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Britain Risks Default Unless Government Cuts Public Sector Pensions - Telegraph

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http://blogs.telegraph.co.uk/finance/edmundconway/100006007/britain-risks-default-unless-government-cuts-public-sector-pensions/

sitting comfortably?

In the end, unless this or the next Government tackles Britain’s public sector pensions problem, there remains a very real chance that Britain defaults on at least some proportion of its on or off balance sheet debt – whoever thought [public sector] pensions could be so exciting?

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Is replacing public sector final salary schemes with money purchase finally on the cards?

this was already on the cards for new entrants

it could now be on the cards for impending retirees - serious stuff - possibly

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this was already on the cards for new entrants

it could now be on the cards for impending retirees - serious stuff - possibly

they could make quite a good start by putting a recruitment freeze on the public sector...period.

and all those bin police that have been employed to spy on your refuse could be retrained to ride shotgun on the dustcarts and actually empty them.

likewise with the highways agency:

get the people responsible for putting up those tarmac monstrocities they call "traffic calming measures" to fill in potholes instead.

(this would also have the added bonus of less compensation claims,less wear and tear on vehicles and less health+safety inspectors inspecting stuff that has been deliberately created to cause inconvenience/annoyance)

Edited by oracle

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What will existing public sector workers want in exhancge for this massive cut in pay?

a blankety blank cheque-book and pen?

(more seriously, if this has to happen, then as I have said before, it should be in response to accrued benefits during the last 7 years or so of extravagance - in time before this beter pension provision really did compensate for lower salary)

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What will existing public sector workers want in exhancge for this massive cut in pay?

Nice thing for employers in the UK, is a huge majority, even after being rattled by their union.. Know deep down final salary benefits where money for old rope and would never last (Hence few strikes)

Given the generous wages, I'd expect many in the public sector to welcome a wage freeze over a job cull! Even with the pension entitlements being lost/frozen... Many know they had it better than most.

Final salary has been dying for years, big perk with big employer risks.... Most would rather have a job than join that dole queue.

It is one of the UK's biggest strengths, that we will endure!... and thanks to Gordon... There is lots of wiggle room for cuts.

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What will existing public sector workers want in exhancge for this massive cut in pay?

Don't be silly the printers will pay for it they can pay for everything and forever!

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So to avoid default on some state liabilities the government should default on others.

What happens when there is nothing left to steal ?

Edited by realcrookswearsuits

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So to avoid default on some state liabilities the government should default on others.

What happens when there is nothing left to steal ?

default is not the same as theft - the lenders knowingly lent exchanging risk for interest. it may in future mean publuic sector workers will pay only for salary and concrete defined contribution pensions, which might be a good thing.

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The average pension in the NHS is £3800 / pa.

The private sector pensions were the envy of the World until Brown removed the tax breaks. Then insurance companies and private businesses plundered the funds.

Workers in the private sector felt envious that public sector pensions still had value, so started to systematically attack them.

It seems grossely unfair that public sector pensions should be reduced just because private funds have been appropriated by un-regulated capitalists IMO. We have a race to the bottom situation. 'I don't have a pension - so why should you?' scenario.

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It seems grossely unfair that public sector pensions should be reduced just because private funds have been appropriated by un-regulated capitalists IMO. We have a race to the bottom situation. 'I don't have a pension - so why should you?' scenario.

but that isn't the reason. it's because the state is virtually bankrupt. it all seems grossly unfair. there are venal people involved. the greed of the bankers is indeed breathtaking.

but the deficit is much larger than the bankers bailout costs.

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They do not need to take a pay cut they are all so skilled and desireable as employees that they will just leave and take up better paid positions in the private sector. Or they will start businesses especially if the government make NI concessions for the first ten employees, they will be minting it.

Are you sure they won't just down tools and stamp their feet and set fire to things until they get a pay rise(freshly printed money) at that?

