Cost of living squeeze in 2022

[roger.mellie]

Sway said:

There's generally a 'long term reward' in the form of a pension that is pretty much impossible to achieve in the private sector.

I’ve flip flopped on begrudging them that (my wife’s on a future nhs pension and I’ve compared numbers). But I’ve fallen into the view that it’s not that public sector pensions are too generous, it’s that private sector ones take the piss. The wherefore and why is easily debated but I’m past the age where I’ll fall for it. I’m involved in doing the books on our company and am the asshole that will tip you on the shoulder questioning why you’re not at least doing matching contributions.

[Welshbeef]

Armchair_Expert said:

Sway said:

There's generally a 'long term reward' in the form of a pension that is pretty much impossible to achieve in the private sector.

That was the promise made a long time ago, however, it has been broken and now that golden handshake no longer exists.

I’d happily say switch to defined contribution and be done with it then there is no debate over you’ve got xyz we haven’t and then basic salary and it’s rises are all that count.

[Armchair_Expert]

Welshbeef said:

I’d happily say switch to defined contribution and be done with it then there is no debate over you’ve got xyz we haven’t and then basic salary and it’s rises are all that count.

Problem we have is that nobody understands them or helps you with them, or gives any valid input. Plus we don't have any options, it is one scheme, and that scheme keeps changing so that you have to put more money in, to get less out, and much later on. As it stands I along with thousands others, stand to lose a tonne of money that we were promised / signed up to at the start, purely as the government repealed laws.

The judges, firefighters, police (and I think teachers?) pensions were all effected in the same way.

[roger.mellie]

Welshbeef said:

Armchair_Expert said:

Sway said:

There's generally a 'long term reward' in the form of a pension that is pretty much impossible to achieve in the private sector.

That was the promise made a long time ago, however, it has been broken and now that golden handshake no longer exists.

I’d happily say switch to defined contribution and be done with it then there is no debate over you’ve got xyz we haven’t and then basic salary and it’s rises are all that count.

I’ve one DB in my “portfolio”. Hours worked vs reward is ridiculous compared to my private sector pensions but I’ll maintain that’s a private sector lacking. I salary sacrifice heavily but even so it doesn’t come close if you compare numbers.

I do think one of the reasons the government has pushed employment pensions is to disavow themselves of the need to provide. The state pension won’t disappear but anyone working relying on it will get screwed as usual compared to those who don’t need it and those who’ve never worked. Pension credits are good and necessary but if you know someone who falls through the net due to having worked but is within certain thresholds you’ll realise how biased the system is.

[OzzyR1]

Throttlebody said:

The Govt is now deleveraging after years of debt fuelled growth and consumerism.

Genuine question - in what way is the Govt deleveraging?

[OzzyR1]

Armchair_Expert said:

Problem we have is that nobody understands them or helps you with them, or gives any valid input. Plus we don't have any options, it is one scheme, and that scheme keeps changing so that you have to put more money in, to get less out, and much later on. As it stands I along with thousands others, stand to lose a tonne of money that we were promised / signed up to at the start, purely as the government repealed laws.

The judges, firefighters, police (and I think teachers?) pensions were all effected in the same way.

Never worked in the public sector so have little knowledge of PS pensions.

No idea what job you have, but when you started was there a specific mention in your contract that your pension would be XX% of final salary? If so, how can they vary the terms of that without your agreement?

From my experience of pensions in the private sector, you put in more in, in the hope of getting a better return at retirement. Can't fathom your statement of having "to put more money in, to get less out"

What do you mean by that?

[Welshbeef]

Armchair_Expert said:

Problem we have is that nobody understands them or helps you with them, or gives any valid input. Plus we don't have any options, it is one scheme, and that scheme keeps changing so that you have to put more money in, to get less out, and much later on. As it stands I along with thousands others, stand to lose a tonne of money that we were promised / signed up to at the start, purely as the government repealed laws.

The judges, firefighters, police (and I think teachers?) pensions were all effected in the same way.

Each time they change the pension scheme it is from a future date onwards / what you have earned to date is locked in.

As such the “promises” stand
They have been changing the future schemes a tiny amount and yet you will pay in more a lot more for far less than you would under the previous scheme. That’s the point it’s hugely expensive people living far far longer (decades) yet the paying in hasn’t really changed.

[Armchair_Expert]

OzzyR1 said:

Never worked in the public sector so have little knowledge of PS pensions.

No idea what job you have, but when you started was there a specific mention in your contract that your pension would be XX% of final salary? If so, how can they vary the terms of that without your agreement?

From my experience of pensions in the private sector, you put in more in, in the hope of getting a better return at retirement. Can't fathom your statement of having "to put more money in, to get less out"

What do you mean by that?

