasional market crash which can wipe 30 or 40 percent off the value of your pension pot in the space of a couple of weeks.

I watched a programme on BBC TV a few years back (possibly The Money Programme) where Dr. Ros Altman was brought in to assess the pension situation of a few individuals with different backgrounds. The case that was nearest to my own was a musician from Brighton who was in his mid-thirties and had no pension provision. He wanted to know how much he had to save to have some kind of decent pension provision when he was 65. Ros Altman went away to do the numbers and came back with a monthly contribution figure of £235. The guy in his thirties was aghast and said that there was no way that he could put that kind of money aside.

Funny thing is, we're being told that if we can't afford to support ourselves in our old age, the country can't afford to do it either. Hmmm. Maybe that's not so funny...

 

[JohnH]

Don't forget that people employed by the public sector still pay tax on their wage and on every other thing people in the private sector do (more in a lot of cases as many people I know have a way of fiddling NI etc).

Okay, but you can't fund the public sector with taxes collected from the public sector. That's like trying to lift yourself up by grabbing hold of your own shoes.

Getting back to pensions.... The idea when mine was set up was for the money paid in to go into a pot and stay there, ready to pay out when people retired. What actually happened was that various Gov's saw a whoping great pile of cash sitting in our pot so dipped their hand in and spent the lot.

And it wasn't just governments that did that; as Grannygrinder mentioned, the parent corporation of the company that he worked for raided the pot, as did Allied Steel & Wire in South Wales. This should be a criminal offence. Once money has been put into a pension pot, it should be out of reach of employers' hands.

One possible solution is the private pension fund, although often they are heavily "front-loaded" (the guys running the fund help themselves to a chunk of what you initially put in as a "management fee"). So even though your employers can't get to your pension pot, the fund managers can. I think it was the BBC Watchdog programme that highlighted the worst offender for this: if you deposit £120,000 into one of HSBC's pension funds, they help themselves to over £95,000 of that as a "fee" and leave the rest to grow together with whatever contributions you make after the initial deposit.

No wonder many people check on the state of their pension pot after many, many years of contributions, only to find that there's less in there than their total contributions. They might as well have stuck the money in a building society account.

 

[silverclaws]

Nope, no pension plan apart from 7/22nds of full pay index linked from my military period, which could well amount to diddly squat, but it's better than nothing. Private pension, well, I invested in equitable life, that turned to shit, so now, stuff it, work as long as I can, working for myself, if I die on the job, so be it.

 

[brocklanders023]

Okay, but you can't fund the public sector with taxes collected from the public sector. That's like trying to lift yourself up by grabbing hold of your own shoes.

No, you can't, but it's also wrong to say that the good eggs that work in the Private Sector pay all the wages of the dastardly Public Servants. 100% of workers help to pay for the services the Gov of the time decide are required. The point being the Tories believe less services are required to be carried out by the PS then Labour do so are using the econonic climate to force through at double time what they'd always want to do anyway.
As I mentioned before, most of these jobs will still need doing, and paying for, it'll just be private companies that carry out the work. The Gov will still have to pay for this but the figures will show less Public Service and more Private.

I have great sympathy for anyone that has had their pension robbed. I comment about the Public Sector pensions because that's what I pay in to and have information for.