to think everyone should retire at 60 and the state pension should be a livable amount

[pollyis]

Hi,

I was one of the lucky ones that got to retire at 60, but now this this being raised to 66. I think this is very unfair and downright wrong. If anything it should be lowered for both men and woman so they can spend their last few years with some hard earned rest.

Also the amount is much lower than countries like France and Germany. My pension is 146 pounds a week. Hardly a decent amount and I'm expected to live off this for another 20-30 years!

I think we should all support each other to get the age lowered and increase the amount to the same as Germany. Sok about 320 a week per pensioner. Do you agree?

Polly

is that a quote from the superheroes comic that you're reading Greengrow?

I'm a real woman...I have tits and everything

suzanne

I plan to take my NHS pension after 30 years and retire at 50, if they don't decimate it further by then. The job's been so bloody hard I expect to be dead by mid 60s.

I know rates are lower at the moment but mortgages are stress tested for higher rates. I was responding to the comment that it is easier for young people to buy houses now, which it really isn't

Other than what earlier posters said about NICs having funded present pensions from the outset the other point about investing NICs is to ask what would they be invested in? The numbers are just too large. Private/company pensions are often partly invested in gilts i.e. loans to the government, and there wouldn't be the capacity in the share/corporate bond market to absorb these sums. So you'd be looking to invest loads abroad? Whatever the rhetoric about the crash in 2008 the seeds of it were excess cash from the BRICS swilling around and looking for a home.

So you'd be looking to invest loads abroad?

If NICs were invested, it would become absurdly political. There would be pressure to "invest" the NIC fund into UK companies, even if they were on death's door (how much pressure would there have been to "rescue" MG Rover?) There would be pressure to use the NIC fund to support foreign policy objectives (this country is nice, this country is nasty). And there would be endless debates about ethical investment, just for fun. Governments with large amounts of money to invest rarely do it well.

And, of course, what would the people that think NICs should be invested think should happen if the NIC fund lost value and couldn't meet its commitments?

How wonderfully naive…

I will still be retiring at 60.

Not onto the state pension, I have self funded by saving and investing 15% of my income all my working life - like it is actually recommended to do by every financial advisor I have ever seen.

Spend it all and have loads of fun now, or save a bit and live in comfort later. Choices always need to be made.

How nice that you are paid enough to be able to afford that.

All these exhortions by worthy people to "save more, put money aside" are often met with no more than a hollow laugh. If you are on minimum wage, there is NO WAY you can afford to do what you have done. And it is not the case that these people are simply choosing to have fun now rather than live in comfort later.

Use your imagination.

That's life though Hester. People who earn more drive nicer cars, live in nicer houses and retire earlier - at their own expense. The hand out culture is relatively new - I am all for it for the needy, but a healthy employed 60yo is not in need of hand outs and has no moral right to a life of leisure at public expense. And society can't afford it, sadly. Even if the govt could afford that kind of hand out, I would vote for paid years off for those with young children rather than 60 year olds who have no competing child care issues.

Greengrow
Real women earn their own money and fund their own pensions. They don't rely on the state pension.
I take it you did not take the 40% tax bung to top up your contributions then

ALL Pensions are paid for or subsidised by the state
either directly
or through the top-up of the contributions by the taxpayer at 20%, 40% or 50%
so the wealthiest get the biggest benefit from the largess of the poorest

or through the top-up of the contributions by the taxpayer

You realise that occupational pensions are also paid out of gross income, right? A teacher on £40k would pay an extra £50 a month of tax were that not the case. Or is your objection to tax relief on pension contributions more selective than that?

And it would be completely invidious for pension contributions to be taxable, because the pension, when it's paid out in retirement, is taxed. You get a simple choice: you can pay the contributions out of gross income, and pay tax on your pension, or you can save money out of your net income, and spend it tax free later on. You're not, surely, suggesting that pensions should be taxed twice?

There is, yes, a window for the moderately well paid (mid to high five figures) in which they make pension contributions which attract some tax relief at 40% and then they collect pensions which are mostly or entirely taxed at 20%. But it's just them you'd be targeting if you abolished tax relief on pension contributions.

The rich wouldn't be hugely affected long-term because they're getting tax relief at 40%, but a lot of their pension is taxed at 40%. You'd see some fairly tricksy structuring of salaries to minimise the effect, too.

The less well off, particularly those in public sector pensions, wouldn't be affected long-term because they're getting tax relief at 20% and their pension is taxed at 20%, but they would be substantially hammered while working. Someone on £40k would lose £600 per year. As general politics, taking six hundred quid a year off classroom teachers seems quite spiteful for no particular political or economic benefit.

Actually, I expect to work until I die so not using the tax relief. In fact I would support its abolition.

As for the mention of breasts (relevant)... many a woman does not follow my advice above but has sufficiently good breasts to snare a man who keeps her via his own pension/earnings. So breasts certainly play their role in ensuring women are fed and kept.

OP Are you saying people should have to retire at 60 - or can those of us who choose to work on and enhance our pensions and go when we see fit?

