Pension stuff, how's it all looking ? HAve you prepared ?

[wheelnut]

I see a lot of folk moaning about the state pension, so done some sums

It's £12k a year so you'll get £240k if you live 20 years.

That's been funded I believe by N.I. contribution.

So if you've worked 40 years, you should have paid about £6k a year.

Just checked and you'd need to be on £200k a year to pay that much.

So maybe it ain't that bad really

Screenshot_20240411_203802_Samsung Internet.jpg

Firstly, NI isn’t ringfenced - it’s just part of general taxation.

Secondly, you’re ignoring compound growth. if you’re treating NI like a private pension then contributing 10% of an average salary for 40 plus years would*, I imagine, easily generate a pension pot of £250k.

If you count in employers NI conts (currently 13%) then that number will go a lot higher.

*I haven’t done the sums.

[Count Steer]

I see a lot of folk moaning about the state pension, so done some sums

I think I may have mentioned before that the state pension is unsustainable

People need to either die sooner or work longer*(or everyone under 66 has to accept a lower and lower level of government services / higher taxes).

S'plain as that, them numbers don't lie.

*televised death matches, etc

I always said it made more sense to send the old folk off to war instead of yoofs, your young working, breeding stock. Makes much more sense if your 'Old Contemptibles' are actually old and contemptible.

PS re Yambo's comment ^^^ - my pension statement is one line, wife's, having got hers earlier, is an incomprehensible mish-mash of multiple lines, none of which appear to cover the fact that she deferred it for a year. State Pension's less of a mess now than it was.

[Yambo]

I always said it made more sense to send the old folk off to war instead of yoofs, your young working, breeding stock. Makes much more sense if your 'Old Contemptibles' are actually old and contemptible.

Fuck off.

It's the job of old men to start wars and the job of young men to fight them. It was ever thus and you can't change it now.

Not that you'd want to of course as you're into the age bracket yourself for going off to fight. Let's face it, you're too old for the young man's bit so . . .

And anyway, I did my bit as a young man, there's no way you'll get me to do it again.

[weeksy]

I always said it made more sense to send the old folk off to war instead of yoofs, your young working, breeding stock. Makes much more sense if your 'Old Contemptibles' are actually old and contemptible.

Fuck off.

It's the job of old men to start wars and the job of young men to fight them. It was ever thus and you can't change it now.

Not that you'd want to of course as you're into the age bracket yourself for going off to fight. Let's face it, you're too old for the young man's bit so . . .

And anyway, I did my bit as a young man, there's no way you'll get me to do it again.

I don't think he was actually being serious fella.... Go take a stroll by the sea and calm yourself I get this is an emotive subject for you but you seem to be jumping in here feet first for no real reason.

[Count Steer]

If I'd been on £200k for 40 years I don't think I'd be too worried about the State Pension.

If you'd been earning that then you'd probably have cut your cloth to match it - it doesn't follow that you'd only spend some of it and save the rest.

As your salary increases then inevitably your expenditure does too because you want to raise your standard of living and I think that's the case for most people, otherwise why would you chase the higher salaries?

Everyone's different but I've always cut my cloth so there's a bit of cloth to spare. Conditioning I suppose. I still do it.

So, earning more meant spending more, yes, AND saving/investing more. So yup. The drive for more still worked. I jumped for the jelly beans too.

I was really making a point that earnings tend not to be flat and anyone on £200k today probably wasn't in 1984. I wasn't, that's for sure! But it's true, people could have earned well and spent the lot.

[Mr. Dazzle]

I got into the habit of putting a slice of any pay rise into my company pension a while ago. It means I never get used to having all the extra money, my pension contributions increase from the very first bigger paycheck.

I think I'm up to about 15% voluntary contributions now.

[Yambo]

I don't think he was actually being serious fella....

I didn't think I was either.

I try not to overuse smilies but I suppose one might have been appropriate.

[JackyJoll]

Well unless the pension collapses, I know some people in Carillion who had massive pensions and I think they lost loads.

I left the atomic privatisation triumph that was AEAT PLC in 2001.

Their pension scheme collapsed in 2012. It was rescued by a Govt scheme for such things, but everyone’s pension was reduced and some people ended up with most of their income not index-linked.

[Mr. Dazzle]

I got into the habit of putting a slice of any pay rise into my company pension a while ago. It means I never get used to having all the extra money, my pension contributions increase from the very first bigger paycheck.

I think I'm up to about 15% voluntary contributions now.

And if your employer matches it or at least puts a big chunk in then you’ll be laughing.

Well unless the pension collapses, I know some people in Carillion who had massive pensions and I think they lost loads.

My employer doesn't match it, but they do put in a decent chunk more than the legal minimum. I also get a small extra bonus because they give me some of the NI back as well - it's a salary sacrifice scheme, so they don't pay employer's NI on my pension contributions, they give me 25% of their savings on that.

