UK pensions

[denby45]

Just a heads up and slightly off topic. Anyone thinking about cashing in personal pensions with their provider should first read this:

 

http://www.thisismoney.co.uk/money/pensions/article-5524789/Should-pension-perks-80-bonus.html

 

Unfortunately I already cashed in one small pot with L&G (around 20,000 in 2 lots to avoid the taxes) without thinking. Should have probably waited as I am not desperate for the cash.

 

Getting fully back on topic, this article about topping up your SP is worth a read:

 

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

 

Hope this helps

 

Den

[p414]

On 4/4/2018 at 12:24 PM, nong38 said:

I don't know if anyone noticed in the Express today there was report on funding of care for the elderly and one "expert" said we should consider making people over 60 pay NI! He looked rather well to do and had probably made sure it did not affect him mind! The comments afterwards were illuminating mainly centered around.........."if you had not let 3 million immigrants into the country and then allowed 1.5 million of them not to work we would not be in this position!" etc etc, if you find it its worth a read.

Many of us now retired had to pay 44 years of national insurance to receive full state pension..I believe it is now only 30 years of N.I payments to receive full state pension..To get my full pension I had to back pay several years from my own funds.Now my pension is capped at the rate it was when I first received it.

[billzant]

2 hours ago, shunter said:

 

 

There are it seems funds aplenty to pay for bang bang toys  in the  Middle East  theatre.

Always money for defence, never money for the people. Sadly we are pretty low-down the list considering NHS, education and ...........................................................

[mommysboy]

3 hours ago, p414 said:

Many of us now retired had to pay 44 years of national insurance to receive full state pension..I believe it is now only 30 years of N.I payments to receive full state pension..To get my full pension I had to back pay several years from my own funds.Now my pension is capped at the rate it was when I first received it.

Yes and it will have to be 40 years again in the future and a high retirement age.  And one can't rule out a pension freeze for all.  But to look on the bright side, the youngsters are going to be in a dreadful position.  You are now getting your pension and could be for another 20 or 30 years hopefully.  This simply will not be possible in the future.

[mommysboy]

17 hours ago, nong38 said:

The above is dated 2014 and forecast the fund exhausted by 2016. We will never know we are still getting our pensions from somewhere!

It has always been that current generations pay for the ones ahead, the problem is that there are less payers than required to fund the scheme and it will get worse, technology/robots don't pay tax. At some point some people are going to find out that although they paid for the past generations no one is going to be paying for theirs. There will come a time soon when people will have to fund their own retirement, like the private sector is increasingly having to do, the same will have to apply to the public sector pensions generosity as well its unsustainable but the people in charge don't want it to stop on their watch. Someone is going to have to be tough and explain the facts to them, I don't to keep paying for them especially when they ignore frozen pensions.

Well the current shortfall is being addressed, and there is a progressive policy of mandatory work pensions.  

 

Whatever the outcome, I hope the government (and some other people on this thread) clearly understand that present contributors to the state pension simply can not be done away with.  Because what I hear from some truly worries me.  

[evadgib]

9 hours ago, denby45 said:

Just a heads up and slightly off topic. Anyone thinking about cashing in personal pensions with their provider should first read this:

 

http://www.thisismoney.co.uk/money/pensions/article-5524789/Should-pension-perks-80-bonus.html

 

Unfortunately I already cashed in one small pot with L&G (around 20,000 in 2 lots to avoid the taxes) without thinking. Should have probably waited as I am not desperate for the cash.

 

Getting fully back on topic, this article about topping up your SP is worth a read:

 

https://www.royallondon.com/Global/documents/GoodWithYourMoney/TOPPING-UP-YOUR-STATE-PENSION-GUIDE.pdf

 

Hope this helps

 

Den

I'd gladly pay 5 years NI @ 2,85 p/w  as per note 5 but how on earth do we get an exemption cert (cl 3 to 2)  if living abroad?

[evadgib]

4 hours ago, mommysboy said:

Well the current shortfall is being addressed, and there is a progressive policy of mandatory work pensions.  

