Not bad if you can get it

Discussion in 'Armed Forces Pension Scheme' started by 40yearsman&boy, Feb 20, 2013.

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  1. Read somewhere recently that annuity rates for pensions in the private sector are sinking?! a £million pot will only pay you £27,000 per annum if you want it index linked and half rate to your other half following your death. Looking at our redundancy programme I reckon any Lt Col and above will be in receipt of a figure like this on leaving! Alright for some eh?
  2. WO 37 years service leaves age 55 if in at 18 my trade gets £20,100 this year
  3. You assume the money has actually been put aside by the government, and will be there on retirement.
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  4. we would be in seriously deep trouble as a country if ever we were unable to pay public sector pensions.
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  5. We are already there. Public sector pension schemes are underwritten by the taxpayer. There is no investment of the salary deductions taken from public sector employees salaries; it is simply offset against the pensions of those already retired.

    Some public sector pension funds are in surplus because the current workers are paying more in contributions than the retired are drawing out. Some are in deficit, with the difference topped up by the taxpayer. The money in those in surplus is not invested anywhere to grow.

    The deductions from a public sector workers pension no-where near match the benefits they will draw out when they retire. The gap is paid from the government current account, which is currently propped up by borrowing. The whole thing is underwritten by income of workers in the private sector, from company taxes, council tax and business rates.

    To make matters worse, the pensions of private sector workers have been completely fucked by government policy, primarily Gordon Brown who removed a tax break which makes it impossible for private sector pensions to grow the pots needed to pay final salary pensions. So private sector workers are fucked twice.

    The whole thing is a vast Ponzi scheme. As in all Ponzi schemes, there will come a day of reckoning!
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  6. [​IMG]
    Hahaha they're nicking our pensions.
  7. bobthebuilder - we are still one of the richest countries on earth and we still have AAA credit rating. (USA does not). We are leap years away from even thinking that there may be a problem meeting our public sector pension payments. You sound as if you are with the privater sector and I sympathise with you over what Brown did to private pensions. However it would be wrong to say that public sector pensions will be affected badly in the future because of the reasons you state. They are beginning to change things of course such as moving away from index linking which will affect new entrants - but I think existing pensioners can rest peacefully.
  8. BiscuitsAB

    BiscuitsAB LE Moderator

    You Sir are having a larf! ( and you're also factually wrong about the index linking)
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  9. rpi to cpi for starters!
  10. Bit irrelevant really.

    If the Public Sector pension black hole does catch up with us. Bailing out the Banks will look like small change found down the back of the sofa.
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  11. BiscuitsAB

    BiscuitsAB LE Moderator

    Which effects all members not just new entrants.

    Lets take the NHS for an example of what's happening, purely because I know the schemes inside out.

    1995 scheme. 1/80th Final Salary used to be 6% Employee contribution and RPI linked in payment with an NRD of 60.

    Contributions are rising to 11% and its now CPI linked as you stated.

    2008 Scheme which wasn't compulsory for people to switch to, 1/60th and CPI Contributions rising to 11% NRD 65

    New, new scheme is being brought in (2015 ish) because the 2008 scheme failed to produce the results the government wanted.

    (Probably ) a Career averaged earnings scheme with a retirement age pegged to state retirement which will rise to 70 within 15-20 years, with Employee contributions (possibly) rising to 14%.

    Now the government changed from RPI to CPI whats to stop them changing it to 1% fixed escalation?

    Life time allowance dropping to £1.25M, Thats going to hit pretty much all senior doctors, so they will face a tax charge.
  12. I think perhaps you need to do a little more research before making such comments. Bob is spot on, and if you think public sector workers can rest easy on their laurels, you need to put the coffee machine on and take a long hard sniff
  13. Future public sector pensions will be based on "average salary over the period of employment" and not as at present based on rank on retirement/length of service - the latter being by far the more expensive. (Again this will only affect new entrants). This coupled with the change from rpi to cpi will save the country many £millions over future years.
  14. What do they care, the private sector will be forced to pay it. No one on the public payroll contributes anything at all. It's just a moneygoround.
  15. Well if you are concerned about the Likleyhood of your pension or not, you could always consider the Self Investment Route (its called SIPPs). This will let you take your pension pot at 55 and use the money to fund your own pension, you can't take your state pension but you can take any occupational you might have such as a military pension which isn't paying out. Tis could be of use if you have got to wait a few years before the pension does pay out, and you are in a no hope of a job scenario.

    However, this is not for those who are of weak minds and spirits, as all the risk is yours (with some safe guards), and you really do need an excellent IFA to do the work for you. You will also have to pay the IFA out of your pocket as they no longer get commission from Insurance companies for the products they sell you. However the city slickers who do the investments on your behalf still get commission, usually 3%pa of the fund value, not just the growth made.

    It's an option, not for everybody, but for a few they work well, you have just got to be one of the few.