Cost of living squeeze in 2022
Discussion
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. A friend is a carer at a care home specialising in dementia care. Barely above minimum wage, f
k all pension, zero job security - and some utterly horrific experiences. There are plenty more.Having a pension that is ridiculously unaffordable, where you'd have a bloody good defined benefit for an average of three decades after working for the same amount of time, means I have zero sympathy that the rules have changed.
Feel free to campaign for it to change, and the savings go into pay rises.
Armchair_Expert said:
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 ).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?
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.
15% of salary as personal contribution is pretty high, suspect that a minority of those in the private sector put that level in.
Apologies for more questions, but what do you get for your current 15% contribution? Is it a % of final salary, & if so, what % if that isn't a rude question.
You also say you joined at 19, and expected to retire after 30 years work, then 36 and now 41 years service which I assume puts you at 60 on retirement? Appreciate later than you thought but still fairly young compared to state pension age and most folks in the private sector.
OzzyR1 said:
Cheers for responding.
15% of salary as personal contribution is pretty high, suspect that a minority of those in the private sector put that level in.
Apologies for more questions, but what do you get for your current 15% contribution? Is it a % of final salary, & if so, what % if that isn't a rude question.
You also say you joined at 19, and expected to retire after 30 years work, then 36 and now 41 years service which I assume puts you at 60 on retirement? Appreciate later than you thought but still fairly young compared to state pension age and most folks in the private sector.
I would never retire fully, but would have left the job, and shifts, and all the misery it brings behind, and taken on a new role of lower hours and no doubt pay. 15% of salary as personal contribution is pretty high, suspect that a minority of those in the private sector put that level in.
Apologies for more questions, but what do you get for your current 15% contribution? Is it a % of final salary, & if so, what % if that isn't a rude question.
You also say you joined at 19, and expected to retire after 30 years work, then 36 and now 41 years service which I assume puts you at 60 on retirement? Appreciate later than you thought but still fairly young compared to state pension age and most folks in the private sector.
I can go at 49 still but will only get half the pension I anticipated. Im afraid my numbers and percentages of are woeful so not sure how to answer your question - but it works out at roughly 22k a year I believe assuming zero commutation. Or you can take a lump sum and that would then reduce the pension. And yes the old scheme is final salary not sure on percentage. Google says : The pension is based on 1/60th of your average pensionable 60 pay for each year of pensionable service up to 20 years, and 2/60ths of your average pensionable pay for each year over 20 years, up to a maximum of 40/60ths.
Sway said:
Yet you don't seem to have seen enough to realise that there are plenty of people who don't 'sit in an office', or 'work from home during daylight hours' in the private sector.
A friend is a carer at a care home specialising in dementia care. Barely above minimum wage, fk all pension, zero job security - and some utterly horrific experiences. There are plenty more.
Having a pension that is ridiculously unaffordable, where you'd have a bloody good defined benefit for an average of three decades after working for the same amount of time, means I have zero sympathy that the rules have changed.
Feel free to campaign for it to change, and the savings go into pay rises.
I understand that its not all black and white, and that anti social and difficult jobs exist in the private sector.A friend is a carer at a care home specialising in dementia care. Barely above minimum wage, f
k all pension, zero job security - and some utterly horrific experiences. There are plenty more.Having a pension that is ridiculously unaffordable, where you'd have a bloody good defined benefit for an average of three decades after working for the same amount of time, means I have zero sympathy that the rules have changed.
Feel free to campaign for it to change, and the savings go into pay rises.
Changing the rules and applying them going forward is one thing, but to apply them to people who were already bound by an existing agreement was off. Especially when they only applied them to some existing people and not others ( they tapered and protected a load of people of a certain age / length of time employed which is why there was a 7 year legal challenge over legality and hurt to feelings, which was successful )
Armchair_Expert said:
Sway said:
Yet you don't seem to have seen enough to realise that there are plenty of people who don't 'sit in an office', or 'work from home during daylight hours' in the private sector.
A friend is a carer at a care home specialising in dementia care. Barely above minimum wage, fk all pension, zero job security - and some utterly horrific experiences. There are plenty more.
Having a pension that is ridiculously unaffordable, where you'd have a bloody good defined benefit for an average of three decades after working for the same amount of time, means I have zero sympathy that the rules have changed.
Feel free to campaign for it to change, and the savings go into pay rises.
I understand that its not all black and white, and that anti social and difficult jobs exist in the private sector.A friend is a carer at a care home specialising in dementia care. Barely above minimum wage, f
k all pension, zero job security - and some utterly horrific experiences. There are plenty more.Having a pension that is ridiculously unaffordable, where you'd have a bloody good defined benefit for an average of three decades after working for the same amount of time, means I have zero sympathy that the rules have changed.