 

Whatever the outcome, I hope the government (and some other people on this thread) clearly understand that present contributors to the state pension simply can not be done away with.  Because what I hear from some truly worries me.  

That might be because they have other pensions / income 'in the bag' which isn't relevant to the board and therefore hardly mentioned, leaving others to assume their OAP is their only source of income and vital. 

[mommysboy]

1 hour ago, evadgib said:

That might be because they have other pensions / income 'in the bag' which isn't relevant to the board and therefore hardly mentioned, leaving others to assume their OAP is their only source of income and vital. 

Yes, it needs to be understood that the State Pension is vital for millions of poor people and is in fact a kind of subsistence payment.  If it were to be scrapped it would merely push these people on to benefits such as universal credit, ie, problem not solved and possibly even made worse.

 

Also, what message would it send to all those millions who have paid in but are left without?  These are honest people who by virtue of their NI record must have worked decades.  Thet would not deserve to be classed as benefit claimants.

Edited April 14, 2018 by mommysboy

[billzant]

We have paid for our pensions, it is not a gift from a government - from a benevolent state. Through NI contributions we are forced to pay into the pension fund as were our employers, potentially a good use of force. The government role in this is to manage the pension fund and enable the payment of pensions as promised. The pension fund is not part of the government taxation budget that they can assign to other uses such as defence. This is a line that recent governments have been trying to erase because the cost of pensions is rising.

 

Should we defend the crossing of this line?

 

Do we accept that we should not be getting pensions for longer because people are surviving longer? Or do we say to the fund managers you have the actuarial statistics manage the fund accordingly? If there is a shortfall in fund management, it is my view that the government should take funds from cash cows like defence. But why should a properly-run fund have a shortfall?

 

This line is that the pension fund should pay our pensions as promised.

 

Do we accept that pension age should be increased because they don't want to make those payments? Or do we see it as a tactic to make people work longer?

 

I retired early. In the years prior to retirement work was hard because I was older and could not physically cope as well. This is a natural part of ageing. In a civilised society especially with so many unemployed the retirement age should be lessened, and  that a caring society should look to finding methods for utilising the experience of older people in the workplace.

 

That is if the government has the people's interest.

 

So I draw the line that the pension is our right, that we have earned it, and dismiss the excuses they offer for mismanagement and excuses for making us work longer.

[steve187]

On 4/13/2018 at 12:59 PM, evadgib said:

 

 

The International Consortium of British Pensioners (ICBP) shared Nigel Nelson's post.

10 April at 22:38 · 

 

 

Nigel Nelson

10 April at 22:19 · 

 

Finally, we have been able to get past the DWP intervention. We have posts on Mrs May’s Twitter Account, and now her Facebook Page. Please click on the link below which will take you directly to her official FB Page - if you scroll down to a post that Nigel Nelson has made. Please “like” it - let’s show our solidarity - and, if you feel like it, please also comment on it, but be respectful. If you start your comment with the “@“ symbol followed by theresa_may then the first 255 characters of your message will also be sent to her Twitter Account. If you end your message with a series of # e.g. #immoral #discriminatory #chogm #chogm2018 #Commonwealth Heads of Government #RoyalFamily (or just copy these) then we can see if we can get these trending. Please send this to everyone in your list of friends and family and ask them to do the same. Paste this link into your browser but without the “ at either end of the link
“https://www.facebook.com/pg/TheresaMayOfficial/posts/?ref=page_internal”

I have been looking on T May's facebook page and can not find Nigel Nelson's post can you give me a hint to find it, the date it was posted and the theme /title of the main post that it was posted in

many thanks.

[nong38]

4 hours ago, billzant said:

We have paid for our pensions, it is not a gift from a government - from a benevolent state. Through NI contributions we are forced to pay into the pension fund as were our employers, potentially a good use of force. The government role in this is to manage the pension fund and enable the payment of pensions as promised. The pension fund is not part of the government taxation budget that they can assign to other uses such as defence. This is a line that recent governments have been trying to erase because the cost of pensions is rising.

 

Should we defend the crossing of this line?

