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Increase in contributions to works pension

Community Veteran
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Increase in contributions to works pension

Increase of 1% now with a further 2% increase next year for those paying into a works pension.

This is a lot to find for someone on the average wage and will reduce or totally negate any pay rise they may get.

Paying into a pension is a gamble as some have found to their cost,

There is a option to opt out.

If you were still working and assuming you were on the average wage would you take the risk and accept these increase or opt out and go for alternative arrangements ?

Not a easy decision for anyone to make unless of course these increases were above what you could afford to pay in which case you have little option but to opt out.

38 REPLIES
Minivanman
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Re: Increase in contributions to works pension

Work is fast becoming not as a means to enjoy life and for some raise a family, but as a means of putting away enough to avoid destitution in old age. As for pensions themselves I'd not trust any of them - the hawks have even been seen circling around my State pension. 

Out of pure luck I managed to retire at 60, but the Mrs despite being eight years younger than me (don't tell her I told you) cannot get her State pension until 2021 - so if the state can stitch you up by moving those goal posts, what chance do we have with any of those private pension providers. 

Opt out if you can and start buying gold bars, it's the best way to provide for your old age!   

 

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Champnet
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Re: Increase in contributions to works pension

There's a troy of truth in @Minivanman's last comment.........

Moderator
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Re: Increase in contributions to works pension

With Gordon Brown effectively killing final salary pensions something needed to be done.
I don't see anything wrong encouraging this and there's also tax relief which isn't to be sniffed at.

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Minivanman
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Re: Increase in contributions to works pension

@dvorak

Indeed, but if you look at the details, what's on offer does not suit everybody. Lots of analysis out there well worth looking at before signing on that dotted line. Thumbs Up

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Jonpe
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Re: Increase in contributions to works pension

I can't say I've looked into Workplace Pensions, but as I understand it you could end up with lots of different pensions, i.e. a new one every time you change jobs.  Unless there is tight regulation effectively forcing pension providers to work for nothing, which is unlikely, the pensioner will have a lot of money deducted from their pension(s) in charges.  Generally pension saving is a good idea with the contribution being tax-deductable and the employer typically paying in twice as much as the employee.

However, the main priority for most people is to get a roof over their heads, bringing up their children, putting a few pounds away for a rainy day etc; planning for a retirement that might or might not happen in 40 years time is not always possible, or is not very high on many people's list.

 

Minivanman
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Re: Increase in contributions to works pension

Pensions can be difficult to grasp and to take responsibility for and trust me, I've tried and all I finished up with was a collection of company pensions which did I not really understand and some I know have got lost and therefore unclaimed and yes, I have tried to find them. Nightmare.

What couple of private pensions I did retain track of served in the end only to reduce my additional Pension Credit which in effect made them a complete waste of time and gave no benefit. How much they all cost me over the years I have absolutely no idea - so let's be careful out there, your interests are not always (if ever) a priority of the pension provider even if that provider is the State itself.

Trust no-one when it comes to pensions - even with a ten foot barge pole! 

 

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Re: Increase in contributions to works pension

Moderators Note.
Once again we've had to step in and remove posts.
This is getting tiresome.

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johnashtone
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Re: Increase in contributions to works pension

I find the replies here quite illuminating.  Firstly 2% is not difficult to find.  But how do I know, well I was on Min Wage for some years, with debts from a previous business, that could have bought a brand new mid range Mercedes?  Would people stop whingeing about the Pensions and do some homework.  Yes you have to 'work' at making money, only fools think the Government is going to lay money at their feet.  Governments don't have any money.  Are workplace pensions good, well more to the point they are better than not doing anything.  

 

Yes the pensions industry needs to have its charges capped, they are too high.  But paying into a workplace pension is the easiest way to get people to save.  The savings ratio in UK is lamentable, made worse by Idiot Politcians on the Left who have their heads stuck where the sun doesn't shine and pamper to those on lower wages telling them they are poor.

 

You ain't, virtually everyone reading this is in the top 12% of the richest people in the world?  I'm assuming there are some homeless with little income accessing this via the local public library. 

 

Pensions work on compound interest.  If you are under 50, your pension as it stands today, without adding any more money will double probably every 14 years.  I'm working on 5% growth which is 'very poor by historical standards'.  So someone who is 25 and has put £1,000 into a pension, that £1,000 will be at least £8,000 (+ inflation? so probably around £12,000) by the time you retire.  Now just run this past me, while that idiot Mark Carney is running the Bank of England, where are you going to get that rate of return, without some work and research?  

Minivanman
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Re: Increase in contributions to works pension

Which is all well and good, but what if that financial bubble bursts or the government moves (as they have done) those goalposts.