Feel free to campaign for it to change, and the savings go into pay rises.
Changing the rules and applying them going forward is one thing, but to apply them to people who were already bound by an existing agreement was off. Especially when they only applied them to some existing people and not others ( they tapered and protected a load of people of a certain age / length of time employed which is why there was a 7 year legal challenge over legality and hurt to feelings, which was successful )
There is no 'existing agreement' for private sector workers, and hasn't been the entire time I've been of working age.
The costs are absolutely staggering. Even with the changes, then you'll have a damned good retirement income for an average of two decades.
As I say, feel free to campaign to a change to defined contribution that you can flex to suit. Just like the rest of the workforce. Recognise that a big reason why you're not getting formal payrises (but I've never seen a public sector worker who isn't getting tenure/grade based rises...) is because of how unaffordable the pensions are for those that came before you.
Sway said:
Yet for pretty much everyone in the private sector, they haven't a clue what they'll be getting by the time they retire. They know how much they'll be paying, but not what it'll be worth.
There is no 'existing agreement' for private sector workers, and hasn't been the entire time I've been of working age.
The costs are absolutely staggering. Even with the changes, then you'll have a damned good retirement income for an average of two decades.
As I say, feel free to campaign to a change to defined contribution that you can flex to suit. Just like the rest of the workforce. Recognise that a big reason why you're not getting formal payrises (but I've never seen a public sector worker who isn't getting tenure/grade based rises...) is because of how unaffordable the pensions are for those that came before you.
Pros and cons of each isn't it - public sector = big safety blanket and decent pension but no bonuses or huge earning potential, and generally anti-social work. Private sector = risk of redundancy and pressure on performance, but far better re-numerated and generally much more social hours.There is no 'existing agreement' for private sector workers, and hasn't been the entire time I've been of working age.
The costs are absolutely staggering. Even with the changes, then you'll have a damned good retirement income for an average of two decades.
As I say, feel free to campaign to a change to defined contribution that you can flex to suit. Just like the rest of the workforce. Recognise that a big reason why you're not getting formal payrises (but I've never seen a public sector worker who isn't getting tenure/grade based rises...) is because of how unaffordable the pensions are for those that came before you.
Either way and no matter how crazy the old pension schemes may have been, not something a new worker really has any idea about when they embark on new career at the age of 18. I didn't even know what a pension was I don't think when I started work let alone the mechanics behind funding them.
Private sector pay as a whole isn't better renumerated.
Looking at payscales, anyone in the public sector doing the 'tough jobs' are earning more than half the population within a couple of years. Add in the value of the pension, and that's compounded.
It really is a myth. Used to be the case, isn't anymore.
As for 'bonuses' etc.,
that's not been the norm since 08 at least. Any bonus I've had has been based on a list of criteria as long as your arm and required me to perform in the top ten percent of employees - even then it's been contingent on overall company performance. Any payrise (at least, greater than the equivalent to a scale point rise within public sector pay scales) has required a promotion.
Looking at payscales, anyone in the public sector doing the 'tough jobs' are earning more than half the population within a couple of years. Add in the value of the pension, and that's compounded.
It really is a myth. Used to be the case, isn't anymore.
As for 'bonuses' etc.,
that's not been the norm since 08 at least. Any bonus I've had has been based on a list of criteria as long as your arm and required me to perform in the top ten percent of employees - even then it's been contingent on overall company performance. Any payrise (at least, greater than the equivalent to a scale point rise within public sector pay scales) has required a promotion. Armchair_Expert said:
OzzyR1 said:
Cheers for responding.
15% of salary as personal contribution is pretty high, suspect that a minority of those in the private sector put that level in.
Apologies for more questions, but what do you get for your current 15% contribution? Is it a % of final salary, & if so, what % if that isn't a rude question.
You also say you joined at 19, and expected to retire after 30 years work, then 36 and now 41 years service which I assume puts you at 60 on retirement? Appreciate later than you thought but still fairly young compared to state pension age and most folks in the private sector.
I would never retire fully, but would have left the job, and shifts, and all the misery it brings behind, and taken on a new role of lower hours and no doubt pay. 15% of salary as personal contribution is pretty high, suspect that a minority of those in the private sector put that level in.
Apologies for more questions, but what do you get for your current 15% contribution? Is it a % of final salary, & if so, what % if that isn't a rude question.
You also say you joined at 19, and expected to retire after 30 years work, then 36 and now 41 years service which I assume puts you at 60 on retirement? Appreciate later than you thought but still fairly young compared to state pension age and most folks in the private sector.
