Pensions in the private sector - an impossible goal

[Newmeagain]

I am feeling quite depressed about my pension and it seems to me that for most people in the private sector it is impossible to accumulate a decent pension.

it feels like we have three categories of people: people in the public sector who get really good pensions; people in the private sector with very high paying jobs; and then people in the private sector with less well paying jobs and it is this last group that have no hope.

I currently have a well paying job but for many years my pay was lower and I could not increase my contributions because I was a lone parent and had to prioritise living costs. I am in my early 50s and my pot is £135k. My googling indicates that even a £400k pot (which seems like an impossible goal) would only give me a very modest annual pension. I am single, so no one to share costs with.

She was awful. I promise and costing the council thousands in incompetence and negligence and other “issues” in addition to good people leaving because of her. But she was far from alone, there were lots all the same caliber

Perhaps you should become the arbiter of who is deserving of a pension? Otherwise I can’t see the relevance of this post?

It needs addressing pronto, but as Labour are fast becoming the party of welfare and pubkic sector. I don't see it happening anytime soon.

@Katypp so which public sector pensions do you want the government to sort out? The current retirees on final salary or the newer entrants who have already moved to career average & have a higher retirement age?

It has more to do with lower wages and lack of ladder to rapidly climb. Many nurses never get past grade 5 so despite paying into the scheme the majority of their pension will be calculated on their final salary. The new 2015 pension is a CARE scheme without lump sum, although you can reduce the pension in exchange for an optional lump sum. Any nurse who started the scheme before 95 had special circumstances and could take full pension at 55. Now they have to wait until 60 or state pension age if they are in 2015.

Contributions into the 95 are not representative of final pension they just fund the scheme. So if you’ve paid in £200k you cannot use that money to buy an annuity. It’s all calculated on the highest yearly salary from the 3 years before retirement. If you retire early the pension is reduced to account for early repayment.

My NHS pension has always been a CARE pension because in my profession earning potential is highest in our 40’s and drops off after that so end salary pension would not represent how much we have paid in superann.

The new 2015 is calculated the same way. It is a fairer way because it doesn’t benefit the high earners over the average ones. Some of the managers who start of on low grades but rapidly go up the salary grade system have an unfair advantage over the majority of nurses who remain on grade5/6 all their career. It is a sort of leveller. It obviously will reduce the overall cost of the public pension bill.

In addition you do need a decent carrot to encourage people to work within the NHS.

I was only in the local government pension scheme for six months. And it’s worth £6000.

The LGPS is different to other public sector schemes in that it is funded & employer contributions go up and down depending on performance

Oh here we go, claiming that public sector have final salary pensions blah blah. I did nearly 20 years full time in public sector, have retired with less than £5k a year.
Rich I ain’t.

It is almost like employers will only provide the absolute minimum they can get away with, so there are different baseline terms and conditions in places with enough union representation they can negotiate collectively.

Completely up for that challenge

I appreciate it does say that on the application page and I’m sure there’s some justification for it but the 23% figure isn’t real. It’s just a defined benefit pension. