General Chat

But of course Bob, here is another demographic timebomb! All these immigrants picking sprouts and cockles aren't actually paying into the national insurance, private pension or any other taxation system, 'cos they are on the lump! So in the present situation, they are not contributing anything. But in the future, they will grow old and present another liability to the taxpayer! ( Or NI payer)!

Brian If the Government had operated a “funded” pension scheme it would, by now, be so big that it would distort the economy. When they started it in the 40s it was a perfectly sound proposition. It is only now, 60 years later, that the problems arise. Marjori I agree with most of what you say although I hope you were not advocating a return to the workhouse or sending unmarried mothers to mental hospitals. Any benefit system will generate some scroungers who exploit every angle to screw the system. I remember being astonished back in 96 when on a short period of unemployment I found myself in a queue of young people for whom there was no obvious barrier to finding a job. What we see on TV is an image created by the programme producers. They want to present a picture and look for a “sullen young man” to reinforce the stereotype. I can remember the outcry when we accepted the Kenyan Asians. I go back far enough to remember the doom and gloom when we accepted Hungarians in 56 and more recently from Hong Kong. For every sullen scrounger there are probably 10 hard working relations picking sprouts in fields, sweeping your streets or doing any number of jobs that the “locals” don’t want to do.

Yes, whilst researching my family history I have found:Immigrants to this country. Single mothers. (No Gypsies or Travellers so far, but who knows?) However, my immigrant ancestors lived in a house shared by 24 other unrelated people. In ten years, they managed to get themselves a rather nice house.They did not, as far as I know, get any help from the State. The single mothers either married damn quick, or in the case of several, finished up in the Workhouse. One even went to prison in 1812 because she was unable to name the father of her child. They too, did not get any help from the State, although of course, the Workhouse clothed and fed them. This state of affairs can hardly be compared to today's. Everyone is entitled to one mistake, but you cannot tell me that at least SOME women cynically exploit the Benefits System by having child after child - the more children you have, the more the state will help you. No-one ever dares to suggest that these women should restrain themselves or that the fathers concerned should keep these children. I dont know what the Benefits Bill is each year, it must be billions of pounds - I dont want my hard-earned money going to keep the children of feckless parents. As for Asylum seekers - well, we are the laughing stock of the world on that front. I am sure none of us would grudge a genuine Asylum seeker, but why, when I see them on TV, are they all sullen young men, hardly ever any hard-working families such as we saw when we opened our doors to the Asians kicked out by Idi Amin. Those people have "disappeared" into our Society, hard-working and supporting their families and being an asset to this country, not a drain on our economy.

Bob An unfunded pension scheme is where the contributions from those still working are used to pay the pensions of those who have already retired. A funded scheme is where contributions made whilst working are invested to pay your pension when you retire.

My Mother worked part time as she couldn't afford childcare let alone find such a luxury. During this time she paid married womans NI. In 1984 my Father had the audacity to die at the age of 50. My Mother, who still worked part-time claimed widows benefit and my Fathers company pension.(The princely sum of £10 a week) My Mother jumped through hoops to get her widows pension which totalled about £40 a month. (At one point she was told she was lucky that she was widowed at 40 cos she wouldn't have got a penny if she'd been 39) Well with an income of about £46 a week, which she had to pay tax on cos of the pension she found herself another part time job cleaning for the council as well as her other job. My Mother was offered the option of paying full stamp, which, thinking of the future, she paid. Then to save for her retirement she opened a personal pension and took out an AVC. Of course it later transpired that she could have joined the council scheme and spent years waiting for a decision on the misselling. My Mother retired from the council last year. At that point she found out that she had not made enough NI contributions so her pension would be based on my father's NI. My mother paid full stamp for 20 years when she could have carried on paying married womans stamp. She also made the mistake of saving a bit each week so she would be able to do things at retirement. This means she can't afford to give up her other job. She receives about £70 a week from the government and her money is made up to the minimum income with both pensions. Because of her modest savings she would not be able to claim a penny to pay her rent (£50 pw),council tax (£30 pw) not forgetting buying luxuries like food, heating etc and because she has her council pension and my dad's company pension she is taxed on every penny she earns as a lollipop lady. Still, at least she doesn't have to pay NI anymore.

Brian I agree with most of what you say except: What is an unfunded pension scheme? If I emigrate who will support me in my old age? Bob

National Insurance is a complete misnomer. It's not insurance but income tax by a different name. The basic rate of income tax on earned income is 33%, not 22%. Means testing makes saving a pension pointless if you are on average or below average wages. BUT: will the system be the same in 20 or 30 years? Unfunded pension schemes are a disaster in the long term. Demographic changes, inflation and increases in life expectancy make them unviable. The personal allowance for income tax is way too low. Forty years ago if you were on an average wage you paid no income tax. Now you pay tax on earnings of less than a quarter of the average wage. And indirect taxes (VAT; excise duties; insurance premium tax; stamp duty; inheritance tax et al) have all rocketed. Public servants in final salary pension schemes have nothing to worry about (including MPs who have the best scheme going). Any shortfall will be made good by taxpayers and Council Tax payers. Emigrate before it's too late!

