To think we are heading into a pensions disaster

Yes public sector jobs should be advertised eg as £50k (£40k salary + £10k benefits). Perhaps that wld make it more obvious and more people wld be attracted to them.

If we all worked for the public sector there’d be nobody to pay the wages!

So come and work for the public sector. There are plenty of vacancies.

The point is that the lower pay you receive today is far less of a sacrifice than the huge benefit you will receive in the future from your pension.

It is very difficult for most people to really visualise this and understand it. You are giving up something today for a better future.

The public sector pension benefit is worth approx 25% extra salary today plus the value of the guarantee which is hard even for actuaries to quantify.

You may think that even if your salary today was 25% higher, you would be underpaid, but I think this is less of a slam-dunk and you still have to value the pension guarantee that no one on the private sector with a defined contribution pension has.

The Trump drama this week has caused stock markets to fall massively. We, with private pensions, have all lost some pension as a result. No one in the public sector has suffered a loss at all.

Can you begin to see how valuable your pension is?

Well it's currently 35 years to earn the full state pension. I worked full time for 10 years until I had my children, then only worked part time until I was 58. So you will qualify for a full state pension without having to work full time for 40 years! I know everyone's circumstances are different and women do tend to work full time now, even when they have a young family to raise. But we all have choices - we worked hard and managed to clear our mortgage in our 50s but that meant making sacrifices in our 30s and 40s. I didn't run a car for years and we couldn't afford foreign holidays until our children were older. Neither of us have a private pension and we feel quite comfortable financially 🤔

100% agree, plus the profit on your main residence is completely tax free

Nothing. But you'd have to work full time for 40 years to get it.

As I’ve said previously I disagree with the blanket “public service jobs pay less” statement. A friend works as a finance officer in education. She’s a glorified data-entry clerk, her job is solely to input invoices. She’s on £31K + excellent pension. Nowhere in the private sector would pay more than NMW + 3% pension contributions for that role, and most likely SSP only.

Though this is MN so I expect everyone is a high flying executive, not your average Joe.

This is MN. You’ll be freezing and living of baked beans on less than 100k

I agree. We can live on two state pensions as our income isn’t much more than that now when working. Mortgage paid off, adult child self sufficient, no car leases, our overheads are low.

Occupational plus state pension is pretty similar to working wage for public sector workers with lots of years of service. Nothing to complain about.

Not being funny but what's wrong with an income of £25,000 in retirement?! Sounds very comfortable to me. Obviously once you're that age you hopefully are not paying rent or a mortgage and as a couple I know that we need around £15,000 a year to live on. Once I have my state pension in a few years time, our income will be around £25,000, therefore we'll have £10,000 a year spare. That's just under £1,000 a month! We've never had that kind of spare money whilst bringing up our children and paying a mortgage - can't wait!

You think government employees have great pensions 🤣

Yes a good chunk goes into our pensions - but we get less right now. Government pay is not on par with private pay.

People are totally deluded about what they need in retirement to have even a modest standard of life. An elderly aunt and uncle have saved all their lives and have a joint monthly income of £5,000. However both are now in residential care and their joint fees are over £14,000 a month- that’s £170,000 a year. When it runs out I dread to think what will happen as the local authority will only pay half of that.

It's not really that great any more. Local govt is 1/40 th of your salary for every year worked. It's actually a lot less than my pension from an insurance company I worked for, where my salary was £20k more than my current more difficult role, 20 years ago. My salary in a professional role is less than national average (it's under £30k). I'm a graduate. I choose to work for local govt because I like the people there. But the majority are like me. They'd have to work there 40 years to get a £25k pension. Most women haven't with caring duties.

Easy solution to this problem is to work for the government. NHS, teachers, etc., all get great pensions, with employer contributions hugely subsidised by the minority who work in the private sector. For REALLY good pensions, which are completely non-contruibutory, join the military 👍

Everyone starts a career on lower pay than they finish (assuming a successful career). Everyone has lower contributions in their early years to the higher paid years. Only the the most generous public sector pensions guaranteed a final salary pension, index linked with generous widow benefits, funded by the tax payer.