 

Do we accept that we should not be getting pensions for longer because people are surviving longer? Or do we say to the fund managers you have the actuarial statistics manage the fund accordingly? If there is a shortfall in fund management, it is my view that the government should take funds from cash cows like defence. But why should a properly-run fund have a shortfall?

 

This line is that the pension fund should pay our pensions as promised.

 

Do we accept that pension age should be increased because they don't want to make those payments? Or do we see it as a tactic to make people work longer?

 

I retired early. In the years prior to retirement work was hard because I was older and could not physically cope as well. This is a natural part of ageing. In a civilised society especially with so many unemployed the retirement age should be lessened, and  that a caring society should look to finding methods for utilising the experience of older people in the workplace.

 

That is if the government has the people's interest.

 

So I draw the line that the pension is our right, that we have earned it, and dismiss the excuses they offer for mismanagement and excuses for making us work longer.

You have to watch the wording here, we think of it as an "entitlement" we were lead to believe that when we retired we would get a state pension which we do ( only if you move abroad there may be consequences, something never high lighted when we were being forced to pay into the system ). Remember we had no opt out from paying NI so you would think you were entitled but HMG have been using a different word for some time now and that word is "benefit". Now I always thought benefit was like a perk something you got for nothing but the HMG is trying to play with the words and make out that they are all jolly good chaps and chapesses in giving you something you been paying for years.

Its a bit like taking your bike into the garage to have a puncture repaired only to find that now the brakes don't work! The garage then fixes the brakes free.

 

When I was at John Lewis we were called partners when Peter Lewis was Chairman when he retired we got some ex civil servant to take his place called Stuart Hampson he decided we would now be co-owners, makes you wonder why the name change but there must have been a reason only no one bothered to tell us!

[sandyf]

On 4/13/2018 at 7:59 PM, mommysboy said:

I found this very informative- it explains how the state pension scheme, and it just shows that a lot of us are misinformed particularly regarding funding.  It appears also there is a fund and some investment. (assuming info. is correct of course):

 

http://www.thisismoney.co.uk/money/pensions/article-2787888/how-state-pension-funded-cash-runs.html

When they refer to the National Insurance Fund, they are referring to the amount collected by NI each year, this never exactly matches the outgoings and previously they carried an accounting surplus, this para refers.

'While fund exhaustion may be of little economic significance (it is an accounting curio rather than a real fund), it will be a symbolic event, indicating that the new state pension is unsustainable.'

 

This is the fundamental problem.

 

On current trends, from now until 2037, while the numbers of those aged 15 to 64 in the UK will grow on average by 29,000 a year, the numbers of people aged 65 and over will rise by 278,800 a year, according to the thinktank International Longevity Centre – UK.

https://www.theguardian.com/science/2014/nov/09/ageing-britain-time-to-cater-peoples-needs

[mommysboy]

1 hour ago, sandyf said:

When they refer to the National Insurance Fund, they are referring to the amount collected by NI each year, this never exactly matches the outgoings and previously they carried an accounting surplus, this para refers.

'While fund exhaustion may be of little economic significance (it is an accounting curio rather than a real fund), it will be a symbolic event, indicating that the new state pension is unsustainable.'

 

This is the fundamental problem.

 

On current trends, from now until 2037, while the numbers of those aged 15 to 64 in the UK will grow on average by 29,000 a year, the numbers of people aged 65 and over will rise by 278,800 a year, according to the thinktank International Longevity Centre – UK.

https://www.theguardian.com/science/2014/nov/09/ageing-britain-time-to-cater-peoples-needs

It's a problem, but not that complex really!

 

And in the final analysis if nothing is done, it's a problem that must be burdened by the government- because really it's a subsistence payment dressed up as a pension scheme.  If you disbanded the pension scheme you have millions of destitute people who will just have to claim universal credit.

 

It seems obvious to me:

Freeze, or cut the current payout to 130 pounds.  And make benefit top up means tested.

Increase retirement age 70 to 75 over time.

Increase NI rate for employers and employees 3%

Increase contribution years to 40-45

 

The government has also introduced automatic enrolment in to work place pension schemes.  

