Petem95

http://news.bbc.co.uk/1/hi/uk_politics/5099428.stm

Details of Gordon Brown shocking pensions raid, where £5billion was raided by Labour in 1997, are to be released.

Will be interesting to see if Brown knew at the time that the effects would be so dire...

Labour have done so much damage its impossible to ever repair it - we'll be living with the conseqences of these things for decades

Suresh

Utter nonsense.

Removing the tax credit on dividends encourages firms to reinvest their profits for the longer term rather than paying them out to shareholders in the sohrt term. The extra growth thus generated over the long term is good for shareholders i.e. pension funds. Surely only an idiot would think otherwise.

lozgti

Correct.No pensions crisis whatsoever.No company schemes closing.No shortfalls in company schemes.No problems with the stock market affecting those funds.People are rushing to invest in pensions and not the more attractive property market created by a false economy based on debt riddled people.

That man is a genius.Whatever could go wrong with his flawless plan.

DCI Gene Hunt

He could become Prime Minister................

The Snug Rhino

The pensions crisis is due to an aging population expecting to live for years having saved bugger all.....the current generation who belive "pensions are bad" are going to be completly screwed because they have been encouraged NOT to save up some money to live on.

the tax credit issue is tiny in relation to the issue of people not saving.

TopBanana

Pensions aren't the only way to provide for retirement.

Leslie

Suresh,

If it was such a good idea, what happened to people's pensions then, and why?

Les

Gordo

It's very clear:

- companies pay dividends. yes, the tax credits may have encouraged them to pay more, but shareholders often seek cash yields. Many companies don't have profitable ways to invest the profits they create and so return them to shareholders.

- Brown's £5bn a year raid has to date removed £40bn cumulatively from UK pensions. i.e. a recent actuarial review of the UK showed that the total pension pot today would have been £140bn rather than the actual £100bn, had the £5bn a year not been lost.

- The ageing population is nothing new - actuaries have been calculating their figures on this basis for a long time. The issue is the shortfall that was unforeseen, created by Brown.

- New Labour have been largely culpable for the mess pensions are now in. Couple with that the lies around unemployment and hosing away our money on the public sector means we are now in a pretty shaky position financially. If they were a main board, they would have been removed by now.....

sti-04!!

He should be jailed for what he has done. Con artist & fraudster come to mind.

Jonathan Davies

The tax credit change was made at a time when corporates and their pension schemes were fairly healthy. It wasn't helpful and I don't agree with it, but there's more to the pension problem than that. Which is demonstrated imo by the fact that national and corporate pension schemes all over Europe and the world are in trouble... what they have in common is an ageing population and lack of compuslory pension saving. Not a new problem, that, although no government is likely to tackle unless they really have to.

Any govt. could have imposed compulsory pension saving, but the idea that individuals are responsible for their own old-age financing is not a vote winner, and so they won't. And why should they? Their pensions will be quite good.

Petem95

Things are different in Australia - employees and employers have to contribute 10% of the employees salary into pension schemes, and as a result they have some of the richest pensioners in the world. Combine this with a very tough immigration policy, only really allowing in skilled workers, and they are looking like theyre in a very healthy position (total opposite to the UK).

The Snug Rhino

no, but people arent saving at all.

Iwan

The simplistic way I look at it. I made provision for my future by selecting a decent pension, and paying in an appropriate amount under the terms at the time - to allow me to live comfortably after retirement.

Then Gordo changes the rules, and I have to massively increase my contribution to get the same final pension I would have before.

What gets my goat, is that all the sponging doleite scum who put away nothing for their futures didn't even notice. They expect to live on handouts and don't contribute anythign to themselves or society, so it didn't affect them at all. Wheras decent hardworking people got raped in the a$$ by New Labour, "friend of the non-contributor".

I hope GB and TB both rot in hell.

phil_wrx

iTrader: (2)

yep maybe the pension problem wasnt just created by gordon brown but his tax credit trick sure as hell was the biggest single reason why im after leaving this country

Jonathan Davies

Yep. Australia introduced compulsory saving in 1992 and some of the effects are being seen now. The UK's demographic position is worse than Australia's, and the need for compulsory pension saving is greater here, and the problem has been obvious for at least as long. If Australia could do it in 1992, why couldn't the UK? Why didn't the Tory government do it when the treasury coffers were stuffed with North Sea energy money and privatisation proceeds? Why didn't labour do it in 1997 when they had a mandate and majority to do radical things? Because it's unpopular and they care most about staying power, not what your pension will be.