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Are you sure they won't just down tools and stamp their feet and set fire to things until they get a pay rise(freshly printed money) at that?

this isn't the steelworkers or the miners you know

do you think they even know how to set fire to anything?

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It seems grossely unfair that public sector pensions should be reduced

If I was in the P/S I'd be hopping mad.

The governments past effectively said, "you can't be trusted to save for your retirement, so we'll force you to pay X% of your salary into a pension that we will guarantee for you".

So everybody diligently paid.

Did the government invest the money? No. Did they even save the money? No.

The government spent your money in the belief that they'd just get some other poor idiot to pay further down the line.. talk about genius!

Problem is, they don't have enough money coming in to pay you now, and they already spent the money you paid in.

Would you rather have your pension cut, or would you rather be paid in devalued currency? That appears to be the choice.

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If I was in the P/S I'd be hopping mad.

The governments past effectively said, "you can't be trusted to save for your retirement, so we'll force you to pay X% of your salary into a pension that we will guarantee for you".

So everybody diligently paid.

Did the government invest the money? No. Did they even save the money? No.

The government spent your money in the belief that they'd just get some other poor idiot to pay further down the line.. talk about genius!

Problem is, they don't have enough money coming in to pay you now, and they already spent the money you paid in.

Would you rather have your pension cut, or would you rather be paid in devalued currency? That appears to be the choice.

Yep - a notional fund. Doesn't actually exist. Pretty smart with respect to the Government, because war could actually wipe out the countrys assets.

If the money had been invested, the fund now, would be so massive that it would destabalise economies.

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PS I should offer a hat-tip to Zero Hedge for the analysis on Britain being targeted for £3bn of “shorts” in the CDS market, which you can find towards the bottom of the column.

****** me, did I just see ZeroHedge being attributed & linked to from the Telegraph?!?!?!?!!?!?!!?

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Guest sillybear2

This guy ignores the fact the government can just rig the RPI and lie about the true level of inflation, this is precisely what Argentina did to escape the real value of its indexed linked bonds and obligations. Real inflation = 15%, RPI = 5%, fuddruck them for 10% and run it at that level for two or three years.

Edited by sillybear2

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The private sector pensions were the envy of the World until Brown removed the tax breaks. Then insurance companies and private businesses plundered the funds.

Workers in the private sector felt envious that public sector pensions still had value, so started to systematically attack them.

It seems grossely unfair that public sector pensions should be reduced just because private funds have been appropriated by un-regulated capitalists IMO. We have a race to the bottom situation. 'I don't have a pension - so why should you?' scenario.

Actually, in the late 90's, financial advice was widely given in the press, Telegraph, Mail on Sunday from my readings that if you were a well paid director in a final salary scheme you should remove your share, and transfer the money into a private scheme. This had a disproportionately large impact on the existing scheme as the transfer values for high earners would be massive, and as such those remaining in the scheme had less available to them. Remember the fees to arrange this are prohibitive unless you earn massively, and it is the high earners who sign the cheque which pays the actuary who determines the transfer value.

The tax change, IMHO is fairly insignificant. Any financial company should be able to produce returns even if they are taxed, however over teh last 10 years the figures seem to be flat or downwards. Gordon is a handy scapegoat for the underperformance of these "Masters of the Universe", i mean they do tell us that investments can go up or down. And with that they can snort all our savings and it is all Gordon (and our) fault.

Consider also the removal of the earnings cap on final salary schemes (c2007), this now means that the higher earners are able to claim the same proportion as the cleaner. Ao the scheme is again damaged in favour of the management.

However the race to the bottom is spot on. It would be much more sensible to fight to raise your own situation than degrade anothers.

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They do not need to take a pay cut they are all so skilled and desireable as employees that they will just leave and take up better paid positions in the private sector. Or they will start businesses especially if the government make NI concessions for the first ten employees, they will be minting it.

Public sector employes "so skilled and desirable"?! I take it you don't work for a FTSE company, I can safely tell you the opinion of those recruiting is not yours!!

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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