junction1 Posted January 19, 2012 Share Posted January 19, 2012 Something that we suddenly have a lot of 'experts' on. I worked for 48 years and am about to draw a variety of pensions, including the state pension. By my reckoning I will receive a total of £13,500 p/a, £8,000 being inflation/NAE linked, £4,500 increasing in line with fund growth and £1,000 not increasing, I will also receive circa £27K in tax-free cash. I say this because I was listening to The Jeremy Vine Show, a 70 year old, retired head teacher was on, moaning about his £30,000 p/a inflation/NAE linked pension, that he had been drawing since he was 52. Vine had to drag out of him the fact that both he and his wife also drew linked state pensions totaling £10K p/a, but he classed this as an irrelevance. He also stated that if he pre-deceased his wife that she would get none of his teachers pension, this is wrong as she would get 50% linked for life, along with her state pension, so £20K p/a for starters. It is no wonder that a lot of us are getting sick and tired of whinging public secror workers. OK it's off my chest, rant over. Link to comment Share on other sites More sharing options...
quisquose Posted January 19, 2012 Share Posted January 19, 2012 To make matters worse, I think what you are expecting to receive is far more than than the average employee obtaining private sector employment today can dream of receiving when they retire. Link to comment Share on other sites More sharing options...
vwkittie Posted January 19, 2012 Share Posted January 19, 2012 Not all public sector workers get such deals - you can't lump them all together like that. Link to comment Share on other sites More sharing options...
Tony Posted January 19, 2012 Share Posted January 19, 2012 To make matters worse, I think what you are expecting to receive is far more than than the average employee obtaining private sector employment today can dream of receiving when they retire. I don't begrudge anyone as an individual but collectively it just can't carry on. Let's say that a teacher pays 6% of their salary in over a lifetime, with an average of £25k over 30 years. That's a total total career personal contribution of £45k. If they retire at 55 with a final salary of £38k just where is the money going to come from for an index linked two-thirds final salary pension the next 30 years? Their contribution has gone in less than two years! Link to comment Share on other sites More sharing options...
quisquose Posted January 19, 2012 Share Posted January 19, 2012 I don't begrudge anyone as an individual but collectively it just can't carry on. Let's say that a teacher pays 6% of their salary in over a lifetime, with an average of £25k over 30 years. That's a total total career personal contribution of £45k. If they retire at 55 with a final salary of £38k just where is the money going to come from for an index linked two-thirds final salary pension the next 30 years? Their contribution has gone in less than two years! I'm sure that Wildcat will appear shortly with the Unison arguments about how affordable they all are but .... Somebody retiring at 55 on a £25k pension requires an annuity well in excess of £500k in the real world. http://www.ft.com/personal-finance/annuity-table Link to comment Share on other sites More sharing options...
Tony Posted January 19, 2012 Share Posted January 19, 2012 ... and to add insult to injury, the public sector is now better paid than the private sector! ... then compounded still further by the fact that the private sector pays for it all! Link to comment Share on other sites More sharing options...
junction1 Posted January 19, 2012 Author Share Posted January 19, 2012 Not all public sector workers get such deals - you can't lump them all together like that. Well stop siding with the ones that get all the perks then, such as early enhanced retirement, it's like turkeys voting for Christmas. Link to comment Share on other sites More sharing options...
Pegasus Posted January 19, 2012 Share Posted January 19, 2012 Its true that Public Sector Pensions are good but there are a number of facts that need to be considered: There are many differing pension schemes within the public sector and they're not all the same i.e. Police, Fire Brigade, Armed Forces, Teachers, Local councils, NHS, MPs etc. (some have differing retirement ages and benifits) Not all public sector workers opt in to the pension scheme. You can transfer your private pension, if you move into the public sector, buying years in relation to the contributions you have made. The majority of workers who contribute are low paid and in many cases part time workers. If you contribute then you put in 6% of your earnings (you can't opt to contribute more as with a private pension) Other contributions are made by the employer topping up the contributions to 15% of an individual's total earnings. I would consider this as deffered earnings. The government is proposing to reverse this by making the employee contribute between9.2% and 9.4% the employer contribute 5.6% to 5.8%; if you opt into the scheme then you haven't got a choice about how much you contribute. Those people who retired early during the late eighties and early ninties where very lucky and are far and few between as they retired as part of an enhanced redundency scheme where they could draw part of their pension early and this was topped up by the employer. Many local authorities are still having to pay for this out of their budgets not direct from the treasury/inland revenue. Also anyone who has been contributing prior to 2007 can still retire under the 80 year rule where your age and total pension contributions add up to 80 then you can retire on a reduced pension but if you did this you would lose at least over 60% of your total pension entitlement. At present if you have contributed prior to 2007 you are entitled to a lump sum plus you anual pension. The government has proposed that anyone contributing after 2007 will have to cash in some of their anual pension if they want a lump sum. Some other facts: Since public pension schemes were introduced the treasury (on behalf of the tax payer) has helped itself to almost 50 billion of the funds. If that money was still in the fund then there would not be a problem. Remember that the employers contribution is viewed as deffered wages put aside for retirement. When interest rates in the eighties were as high as 15% pension schemes were making so much money that the employers were allowed to susspend their contributions for up one, two, three and in some cases four years. (saving the treasury millions) Contrary to the view put out in the media: The general popultion on average are not living longer. Yes there are more people living to a greater age however this is not the average population. According to the United Nations the average maximum age for the male population inthe UK is 77 years for the female population its 79 year (this is the average maximum not the average age of death in the UK) this is reduced significantly depending on where you live where you have worked and what industries you have worked in. To get the full public pension benifits you have to have contributed for at least 40 years. You can get comparable pension schemes in the private sector but it all hinges on how much you want to contribute and how much you employer will chip in as well. Link to comment Share on other sites More sharing options...
Glennis Posted January 19, 2012 Share Posted January 19, 2012 Not all public sector workers get such deals - you can't lump them all together like that. No, you certainly can't - trying working for the uinversity on grades 1-5 - its crap. Incidentally, Unilever are being offered the same deal, which has been forced upon the lowest paid staff at the university last year - and they are about to strike Link to comment Share on other sites More sharing options...
WeX Posted January 19, 2012 Share Posted January 19, 2012 pensions are not the only perk many public sector works receive that is over and above that of the private sector. Link to comment Share on other sites More sharing options...
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