Public sector pensions

[cptrayes]

I don't intend to keep repeating anything as I simply see no need to. However as it is obviously terribly important to you please do so (but just not for my benefit).

Paddy555 you are quite right. It is terribly important to me that the people who struck against changes to their pensions that will still leave them better off than almost all the people who pay their wages understand what they have done.

You clearly do not, which is a shame. Though I am pleased to hear that you did not strike.

Can I ask you what job you actually do?

 

[cptrayes]

the shop worker will certainly get winter fuel allowance. However do YOU really think it fair that YOU (obviously not me) are funding winter fuel etc for higher rate taxpayers?

I don't but it has nothing to do with your pension. The argument is that if you means test it then thousands of pensioners who need it will not apply. Unlike later generations, many current pensioners regard payments like that as charity and will not apply. Until that changes, paying it to everyone is probably as close to fair as we can get.

If you are happy to do that then I cannot see why you are unhappy about funding public sector pensions.

This comment just indicates that you are unaware of how much your pension costs and that you do not see the injustice that, unlike winter fuel payments, it is unavailable to almost anyone except a public sector worker.

Please also get your facts correct. "my union" is incorrect. Don't assume my union as I did not belong to the union. The reason for that was that I was not prepared to strike.

I apologise for the assumption.

Actually, I am almost starting to change my mind on that when I read some of the vitriol which seems to be levelled at public sector workers.

If you are intending to accuse me of vitriol please point out to me where it is in my posts and I will apologise for inadvertantly being vitriolic towards the Public Sector.

 

[perfect11s]

Your tax funds NOTHING.

Absolutely NOTHING.

Read the thread if you do not understand that.

Look ! sorry to tell
you this But if the public sector dont understand they will look at the mirror ,guardian,
or ask a labour mp or their union rep for the facts ...and not someome who lives in the real world

 

[BeesKnees]

Paddy555 you are wrong in your assumptions. If you had read the thread you would have seen that I have stated my support for the public sector. In answer to one of your questions, I did work in the public sector for 4 years ( as have several of the people on this thread questioning the strike, again something you would have seen had you read the thread fully).

So no, I don't consider my taxes going to pay for those services as a 'handout' and I'm not against the pension per se, although my expeerience showed me that many in the public sector are not valiant frontline workers, and do very little to deserve their generous pay and conditions.

I do object to people striking to keep a pension that is no longer affordable at a time when everyone is struggling and having to accept cutbacks, especially when as SantaPAws says, the adjusted pension is still very generous and will make you much better off in retirement than many of the people who funded it.

It is true that a few on here have stated very negative views of the PS, but I don't think most of us have been in any way vitriolic. We have questioned assumptions and misinformation that people supporting the strikes have made on the thread, including the idea stated by some that they fund their own pensions, and contribute to services through tax, when in reality they don't.

Far from being a silly or unhelpful argument, understanding the realities of PS financing is a fundamental part of the argument for reform. I believe that if more PS workers truly understood how their salaries and pensions are financed, instead of continuing under the illusion that they contribute, it might enable some realistic negotiation.

Instead I have been quite appalled by how little many people on this thread and the JC
one, understand about their pensions, yet they are happy to strike over it.

 

[Wundahorse]

I don't intend to keep repeating anything as I simply see no need to. However as it is obviously terribly important to you please do so (but just not for my benefit).

Couldn't agree more Paddy555,i have tried to assert the same points,but find that some people seem to believe they are self declared experts whose opinions are more valid than others without even attending to some of the salient points made.I do know exactly how my pension is funded,and how it is sustained over time,and again repeat that the members contribute to their pension with contributions from the employer,out of funds agreed for this purpose.I agree some pensions are gross because some staff earn mega bucks compared to others,and this is not right.I have only tried to defend those staff who are on comparatively low wages.I also know barely any Nurses went on strike,for the record,as we could not leave services short of staff,or compromise patient care.Some people here should try a shift on duty at A&E to appreciate how hard staff have to work during times where cutbacks are biting very hard.I have also tried to say i do appreciate how difficult things are in the private sector,but again people are very selective about what they focus on in this debate.My eldest daughter is in the private sector and has to work hard to get enough money to barely live on,and my son will be looking for work when he leaves Uni next year.It is this generation and those that follow who i really feel for.