Are you just trying to free up jobs?

And in your utopia shall mortgages or rent equate to no more than 10-15% of salary.

Back in the real world............

Personally I'm in favour of tax relief on pensions - surely anything we can do to encourage people to save for their own future is positive. And with the changes to annuity requirements it will be easier for people to use the funds flexibly as they age to support different combinations of work and semi retirement as suits their needs.

YABU.
Do you not listen to the news at all?

Luckily most of the posts understand the real world.

No party is proposing abolition of pension tax relief so no one need to worry that my desire for very simple flat taxes with no reliefs is coming in any time soon. I will have to found my own party for that.

The new pension rules are not as good as people think. If you are still working and take your pension as a lump sum for many that means the state confiscates 40% or 45% of 75% of it (only 25% is tax free) if you are still working as many of us are and paying higher rates of tax.

The latest proposal that if you die over 75 I think it is that your children will inherit the pension even then it is not tax free. They pay tax on it at their marginal rates so in our case probably 40% again is confiscated. If you save the money into your own savings account the state takes 40% on death if you have n ot given it to your children 7 years before you die.

Now there wa sa letter in the press this week FT I think saying that this change will mean people will pass on pensions to grandchildren tax free on death and that was a bad idea and the current 55% death charge was better but that only works if you have grandchildren with no income. I suppose if had 9 grandchildren under 10 and they do not use their £10k single person allowance that is £90k you could leave tax free but it is still not huge sums able to be left tax free.

I wasn't talking about the inheritance aspects, more the liberation of pensions which removes the need to buy an annuity. Most people wouldn't still be paying HRT at the point where they take the money out of the pension - and there are more sensible ways to use the funds than that, you don't have to just take the whole lot as a cash lump sum and I expect new retirement products to come on to the market to facilitate this sort of approach more easily.

The most recent HMRC figures show that 87.6% of income tax payers have no liability to HRT. So the number who will be in the position of taking their pension at a point where they are still paying higher rate tax is pretty small.

The details of the latest proposals are still coming out, but why should your children inherit the pension pot for free (whether of income tax or inheritance tax), especially given that the contributions in to it were tax free?

pollyis, through poverty, rationing, etc. Calorie restriction and longevity are connected. When I was a teen in the 70s I was a real fatty, an old size 14-16 :). The later, well-fed and over-fed generations won't achieve these great ages in the same numbers.

So breasts certainly play their role in ensuring women are fed and kept

Oh ok.
Cancer got both of my breasts.
That must be why we're on the breadline.

OP - so you didn't get any help to buy your house? Really??

I don't believe it!

DH and I bought our first house in 1977. The mortgage interest was tax deductible on loans up to, and including £15,000 if I remember correctly, and this was later increased to £25,000. The tax relief was given via an increase in the tax code.

The only people who couldn't benefit were those whose taxable income wasn't high enough. For them, there was the option mortgage scheme which then became the same for everyone - MIRAS - mortgage interest relief at source.

However, in the period between 1977 and 1992 we paid interest on our mortgage at anything between 10% and 16.5% as this was the standard variable rate at the time.

The UK used to have one of the best, if not the best occupational pension systems in the EU. Unfortunately, the chancellor, Gordon Brown decided to ruin by scrapping the system of ACT, advance corporation tax, which enable company pension schemes and individual investors to reclaim the ACT paid on dividends. Without this 33% uplift in dividend income, many companies decided to close their final salary pension schemes, replacing them with defined benefit schemes, but putting in a much lower percentage employer's contribution.

DH worked in public service, and his employer's pension scheme was funded unlike many public sector ones, was contributory and was in surplus, so that the employer was granted contribution holidays in the 1980s.

Unfortunately, while his salary was at a standstill for most of the 80s, I changed jobs on a regular basis so that we could make ends meet. To secure my retirement, I set up a personal pension with, unfortunately, Equitable Life, and it wasn't one of the guaranteed annuity ones. From a pension forecast of £15,000 I now receive £1799 but it's better than nothing.

During the Conservative government of the 1980s at about the time Maxwell stole the unfunded Mirror pension fund, and then mysteriously disappeared from his yacht, the government quoted a sum of £10 billion I think (when a billion was a million million, not a hundred million) to create a ring-fenced state pension fund, but decided to retain the pay as you go system that still exists. A great pity that they didn't bite the bullet.

Income tax could well increase. In 1976 when I started work, the standard rate of income tax was 33%, and the top rate something unthinkable like 95%. The bank base rate was 10%, and the APR for a personal loan something like 20%. Due to high rates of excise duty, the cheapest crappiest bottle of plonk was about £3 - so rather expensive.

People often quote the standard French occupational pension of 75% of final salary. BUT, once retired they still pay the equivalent of NI on their pension income, both occupational and state. Also, the standard rate of NI is well in excess of 20% in addition to the employers' rate, and employee charges on the employer are about 50% of an employers' revenue. And the system is at breaking point.