I can go at 49 still but will only get half the pension I anticipated. Im afraid my numbers and percentages of are woeful so not sure how to answer your question - but it works out at roughly 22k a year I believe assuming zero commutation. Or you can take a lump sum and that would then reduce the pension. And yes the old scheme is final salary not sure on percentage. Google says : The pension is based on 1/60th of your average pensionable 60 pay for each year of pensionable service up to 20 years, and 2/60ths of your average pensionable pay for each year over 20 years, up to a maximum of 40/60ths.
Must admit I'm surprised at your statement of "I can go at 49... half the pension I anticipated... but it works out at £22K a year".
Did you originally anticipate £44K/year as a pension at 49 y/o?
£44K /year would need a pension pot of around £1.5million at that age in the private sector.
Taking into account compound interest, from the age of 19 to 49 someone in the private sector would likely have to contribute a minimum of £10Kp/a net from the time they started working at 19y/o, possibly more which is impossible for 95% of folks, especially those in their 20's.
Hopefully you'll live till at least 79 y/o, the same amount of time you worked from 19 till retirement at 49.
15% contribution (and less then 15% in your earlier working life as you said it increased) to get £22K p/a guaranteed is a pension a lot of folks would love to have. When you hit 67, that will be topped up by the state pension so a personal retirement income of £30K/year and if you have a partner, lets say they have a smaller private pension of £8K/year plus state, will take your household income to around £45K p/a in retirement.
You aren't going to go out an buy a private island, but that's an annual income a lot of retired folks would be very happy with.
Edited by OzzyR1 on Monday 16th May 01:35
pghstochaj said:
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.Armchair_Expert said:
I would never retire fully, but would have left the job, and shifts, and all the misery it brings behind, and taken on a new role of lower hours and no doubt pay.
I can go at 49 still but will only get half the pension I anticipated. Im afraid my numbers and percentages of are woeful so not sure how to answer your question - but it works out at roughly 22k a year I believe assuming zero commutation. Or you can take a lump sum and that would then reduce the pension. And yes the old scheme is final salary not sure on percentage. Google says : The pension is based on 1/60th of your average pensionable 60 pay for each year of pensionable service up to 20 years, and 2/60ths of your average pensionable pay for each year over 20 years, up to a maximum of 40/60ths.
To put this into some sort of context versus private sector defined contribution schemes.I can go at 49 still but will only get half the pension I anticipated. Im afraid my numbers and percentages of are woeful so not sure how to answer your question - but it works out at roughly 22k a year I believe assuming zero commutation. Or you can take a lump sum and that would then reduce the pension. And yes the old scheme is final salary not sure on percentage. Google says : The pension is based on 1/60th of your average pensionable 60 pay for each year of pensionable service up to 20 years, and 2/60ths of your average pensionable pay for each year over 20 years, up to a maximum of 40/60ths.
I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
loafer123 said:
How can it be set at a level below the benefit cap?
Or is the assumption that people get UBI and benefits?
Or is the assumption that people get UBI and benefits?
A cap is the maximum amount people could receive in benefits so not sure why that would become a new minimum floor under a UBI system?. After all most people on benefits won't be receiving that in public funds now let alone the rest of us.
This does however highlight the issue of a sudden shift to a UBI system. Many people benefit from the current system and have living arrangements set on that basis.
If UBI is ever going to happen in this country, without the penal tax rates highlighted, it would be a gradual change. I.E. move all on benefits off legacy benefits and on to UC. Then, over time, reduce the percentage rate of benefit withdrawal and reduce the premium that subsidises lifestyle choices.
JagLover said:
To put this into some sort of context versus private sector defined contribution schemes.
I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
Add on that you've probably never been taught about investments and portfolios unless you've self educated. I was taught about superannuation in school but that's about as useful as tits on a bull. But as a private sector worker you/we all have a pot or many pots sitting there being managed that we may or may not really understand. If you look around the world at wealthy countries you might start thinking UK private sector workers are getting a bad deal but they voted for it.I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
roger.mellie said:
JagLover said:
To put this into some sort of context versus private sector defined contribution schemes.
I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
Add on that you've probably never been taught about investments and portfolios unless you've self educated. I was taught about superannuation in school but that's about as useful as tits on a bull. But as a private sector worker you/we all have a pot or many pots sitting there being managed that we may or may not really understand. If you look around the world at wealthy countries you might start thinking UK private sector workers are getting a bad deal but they voted for it.I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
https://www.theguardian.com/business/2004/oct/03/p...
The fact is that people are living longer and so if you want a decent pension in retirement for 30 years then someone needs to pay for it. If it is the employer then the fact they will probably need to put aside a large percentage of your salary to pay for it then that will reduce the amount that can go to you in salary, so in effect you will be paying for it whichever party is formally making the contributions.