 

[BeesKnees]

...some people seem to believe they are self declared experts whose opinions are more valid than others without even attending to some of the salient points made.

Please can you point me to the salient points that have been made? I would like to address anything I have missed.

I do know exactly how my pension is funded,and how it is sustained over time,and again repeat that the members contribute to their pension with contributions from the employer,out of funds agreed for this purpose.

What 'funds agreed for this purpose' are you meaning?

I have only tried to defend those staff who are on comparatively low wages.

Can you be more specific about which staff you mean?

Some people here should try a shift on duty at A&E to appreciate how hard staff have to work during times where cutbacks are biting very hard.

Can you explain how this point relates to the argument about pension reform?

My eldest daughter is in the private sector and has to work hard to get enough money to barely live on,and my son will be looking for work when he leaves Uni next year.It is this generation and those that follow who i really feel for.

So Wundahorse, if you see you daughter struggling to even live, do you still feel it fair that her taxes should be diverted towards paying foran unaffordable pension system, when they could go towards frontline services, or paying better salaries for those you describe as relatively low paid?

 

[Wundahorse]

So Wundahorse, if you see you daughter struggling to even live, do you still feel it fair that her taxes should be diverted towards paying foran unaffordable pension system, when they could go towards frontline services, or paying better salaries for those you describe as relatively low paid?

Public services are necessary to maintain society,and this has to be funded via taxes.If people were told they had to make provision for services that are essential,they would have to set up some funds to support this privately,so it still costs any way to live in a decent society whether it comes from private or public money.I get the strong feeling that some people would rather we provided our services entirely voluntarily.This is not a debate as the views are so polarised there will never be any consensus,even to agree to disagree.Furthermore,the media's campaign against public sector staff,has i believe,been successful,despite the fact that much of what the Daily Mail,for example reports,is based on distorted information which they dress up to appear quite sensational.

 

[cptrayes]

self declared experts whose opinions are more valid than others

The fact that public sector pensions are entirely financed by the private sector taxpayer, who does not have the same wonderful benefit themselves, is not an "opinion" - it's a fact.

without even attending to some of the salient points made.

Can you please remind me Wundahorse and I will answer you. I have not knowlingly failed to answer any point that you have made.

I do know exactly how my pension is funded,and how it is sustained over time,

It cannot be sustained over time without massive increases in taxation for the private sector workers. Can you tell me why we should pay it, when it is a benefit that we cannot hope to have ourselves and your salaries are already at par or greater?

and again repeat that the members contribute to their pension with contributions from the employer

I hope that you are not still confusing money being deducted out of your salary with who is actually providing that money. That goes for your employer's contribution too - the private sector taxpayer is your employer.

.I agree some pensions are gross because some staff earn mega bucks compared to others,and this is not right.

So do I, it goes for the private sector too. The gap between top and bottom is obscene.

I have only tried to defend those staff who are on comparatively low wages.

I have tried to defend those staff in the private sector on even lower wages who, unless you take big cuts in your pensions, face paying even more tax so that you can keep a benefit that they will never see the like of.

Some people here should try a shift on duty at A&E to appreciate how hard staff have to work during times where cutbacks are biting very hard.

I don't doubt that A&E staff do a great job, but I can't really see how much worse it is than a number of private sector jobs. If being a public sector nurse is so bad, I can't help but wonder why the vast majority of the entire nursing staff at a private hospital not 5 miles from two very major NHS hospitals with vacancies, which I visited earlier this year for 5 days in a row, 12 til 7, were foreigners on work permits?

I have also tried to say i do appreciate how difficult things are in the private sector,but again people are very selective about what they focus on in this debate.

I'm glad that you appreciate it but the point of debate was very narrow. It was about whether public sector staff were justified in striking to retain a benefit which would result in the private sector staff who fund it paying massively more in tax in the coming years.

My eldest daughter is in the private sector and has to work hard to get enough money to barely live on,and my son will be looking for work when he leaves Uni next year.It is this generation and those that follow who i really feel for.

So do I. They have been "done to" by the have-it-all-on-credit generation, the unbelievable laxity in controlling the behaviour of the banks by our elected governments, and some very greedy bankers. Nothing much to do with your pension though, which is almost all about how long we are all living.