 

What is also ignored is that pensioners pay income tax if they have a decent pension scheme, so why not put this in the NI fund?

 

 

Edited April 15, 2018 by mommysboy

[dick dasterdly]

2 minutes ago, mommysboy said:

It's a problem, but not that complex really!

 

And in the final analysis if nothing is done, it's a problem that must be burdened by the government- because really it's a subsistence payment dressed up as a pension scheme.  If you disbanded the pension scheme you have millions of destitute people who will just have to claim universal credit.

 

It seems obvious to me:

Freeze, or cut the current payout to 130 pounds.  And make benefit top up means tested.

Increase retirement age 70 to 75 over time.

Increase NI rate for employers and employees 3%

Increase contribution years to 40-45

 

The government has also introduced automatic enrolment in to work place pension schemes.  

 

What is also ignored is that pensioners pay income tax if they have a decent pension scheme, so why not put this in the NI fund?

 

 

Let's not allow numerous governments 'off the hook' on this so easily.

 

They had many decades to build up a proper pension fund from NI payments, but preferred to spend the income on other things and rely on current work-forces paying for current pensioners....

 

There's no point (re. state pensions) in increasing the NI rate/putting pensioners' income tax into the NI pot - as long as the govt. can spend it on pretty much anything they like?

[mommysboy]

43 minutes ago, dick dasterdly said:

Let's not allow numerous governments 'off the hook' on this so easily.

 

They had many decades to build up a proper pension fund from NI payments, but preferred to spend the income on other things and rely on current work-forces paying for current pensioners....

 

There's no point (re. state pensions) in increasing the NI rate/putting pensioners' income tax into the NI pot - as long as the govt. can spend it on pretty much anything they like?

It's also a myth to suggest it is not a fund as some do, but purely 'pay as you go'.  In fact the fund invests in gilts.

 

Yes I believe the gov has dipped in to this pool from time to time but can't find any examples.

Edited April 15, 2018 by mommysboy

[Oxx]

57 minutes ago, mommysboy said:

It's also a myth to suggest it is not a fund as some do, but purely 'pay as you go'.  In fact the fund invests in gilts.

 

Do you have a single shred of evidence to confirm what you assert? I'm guessing "no".  There is no "investment" in gilts.  Zip, nada, zilch.

 

The only person mythologising here is you.

[Rajab Al Zarahni]

14 minutes ago, Oxx said:

 

Do you have a single shred of evidence to confirm what you assert? I'm guessing "no".  There is no "investment" in gilts.  Zip, nada, zilch.

 

The only person mythologising here is you.

Here is the answer for those who are interested in the dreary detail:

 

National Insurance Fund Investment Account

 

This Fund, which dates in its present form from 1975, is by far the largest of those managed by CRND. The Social Security Acts of 1973 and 1975 established a new Scheme of social security contributions and benefits, replacing the National Insurance Acts and assimilating the Industrial Injuries Acts. Under the 1973 Act, two separate funds previously comprising the National Insurance (Reserve) and the Industrial Injuries Funds were wound up and their assets transferred to the National Insurance Fund (NIF) on 1 April 1975.

The NIF is intended to be the 'current account' of the National Insurance Scheme, holding sufficient funds to even out fluctuations over time in the movement of contributions and benefits and to provide a source of finance to meet exceptional demands, for example in times of high unemployment or a sickness epidemic. By virtue of section 161(3) of the Social Security Administration Act 1992, HM Revenue and Customs (HMRC) transfers money to the Investment Account on days when it has a net inflow of cash and draws from the Investment Account on days when payments exceed receipts.

Following a review by HMRC, HM Treasury and CRND, a change to the NIF investment strategy was approved in December 2006. This change has resulted in lower administrative charges to the NIF. The change was effected in January 2007, when all the Investment Account’s gilt holdings were sold and the proceeds placed into the Debt Management Account Deposit Facility. Since then, the earnings of the Investment Account have been much more closely aligned to the Official Bank of England Rate (Base Rate).

[Bangkokazy]

Hurray I'm retired. I am looking forward to the good life.