I signed up to the pension at 19 so have vague memories, but what was promised has now changed and the government changed the laws to allow them to facilitate this ( it was unlawful so they changed the laws to make it not so ).

So my contributions have increased and are currently at 15% of my salary. I was supposed to go after 30 years but now have to work a minimum of 36 possibly 41 before I can take the pension. So paying in more, for longer. And the end product ( as it has now ceased and has been replaced ) has been reduced significantly.

Its the same pension change as the police / fire / judges which have been swashing through the courts since 2015 I believe. The government have lost all cases relating to these pensions.

[Welshbeef]

Armchair_Expert said:

I signed up to the pension at 19 so have vague memories, but what was promised has now changed and the government changed the laws to allow them to facilitate this ( it was unlawful so they changed the laws to make it not so ).

So my contributions have increased and are currently at 15% of my salary. I was supposed to go after 30 years but now have to work a minimum of 36 possibly 41 before I can take the pension. So paying in more, for longer. And the end product ( as it has now ceased and has been replaced ) has been reduced significantly.

Its the same pension change as the police / fire / judges which have been swashing through the courts since 2015 I believe. The government have lost all cases relating to these pensions.

You were supposed to go after 30 years ? Did you expect to retire at 49years old?

The pension changes to public sector are NOT retrospective. As such IF you had a pension stating you could retire at 49yo that what pension you’d earned up to the rule change you can still take it out at that age.


Right now you are paying in 15% - can you clarify what each years work you now do earns what as a % of your final salary? Is it 1/60th every year you work you earn 1/60th of your final salary for the cost to you of 15%
Numbers example let’s say this individual earns £40k a year for 1 year you’d pay in 15% £6k but that then buys 1-60th which would be £666.67. So crudely 9 years and you’ve got your £6k.

Now if it was a defined contribution where company pays in max 5% and you pay in the same 15% you’d pay in £6k and the company pays in £2,000 and govt £1,500 so £9.5k.
The general rule of thump for a drawdown pension is that you shouldn’t drawn more than 4% of the pots value for it to last the average retirement age - so 4% of £9.5k so you’d get £380 a year. That would mean crudely it would take 16 years to get your money out - plus it’s at risk as the stock market performance is the employees risk whereas the other there is no risk to the £666.67

[Armchair_Expert]

Welshbeef said:

You were supposed to go after 30 years ? Did you expect to retire at 49years old?

The pension changes to public sector are NOT retrospective. As such IF you had a pension stating you could retire at 49yo that what pension you’d earned up to the rule change you can still take it out at that age.


Right now you are paying in 15% - can you clarify what each years work you now do earns what as a % of your final salary? Is it 1/60th every year you work you earn 1/60th of your final salary for the cost to you of 15%
Numbers example let’s say this individual earns £40k a year for 1 year you’d pay in 15% £6k but that then buys 1-60th which would be £666.67. So crudely 9 years and you’ve got your £6k.

Now if it was a defined contribution where company pays in max 5% and you pay in the same 15% you’d pay in £6k and the company pays in £2,000 and govt £1,500 so £9.5k.
The general rule of thump for a drawdown pension is that you shouldn’t drawn more than 4% of the pots value for it to last the average retirement age - so 4% of £9.5k so you’d get £380 a year. That would mean crudely it would take 16 years to get your money out - plus it’s at risk as the stock market performance is the employees risk whereas the other there is no risk to the £666.67

I would have carried on working in a different role at 49, but would have taken my full entitlement and left that job, yes. And no I can't now take what I was supposed to because the new scheme is full of penalties if you claim before age 60 - meaning I can only take around half of what I was supposed to at 49. If I was to go before 55 the new scheme wouldn't pay out until I was 67.

I am not sure about the fractions but yes 1/60th sounds familiar.

Broadly I made plans to leave at 49, take a decent pension with lump sum, pay off mortgage and take on a new job of less hours etc. As it is now I am broadly stuck in the same job, for longer, with my plans scuppered. I don't deny it is still a fairly decent pension compared to some, however it is not at all what I signed up to.

[Sway]

My sympathy cup runneth over...

[Armchair_Expert]

Sway said:

My sympathy cup runneth over...

You say that, but its about the only carrot at the end of a career that leaves you mentally and physically broken. 20 years of nightshifts have finished me off already and I am nowhere near retirement.

[Sway]

Armchair_Expert said:

Sway said:

My sympathy cup runneth over...

You say that, but its about the only carrot at the end of a career that leaves you mentally and physically broken. 20 years of nightshifts have finished me off already and I am nowhere near retirement.

That's the same for plenty in the private sector, with nothing like the job security or pension...

[roger.mellie]

Armchair_Expert said:

Sway said:

My sympathy cup runneth over...