 

[cptrayes]

Public services are necessary to maintain society,and this has to be funded via taxes.If people were told they had to make provision for services that are essential,they would have to set up some funds to support this privately,so it still costs any way to live in a decent society whether it comes from private or public money.I get the strong feeling that some people would rather we provided our services entirely voluntarily.This is not a debate as the views are so polarised there will never be any consensus,even to agree to disagree.Furthermore,the media's campaign against public sector staff,has i believe,been successful,despite the fact that much of what the Daily Mail,for example reports,is based on distorted information which they dress up to appear quite sensational.

Wundahorse no-one is suggesting that we dismantle the public sector. All we want you to do is be more reasonable about your expectations of how much money we should provide for your pensions when we cannot have a pension like it ourselves.

A number of people have given their own stories of working in the public and private sector on this forum, nothing to do with the Daily Mail, but you do not want to hear them.

Why are you trying to make this into a discussion about wiping out the Public Sector? It's not.

It's about your unaffordable and unfair pensions and what possible justification there may have been for striking to try and retain them. I'm sorry but "we work hard and do a useful job" is not a strong argument, however true it may be.

 

[Wundahorse]

The fact that public sector pensions are entirely financed by the private sector taxpayer, who does not have the same wonderful benefit themselves, is not an "opinion" - it's a fact.




Can you please remind me Wundahorse and I will answer you. I have not knowlingly failed to answer any point that you have made.




It cannot be sustained over time without massive increases in taxation for the private sector workers. Can you tell me why we should pay it, when it is a benefit that we cannot hope to have ourselves and your salaries are already at par or greater?




I hope that you are not still confusing money being deducted out of your salary with who is actually providing that money. That goes for your employer's contribution too - the private sector taxpayer is your employer.





So do I, it goes for the private sector too. The gap between top and bottom is obscene.




I have tried to defend those staff in the private sector on even lower wages who, unless you take big cuts in your pensions, face paying even more tax so that you can keep a benefit that they will never see the like of.




I dont' doubt that A&E staff do a great job, but I can't really see how much worse it is than a number of private sector jobs. If being a public sector nurse is so bad, I can't help but wonder why almost the entire nursing staff at a private hospital not 5 miles from two very major NHS hospitals with vacancies, which I visited earlier this year for 5 days in a row, 12 til 7, were foreigners on work permits?



I'm glad that you appreciate it but the point of debate was very narrow. It was about whether public sector staff were justified in striking to retain a benefit which would result in the private sector staff who fund it paying massively more in tax in the coming years.



So do I. They have been done to by the have-it-all-on-credit generation, the unbelievable laxity in controlling the behaviour of the banks by our elected governments, and some very greedy bankers. Nothing much to do with your pension though, which is almost all about how long we are all living.

Speaking for myself,and not union members i felt that the strike really should have centred on Government cutbacks in essential front-line services,and not about pensions at this stage,as more staff will lose their jobs,leaving greater gaps in the delivery of patient care,which i agree is not as good as it should be.I am much more concerned with what is going on now,and what is yet to come,all of which is more bad news for anyone needing medical care.

 

[cptrayes]

Speaking for myself,and not union members i felt that the strike really should have centred on Government cutbacks in essential front-line services,and not about pensions at this stage,as more staff will lose their jobs,leaving greater gaps in the delivery of patient care,which i agree is not as good as it should be.I am much more concerned with what is going on now,and what is yet to come,all of which is more bad news for anyone needing medical care.

I'm really glad you feel that way Wundahorse. Unfortunately it was about pensions and by striking for their pensions the Public Sector as a whole turned the Private Sector against them in a big, big way

Cuts in nurses and police worry me a lot.

 

[Wundahorse]

I realise that which is why i felt the public perception was influenced strongly by the media.At the moment there is so much going on that public sector staff,at least in the NHS, fear for their services and worry about the impact on patient care for the foreseeable future.Anyway i am of to Olympia now for the annual outing.

 

[BeesKnees]

At the moment there is so much going on that public sector staff,at least in the NHS, fear for their services and worry about the impact on patient care for the foreseeable future.

But they didn't strike about that. They struck, or supported the strike, over keeping their own benefits as high as possible. You don't need the hideous Daily Mail to spin how selfish that looks!