My social and financial contract was 'cradle to the grave' and yes I've made it, but only just. Those following might just as well flip a coin and shout heads or tails in fifty years time.

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johnashtone
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Re: Increase in contributions to works pension

You've been sold a lie.  But hey you believed Labour so more fool you?

 

The cradle to grave isn't a bad idea, but believing you can do so without having to think for yourself doesn't work.  

 

I won't bore you with the long story of how I came to the postion I'm now in, ie semi retired (I work 2 days a week?) but I had to do a lot of my own homework on saving.  And one of the simplest things I learnt, sounds so silly it is nearly unbelievable, stop spending?  

 

But also compound interest, Einstein called it the 8th wonder of the world.

Minivanman
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Re: Increase in contributions to works pension

Well it was not seen as a lie at the time, it was to be the post war promise of a 'New Jerusalem' by a National (not Labour) government to provide a plan outlined by Beveridge. Labour did not conceive it, they only delivered the baby.

And who did without.

Well I did by paying over fifty years of contributions and fifty years of tax out of my wage packet and purchases. We were not being given or expecting a free lunch and all I am saying is if you depend on either the market of the State to provide you'd be foolish to do so?

Like us (as in pensioner) you are handing over your money on a promise and like us, you might find that promise is not worth the paper it was never written on and so yes, stop spending and save but don't trust those money men looking after your money and don't put all your eggs in that State basket - they're to liable crack.

PS. And I'm still paying tax on those purchases. Wink 

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johnashtone
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Re: Increase in contributions to works pension

Labour made a complete hash of the whole thing.  NHS has never worked from day 1.  If you don't believe me read up on the newspapers at the time.  2nd worst health service in the world, so bad no other country has tried to copy it?  Earnest Bevan wrong in every particular in the way he set up NHS.  Run by Politicians, and the people have little say in how it is run.  

 

Town & country Planning act 1947 has ensured there is a continual shortage of housing, hence high homeless rates.  There is NOTHING good about the so called green belt.  The reason HS2 is going the route it is and destroying the open Countryside is because no Government is prepared to over turn the useless, nasty piece of legislation Town & country plan act 1947, Clem Atlee was a an empty head 1st class and in my opinion probably the worst PM this country has ever had.   

Meanwhile back to the subject, pensions have never been properly addressed because savings have always been allowed to be too low. Nasty Socialists always saying that people are too poor to save, odd that when they were first spotuing this [-Censored-], in Japan the standard of living was much lower and yet they were saving 3 times the amount of the British, and as a consequence always had muich higher productivity and hence now have pensions that make ours look lame?

 

Minivanman
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Re: Increase in contributions to works pension

I think you mean Aneurin Bevan. Ernest Bevin was Trade Union leader?

For myself at least it has worked because not only am I the same age as the NHS but I was born severely underweight and would have expired in that sluice room had it not been for those doctors and nurses.

I could add Scarlet fever, mumps leading to a life of deafness.....

Sure it's broken, based as it was on the Bismark and to a greater extent the Swedish model of health care and that's why it needs to be fixed pronto and without being the source of all things to all people above and beyond the original idea of health care for all.  Society has changed dramatically - but NHS still thinks it's a 1940s provider.

Ah yes, Clement Attlee - "An empty taxi drew up outside number 10, and Clement Attlee got out" - Churchill's jibe of course and it was so easy to mock the man, but he administered in difficult times and sure he was devoid of charisma, modest and unassuming but, he made the best of a bad job in a fast changing post war society bereft of Empire, skint, and in hock to America

So when are you emigrating? Thumbs Up

 

 

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Jonpe
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Re: Increase in contributions to works pension

It's all well and good to say "Don't spend" but with RPI being over 3.5%, and interest rates on easy access accounts being about 1%, your money is losing value.

When the NHS came into being it was claimed that as the population became healthier they would need the NHS less and the cost of the service would drop.  They hadn't foreseen the cost of CAT and MRI scanners or the seeming ability of the medical profession to keep someone alive almost indefinitely with machines.

When I used to shop in Hammersmith (which is close to the Charing Cross Hospital) on Saturdays, I was invariably approached by people collecting money for scanners etc. for the hospital; so much for a tax-payer funded NHS.

The problem is that no party is going to win an election if they say they'll so much as tinker with the NHS.

I dread to think what will happen when tattoos are no longer popular; there won't be enough dermatologists in the kingdom to remove them all.

Perhaps we should have followed the Norwegian model of pension funding and put a large part of our oil revenue into a special fund.  Theirs currently stands at over US$1 trillion, or US$192,307 per citizen, and this is in addition to the amount collected via income tax (Wikipedia).