It's a SIPP, not invested in a company scheme, so once the money comes to me they're no longer involved.

[Mr. Dazzle]

I've only ever had one pension where the money was in a company scheme - I've still got it in fact, my Rolls-Royce final salary scheme from my first "real" job. It's worth the grand total of 2.5 forty fifths of a pension based on my final salary of £29k Think it comes to about £700pa

Everything else I've consolidated into a single SIPP which is also the one my current bunch pay into every month.

Even if the firm managing the pension went tits up it shouldn't matter (he says ) because they don't actually have my money, said money is spread across loads of different investments (which of course, I own) which they merely manage on my behalf.

I'd need about 100 different companies to go tits up simultaneously to lose it all. Fingers crossed

[mangocrazy]

My company pension from 1974 to 1989 was invested with Equitable Life.

That ended well...

[Count Steer]

My company pension from 1974 to 1989 was invested with Equitable Life.

That ended well...

I know a couple of people in that situation too. I think one of them, having been self-employed for a long time had just about all of her pot with them.

No government bail-outs there.

Just goes to show that things that shouldn't/don't happen, actually sometimes do. Hard to plan for other than spread stuff around a bit.

[Mr. Dazzle]

Hard to plan for other than spread stuff around a bit.

That is investment knowledge 102 of course

101 being "the value can go down as well as up"

[JackyJoll]

My company pension from 1974 to 1989 was invested with Equitable Life.

That ended well...

Bloody hell!

The Coalition Government then passed the Equitable Life (Payments) Act 2010, establishing a £1.5 billion compensation scheme for affected policyholders. This was significantly less than the £4 – £5 billion which was requested by the Equitable Members Action Group (EMAG), which was set up to campaign for compensation for policyholders. The Government estimated total losses at £4.1 billion.
The compensation scheme amount of £1.5 billion covers around a third of the total amount claimed. EMAG claims that because the Government agreed to completely cover the losses of those who were already receiving annuities, the vast majority of those affected received only 22% of the money they had lost. The Government has repeated on numerous occasions since the compensation scheme closed at the end of 2015 that it does not intend to make any further payments.

[mangocrazy]

My company pension from 1974 to 1989 was invested with Equitable Life.

That ended well...

Bloody hell!

The Coalition Government then passed the Equitable Life (Payments) Act 2010, establishing a £1.5 billion compensation scheme for affected policyholders. This was significantly less than the £4 – £5 billion which was requested by the Equitable Members Action Group (EMAG), which was set up to campaign for compensation for policyholders. The Government estimated total losses at £4.1 billion.
The compensation scheme amount of £1.5 billion covers around a third of the total amount claimed. EMAG claims that because the Government agreed to completely cover the losses of those who were already receiving annuities, the vast majority of those affected received only 22% of the money they had lost. The Government has repeated on numerous occasions since the compensation scheme closed at the end of 2015 that it does not intend to make any further payments.

Yes, that's about the scale of the payback we received - less than a quarter of the original pot value. That's one of the reasons I had to carry on working until I was 70.

But I'm not bitter...

[Count Steer]

Ah. There was a bit of a bail out. That 22% fits with what our friend ended up with. Fortunately she had a house in Twickenham and could sell up and move (back to her roots) on The Wirrall and convert some bricks to £.

In a coincidental fashion I did a training course run by a chap called Vincent Nolan. Next time I saw that name he was chair of EMAG.

[mangocrazy]

I've never fully understood why and how Equitable Life went down the pan, but by the scale of it I'd hazard a guess that there was an element of fraud involved and not just bad management.

[Count Steer]

I've never fully understood why and how Equitable Life went down the pan, but by the scale of it I'd hazard a guess that there was an element of fraud involved and not just bad management.

They issued 'policies' with contractually guaranteed, unsustainable returns/benefits if certain market conditions pertained, which they did. The cost of meeting their obligations drained them of £.

They asked those holding them to take a bit of a hit ie less than they had every right to expect. That would have enabled them to spread the pain but survive. The holders said 'foxtrot oscar' and bought the whole house of cards down, but, as I understand it got paid while the others got stiffed. It wasn't fraud it was incompetent drafting of product terms.

That's my understanding anyway. Turned out to be not such an equitable life Henry.

[mangocrazy]

OK, so it looked like a bit of a Ponzi scheme, but was in fact just sloppy management (or management who didn't understand the implications of their actions).

[Count Steer]

OK, so it looked like a bit of a Ponzi scheme, but was in fact just sloppy management (or management who didn't understand the implications of their actions).

Yup. The first para of the Wiki sums it up.

https://en.wikipedia.org/wiki/The_Equit ... r%2Dfunded.

I suspect word got around about the rather good terms and a lot of people piled in to EL...but not necessarily into the scheme that caused the problem (or the terms were changed, dunno). Some probably just did a bit of market research and EL kept coming up as

(One of the missus' colleagues was in that boat too apparently).