Can anyone give me their opinions on the future of the second state pension, formerly serps, I opted out 14 years ago, and directed the annual payments to a Personal private pension, however I am hearing more and more people are opting back in, I know no decision has been made by the goverment on the pensions crisis, however can someone advise me if opting back in is a good idea or is this yet another going with the herd mentality situation?
Any advice would be appreciated, thanks
Full Version: Second State Pension
QUOTE(zzg113 @ Feb 1 2005, 02:48 PM)
Thanks ZZQ,
Wurzel, go to uk.finance newsgroup and look for the thread titled:
NI - Contracting back in or out?
NI - Contracting back in or out?
QUOTE(Wurzel @ Feb 1 2005, 09:44 AM)
Any advice would be appreciated, thanks
This is not advice - this is generic comment.
It is appropriate for most people of an 'average' risk profile to contract back to S2P (State 2nd Pension) as the growth rate after charges on a PP required to 'beat' S2P benefits is quite high. However, the Treasury have notices this - that many are contracting back in - so they may change the rules again and make it advantageous to stay/contract out again.
HTH
If you are contracting back in - do so before 5/4/05
QUOTE
It is appropriate for most people of an 'average' risk profile to contract back to S2P (State 2nd Pension) as the growth rate after charges on a PP required to 'beat' S2P benefits is quite high
The difference is, if you 'contract in', you have to hope that future governments will actually pay up when you retire, whereas if you 'contract out' you have to hope that the economy will continue to grow at a decent rate and the stock market will grow with it.
IMHO, anyone who expects to retire on a state pension after about 2020 is likely to end up living in a cardboard box and eating dog food, if they're lucky. Anyone who expects to retire on a private pension by then _might_ have a chance of not having to live on dog food. The whole idea that you can have a sizeable portion of the population retired and living well off the backs of the rest is unlikely to work in the real world.
Probably the best bet would be to have lots of kids and hope you can scrounge off them when you're old and grey... assuming they're not paying 80% tax rates to keep state pensions flowing.
QUOTE(MarkG @ Mar 10 2005, 12:33 AM)
The difference is, if you 'contract in', you have to hope that future governments will actually pay up when you retire, whereas if you 'contract out' you have to hope that the economy will continue to grow at a decent rate and the stock market will grow with it.
IMHO, anyone who expects to retire on a state pension after about 2020 is likely to end up living in a cardboard box and eating dog food, if they're lucky. Anyone who expects to retire on a private pension by then _might_ have a chance of not having to live on dog food. The whole idea that you can have a sizeable portion of the population retired and living well off the backs of the rest is unlikely to work in the real world.
Probably the best bet would be to have lots of kids and hope you can scrounge off them when you're old and grey... assuming they're not paying 80% tax rates to keep state pensions flowing.
IMHO, anyone who expects to retire on a state pension after about 2020 is likely to end up living in a cardboard box and eating dog food, if they're lucky. Anyone who expects to retire on a private pension by then _might_ have a chance of not having to live on dog food. The whole idea that you can have a sizeable portion of the population retired and living well off the backs of the rest is unlikely to work in the real world.
Probably the best bet would be to have lots of kids and hope you can scrounge off them when you're old and grey... assuming they're not paying 80% tax rates to keep state pensions flowing.
If they are paying 80% tax rates then their net incomes will be very low. This could start to happen in 10-20 years or so when the baby boomers start to retire and only a small percentage are actually left working. What will happen to the house prices then? They will surely go down in proportion with the incomes, as will the rent prices. So perhaps housing is no longer even safe as a long term investment.
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