Private sector pensions are not only DC rather than DB but are subject to the movement of the stock market and the risk of pension companies ability to survive and grow in uncertain economic times. Many of those due to retire around 2008 found themselves with a much smaller pot to retire on than even twelve months previous and had to defer retirement or take additional work in retirement. It is the same every time there is a stock market reset or a recession. These are risks which public sector pensions simply don't face as well as being far more generous for the level of employee contribution.

Its reasonable to say that public sector employees may sacrifice salary for better pensions, holidays and in some cases much better T&C than their equivalents in the private sector. That's a choice. Its not reasonable to make that choice and then complain about the pension not being quite as gold plated as it was 30 years ago.

I lost a shed load when Equitable Life collapsed - again, NHS workers don't have that worry.

That’s understandable. Dropping to 3 days sounds like a good idea. Out of interest, what is your job? I also have a very cognitively demanding role

No, I suppose not. I dont know if academies have to be part of the lgps for support staff. Obviously in maintained schools the staff are local government employees.

@Frowningprovidence I assume you are not a local government employee technically then?

@EveryonesTalkingRubbish And also suffered the Liz Truss effect! No NHS employee had that worry.

Also - relative to the population - consultants are well paid and their pensions are massive. That’s one of the main reasons why the cap on pensions had to be removed as so many Drs were reaching the cap (which I think was around £1.25m) and then having to pay a penalty, like other people with large pension funds have to do. There was a huge fuss about it. The (conservative) govt tried to find a work around where they could exempt Drs from the charge but in the end couldn’t find one so lifted the cap for everyone. Labour opposed the lifting of the cap but have not reinstated it because they would run into the same problem.

I don’t doubt that your pension is likely to be lower than people ahead of you who have already retired, but this has happened to everyone in the private sector too. And most of them have been moved to much lower defined contribution schemes where there is no guaranteed income at all and the cost of buying an equivalent annuity is far higher than the implied multiple used to value defined benefit schemes.

The irony is though that your salary that is nominally linked to pension each year is then index linked so could be going up at a faster rate than your wages, in fact if your wages are falling behind inflation, it will be going up at a faster rate. So if someone stayed in the same job their average salary pension would actually be higher than the old final salary pension.

It’s so difficult for most of us to really value the benefit of our future pension today. And after all if you die soon after retiring you won’t get the full benefit. That’s why I think it would be better for govt to require all jobs to be advertised as a “total costs” package so that it would be clear to everyone.

There was a school academy chain who tried to change their pension scheme so that new teachers could get a big boost to their salary today and a smaller pension. They reasoned that a lot of young staff have a lot of costs - mortgage, childcare - and would value more money today and less in retirement when their expenses will be much lower. It would also help the teacher recruitment crisis. But the teachers union went nuts - they just want the magic money tree to pay more salary and more pension. Oh well.

There’s no doubt that final salary pensions are extremely valuable and expensive and that’s why the private sector has largely withdrawn this benefit.

And to the poster above (several pages ago I think) who claimed that soon public sector pension funds will be in surplus. I’m afraid this is nonsense. Most of the public sector pensions are unfunded, there’s no pension fund as such (eg civil service, teachers, police, NHS). The main one where there is a fund is the local authority scheme. And there the present govt is trying to get the investment rules relaxed so that the funds can we used for the govt’s own pet projects and we know how well those go….

Ironically, the govt does get a positive inflow of cash today to help pay the teachers pensions other than taxpayers…... From private schools who do have to pay into the TPS as employers even though there is no fund as such. So on a current cash flow it’s beneficial to the govt but of course in real terms because they then get the same benefits as state school teachers it means the taxpayer is underwriting the pensions of private school teachers. It’s strange that no one ever gets upset about that …….

As an academy trust employee, the funding for ny salary comes from the esfa, which is from the treasury (so tax payers).

I'm not moaning about my pension, or my pay.

I'm moaning that people think it should be lower, despite being already devalued in real terms by 40% over the last 20 years.

I was making the point you cant use 120k for your baseline calculation, over a career its about 90k

I showed my working on pay further up the thread. 120k / 52 weeks / 48 hrs = £48/hr. I earn £300+ doing medicolegal work that I'm currently having to turn away due to lack of time.