I'm sorry but you cannot talk about having fears for the future funding of the PS services and at the same time want vauable taxes to be diverted into your unsustainable pension scheme. It just doesn't add up.

 

[Scoutie]

I haven't looked at this post for a couple of days but it seems to go around in circles. Please could someone explain to me:

- Why the public sector pensions should not change, private sector ones already have as they are simply not affordable. What makes the public sector different and isolated from reality? I do not consider it sufficient to say that this is what we were promised, no one promised this, it is only a belief that seems to developed in recent years. Nor is a contractual issue, my pension rights are considered a benefit and are not in my terms of employment, I am highly doubtful if this is different in the public sector.

- If public sector pensions do not change who is going to fund this? There is no money, most of the world is in a economic crisis (excluding the BRICs and a few other countries), to cover this taxes will have to increase, this includes taxes paid by the public sector so the public sector will end up paying for this as will everyone else.

If we continue as we are we will run out of money like Greece, Portugal, Spain, Italy and Ireland and believe me things are a lot worse there. In a number of these countries public sector workers simply not being paid, they do not know if they have a job from one week to the next and as a result private sector business is coming to a stand still but it is this business that will keep the country afloat. These people are simply working out how to survive next week.

 

[Oliver12]

I realise that which is why i felt the public perception was influenced strongly by the media.At the moment there is so much going on that public sector staff,at least in the NHS, fear for their services and worry about the impact on patient care for the foreseeable future.Anyway i am of to Olympia now for the annual outing.

All I can say is thank goodness for the media in making us aware of the discrepancies between public and private sector pensions.

And the cynical in me is screaming that the public sector do not worry so much about cuts in services and "the impact on patient care" but about not getting annual pay increases and mega pensions. And I know so many people who work in the public sector and that is all they harp on about.

 

[paddy555]

Paddy555 you are quite right. It is terribly important to me that the people who struck against changes to their pensions that will still leave them better off than almost all the people who pay their wages understand what they have done.

You clearly do not, which is a shame. Though I am pleased to hear that you did not strike.

Can I ask you what job you actually do?

I am really sorry to disillusion you but the facts seem very simple to me. Public sector employees are aware that their employer is the government, NHS, local authority or whatever. They are aware that their salaries etc are therefore funded by the treasury ie taxation. You do not need to keep going on about this. Public sector workers know this. I appreciate it is important to you but I can assure they do know.

Many, and certainly the unions believe they should maintain their current level of pensions. Some have more moderate views. Some of those could be considered greedy. Many in the private sector would think them very greedy. Many in the public sector believe it is their entitlement ie part of their "remuneration" package. (for want of a better word) and as part of their employment they were entitled to join the pension scheme.


There are other issues involved that Wundahorse pointed out. Staff morale, fear of job losses, reductions in services, closing of offices and dreadful management to name but a few. A generally unhappy workforce. Add to the equation that their employer wants to reduce their pension and this is the situation you have.

A lot has been stated about shop assistants funding public sector pensions although on 11K pa their tax and NI contribution is not that great and they may well be in receipt of benefits themselves.

There are a lot of people who are remunerated in excess of public sector workers. The whole of the private sector are not shop assistants.

Many years ago I considered leaving the public sector and going to the private side. Some of my colleagues did and received a higher level of remuneration. I chose to stay, my pension provision being one of the reasons for this.

I disagree strongly with your notion that public sector workers do not pay tax/NI.
As I have said I understand your argument just don't think it particuarly contributes.
Personally as a taxpayer I have no problem funding public sector pensions.
My tax, as indeed does yours, helps to fund this. I feel very confident that I can say this, as even if I went along with your argument that tax paid in my public service income is not really "tax" then I pay a fair amout of tax on my other income. Just looking ahead to your next comment I can assure you that this is not derived in anyway from the public service and I can therefore be confident, at least in your eyes, that I am a PROPER taxpayer.

you can certainly ask about my job but I don't put that sort of personal information on a public forum.

 

[fburton]

If an argument can be made for reducing public sector pension provision for those who have not yet retired, is there not also an argument to claw back some - 5-10% say - of existing pensions for redistribution and/or support of those private sector pensions that have gone from adequate to inadequate through govt policy changes? No one who has worked hard all their life should suffer financial misery in their old age, and some retired PS workers seem to be living the life of Riley. Such inequality can't be considered fair, surely?

