opt_out Posted February 16, 2023 Share Posted February 16, 2023 5 hours ago, kzb said: How much is that increase in cash terms? (At the bottom end, inflation probably exceeds 16.8%.) £168pw to £197pw Quote Link to comment Share on other sites More sharing options...
onlooker Posted February 16, 2023 Share Posted February 16, 2023 5 hours ago, opt_out said: Well, my old man paid his stamp, and today he got his (inflation busting) 16.8% state pension increase ! From £168pw to £197pw. I was expecting it to be 10.1% The reason: part of it is the difference between 2 big numbers (Pre 97 additional state pension -Contracted out Deduction) and the Pre97 part went up 10% but the COD only went up 3%. Sorry to be slow, but can you explain how this has come about? He has SERPS from before 1997? But why is the increase so large? Quote Link to comment Share on other sites More sharing options...
bearishonhouses Posted February 16, 2023 Share Posted February 16, 2023 On 15/02/2023 at 05:57, spyguy said: One, Brown levelled up public setcor to match the private sector. Two, Ive no issue with publc setcors - thats what the job says. However - they are not funded. Thast the problem. Average public sector pension will cost 40% of salary. There is no money being set aside. There neesd to be a public pension pot, ivnestign in idnex linked bond, just liek the BoE does. That way, youd get a true cost of public services ratehr than a large unfuinded tax on future tax payers. If you want to get an estimate of what proportion of salary is required to fund a pension see explanation below: You can alter the model to put in your own assumptions about life expectancy; desired pension as percentage of salary; real rate of return on investments (pension assets), age of retirement; age at which you start saving. Quote Link to comment Share on other sites More sharing options...
kzb Posted February 17, 2023 Share Posted February 17, 2023 3 hours ago, opt_out said: £168pw to £197pw If there is no further help with energy bills after March, this increase will likely be entirely eaten up by the gas/electricity and council tax increases. Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 17, 2023 Share Posted February 17, 2023 8 hours ago, bearishonhouses said: If you want to get an estimate of what proportion of salary is required to fund a pension see explanation below: You can alter the model to put in your own assumptions about life expectancy; desired pension as percentage of salary; real rate of return on investments (pension assets), age of retirement; age at which you start saving. Theres an easier way. Defence orgs are semi private public, with a CS pension. https://des.mod.uk/on-boarding/civil-service-pension-choices/ What is the regular employer contribution? Between 26.6 and 30.3%. Please note that this is the average employer contribution made to the Civil Service Pension Scheme. Actual employer contributions depend on your salary banding. How much will I pay? Between 4.6% and 8.05% depending on earnings. In simple terms ,for the higher (40k+) jobs employee pays 10%, employer pays 30. The reality is for public sector jobs where the majority are women (teaching, NHS) the funding needs to be 50%-60%. Th is one of reasn why Gioit accelerated the 65 ->? 67 retirement age. Theres a *huge* amount of funded pension liabilities hitting UKGOV. And thers just not been the economic growth/tax to fund it. Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 17, 2023 Share Posted February 17, 2023 DWP give a nice stats page - https://www.gov.uk/government/statistics/dwp-benefits-statistics-february-2023/dwp-benefits-statistics-february-2023 Jobseeker’s Allowance - 89,000 Must be iin for a anotehr year of budget surpluses .... Quote Link to comment Share on other sites More sharing options...
Will! Posted February 17, 2023 Share Posted February 17, 2023 58 minutes ago, spyguy said: DWP give a nice stats page - https://www.gov.uk/government/statistics/dwp-benefits-statistics-february-2023/dwp-benefits-statistics-february-2023 Jobseeker’s Allowance - 89,000 Must be iin for a anotehr year of budget surpluses .... 9.1 million people of working age claiming benefits. That's a lot of people. Quote Link to comment Share on other sites More sharing options...
kzb Posted February 17, 2023 Share Posted February 17, 2023 4 hours ago, spyguy said: Theres an easier way. Defence orgs are semi private public, with a CS pension. https://des.mod.uk/on-boarding/civil-service-pension-choices/ What is the regular employer contribution? Between 26.6 and 30.3%. Please note that this is the average employer contribution made to the Civil Service Pension Scheme. Actual employer contributions depend on your salary banding. How much will I pay? Between 4.6% and 8.05% depending on earnings. In simple terms ,for the higher (40k+) jobs employee pays 10%, employer pays 30. The reality is for public sector jobs where the majority are women (teaching, NHS) the funding needs to be 50%-60%. Th is one of reasn why Gioit accelerated the 65 ->? 67 retirement age. Theres a *huge* amount of funded pension liabilities hitting UKGOV. And thers just not been the economic growth/tax to fund it. I don't get the massive problem. The CS will have worked out what contributions are needed and set them accordingly. As a rough estimate, say a person works 44 years and survives in retirement for 22 years. They get 50% of salary as a pension. Assume staff numbers and real incomes stay constant and there are no investments. That means you need 25% contributions to fund the pensioners. So 40% contributions should cover it. QUESTION: you are not one of these people who think that a final salary pension means you get your final salary as a pension are you? Quote Link to comment Share on other sites More sharing options...
