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Public Sector Pensions Discussed On The Bbc!

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Seems well balanced and something needs to be done. I do wish people wouldn't shoot down everyone and anyone that tries to publise the issue.

I dislike the way they try to pin this on Thatcher as well, people have known for years that this is a major problem but no-one has done anything about it, it is all their fault.

http://www.bbc.co.uk/blogs/daveharvey/2010/09/scrap_public_pensions_says_pen.html

"Scrap Public Pensions", says Pensions Guru...

Dave Harvey | 09:50 UK time, Wednesday, 8 September 2010

It was the battle Mrs Thatcher ducked.

"Leave it for another government", the former PM was reported to murmur, when presented with a civil service dossier marked "Public Sector Pensions."

The Iron Lady, famed for relishing a fight with miners or Argentinians, flinched when it came to dinner ladies' nest eggs.

Mark Dampier, Head of Research at Hargreaves Lansdown in Bristol

Well, now a man has picked up the dossier she dared not open. A man respected throughout the City of London for his financial savvy. As it happens, a rather affable man who doesn't usually go looking for trouble.

"I'm afraid my unpopular measure is simply, we must stop public pensions now, and replace them with private pension plans."

Mark Dampier is Head of Research for Hargreaves Lansdown, the massively successful investment brokers based in Bristol. The firm recently reported an 18% rise in pre-tax profits, they've signed up 48,000 new clients and now look after £17.5bn of people's money. So these people understand money.

Much of their expertise is in pensions or other ways of saving for your retirement. And Mark Dampier has long banged on about the need for more people to save. Never stops cajoling journalists like me to encourage youngsters to think about the dark day the pay check stops coming and they still have bills to pay.

So Mr Dampier is not "anti-pension". Far from it. What's he got against special pensions for firefighters and French teachers then, bin men and brigadiers?

You can watch his whole argument here, if you like, as he sets it out on a special Points West Debate on the Spending Review, to be broadcast on Thursday evening, 9 Sept, BBC One, at 10:35. It will also be on the iPlayer, here.

I was at the recording, and I can tell you Mr Dampier didn't go down well. A teacher accused him of "raiding the poor to rescue the country from the mistakes of rich bankers". Council union people asked him if he'd like to work for twelve grand a year, and then have a fat cat steal his pension. A policeman, of 50, said millions of public servants like him had worked unstintingly in the national interest, and didn't deserve to be treated like this.

It's a lively debate, ahead of its time, and well worth watching.

The Points West Debate on Spending Cuts, filmed in Filton College, north of Bristol

"I wasn't surprised at the reaction," Mark Dampier told me afterwards, "but if anything it makes me more convinced."

Now of course he's not arguing teachers and nurses should be left with nothing, nor that people in their 50s should have the promised pension ripped from them just as they reach retirement. Future staff, he says, should have the same pensions as everyone else in the private sector, no more and no less.

What struck me was that this is an argument where the two sides pass like ships in the night. The public sector reaction is fueled by understandable emotion. Betrayal, anger, envy are everywhere. But Mr Dampier's argument is simply cold financial logic.

In 2008-9 the Treasury paid out £13,387m to NHS Pensioners. It was over a tenth of the total NHS budget of £119bn. (You can see the figures for yourself here , half way down page 6). Since one in four public sector workers are in the NHS, a rough total for the national pension bill for retired government staff would be in the order of £50bn.

The point is, it's a lot of money. And public sector pensions are much more generous than private ones. Here's how Mark Dampier explains that:

"Take for example a nurse earning £25,000 a year. Currently she pays 6.5 per cent of her salary towards her pension - that's £1,600 a year. We taxpayers then promise her a further 14 per cent on top. Overall, £3,500 goes towards her pension each year.

Then take someone working in the private sector, a shop worker perhaps, also on £25,000 a year. On average employees like this pay six per cent of their salary towards a pension - equating to just fifteen hundred pounds a year - less than half what the nurse receives. How can that be right?"

Will his radical plan ever happen? That depends on a political calculation. Teachers unions, council unions, police officers and nurses can all be relied on to oppose change, perfectly understandably. But for every public sector worker in the UK, four people work for private firms.

So for every person furious at Mr Dampier's proposal, there will be four people who pay the bill he's trying to cut.

He know's it is unpopular, possibly brutal. But is there an option?

The rest of this argument is for you. Have your say, then come back and read what others say. Mark Dampier himself will read this page, and respond. I know it's an emotive issue. In 20 years in journalism, I've never reported a proposal Mrs T considered too hot to touch. Over to you then...