 

[perfect11s]

If an argument can be made for reducing public sector pension provision for those who have not yet retired, is there not also an argument to claw back some - 5-10% say - of existing pensions for redistribution and/or support of those private sector pensions that have gone from adequate to inadequate through govt policy changes? No one who has worked hard all their life should suffer financial misery in their old age, and some retired PS workers seem to be living the life of Riley. Such inequality can't be considered fair, surely?

Life isnt fair!! things are in a mess the goverment's credit card is maxed out!!! sorry but the truth is we all have to work a little harder and longer and be happy with less this has been reality for the private sector and now it applys to the public sector too !!!

 

[Fellewell]

If an argument can be made for reducing public sector pension provision for those who have not yet retired, is there not also an argument to claw back some - 5-10% say - of existing pensions for redistribution and/or support of those private sector pensions that have gone from adequate to inadequate through govt policy changes? No one who has worked hard all their life should suffer financial misery in their old age, and some retired PS workers seem to be living the life of Riley. Such inequality can't be considered fair, surely?

It's an interesting thought, but it would probably cost the govt more to implement those changes than the funds they'd actually recoup. And let's face it, they don't have the staff anymore

 

[cptrayes]

Public sector workers know this.

Many still do not. I work with a lot of highly quaified and highly paid and intelligent public sector workers who still think that their tax contributes to the payment of their pensions. I actually believe that the majority of public sector employees believe this. I am please to see that you realise that only the tax on your savings interest and private sector earnings actually contribute to finance the public sector.

A lot has been stated about shop assistants funding public sector pensions although on 11K pa their tax and NI contribution is not that great and they may well be in receipt of benefits themselves.

Benefits which are paid for by private sector taxation, of course, and therefore of no relevance to the discussion as to whether a shop assistant on less than 12k a year should be asked to pay more tax to fund a £30,000 a year nursing sister's 40/55ths pension, which if she nurses from 25 to 65 will give her a pension of approaching twice what that shop assistant earns for full time work.

There are a lot of people who are remunerated in excess of public sector workers. The whole of the private sector are not shop assistants.

So what? Should a vet on £50,000 a year pay additional tax to fund a nurse on £30,000 a year to get a £20,000 a year pension when they would need to build up a fund of about half a million pounds to get the same benefit? (but without early retirement for ill health, just the sack if they can't work any more).

Many years ago I considered leaving the public sector and going to the private side. Some of my colleagues did and received a higher level of remuneration. I chose to stay, my pension provision being one of the reasons for this.

Many years ago I left the public sector for a more stimulating job than public administration and took a major pay cut to do so. You made a different choice, and even after the proposed changes you will have a pension few people in the public sector can dream of, so you made the right choice.

I disagree strongly with your notion that public sector workers do not pay tax/NI.

Of course they pay it, it's on their payslip. It just means nothing that they pay it because they could equally well be paid net and there would be no difference. Unfortunately, the fact that it shows on their payslip is a major cause of the confusion in public sector workers' minds thinking that they contribute to the funding of the private sector when they don't. Your paragraph reads as if you still doubt this, but I'll take your word for it that you don't.


Paddy555 are you aware that we are not talking about taxes staying the same to fund your pensions?. We are talking about major tax increases for everyone for you to keep your pensions because there are big black holes in the finances and we are still continuing to live longer. Ironically, , because you are on a pay freeze, you will actually be truly contributing more while your pay remains frozen, because there will be a bigger deduction returned to the Treasury from a fixed amount paid out.

Can you tell me, do you really think the private sector, whose defined benefit pensions like yours were removed years ago, should pay even more for you to keep that benefit at the level you have it now, when even after the reductions proposed they are still beyond them even dreaming about?

And if so, can you tell me why? Because I'm sorry but "we work hard", "people need our work", "morale will drop if our pensions go down a bit", "there are lots of people paid more than us" and "sometimes our jobs aren't nice" don't hack it for me.

 

[cptrayes]

I can therefore be confident, at least in your eyes, that I am a PROPER taxpayer.