I don't see what immigration has to do with underfunded corporate pensions though.

Suresh

You're obviously quite new here then

Jonathan Davies

I expect someone will explain before long.

Petem95

I was expanding on the point of Australia being in a good state as a country, and one plus point is they have an immigration policy which favours skilled workers, unlike here where we seem to favour unskilled immigrants with criminal backgrounds, who dont want to intergrate with our culture.... but anyway thats another thread altogether!

Will be interesting to compare Australia to the UK in 20 years time....

Greatnorth

right then lets burn all the immigrants, force every employer large and small to pay in 10% worth of every employees annual salary every year

we'll see lots of old people in nice cars in nice clothes while they watch all the jobs they used to do that earned their pensions fly off to a far eastern country in which labour costs are one tenth of the UKs?

why pay £50 to fu<k a 19 stone english prozza who's smoking a rolly on the job when you can fly to india for £20 pay a £5er for a 8 stone indian prozza who'll polish your shoes on the way out after nailing your brains out?

thats why all the jobs are slipping away its CTE (cost to employ)

if it was your money in your business and your accountant said simply shifting ops to india would mean you make more money you wouldnt say well wait a minute what about all those pensioners who need my hard earned money to live on, they would of done it for me if they had the chance!

yeah, thats why your 70 year neighbour is drivng his brand new 3 series down to tesco.

Dracoro

There's somewhat of a revseral of this in some companies. They're realising that it's all well and good saving money having callcentres in India but if the service quality lowers, customers leave. You may have the cheapest labour force going but that's no good if you don't have any customers.

Diesel

Bet a few Aborigines would have a word to say about that

Lum

And here was me thinking that National Insurance WAS a compulsory contribution to my future pension.

People aren't saving because they're too busy paying off credit cards.

r32

What is it these days around the middle of June now before you start earning money for yourself?

douglasb

You're half correct. NI is a compulsory contribution. It goes to fund current spending though and is not invested for the future. It will be paying pensions to pensioners who are currently receving pensions, but not a penny is going towards your future pension.

Leslie

Not sure why the ageing population should have an effect on private pensions being paid for by the individual personally on the premise that the pension firm would invest it wisely so that he would get the sort of pension that was promised to him at the beginning, only to find that Flash's thieving grab of their money has ruined their aspirations. Have I missed something here? The State pension is paid for by further contributions by that individual through National Insurance. Funny how government pensions just seem to get better though!

Suresh,

Did you miss the question I asked you earlier. or can't you answer it anyway?

Les

Suresh

Sorry Les I didn't understand your question to be honest.
You asked "what happened to people's pensions then, and why?" Can you quantify what you mean by your statement and give a credible source? i.e. not the Shadow chancellor.

Suresh

Lum

But if you don't pay NI then you don't get a state pension, therefore it is a contribution to the state pension.

If it's not going towards my pension then why don't they just admit fact and call it Income Tax Part 2

douglasb

In effect, it is Income Tax part 2. When I look at my payslip each month and see what has been deducted, it feels exactly the same to me.

However, something that makes it a bit different from a top-up income tax is that NI is only paid on earnings. If you win the lottery, give up your job, stick the money in the bank and live off the interest, you won't be paying NI.

You're correct in that you need to have paid NI to qualify for a State pension, but that pension will be paid for by the people who are paying tax and NI when you have retired.

By paying NI you are not funding your future pension; you are paying for your entitlement to a future pension. It's a subtle difference, but think of it this way. If you pay into an employer's pension or a private pension then, broadly speaking, the more you have paid in the bigger a pension you will receive. No matter how much NI you pay it will have no effect on the amount of your State pension.

Deep Singh

[QUOTE=
why pay £50 to fu<k a 19 stone english prozza who's smoking a rolly on the job when you can fly to india for £20 pay a £5er for a 8 stone indian prozza who'll polish your shoes on the way out after nailing your brains out?

Any idea where I can book a package for the latter?

logiclee

The Government is also entitled to 50% of any surplus from the Mine Workers Pension Scheme.
It was not believed that a labour government would cream off the Miners pension scheme but they have infact take £1.3 Billion out of the scheme.
Of course there is currently no surplus for the Government to cream off.

Cheers
Lee