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Seems well balanced and something needs to be done. I do wish people wouldn't shoot down everyone and anyone that tries to publise the issue.

Looks like a current BBC 'theme' - I thought this Paxman special was quite fascinating - not a word normally

associated with Pensions!

Newsnight

Real tension amidst the gallows humour - everyone (apart from the 'folded arms' bloke) could see there is not enough in the pot and seemed torn between trying to pull together and descending into conflict.

The folded arms bloke was interesting - he had plannned for his retirement, paid his contribs and was damn well expecting his dues. Where his dues were coming from didn't seem to cross his mind.

Also remarkable was the whoopie on his yacht discussing his larks at the Marina bar in one breath, and the problem his son will have paying off his student loan in the next.

He genuinely didn't seem to connect the 2 in his mind.

Its pretty clear that he has a yacht by virtue of diligently avoiding spending money on anyone but himself, including his son!

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I think all the politicians over the last 20 years are to blame for this equally.

I can understand you needed the pension incentive as a carrot to dangle infront of people to get them to do some

of the public sector jobs in the past. You know, the time when we had factories in this country and people went down mine

shafts etc, rather than everyone working the long con in the city.

20 years ago the government should have closed shop and said "that's it, we are going out of the public sector pension

business, no new people will be allowed into the scheme, you are on your own".

People would have still took the jobs if they paid the same or less wage as the private sector, for the job security.

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You're kidding right? a shop worker on 25K, people in retail are usually on min wage of just a slight bit above it.

That is true, but it doesn't mean there are no shop workers on £25K.

Timpson 'members' are on more than that, as are a lot of Waitrose staff.

The OP point in not that all shop workers are on the breadline, but rather than they will be when they retire.

Edited by xux42

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You may care to notice that a lot of the anti-public sector pension debate is being driven by companies involved in providing private pensions and annuities...

...could it be that they have something to gain from an end to public sector pension provision or have already gained from companies pulling their own pension plans?

The whole deal about pensions being unaffordable is mainly being driven by interested parties which are seeking the billions of extra investment income which will come their way should public-sector pension provision be scaled back. There is already a large lobby group pushing for compulsory private pension provision to supplement/ replace state pension provision.

Why do you think the media have been building consenus on this for so long, who will benefit most?

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Seems well balanced and something needs to be done. I do wish people wouldn't shoot down everyone and anyone that tries to publise the issue.

I dislike the way they try to pin this on Thatcher as well, people have known for years that this is a major problem but no-one has done anything about it, it is all their fault.

http://www.bbc.co.uk/blogs/daveharvey/2010/09/scrap_public_pensions_says_pen.html

You are joking, Thatcher is personally responsible for everything that might be wrong with the UK (and probably World) right now and will continue to be for years to come.

What I was enjoying the other day was the extensive BBC news reports about the cuts made by the current Government which are leaving schools in poor states of repairs - failing to investigate where all the money the previous government had spunked on education had ended up.

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What I was enjoying the other day was the extensive BBC news reports about the cuts made by the current Government which are leaving schools in poor states of repairs - failing to investigate where all the money the previous government had spunked on education had ended up.

Quite. I'm stunned by how it's the conservatives fault for installing this new HMRC tax computer system 4 months before they came into power...

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Quite. I'm stunned by how it's the conservatives fault for installing this new HMRC tax computer system 4 months before they came into power...

I guess the champagne wasn't flowing in White City like it was in 1997.

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You may care to notice that a lot of the anti-public sector pension debate is being driven by companies involved in providing private pensions and annuities...

...could it be that they have something to gain from an end to public sector pension provision or have already gained from companies pulling their own pension plans?

The whole deal about pensions being unaffordable is mainly being driven by interested parties which are seeking the billions of extra investment income which will come their way should public-sector pension provision be scaled back. There is already a large lobby group pushing for compulsory private pension provision to supplement/ replace state pension provision.

Why do you think the media have been building consenus on this for so long, who will benefit most?

Spot on.

Funny how everyone cries VI when it is something that they disagree with :)

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You may care to notice that a lot of the anti-public sector pension debate is being driven by companies involved in providing private pensions and annuities...

...could it be that they have something to gain from an end to public sector pension provision or have already gained from companies pulling their own pension plans?

Hadn't thought of that.

Surely we should be aiming for a decent pension for everyone - capping excessively generous private and public deals and uplifting poor schemes.

Looking for ways for older people to be more active and healthy while removing the focus on prolonging lives using public money would help balance the books too.

Its the lack of contructive, selfless activity and too much individual nest feathering that gets me down.

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The problem is the deals were made and the workers kept their side of the deal.