[mommysboy]

51 minutes ago, Oxx said:

 

Do you have a single shred of evidence to confirm what you assert? I'm guessing "no".  There is no "investment" in gilts.  Zip, nada, zilch.

 

The only person mythologising here is you.

Yes I do.  It is a well known fact. It really is a case of you go fetch, both because the information is readily available on the net and why should I help such rudeness?

[mommysboy]

2 hours ago, dick dasterdly said:

Let's not allow numerous governments 'off the hook' on this so easily.

 

They had many decades to build up a proper pension fund from NI payments, but preferred to spend the income on other things and rely on current work-forces paying for current pensioners....

 

There's no point (re. state pensions) in increasing the NI rate/putting pensioners' income tax into the NI pot - as long as the govt. can spend it on pretty much anything they like?

My fear is that some form of privatization will be vaunted, but imo the only thing that works about privatization is that money due for the poor gets given to the rich, and that present generations plunder future wealth by means of insane borrowing. So it would just be a device for screwing people over.

 

I don't think there are any clear examples of the government plundering the NI fund for other purposes, however.  

 

The problem in the future is that there are many more retirees than folk entering the job market.  So major adjustments are inevitable.

 

But as I've said before the problem with the NI fund is just symptomatic of a wider and more profound malaise in the economy: that is the elephant in the room.  

 

 

 

 

 

 

Edited April 15, 2018 by mommysboy

[sandyf]

55 minutes ago, Rajab Al Zarahni said:

Here is the answer for those who are interested in the dreary detail:

 

National Insurance Fund Investment Account

 

This Fund, which dates in its present form from 1975, is by far the largest of those managed by CRND. The Social Security Acts of 1973 and 1975 established a new Scheme of social security contributions and benefits, replacing the National Insurance Acts and assimilating the Industrial Injuries Acts. Under the 1973 Act, two separate funds previously comprising the National Insurance (Reserve) and the Industrial Injuries Funds were wound up and their assets transferred to the National Insurance Fund (NIF) on 1 April 1975.

The NIF is intended to be the 'current account' of the National Insurance Scheme, holding sufficient funds to even out fluctuations over time in the movement of contributions and benefits and to provide a source of finance to meet exceptional demands, for example in times of high unemployment or a sickness epidemic. By virtue of section 161(3) of the Social Security Administration Act 1992, HM Revenue and Customs (HMRC) transfers money to the Investment Account on days when it has a net inflow of cash and draws from the Investment Account on days when payments exceed receipts.

Following a review by HMRC, HM Treasury and CRND, a change to the NIF investment strategy was approved in December 2006. This change has resulted in lower administrative charges to the NIF. The change was effected in January 2007, when all the Investment Account’s gilt holdings were sold and the proceeds placed into the Debt Management Account Deposit Facility. Since then, the earnings of the Investment Account have been much more closely aligned to the Official Bank of England Rate (Base Rate).

Yes but how much is left. In 2009 we know there was a surplus of around £59 billion but 12.8% of income tax was used in the 2014/15 tax year to make up the shortfall between available NI and the state pension liability.

[Rajab Al Zarahni]

1 minute ago, sandyf said:

Yes but how much is left. In 2009 we know there was a surplus of around £59 billion but 12.8% of income tax was used in the 2014/15 tax year to make up the shortfall between available NI and the state pension liability.

As at the 29.03.2018 the investment account had a balance of: £26,527,000,000.

[billzant]

5 hours ago, nong38 said:

You have to watch the wording here, we think of it as an "entitlement" we were lead to believe that when we retired we would get a state pension which we do ( only if you move abroad there may be consequences, something never high lighted when we were being forced to pay into the system ). Remember we had no opt out from paying NI so you would think you were entitled but HMG have been using a different word for some time now and that word is "benefit". Now I always thought benefit was like a perk something you got for nothing but the HMG is trying to play with the words and make out that they are all jolly good chaps and chapesses in giving you something you been paying for years.

Its a bit like taking your bike into the garage to have a puncture repaired only to find that now the brakes don't work! The garage then fixes the brakes free.