What we could vote for is a parties promising to make the state pension a bit more generous and no doubt the "triple-lock" has played a part in securing the Conservatives election victories.
Armchair_Expert said:
I've been reading about people getting "cost of living pay rises" of around 4 - 5% percent of their annual salary. Purely in response to the current issue. That really is a perk I could only dream of.
I'm private sector, contracated to public sector, and I've had nothing like that in 30 years of working. Ever. My pension is certainly smaller than yours, I bet I've done as many night shifts, and I won't be retiring at 60. (My younger brother does the same job as you, not Met but still Plod, and the perks he will get as he gets towards the end of his career are far more attractive than what I'll get.)
Plus I know many ex-coppers who have retired and gone on to do nice fat (£50/hr) contracting roles in other areas - road safety, traffic management, etc.
JagLover said:
To put this into some sort of context versus private sector defined contribution schemes.
I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
Last time I looked, I could have sworn annuity rates were something like 2k per 100k pot at 55. (With an RPI adjuster, which in the circumstances is probably very wise!).I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
So that 22k would need a 1m pension pot....at 55. No way you're getting that at 49.
(To be fair, Armchair could have been referring to the full rate at later retirement?).
OnTheBreadline said:
Armchair_Expert said:
I've been reading about people getting "cost of living pay rises" of around 4 - 5% percent of their annual salary. Purely in response to the current issue. That really is a perk I could only dream of.
I'm private sector, contracated to public sector, and I've had nothing like that in 30 years of working. Ever. My pension is certainly smaller than yours, I bet I've done as many night shifts, and I won't be retiring at 60. (My younger brother does the same job as you, not Met but still Plod, and the perks he will get as he gets towards the end of his career are far more attractive than what I'll get.)
Plus I know many ex-coppers who have retired and gone on to do nice fat (£50/hr) contracting roles in other areas - road safety, traffic management, etc.
1 of 1 for that job role, no danger of the role being evaporated but equally, nowhere left to progress to.
JagLover said:
roger.mellie said:
JagLover said:
To put this into some sort of context versus private sector defined contribution schemes.
I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
Add on that you've probably never been taught about investments and portfolios unless you've self educated. I was taught about superannuation in school but that's about as useful as tits on a bull. But as a private sector worker you/we all have a pot or many pots sitting there being managed that we may or may not really understand. If you look around the world at wealthy countries you might start thinking UK private sector workers are getting a bad deal but they voted for it.I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
https://www.theguardian.com/business/2004/oct/03/p...
The fact is that people are living longer and so if you want a decent pension in retirement for 30 years then someone needs to pay for it. If it is the employer then the fact they will probably need to put aside a large percentage of your salary to pay for it then that will reduce the amount that can go to you in salary, so in effect you will be paying for it whichever party is formally making the contributions.
What we could vote for is a parties promising to make the state pension a bit more generous and no doubt the "triple-lock" has played a part in securing the Conservatives election victories.
JagLover said:
f UBI is ever going to happen in this country, without the penal tax rates highlighted, it would be a gradual change. I.E. move all on benefits off legacy benefits and on to UC. Then, over time, reduce the percentage rate of benefit withdrawal and reduce the premium that subsidises lifestyle choices.
Premium? Lifestyle choices?gov.uk said:
Single and under 25 £265.31
Single and 25 or over £334.91
In a couple and you’re both under 25 £416.45 (for you both)
In a couple and either of you are 25 or over £525.72 (for you both)
'''
If you have 1 or 2 children, you’ll get an extra amount [£244.58] for each child.
https://www.gov.uk/universal-credit/what-youll-getSingle and 25 or over £334.91
In a couple and you’re both under 25 £416.45 (for you both)
In a couple and either of you are 25 or over £525.72 (for you both)
'''
If you have 1 or 2 children, you’ll get an extra amount [£244.58] for each child.
It doesn't look that tempting to me.
Murph7355 said:
JagLover said:
To put this into some sort of context versus private sector defined contribution schemes.
I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
Last time I looked, I could have sworn annuity rates were something like 2k per 100k pot at 55. (With an RPI adjuster, which in the circumstances is probably very wise!).I cannot find an annuity calculator at age 49 as they start at 55. Likely though this would require a pension pot of at least £1/2 million at age 49 to receive an annuity of £22K.
So that 22k would need a 1m pension pot....at 55. No way you're getting that at 49.
(To be fair, Armchair could have been referring to the full rate at later retirement?).
There are currently three different schemes in play ..the best being the now defunct 1987 scheme which allows you to take your full pension at 48 + if you have 30 years service
Beyond that it’s age 50 with at least 25 years service
Taking the full commutation would leave you with 50% of your best 12 months in the last three years service
It’s quite possible to take a pension of £22k at 48 on that scheme assuming you joined at 18
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