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UK: Excessive Austerity? Becoming like the US?

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  1. #31

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    No. People were given the option to opt out and told it would not effect their basic pension. Now it does. You should not be penalised because you saved via a work pension.

  2. #32

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    It is complex. Basically a while ago workers were given the option to on,y pay the basic state pension contribution and not an additional amount, but only if they were paying into a work pension. This we were told would not impact our basic state pension. Recently they changed the rules so it does.

    Both my work pension and my state pension will be taxed.

  3. #33

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    They have been as I stated before, and the contributions significantly increased. The cuts only applied to those more than ten years from retirement though so I was fine.

    Retirment moved from 60 to 68, payout reduced from 1/60th of final salary for each year worked to 1/80th. Also think they have changed it from final year salary to average career salary which for most people will be a lot less. All this and you pay more in.

  4. #34
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    Actually, reading the pdf in detail, working age families are worse of so it's only pensioner and pensioner families that are better off, lol.

    Makes sense. Often time pensions aren't tied to the job market. It's only when the government runs out of money that pensions decrease.

    Yikes, falling wages due to austerity, but at the same time opening up the real estate market to foreign speculators, (ie. sheiks, Hong Kong tycoons, Russian mafia) to counter the effects of austerity. No wonder people wanted a Brexit.

  5. #35

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    Not sure how much you think these pensions are? Believe me they are not bountiful.

    The contribution is between 7 and 11.7% for the employee and 16.48% from the employer (in my case the university). The FT calculated the pension costs 20% of salary. Even just taking the employee contribution that is not a single digit contribution to the cost is it?

    The argument was always that you earned less in the public sector because of the generous pension. A trade off.

  6. #36

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    I would hope so or else I would have been better off putting the contributions into an investment. I am not complaing about my pension, it is ok. If you put 10% of your salary into an investment vehicle for 40 years and your employer another 15% then I think it should be worth hundreds of thousands after those 40 years.

  7. #37

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    If you retired at 55 you would get a very small pension because of actuary reductions. I am not denying the public sector pension, as was at least, is good and is subsidised. However your claim that the total contribution is single digit is very false.

    Your example of a 15k pension would have required the worker to have worked all their working life in the public sector on an average salary of 30k. That would be a total contribution of 7.5k per year. Say investment income on that of 5% per year (or whatever figure you choose) then calculate the final figure after 40 years.

  8. #38

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    Well you could always have been a teacher or a nurse and joined them laughing all the way to the bank, why didn't you? Oh yes, the pay is shit.

  9. #39

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    You seem to have a big issue with this but you are exaggerating.

    From a government White Paper pushing for reductions in the public sector pensions:

    The discount rate was increased from 25% to 33.8%. Employees pay 9.6% and employers 16.4%.

    Taking the new discount rate and just the employees contribution your "single-digit" contribution is false. Every work pension I know has both an employee and a larger employer contribution so really the two should be combined.

    The White Paper states that if nothing is done then the cost of funding these schemes (for teachers, nurses, military, all public sector workers) could even go as a high as one billion in the future. So it is clearly much less than that now, though no figure is given. So let's say half a billion (I am guessing it is less than that), over the last ten years 5 billion. What is the total budget deficit over the past ten years? To blame the country's financial shortfall on public sector pensions is laughable.

    Edit: a rough count shows the budget deficit over the past ten years at around 600 billion. So the public sector pensions are something like 0.9% of that (probably less).

  10. #40

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    No. Though earlier you seemed to be ignorant of this.

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