Pension Pot Changes

[Doon frae Troon]

Are we opening the magic bottle or giving our grandchildren a debt legacy ?

 

[Fyldewhite]

This worries me too. I know Osborne is playing the populist "we are all grown ups and don't need the state to dictate the rules" card which is fine but what's to stop people blowing the cash, or maybe just living on it until it's gone and leaving the state to pick up the bill in old age? I just have a feeling that this is one of those policies that sounds great on paper (poll tax?!?!) but will come back to bite down-track.

 

[Deleted member 18588]

This worries me too. I know Osborne is playing the populist "we are all grown ups and don't need the state to dictate the rules" card which is fine but what's to stop people blowing the cash, or maybe just living on it until it's gone and leaving the state to pick up the bill in old age? I just have a feeling that this is one of those policies that sounds great on paper (poll tax?!?!) but will come back to bite down-track.

Do you generally subscribe to the theory that the State knows what is best for us.

Personally I find it patronising to suggest that those who have been sufficiently prudent to make provision for their retirement should then be dictated to politicians and bureaucrats over the use of those funds.

 

[Fyldewhite]

Do you generally subscribe to the theory that the State knows what is best for us.

Personally I find it patronising to suggest that those who have been sufficiently prudent to make provision for their retirement should then be dictated to politicians and bureaucrats over the use of those funds.

I'm no expert in any of this but it looks as though most people affected directly will be those in company schemes who far from being "prudent" have just ended up in a job that has a pension. These have been protected, "ring fenced" if you like and people have been forced to use these funds in a certain way. I'm not saying that it will end in disaster and I'm sure that many, maybe most people will be better off but I just feel there is a danger of a knock-on further down the line. Not sure why really but just feel it's a bit of a leap into uncharted territory.

As for state control then we live in a democracy and in theory our politicians are accountable to the electorate. That however is a double edged sword as popular policies are not always the best for the country but with an election looming......

 

[Deleted member 18588]

As for state control then we live in a democracy and in theory our politicians are accountable to the electorate. That however is a double edged sword as popular policies are not always the best for the country but with an election looming......

A democracy should not automatically deny the individual freedom provided that in exercising that freedom it is not at the expense or to the detriment of fellow citizens.

The new legislation will not oblige anybody to utilize his/her pension funds in any different manner to the present system. It will, however, provide the individual with a freedom of choice.

That same freedom of choice that may have existed when choosing to join or stay with an employer who offered a pension scheme as opposed to one who did not but may have paid a higher salary.

 

[SwingsitlikeHogan]

I think we may have to differentiate between private sector and public sector.

The public sector pension scheme is designed to provide for employees for the duration of their retirement. It is perhaps THE great benefit that working for the public sector provides. It is a means by which individuals can contribute through their working life and in return get a relatively pretty good guaranteed pension for life. You sign up to a public sector pension in your working life - the public sector guarantees to pay you a pension throughout your life in retirement - and the guaranteed amount is based upon the assumption of the pension being drawn form NRD for about 20-25yrs.

It is not a savings plan in the sense that a private pension is (with all the faults and lack of guarantee inherent all defined contributions schemes) and hence I struggle to see how the individual can be able to spend their pension pot (which doesn't really exist anyway) when and as they like.

 

[Fyldewhite]

A democracy should not automatically deny the individual freedom provided that in exercising that freedom it is not at the expense or to the detriment of fellow citizens.

Very true. Time will tell on this one then.

The new legislation will not oblige anybody to utilize his/her pension funds in any different manner to the present system. It will, however, provide the individual with a freedom of choice.

That is true too, but how do you know that by making other choices using this new found "freedom" it won't be detrimental (to the country as opposed to you and me) overall?

That same freedom of choice that may have existed when choosing to join or stay with an employer who offered a pension scheme as opposed to one who did not but may have paid a higher salary.

Yep, we all have to make those choices every day. In the real world you are lucky to have a job and if it has a pension then great. Can't say I know one person who has accepted/refused a job due to the pension arrangements.

I'm not really disagreeing with what you say, just that in relation to the OP I still think we may be opening a can of worms. Funny how it's only just becoming Tory policy when a significant number of people in a certain demographic seem to be voting UKIP? Maybe just me being a cynic but I really don't think the longer term implications are fully understood and I am deeply suspicious of the timing.

 

[Deleted member 18588]

Funny how it's only just becoming Tory policy when a significant number of people in a certain demographic seem to be voting UKIP? Maybe just me being a cynic but I really don't think the longer term implications are fully understood and I am deeply suspicious of the timing.

As a relatively, recently retired Employee Benefits Consultant I can assure you that reform of the system along these lines has been under consideration by both major political parties for some time.

As for UKIP I am not even certain that they have a policy on retirement benefits.

Trust the people, they have a better idea of what to do with their money than any politician does!

 

[Deleted member 18588]

It is not a savings plan in the sense that a private pension is (with all the faults and lack of guarantee inherent all defined contributions schemes) and hence I struggle to see how the individual can be able to spend their pension pot (which doesn't really exist anyway) when and as they like.

There are Defined Benefit schemes in both the Public and Private sectors and the benefits at retirement from these can be given a value. Most commonly it is calculated as a Transfer Value which is representative of the cost to the Scheme, (Public or Private) of providing those benefits at Normal Retirement Age.

By the way no scheme "guarantees" to pay benefits at a certain level. Scheme benefits can and have been varied in retirement. It is unusual for this to happen but it is important that members of schemes are aware of the possibility.

More of a promise than a guarantee.

 

[Fyldewhite]

As a relatively, recently retired Employee Benefits Consultant I can assure you that reform of the system along these lines has been under consideration by both major political parties for some time.

As for UKIP I am not even certain that they have a policy on retirement benefits.

Trust the people, they have a better idea of what to do with their money than any politician does!

Yes, hence my mistrust of the timing. The point about UKIP is that lots of Tory voters of your age are voting for them despite the lack of policies (on most issues but that's another story!). Far be it from me to cast aspersions but it could just be construed that the decision to bring this in now it not unrelated to that fact!

I'm not disagreeing with it nor do I necessarily think it's going to be bad. Just that without a crystal ball I'm worried it might be that's all.

However, I'm all for "power to the people"

 

[Doon frae Troon]

My old boss used to say, 'never underestimate the stupidity of the general public'.

Sometimes he was right.

 

[Deleted member 18588]

My old boss used to say, 'never underestimate the stupidity of the general public'.

Sometimes he was right.

Your old boss would have made a "good" politician with patronising tosh like that.

And remember in different contexts we are all "the general public".