johnh009

Yes, I suppose "better" is a very subjective word. I remember when I trained in the engineering industry in Leeds in the 1960s-1970s. In those days, there was very little movement of labour and people would contribute into the company pension scheme for up to 50 years. But, in those days, people would often die within 2 to 3 years of retiring, if they made it at all. The pension fund manager was regarded has having the best job in the company and the pension fund was awash with cash. I'll bet he did not have to worry about the gyrations of the stock market, the money was probably held mostly in deposit accounts.

johnh009

In another article, David Cameron claims that paying everyone a straight 140 a week will save on the enormous administration costs. This, apparently, is where the money is going to come from. And probably the proposed cutbacks on civil service pensions. All politics. By the time it is introduced, inflation will have kicked in and it may not be the good deal it seems to be at the moment. Plus the fact, it only brings us into line with most of Europe anyway.

Pistolpete2

Admin costs associated with means-testing applicants for the Pension Credit and Savings Credit, apparently.

But if we were all entitled to this 140 pounds, even if we live overseas, that would seem to suggest massive additional cost. So there is likely to be some sort of residency requirement to bring us into the income tax fold.

Something to think about as we approach pensionable age.

Sally Redux

It's weird though because they are planning to means-test child benefit, so won't that eat up the savings?

MNandMN

So where is the incentive to pay National Insurance at all if we will all get a pension? I am paying, because I can't see how they can give £140 per week to everyone whether they have paid in or not, when there is no incentive to pay a penny into it. I guess we wait and see, but surely there will be some criteria?

Sally Redux

It looks from that article as if there will be a new form of payment to be made.

Ex-pats are not going to be a huge consideration for any government.

robin1234

But what about the huge savings the system is making right now, by raising the pension age for women from 60 to 65? I would have thought that alone would put the system on a sound footing for decades to come.

Pistolpete2

Most likely there will be two parts:

1. The 140 pounds for all Uk residents
2. The full "reduced" pension for non-residents who are paid up - so we should still pay up under that scenario

Pistolpete2

The system was not funded!

If the Government properly actuarily accounted for the future liabilities associated with State and Public pension liabilities it would have been bankrupt. Hence the necessary changes which create some stability for the outsiders view of the Uk economy and the value of Sterling so that they will consider buying issuances of future Uk government debt at a reasonable price.

BristolUK

Do you have any evidence of that or is it just the usual anti civil service "tea drinking, overpaid, underworked" tripe repeated so often?

Back in the early 70s I do remember my mum (who worked in a gov personnel dept) saying that certain staff would get a promotion just before retirement but today's civil service is a long way from that with its recruitment and promotion bans on for constant staff savings.

You can't just get a promotion willy nilly.

I'm sure there will be an old boy's network among MPs and/or senior civil servants creating positions to gain advantages but that's going to be a tiny minority.

The majority of civil servants are in the lower grades. That means lower salaries and since the pension is based on final salary, that naturally means a low pension.

Strange. That 1/80th business describes exactly my civil service pension. I think that counts as a final salary public sector pension.

Of course it's a bit of a myth about civil service pensions being non contributory. Pay rates were calculated and than adjusted downwards achieving an identical result to paying the pre-adjusted amount and then having an identical deduction.

But what's a little anti civil service bias eh?

Not that I'm bitter in any way.

BristolUK

Here ya go.
(2008 rates but not so different now)

So assuming you work the maximum time you'd really be living it up on your absolute maximum £8,800.

The next grade up - junior managers - the max is £24,000. So if you can survive a full working life in DWP and get promoted to managerial level despite all the cuts and then survive the several years it takes to get the max, you might just come away with a £12k pension.

Mummy in the foothills

I am so not a tea partier they make me crazy.
But there have been quite a few reports of people retireing from local government here in CA lately that are doing exactly what I described. I didn't realize this was even going on in UK.
The only civil servant workers in UK I knew worked bloody hard for their money and didn't get a bogus pay rise or promotion right before retirement. I'd think to give a raise before retirement there would be more difficult isn't it all on pay scales therefore not negotiated?
Here they seem to do whatever they please. You only have to google Bell California scandal, if it wasn't for the recession no one would have caught this lot.

Rambi

I don't get this bit from the original article.

Isn't that what the Employer's NI is doing now? Or are they saying that they are going to make the self employed pay their way?

BristolUK

Ah, well in North America, maybe. That doesn't surprise me when the campaign manager of the winning provinical candidate strangely gets made CEO (or whatever title) of the Province's Liquor department.


Exactly. I didn't realise you meant N America. Apologies for mini rant.

robin1234

My wife is in a state government pension scheme - New York State. It is not quite as simple as final salary, not sure of the exact details but I think it is based on the average of your "best three years" or something similar, I assume most state schemes are similar... that would be to avoid the kind of inequities you allude to.