Guest sibon Posted October 16, 2011 Share Posted October 16, 2011 The state has let people with small occupational/private pensions down. My generation (and older) expected a level playing field at retirement. But by keeping basic state pensions low and introducing Pension Credit in 2003, the previous government effectively thumbed their noses at those of us who tried to provide a little extra for our retirement. It makes sense for those expecting fairly large incomes at retirement to contribute, but for people who may get just a few pounds more than if they'd never save, why would they? Absolutely. Surely it is a no brainer for a Government to encourage people to provide for their own retirement. The opposite is actually the case. It would make sense for me to forgo my pension payments. Then spend my savings on something liquid but tangible, like gold, or art. Then I could retire early and claim benefits, which would be in excess of my pension. I could then sell my assets gradually to fund a nice lifestyle. I think I have a plan:) Link to comment Share on other sites More sharing options...
xenia Posted October 17, 2011 Share Posted October 17, 2011 this could work! Absolutely. Surely it is a no brainer for a Government to encourage people to provide for their own retirement. The opposite is actually the case. It would make sense for me to forgo my pension payments. Then spend my savings on something liquid but tangible, like gold, or art. Then I could retire early and claim benefits, which would be in excess of my pension. I could then sell my assets gradually to fund a nice lifestyle. I think I have a plan:) Link to comment Share on other sites More sharing options...
Nagel Posted October 17, 2011 Share Posted October 17, 2011 The rioting on the street may have distracted you from what is happening to pensions. Pensions are getting wiped out. The youth can't afford to pay the debt accrued by the elders. They are out on the streets robbing from the likes of Primark for crying out loud. Inflation is going to wipe out the value of your pensions. Soon people will be marching on the street for wage increases, pensions will be wiped out as inflation and wage inflation are used to reduce the 'debt'. Where do you think people should invest their retirement pot to avoid it being wiped out by inflation and low interest rates? Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 17, 2011 Share Posted October 17, 2011 Where do you think people should invest their retirement pot to avoid it being wiped out by inflation and low interest rates? This is the problem. There isn't really anywhere that offers safety and decent returns. In a low interest rate environment people will start to seek out investments that hold promise of higher returns. For example when interest rates dipped from roughly 2000 onwards buy to let became very popular - I lost count of the number of people who said they were doing that instead of investing in (poorly performing) pension funds. Problem is housing is still in a bubble that hasn't burst yet. There will be a lot of burned fingers eventually. And that is the problem with low interest rates - they encourage the formation of asset bubbles as people seek investing value. So, you could sit back and wait for the next bubble to start developing. Jump on but then jump off with your profits before it pops. What the bubble will be in who knows. Given the behaviour of our bankers they'd develop a bubble market in anything to make money - maybe it'll be food this time. Link to comment Share on other sites More sharing options...
truman Posted October 17, 2011 Share Posted October 17, 2011 Many corporate funds were in surplus at the time the tax relief was removed. In that sense it was a completely rational move - why subsidise already healthy private corporate funds? Still don't see how a defined contribution scheme can be in surplus...a defined benefit one can be but not a defined contribution.. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 17, 2011 Share Posted October 17, 2011 Still don't see how a defined contribution scheme can be in surplus...a defined benefit one can be but not a defined contribution.. Then you will need to learn about it. Google is good. Even in 2007 there were reports of a net surplus in FTSE 100 pension funds. Once you understand that then you will realise that Brown was right to withdraw relief on private pensions. Several years after withdrawing relief the funds of top 100 companies were in net surplus. Was it right for the taxpayer to continue supporting that through tax breaks? Link to comment Share on other sites More sharing options...
Xt500 Posted October 17, 2011 Share Posted October 17, 2011 Pensioners should blame the person on whose watch it is happening - George Osborne. And never forget. Actually pensions were robbed a long time ago by Mr brown although im sure the short sighted might actually believe you. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 17, 2011 Share Posted October 17, 2011 Actually pensions were robbed a long time ago by Mr brown although im sure the short sighted might actually believe you. If you can explain what he robbed that would be helpful. How much did he take out of the funds and what was the mechanism he used to do it? Or is it just easier to portray him as the bogey man? Link to comment Share on other sites More sharing options...
Xt500 Posted October 17, 2011 Share Posted October 17, 2011 "Back in 1997, while Mr Brown was scheming to plunder private pensions for about £5 billion a year, he was warned in the clearest possible terms by the Inland Revenue that the proposed raid would "make a big hole in pension scheme finances", creating a shortfall of up to £75 billion. He was further alerted to the fact that many of the hardest hit would be those who could least afford a blighted pension. Either the Chancellor was too stupid to see this or he didn't care. Not even Mr Brown's worst enemies (the queue is getting longer) believe he is thick. We must infer, therefore, that the arriviste at No 11, an old-fashioned socialist in New Labour wrapping, was interested only in sucking up as much revenue as he could" http://www.telegraph.co.uk/news/uknews/1547360/Pensions-mugger-Brown-has-been-rumbled.html Link to comment Share on other sites More sharing options...
Xt500 Posted October 17, 2011 Share Posted October 17, 2011 "Overall, the pension picture in Britain after 13 years of a Labour Government is diabolical. For 56% of the population, there is no provision at all other than a mean and rotten state pension supported by humiliating and complex means-testing. " http://www.thisismoney.co.uk/money/pensions/article-1692783/The-scandal-of-the-pensions-apartheid.html#ixzz1b3dCUMeA Link to comment Share on other sites More sharing options...
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