Paddy555 why do you make a value judgement out of this when I didn't? There is no such thing as a "proper" tax payer. There are only tax payers whose taxes fund the public sector and tax payers whose taxes do not fund the public sector and some like you who are a mix.

There is no good or bad implied in that. It's just an economic fact.

 

[Mithras]

I must admit I've never liked the business model of pensions. Seem far too risky to me to base your retirement financial wellbeing on. Better to invest your own money. Anyway, what about a radical change to pension provision?

- Much higher state pension for all. Funded by slightly higher tax directly linked to funding the state pension. If the lower paid were no longer so compelled to pay such a high proportion of their income into private pensions, they could presumably afford slightly higher tax.

- Increased Inheritance Tax. I must admit I've never understood why people are so against inheritance tax, which is paid on an estate after death and the only benefit of which is to give surviving relatives something for nothing, and income tax, which penalises you for working.

I cannot see how people coming into the workplace now, with student loans, tuition fees and unemployment are supposed to save for a pension as well. Maybe it will balance out a bit, as some people have benefitted too much from over-generous pensions. My inlaws for example, both too early retirement from public sector jobs at 53 and 57 respectively. Both live a life of quiet luxury on generous pensions, with 6 months abroad in their holiday home and 6 at home, big homes, new cars, caravans, etc.. Both retired from quite "ordinary" jobs. That can't be right when you have young people graduating with huge loans to pay off with little prospect of ever buying a house, never mind enjoying a prosperous retirement as their taxes will go to pay the more greedy people demanding unrealistic provision working right now.

 

[cptrayes]

- Much higher state pension for all. Funded by slightly higher tax directly linked to funding the state pension. If the lower paid were no longer so compelled to pay such a high proportion of their income into private pensions, they could presumably afford slightly higher tax.

Sorry Mithras, all that has happened is that fewer people paid under £20,000 a year have a private pension of any kind at all to look forward to and in any case next year they are going to be forced to put money into a NEST pension. I also think the higher tax would be huge, not slight, but I don't have the figures.

- Increased Inheritance Tax. I must admit I've never understood why people are so against inheritance tax, which is paid on an estate after death and the only benefit of which is to give surviving relatives something for nothing, and income tax, which penalises you for working.

My favourite too. I'm guessing you have no kids ? Unfortunately it would not increase the tax take, the parents would just give it away when they were still alive. It might boost the economy though!

I cannot see how people coming into the workplace now, with student loans, tuition fees and unemployment are supposed to save for a pension as well.

They are going to be forced to from 2012, with NEST pensions.

 

[Anglebracket]

I must admit I've never liked the business model of pensions. Seem far too risky to me to base your retirement financial wellbeing on. Better to invest your own money. Anyway, what about a radical change to pension provision?

- Much higher state pension for all. Funded by slightly higher tax directly linked to funding the state pension. If the lower paid were no longer so compelled to pay such a high proportion of their income into private pensions, they could presumably afford slightly higher tax.

- Increased Inheritance Tax. I must admit I've never understood why people are so against inheritance tax, which is paid on an estate after death and the only benefit of which is to give surviving relatives something for nothing, and income tax, which penalises you for working.

I cannot see how people coming into the workplace now, with student loans, tuition fees and unemployment are supposed to save for a pension as well. Maybe it will balance out a bit, as some people have benefitted too much from over-generous pensions. My inlaws for example, both too early retirement from public sector jobs at 53 and 57 respectively. Both live a life of quiet luxury on generous pensions, with 6 months abroad in their holiday home and 6 at home, big homes, new cars, caravans, etc.. Both retired from quite "ordinary" jobs. That can't be right when you have young people graduating with huge loans to pay off with little prospect of ever buying a house, never mind enjoying a prosperous retirement as their taxes will go to pay the more greedy people demanding unrealistic provision working right now.

Sounds like a very fair solution to me.

 

[cptrayes]

I must admit I've never liked the business model of pensions. Seem far too risky to me to base your retirement financial wellbeing on. Better to invest your own money. Anyway, what about a radical change to pension provision?

Maybe, maybe not. If you have a completely private pension you can choose a low risk, low growth fund which is about as safe as it can get. For every contribution you make, you do not pay tax, so paying in £120 actually costs you £100 of taxed income. That's effectively 20% growth before you even start, which can be handy.

If you are employed, of course, you'll miss out on your employer contributions if you make your own arrangements.