You say that, but its about the only carrot at the end of a career that leaves you mentally and physically broken. 20 years of nightshifts have finished me off already and I am nowhere near retirement.

Ain’t nobody here but us chickens.

Soz couldn’t help my self.

[Armchair_Expert]

Sway said:

That's the same for plenty in the private sector, with nothing like the job security or pension...

I can assure you sitting in an office, or working from home during daytime hours doesn't compare to some of the sites and situations I have had to deal with over the years, often overnight or into the next day.

[number2]

Welshbeef said:

You were supposed to go after 30 years ? Did you expect to retire at 49years old?

The pension changes to public sector are NOT retrospective. As such IF you had a pension stating you could retire at 49yo that what pension you’d earned up to the rule change you can still take it out at that age.


Right now you are paying in 15% - can you clarify what each years work you now do earns what as a % of your final salary? Is it 1/60th every year you work you earn 1/60th of your final salary for the cost to you of 15%
Numbers example let’s say this individual earns £40k a year for 1 year you’d pay in 15% £6k but that then buys 1-60th which would be £666.67. So crudely 9 years and you’ve got your £6k.

Now if it was a defined contribution where company pays in max 5% and you pay in the same 15% you’d pay in £6k and the company pays in £2,000 and govt £1,500 so £9.5k.
The general rule of thump for a drawdown pension is that you shouldn’t drawn more than 4% of the pots value for it to last the average retirement age - so 4% of £9.5k so you’d get £380 a year. That would mean crudely it would take 16 years to get your money out - plus it’s at risk as the stock market performance is the employees risk whereas the other there is no risk to the £666.67

It is incorrect to state that changes are not applied retrospectively, as they can be in the Public Sector.

Pension age in the Alpha scheme is linked to state pension age for example. When state pension age changes it affects the age at which ALL accrued benefits can be taken without a reduction.

I'm not saying this is the case for the poster but thought it worth correcting the misinformation.

[Welshbeef]

Armchair_Expert said:

I would have carried on working in a different role at 49, but would have taken my full entitlement and left that job, yes. And no I can't now take what I was supposed to because the new scheme is full of penalties if you claim before age 60 - meaning I can only take around half of what I was supposed to at 49. If I was to go before 55 the new scheme wouldn't pay out until I was 67.

I am not sure about the fractions but yes 1/60th sounds familiar.

Broadly I made plans to leave at 49, take a decent pension with lump sum, pay off mortgage and take on a new job of less hours etc. As it is now I am broadly stuck in the same job, for longer, with my plans scuppered. I don't deny it is still a fairly decent pension compared to some, however it is not at all what I signed up to.

Worst possible thing you can do is draw the pension & earn a salary. Why …Taxation.


I know someone fairly close who took their pension but then carried on working / this meant they paid 40% on their pension and over the 14 years they drew the pension and worked they paid £100k in tax needlessly/ they could have returned year and years earlier sadly didn’t waste of money.


Also you do know that ALL pensions are delayed to 10 years from your retirement age. So the earliest you could draw a pension was 55yo but at a hugely reduced rate now in theory earliest you could do is 59 yo.

Is your public sector fireman or police man or military? As otherwise earliest was 55yo any earlier would be medically driven. (I think).

[pghstochaj]

Armchair_Expert said:

Sway said:

My sympathy cup runneth over...

You say that, but its about the only carrot at the end of a career that leaves you mentally and physically broken. 20 years of nightshifts have finished me off already and I am nowhere near retirement.

Thankfully welsh beef is also an expert on your pension and it’s nothing to worry about as you’re wrong.

[Armchair_Expert]

Welshbeef said:

Worst possible thing you can do is draw the pension & earn a salary. Why …Taxation.


I know someone fairly close who took their pension but then carried on working / this meant they paid 40% on their pension and over the 14 years they drew the pension and worked they paid £100k in tax needlessly/ they could have returned year and years earlier sadly didn’t waste of money.


Also you do know that ALL pensions are delayed to 10 years from your retirement age. So the earliest you could draw a pension was 55yo but at a hugely reduced rate now in theory earliest you could do is 59 yo.

Is your public sector fireman or police man or military? As otherwise earliest was 55yo any earlier would be medically driven. (I think).

Sorry but your incorrect. I was able to draw a full 1987 pension at age 49 with no quibble or conditions. That option is now removed. The 55 age comes into play on my new "scheme" but didn't exist on the old one.

[vulture1]

Armchair_Expert said:

Sway said:

That's the same for plenty in the private sector, with nothing like the job security or pension...

I can assure you sitting in an office, or working from home during daytime hours doesn't compare to some of the sites and situations I have had to deal with over the years, often overnight or into the next day.

If you are talking about the police force then you have my sympathies as i do believe that job would break you morally dealing with the skum of society all the time.