If you want to retrospectively change those contracts, you have to pull out of all the EU employment, contract and human rights laws.

Good luck getting the Lib Dems to vote to pull out of the EU.

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going on trade deficit figures, sticky house prices, and sticky public sector pensions - simply loks like the pound isgoing to take a big fall at ome point. really big. and public pensions were attached to CPI inflation just in time to lose out...

Edited by Si1

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The problem is the deals were made and the workers kept their side of the deal.

If you want to retrospectively change those contracts, you have to pull out of all the EU employment, contract and human rights laws.

Good luck getting the Lib Dems to vote to pull out of the EU.

These deals were crooked to begin with. Contracts were made, promising to pay this money. But many of those who have this obligation to pay these pensions, were not even born at the time that the contracts were set up.

You also have to factor in the fact that there were implicit assumptions on the contracts, that people would only live so long in retirement. They are living much longer, so those who werent even born when the deals were made, are going to have to pay even more than they were supposed to.

Contracts can end in bankruptcy, when those who are obliged to pay, cant pay. These pensioners who were promised all this money from those who werent even born to support them in their pensions, have a choice. They can do the maths, accept that they are taking out way more than they put in, and accept reductions in their pension benefits. Or they can fight, protest like hell, make those whom they have cast into debt servitude merely by being born late pay for these obligations, and then after the state has collapsed and been forced to renege on unpayable obligations, consider the foolhardyness of their greed as they die in absolute poverty.

Time for Public sector workers to get real. Time for the government to end public sector pensions for new workers, end contributions from existing workers, and time to pare back the benefits of those working and those retired to affordable levels.

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"Take for example a nurse earning £25,000 a year. Currently she pays 6.5 per cent of her salary towards her pension - that's £1,600 a year. We taxpayers then promise her a further 14 per cent on top. Overall, £3,500 goes towards her pension each year.

This isn't the problem though.

The problem is that what the nurse eventually gets in her pension is nothing whatsoever to do with what has gone into her pension in the form of her payments or taxpayers' topup payments.

That's because it's a final salary pension, which is miraculously index-linked. So it doesn't matter the amount of £s she's contributed.

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The problem is the deals were made and the workers kept their side of the deal.

If you want to retrospectively change those contracts, you have to pull out of all the EU employment, contract and human rights laws.

You need to watch more consumer protection tv programmes.

You would know to trust nobody - and that something that sounds too good to be true is probably a con!

Edited by Caveat Mortgagor

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I think all the politicians over the last 20 years are to blame for this equally.

I can understand you needed the pension incentive as a carrot to dangle infront of people to get them to do some

of the public sector jobs in the past. You know, the time when we had factories in this country and people went down mine

shafts etc, rather than everyone working the long con in the city.

20 years ago the government should have closed shop and said "that's it, we are going out of the public sector pension

business, no new people will be allowed into the scheme, you are on your own".

People would have still took the jobs if they paid the same or less wage as the private sector, for the job security.

They were running on OIL money income - Wot saved Thatcher & kept her in power far longer than she should have been, till they forcibly 'retired' her (as she went power-mad)!

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You may care to notice that a lot of the anti-public sector pension debate is being driven by companies involved in providing private pensions and annuities...

...could it be that they have something to gain from an end to public sector pension provision or have already gained from companies pulling their own pension plans?

The whole deal about pensions being unaffordable is mainly being driven by interested parties which are seeking the billions of extra investment income which will come their way should public-sector pension provision be scaled back. There is already a large lobby group pushing for compulsory private pension provision to supplement/ replace state pension provision.

Why do you think the media have been building consenus on this for so long, who will benefit most?

Good luck to them on that one. Pensions etc are widely perceived to be yet another City scam, and more likely the money will go into pwoperdee instead.

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Contracts can end in bankruptcy, when those who are obliged to pay, cant pay. These pensioners who were promised all this money from those who werent even born to support them in their pensions, have a choice.
  1. They can do the maths, accept that they are taking out way more than they put in, and accept reductions in their pension benefits.

  2. Or they can fight, protest like hell, make those whom they have cast into debt servitude merely by being born late pay for these obligations.

I'm betting on option 2.

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The vast majority of retired people living in the nice twee areas are unemcumbered ex-public sector workers.......could it be a growth area?...they don't have to worry about losing their jobs, wage freezes, below inflation pay rises or interest rate rises on their mortgages that could wipe out a good part of their income.

OK you could say that they lived in times with higher interest rates (but low house prices), they could say their savings are not doing as good as they did....but they have a secure indefinite income that is covered by inflation....more than the working people of today can boast about.