And of course if you just save it, and aren't the kind of person who can completely resist spending it, then you may just go and buy that new car with it, or a bigger house, and then end up with nothing for a pension after all.

You might ask a few people who bought houses as pension investments at the height of the housing boom how their investments are doing now

 

[Anglebracket]

"My favourite too. I'm guessing you have no kids ? Unfortunately it would not increase the tax take, the parents would just give it away when they were still alive. It might boost the economy though!" Santapaws

It's not that easy to just give things away. Generally speaking, when giving a gift of high monetary value a gift tax is often due (which is paid for by the individuals giving the gift). Also, should the parents die within 7 years of making a gift, the children may still be liable for inheritance tax.

 

[Mithras]

Maybe, maybe not. If you have a completely private pension you can choose a low risk, low growth fund which is about as safe as it can get. For every contribution you make, you do not pay tax, so paying in £120 actually costs you £100 of taxed income. That's effectively 20% growth before you even start, which can be handy.

If you are employed, of course, you'll miss out on your employer contributions if you make your own arrangements.

And of course if you just save it, and aren't the kind of person who can completely resist spending it, then you may just go and buy that new car with it, or a bigger house, and then end up with nothing for a pension after all.

You might ask a few people who bought houses as pension investments at the height of the housing boom how their investments are doing now

Theres no rule to say that you have to pay top dollar even at the top of the market... Don't forget that pensions aren't the only investments to offer tax relief. If you develop only your main residence, all gains are free from CGT, plus you have to pay for somewhere to live anyway, so can write off the cost. Some rentals may be CGT if you have ever lived in them as your main residence, and you can apply taper relief to CGT. With pure rentals, you can deduct your mortgage costs from any profits. And then on other investments, theres business relief.

I think your third point, about people's lack of discipline to save on their own, is your most salient.

I often think being employed is a very expensive way to live your life, and not particularly tax efficient. The pension tax relief and employer's contributions don't really get round that, as you can't deduct other expenses, such as travelling costs, provision of a vehicle for commuting and devaluation thereof, buying of (stupid) work clothes, lunches, entertaining, materials, professional fees, etc..

Hmmn, Inheritance Tax - I do think such low IHT contributes heavily to the unaffordability of housing - how many people use inheritances to pay over-inflated prices for homes, at whatever stage of their lives? How can that be fair when you have hard working, very intelligent people, who due to an accident of birth, no matter how hard they work, will never afford a comparable standard of living?

And I do think leaving children large inheritances sort of condemns the less intelligent/less motivated of them to a bit of an under-achieving life. Or at least their children. If I had children, I'd want to leave them with the gift of independence.

Just trying to think out of the box a little!

 

[Mince Pie]

There are other issues involved that Wundahorse pointed out. Staff morale, fear of job losses, reductions in services, closing of offices and dreadful management to name but a few. A generally unhappy workforce. Add to the equation that their employer wants to reduce their pension and this is the situation you have.

same with us in the private sector, only on lower pay with no extra benefits.

A lot has been stated about shop assistants funding public sector pensions although on 11K pa their tax and NI contribution is not that great and they may well be in receipt of benefits themselves.

Not necessarily. I am not entitled to any benefits and at one point I was on just over 10k a year. Seems very unfair to me that I am paying for something for you to have that I can only dream of.

 

[fburton]

- Increased Inheritance Tax. I must admit I've never understood why people are so against inheritance tax, which is paid on an estate after death and the only benefit of which is to give surviving relatives something for nothing, and income tax, which penalises you for working.

A Land Value Tax (LVT) would be a good idea, imho.

http://www.philippelegrain.com/tax-land-not-labour/
http://www.youtube.com/watch?v=ucNXhRhCNIE

 

[perfect11s]

I seriouly doubt the sanity of people calling for more tax and more complicated taxes, that just causes red tape and suppress peoples wish to work hard or build up bussinesses!!!!, less tax and more enterprise will help get us straight I would say at this moment the best thing is to lower taxes and maybe a simple flat tax then the economy will grow and tax take with it , personaly as a self employed tradesman the last thing I would want to do is employ someone and Ive little interest in growing my bussiness its just not worth the hassle sad ?? but how many other people think the same way Hmm!!!