 

When I was at John Lewis we were called partners when Peter Lewis was Chairman when he retired we got some ex civil servant to take his place called Stuart Hampson he decided we would now be co-owners, makes you wonder why the name change but there must have been a reason only no one bothered to tell us!

Their use of the word benefit for something that we are entitled to because we have paid for it is a tactic. It is an attempt to move the "line". Do we accept the notion that it is a benefit when we have paid for it?

 

[DILLIGAD]

Their use of the word benefit for something that we are entitled to because we have paid for it is a tactic. It is an attempt to move the "line". Do we accept the notion that it is a benefit when we have paid for it?
 

I don’t!


Sent from my iPhone using Tapatalk

[Rajab Al Zarahni]

2 minutes ago, billzant said:

Their use of the word benefit for something that we are entitled to because we have paid for it is a tactic. It is an attempt to move the "line". Do we accept the notion that it is a benefit when we have paid for it?

 

You are absolutely right. This argument is equally true of the use of the word "fund". Once this idea becomes embedded in the minds of people you can indulge in the subtle obfuscation that pensions have to be frozen or reduced because there is not enough money in the "fund".

[mommysboy]

3 minutes ago, DILLIGAD said:

I don’t!


Sent from my iPhone using Tapatalk

Me neither. 

[mommysboy]

If it has 4 legs, wags its tail, and answers to the name Rover...then a dog is what it is!

 

It is a pension scheme.

 

It is described in the Pensions Act 2014, and exhaustively explained on the gov.uk website.

[billzant]

1 hour ago, Rajab Al Zarahni said:

Here is the answer for those who are interested in the dreary detail:

 

National Insurance Fund Investment Account

 

This Fund, which dates in its present form from 1975, is by far the largest of those managed by CRND. The Social Security Acts of 1973 and 1975 established a new Scheme of social security contributions and benefits, replacing the National Insurance Acts and assimilating the Industrial Injuries Acts. Under the 1973 Act, two separate funds previously comprising the National Insurance (Reserve) and the Industrial Injuries Funds were wound up and their assets transferred to the National Insurance Fund (NIF) on 1 April 1975.

The NIF is intended to be the 'current account' of the National Insurance Scheme, holding sufficient funds to even out fluctuations over time in the movement of contributions and benefits and to provide a source of finance to meet exceptional demands, for example in times of high unemployment or a sickness epidemic. By virtue of section 161(3) of the Social Security Administration Act 1992, HM Revenue and Customs (HMRC) transfers money to the Investment Account on days when it has a net inflow of cash and draws from the Investment Account on days when payments exceed receipts.

Following a review by HMRC, HM Treasury and CRND, a change to the NIF investment strategy was approved in December 2006. This change has resulted in lower administrative charges to the NIF. The change was effected in January 2007, when all the Investment Account’s gilt holdings were sold and the proceeds placed into the Debt Management Account Deposit Facility. Since then, the earnings of the Investment Account have been much more closely aligned to the Official Bank of England Rate (Base Rate).

Good dreary detail, Rajab, thanks very much. It expects to pay the benefits/entitlements, it seems to me the government in general is trying to avoid that expectation. This is not the frozen pensions issue but pensions in general as they were not uprating pensions prior to the setting-up of this fund.

[sandyf]

21 minutes ago, Rajab Al Zarahni said:

As at the 29.03.2018 the investment account had a balance of: £26,527,000,000.

In the tax year 2014/15, income tax revenue was about 163 billion so about 20 billion was used to prop up the state pension. Again in 2015/16, 12.8% of income tax was taken from the 168 billion of income tax revenue, another 20 or so billion.

Strikes me that whatever is showing in this so called fund is insignificant compared to the annual shortfall in NI.

[sandyf]

Looming over the debate is the long-term future of the state pension in an ageing society with a reducing proportion of working – and, therefore, contributing – people. In October, John Cridland, the state pension age reviewer, launched a consultation paper on the topic. Cridland’s final report could provide a clearer picture of the cost of state pensions towards the end of the next decade.

https://economia.icaew.com/en/technical-update/january-2017/could-merging-national-insurance-with-income-tax-have-worked