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Seems well balanced and something needs to be done. I do wish people wouldn't shoot down everyone and anyone that tries to publise the issue.

I dislike the way they try to pin this on Thatcher as well, people have known for years that this is a major problem but no-one has done anything about it, it is all their fault.

http://www.bbc.co.uk/blogs/daveharvey/2010/09/scrap_public_pensions_says_pen.html

So given that my NHS salary is around 1/2 the equivalent in the private sector, I don't really think staff will stand for having their pensions removed - the only actual benefit left for working in the public sector, now that the other supposed benefit of job security has disappeared.

Public sector workers have to make up for their diabolical salaries somehow if there are no other benefits over working in the private sector. I'll guess one of the following:

1) Many more public sector BTL landlords doing some 'pension planning'

2) Move public sector jobs to the private sector. Healthcare is twice as expensive in the USA as the UK and is less good according to WHO (lower life expectancy, higher infant mortality etc). Much of the extra cost to the public goes on salaries 2.5x those in the UK

3) Much of the real talent in the public sector packs up and does something different (abroad perhaps) leaving education and healthcare services in ruins, with the only alternative to pay through the nose to do those things privately.

The choice for the public is there. Cut public sector pensions to equal the private sector and you will either have to start paying private sector salaries, or end up with services which are complete rubbish.

Or, you could have a good hard look at where much of your money actually went (propping up banks, so that they could go back to paying massive bonuses) and decide whether you think maintaining financial services at this level is more important than keeping health and education services going.

Good luck.

Edited by Analysis

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So given that my NHS salary is around 1/2 the equivalent in the private sector, I don't really think staff will stand for having their pensions removed - the only actual benefit left for working in the public sector, now that the other supposed benefit of job security has disappeared.

you're the chap (medical scientist of some ilk as I have got this wrong in the past?) who missed his calling as a city wizzkid aren't you. Perhaps you could change your name from Analysis (as you have precious little of that) and replace it with 'Entitlement'. :)

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You may care to notice that a lot of the anti-public sector pension debate is being driven by companies involved in providing private pensions and annuities...

...could it be that they have something to gain from an end to public sector pension provision or have already gained from companies pulling their own pension plans?

The whole deal about pensions being unaffordable is mainly being driven by interested parties which are seeking the billions of extra investment income which will come their way should public-sector pension provision be scaled back. There is already a large lobby group pushing for compulsory private pension provision to supplement/ replace state pension provision.

Why do you think the media have been building consenus on this for so long, who will benefit most?

Today's public service pensioners are being paid out of current expenditure. There has been no provision made for the current pensioners, nor has there been any provision made for when today's public servants retire. It's a classic example of today's generation robbing tomorrow's. With the build up of public debt, the government is unlikely to be able to meet all of these commitments without a massive tax burden.

The question, is whether the public servants are making a fair contribution for the pension benefits that they will receive. This isn't a matter of some city scam. This is whether the private sector workers, who struggle to make ends meet on a day to day basis, who are making little or no provision for their own retirement, because they can't afford it, should these private sector workers fund gold plated pensions for the public sector.

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So given that my NHS salary is around 1/2 the equivalent in the private sector, I don't really think staff will stand for having their pensions removed - the only actual benefit left for working in the public sector, now that the other supposed benefit of job security has disappeared.

Public sector workers have to make up for their diabolical salaries somehow if there are no other benefits over working in the private sector. I'll guess one of the following:

1) Many more public sector BTL landlords doing some 'pension planning'

2) Move public sector jobs to the private sector. Healthcare is twice as expensive in the USA as the UK and is less good according to WHO (lower life expectancy, higher infant mortality etc). Much of the extra cost to the public goes on salaries 2.5x those in the UK

3) Much of the real talent in the public sector packs up and does something different (abroad perhaps) leaving education and healthcare services in ruins, with the only alternative to pay through the nose to do those things privately.

The choice for the public is there. Cut public sector pensions to equal the private sector and you will either have to start paying private sector salaries, or end up with services which are complete rubbish.

Or, you could have a good hard look at where much of your money actually went (propping up banks, so that they could go back to paying massive bonuses) and decide whether you think maintaining financial services at this level is more important than keeping health and education services going.

Good luck.

Erm completely correct... apart from the fact that public sector salaries are also higher than private sector salaries on average.

So, actually, completely incorrect. But a C+ for trying.

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You are joking, Thatcher is personally responsible for everything that might be wrong with the UK (and probably World) right now and will continue to be for years to come.

Are you on drugs?

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  • 152 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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