kzb Posted February 17, 2023 Share Posted February 17, 2023 13 hours ago, onlooker said: Sorry to be slow, but can you explain how this has come about? He has SERPS from before 1997? But why is the increase so large? This Contracted Out Deduction calculation is not explained anywhere. Even the benefits charities don't explain the details of the calculation. You have to believe what the pension service tells you. I guess this is intentional, because in future it will all be based on social credit. They want it to be a black box. Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 17, 2023 Share Posted February 17, 2023 1 hour ago, kzb said: I don't get the massive problem. The CS will have worked out what contributions are needed and set them accordingly. As a rough estimate, say a person works 44 years and survives in retirement for 22 years. They get 50% of salary as a pension. Assume staff numbers and real incomes stay constant and there are no investments. That means you need 25% contributions to fund the pensioners. So 40% contributions should cover it. QUESTION: you are not one of these people who think that a final salary pension means you get your final salary as a pension are you? Imagibe you do to Tescos - or Waitrose - and spend ~200/m of food. You carry on doign this for 30y. Then, 30y later, Mr Waitrose knocks on your door and says - Sorry, we unercharged you by 500k. Pay up. But If I knew that Id have never shopped at Waitose! The cost of pension have to be acocunted./charged in the year the service occurs. Large parts of the public sector only eixst due to some elaborate compariisons which shows they offer better value/cheaper than the private sector. The reality is that the cost of publci serces are a good ~50%.miore than billed. The actual cost for pension is not being accounted too. Equally, they dontaccoutn for the cost of nuts sick leave - its common to come across people in the public sector who take 6 months paid sick every year. No. Im not someone who thinks a final slary give you a final salary. These are define benefits pension where the benefits accrue at whatever rate the penson accrues Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 17, 2023 Share Posted February 17, 2023 40% contribution *WOUDL* have convred the cost - if they funded the pension from the start raterh than the 10%/10% However, the ppublic sector is only bothering to wake up to the cost fo DB penson ~20y after the private sector. Tghe reason forthis is the genius of Brown, and his lazer like fouc of growth was expecting th UK eocnomy to grow ~4% a year, theowing off wads of tax. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted February 17, 2023 Share Posted February 17, 2023 1 hour ago, kzb said: This Contracted Out Deduction calculation is not explained anywhere. Even the benefits charities don't explain the details of the calculation. You have to believe what the pension service tells you. I guess this is intentional, because in future it will all be based on social credit. They want it to be a black box. There's information about the COD here: https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet For the period 1978-1997 it's equal to your Guaranteed Minimum Pension (GMP), the calculation of which is set out in legislation. But it is VERY complex. We had to do one by hand as new graduates just to prove it can be done, but it took about an hour to do. Obviously people like you prefer to assume it's all a conspiracy to hoodwink you, rather than being set out in primary legislation, but that's up to you. Quote Link to comment Share on other sites More sharing options...
dpg50000 Posted February 17, 2023 Share Posted February 17, 2023 3 hours ago, spyguy said: Equally, they dontaccoutn for the cost of nuts sick leave - its common to come across people in the public sector who take 6 months paid sick every year. Spyguy in talking utter boll*cks again shocker...... Quote Link to comment Share on other sites More sharing options...
Sackboii Posted February 17, 2023 Share Posted February 17, 2023 Just now, dpg50000 said: Spyguy in talking utter boll*cks again shocker...... Well it's something I've also seen so can't be that boll*cksy...... Quote Link to comment Share on other sites More sharing options...
dpg50000 Posted February 17, 2023 Share Posted February 17, 2023 1 minute ago, Sackboii said: 2 minutes ago, dpg50000 said: Spyguy in talking utter boll*cks again shocker...... Well it's something I've also seen so can't be that boll*cksy...... You might have seen it (I've seen it, both in public and private sector) but it's not common, which Spyguy claims it is. Quote Link to comment Share on other sites More sharing options...
Sackboii Posted February 17, 2023 Share Posted February 17, 2023 Just now, dpg50000 said: You might have seen it (I've seen it, both in public and private sector) but it's not common, which Spyguy claims it is. Fair point, well made. I've seen it far more often in public sector though. Quote Link to comment Share on other sites More sharing options...
kzb Posted February 17, 2023 Share Posted February 17, 2023 3 hours ago, scottbeard said: There's information about the COD here: https://www.gov.uk/government/publications/new-state-pension-if-youve-been-contracted-out-of-additional-state-pension/the-new-state-pension-transition-and-contracting-out-fact-sheet For the period 1978-1997 it's equal to your Guaranteed Minimum Pension (GMP), the calculation of which is set out in legislation. But it is VERY complex. We had to do one by hand as new graduates just to prove it can be done, but it took about an hour to do. Obviously people like you prefer to assume it's all a conspiracy to hoodwink you, rather than being set out in primary legislation, but that's up to you. Well, thanks for that. A bit of light reading for later. I hope I don't find that I am not entitled to full new state pension, despite being told that I am. Quote Link to comment Share on other sites More sharing options...
