A Golden Fleece?
October 8, 2016Posted by on
This week on Facebook: As a pensioner it isn’t inevitable that I should have an interest in pensions, like most people I am only really interested in the limitations that my income has on my lifestyle. I do however find myself increasingly incensed by the seeming insularity that today’s society bestows on those a lot wealthier than me, then why should they ignore the advice that you should never to look a gift horse in the mouth anymore than I would. In deciding to post some articles on UK pensions it seems that I stepped into a minefield, one in which the mines were planted by the government.
That our politicians — in government or opposition — comprises largely of charlatans come mountebanks is of no surprise, public administrations have continually borrowed money to placate voters and maintain office. Nor is it a surprise that successive governments have kept debts off the books, deliberately using inflation as a tool to reduce the debt burden. An action that has the effect of increasing future fiscal deficits, nowhere more so than in the case of pension funds and funding.
“We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting Government spending. I tell you in all candour that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment” [Prime Minister, James Callaghan — 1976 Labour Party Conference]
Monday 3 October 2016 The Sickening Perks Handed Out By Our Broke NHS To The Hundreds Of Health Bosses: As patients face crippling delays for treatment, A&E closures and overcrowded wards, bureaucrats have quietly been building up huge taxpayer-funded pensions. They will be handed tax-free six-figure lump sums on retirement, and annual payouts from the age of 60 of at least £55,000 – guaranteed for life. By contrast, the average British worker on a private pension can expect just £1,200 a year.
Tuesday 4 October 2016 A turbulent history of British pensions, since 1874: The road to our brave new world of pensions has been a rocky one. Paved with best intentions, the journey ended, sadly too often, in scandal, u-turns and empty promises – potholed by political meddling and rising life expectancy.
Wednesday 5 October 2016 How Big The Pensions Deficit At UK Firms Has Grown: The collapse of BHS and the recriminations over the department store’s pension scheme have shone a spotlight on private defined benefit pension scheme deficits. BHS isn’t the only company with a scheme deep in deficit. Data from Mercer, a financial consultancy, today gives one indication of the aggregate size of the deficit of FTSE350 firms. It says they rose to £92Bn at the end of April, up £11Bn over the month. £92Bn is a big and scary sounding number. But how bad is it in the scheme of things?
Thursday 6 October 2016 Retirement Bill For Public Sector Soars By £190Bn: The liability of final salary retirement schemes for NHS staff, police, teachers and other state workers rose by £190Bn to £1.5 trillion in the 12 months to the end of March last year. The revelation throws into sharp relief the rising cost to the state of covering these commitments. Public sector workers — except for local government staff and university lecturers — are in unfunded schemes, which means their retirement benefits are paid out of general taxation.
Friday 7 October 2016 Pensions Apartheid? How Public And Private Systems Compare: The chasm between public and private-sector pensions is already marked, but the inequality is set to widen. Final salary pensions – the most generous sort, which pay a retirement income linked to employees’ wages and length of service – are all but extinct for those of working age in the private sector. But these guaranteed pensions remain a key benefit for public-sector workers and a source of growing envy for everyone else. In the private sector, most schemes have been replaced with so-called “defined contribution” pensions, into which staff save a percentage of their salary, plus a contribution from their employer. But the overall amount saved has fallen dramatically. The benefits received at retirement depend on stock market performance, and there is no guaranteed level of income.
Dr. Ros Altman is a leading authority on both private and state pensions, annuities and retirement policy. Numerous major awards have recognised her work to demystify finance and make pensions work better for people.
I began wondering how much an authority on both private and state pensions, annuities and retirement policy becomes involved in fiscal policy, but on reflection I’m not sure how relevant it is any more. Peering into a crystal ball to foretell the economic future is the stuff of fairy tales.
Occupational Pension Provision In The Public Sector (pdf)
Defined Benefit Pension Schemes: Questions And Answers (pdf)
The New MPs’ Pension Scheme (pdf)
Unfunded Pensions In The Eu And In The Uk Public Sector (pdf)
The Changing Landscape Of Pension Schemes In The Private Sector In The Uk (pdf)