Andy I don’t understand. What is dishonest about pension schemes? I do agree that the rules should be simpler but the basic principle is sound. They are, to some extent, helping these unfortunate people. It will never be sufficient. There are some new rules to help those with a small pension so that they don’t get their pension reduced. By the time the demographic time bomb goes off I will be long since retired. My understanding is that if the majority of the working population don’t soon start saving then it will be made compulsory – this is yet another tax.

Bob, I entirely agree. So why is the Government: A. Being dishonest about the schemes they are trying to get people to buy into, why not just make saving tax free and easy. B. Not helping people who have made the effort and have fallen foul of economic circumstance. Oh no it's 'cos people like you don't want to finance the demographic timebomb!

Oh dear. I am not a financial advisor I drive a truck for a living. Judging from your comments and those of many others it seems that economics and arithmetic has been very badly taught for many years. The government does not and never has had a pension “pot”. NI is just income tax with slightly different rules and today’s pensions are paid out of today’s taxes. The problem is that because we all expect to live longer there will eventually be too many pensioners for the working population to support. This government’s “prudent” policies have made most people reluctant to save for their old age. At today’s prices if you will have less than about £90,000 in your pension pot you are wasting your money because you would be better off on means tested benefit. How anyone can start a family and buy a house these days beats me but they do. A young person, starting work today, must start the habit of saving for their old age right from the beginning. It doesn’t have to be a pension scheme but should be tax free and hard to get at for obvious reasons. The alternative is to assume that the government in 2070 will pay a state pension that is enough to live on. The people who are worst off are those in their 30s and 40s. Most of them don’t really have enough time to save a substantial pension fund but have no way of knowing what the government will do during the next 20 years. I expect that by then the normal retirement age will be nearer 70 than 60. Of course there are many of us who don’t actually want to retire at 60 or 65. I for one have every intention of working as long as I can, although gradually cutting the hours. There have been a couple of rants in this thread about immigrants, gypsies, single mothers et al. I have deleted my original comment about this because it was too exteme. I would have though that our researches would have shown that one or all of the above feature in most of our own family trees so let's show a bit of tolerance Bob

Wendy. Apologies to you about the angry attitude I took toward you re the Bush election and Iraq etc. I can be an opinionated git!

I'm sorry Wendy, are you being cynical?

And think about this folks. Who the hell on an average earnings of £23,000 can afford to: A. House themselves B. Feed themselves C: Start a Family D: AND put something away for their old age! And yes, it does seem to me the more you try to look after yourself the more the Government milks you, taxes on Pension Funds for one thing! Handouts to people who shouldn't be here, ie "Asylum seekers" and other euphimisms for Illegal Immigrants etc. Support for the legions of single mums who get up the duff so they can get housed. Benefit payments to people who are rolling in "cash in hand" In many ways I think the Britain we want is down the pan.

Pensions and endowments are a joke. My money is going under the floor boards.

My money is going under the bed from now on. Pensions are not worth the paper they are written on. Endowments are just as bad. This country is becoming a bloody disgrace. I could run it better. Ooh is the Abuse Manager out there. Is this message going down the drain too. I didn't mention those very rich Gypsies!

Andy, Makes you wonder what National Insurance is for doesn't it!! Slightly calmed down (but still just about unemployed) maggie

Where I work they provide a good pension - if you work for them for 25 years!! I was a single mum for years, (no fault of mine) and worked in schools, term time only for a pittance, so I could be with my children in the holidays - couldn't afford the pension then) I started working full time for the council in 2002 - and was made redundant in July this year cos they decided to move the office to the middle of nowhere - and I don't drive!! I'm really glad I didn't allow them to take £80 off me a month for my pension cos if they're going to b*gger about and move the office - where does that leave me??? Can't get a job now - ageism rules. Apparently my grey hair (which I've had since 30 - but no longer dye brown) indicates that my brain is dead, despite getting a degree at the age of 43!! And not driving is a major sin!!!!!! Thoroughly Peed off maggie

But Brenda, HOW MUCH DO WE INVEST? We all still have to live today as well. Kids education, and they have to go onto higher education or get nowhere, but I for one do not want to see mine start out in life with a 10,000 pds or more defecit. Don't know if this is for all, but, as far as I know, MP's don't pay into a pension so they have nothing to worry about when they retire, we do! so where is that money coming from?

I think the system in Singapore is interesting. Basically, you pay ten per cent of your gross earnings into a compulsory savings account. You are allowed to draw a maximum of two years in a lifetime unemployment benefit and sickness benefit. The rest is viewed as your savings for your old age. This certainly seems fairer to me, although I dont know what happens to those who never work at all - or perhaps they havent got many of those?

We have to invest in our futures. In twenty years time, there will be so many of us post retirement age and so few in full time employment that the value of our pensions will be even less than they seem now. My personal pension will be nowhere near what I was promised, but I will not be alone in this. If you reckon that growth and inflation balance each other over time, the maximum you can save in a pension is not going to be enough to keep you in retirement unless you reckon that retirement will be approximately a quarter of your working life. Not a cheerful thought, but the maths just don't stack up for paying very little in and spending nearly half our adult life in retirement. Brenda