kzb Posted February 17, 2023 Share Posted February 17, 2023 3 hours ago, spyguy said: 40% contribution *WOUDL* have convred the cost - if they funded the pension from the start raterh than the 10%/10% However, the ppublic sector is only bothering to wake up to the cost fo DB penson ~20y after the private sector. Tghe reason forthis is the genius of Brown, and his lazer like fouc of growth was expecting th UK eocnomy to grow ~4% a year, theowing off wads of tax. They've been ramping up the contribution rates and reducing the pension benefits for many years now. Any shortfall to be made up from future taxes will be pretty small. You're getting worked up over nothing. Quote Link to comment Share on other sites More sharing options...
captainb Posted February 17, 2023 Share Posted February 17, 2023 3 hours ago, kzb said: They've been ramping up the contribution rates and reducing the pension benefits for many years now. Any shortfall to be made up from future taxes will be pretty small. You're getting worked up over nothing. Back in the real world, 2.6 trillion undunded liability for public sector pensions so more than gdp https://www.thetimes.co.uk/article/public-sector-pensions-debt-is-a-timebomb-that-is-simply-being-ignored-l6wjj98gr#:~:text=In the ten years to,106 per cent of GDP. Quote Link to comment Share on other sites More sharing options...
kzb Posted February 17, 2023 Share Posted February 17, 2023 1 minute ago, captainb said: Back in the real world, 2.6 trillion undunded liability for public sector pensions so more than gdp https://www.thetimes.co.uk/article/public-sector-pensions-debt-is-a-timebomb-that-is-simply-being-ignored-l6wjj98gr#:~:text=In the ten years to,106 per cent of GDP. It's not more than GDP because you are comparing 1 year of GDP with decades of pension pay outs. Not the same. As I said, the bulk of the unfunded pensions will be paid from ongoing members' contributions in the future. We have a constantly increasing population and an increasing workforce. Two million more on the payroll since the 2016 referendum. Quote Link to comment Share on other sites More sharing options...
captainb Posted February 17, 2023 Share Posted February 17, 2023 2 minutes ago, kzb said: It's not more than GDP because you are comparing 1 year of GDP with decades of pension pay outs. Not the same. As I said, the bulk of the unfunded pensions will be paid from ongoing members' contributions in the future. We have a constantly increasing population and an increasing workforce. Two million more on the payroll since the 2016 referendum. But you understand...that the whole economy can't just go on plugging public sector pensions contributions.. the nazi Germany war machine was about as close as possible to 100% of gdp on one purpose and that wasn't there at 100%> A 100% of gdp unfunded liability takes into account future contributions and pay outs.. hence the net liability. It's huge. Quote Link to comment Share on other sites More sharing options...
Confusion of VIs Posted February 17, 2023 Share Posted February 17, 2023 5 minutes ago, captainb said: But you understand...that the whole economy can't just go on plugging public sector pensions contributions.. the nazi Germany war machine was about as close as possible to 100% of gdp on one purpose and that wasn't there at 100%> A 100% of gdp unfunded liability takes into account future contributions and pay outs.. hence the net liability. It's huge. Not sure where you are getting that from. The last time the government looked into this they looked affordable. According to forecasts in Lord Hutton's report, the amount spent on public sector pensions is projected to fall gradually to about 1.4% of GDP in 2059-60, from a high of 1.9% in 2010-11. Quote Link to comment Share on other sites More sharing options...
14stFlyer Posted February 17, 2023 Share Posted February 17, 2023 33 minutes ago, kzb said: We have a constantly increasing population and an increasing workforce. Until we don’t. Quote Link to comment Share on other sites More sharing options...
captainb Posted February 17, 2023 Share Posted February 17, 2023 (edited) 22 minutes ago, Confusion of VIs said: Not sure where you are getting that from. The last time the government looked into this they looked affordable. According to forecasts in Lord Hutton's report, the amount spent on public sector pensions is projected to fall gradually to about 1.4% of GDP in 2059-60, from a high of 1.9% in 2010-11. https://www.pensions-expert.com/DB-Derisking/Public-sector-pension-liabilities-break-2tn-with-16-surge?ct=true Also daily mail etc but FT driven press probably better! DT behind paywall also readable https://www.telegraph.co.uk/pensions-retirement/news/prime-minister-must-confront-excessive-taxpayer-guaranteed-pensions/ Edited February 17, 2023 by captainb Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 18, 2023 Share Posted February 18, 2023 13 hours ago, dpg50000 said: Spyguy in talking utter boll*cks again shocker...... The local health trusts breaks down sick leave by job classification. The nurses and clerical staff take the most - averages 20 odd shifts a year. A shuft is same as 1.59-5 days. Thats the average. A friend who works there states that theres a hard core who take the full 6 months year in, year out. I sued to school guvnor. the sic/absence in the school was shocking. As a whole public sector sick leaves runs 3x - 4x the rate in the private sector. Quote Link to comment Share on other sites More sharing options...
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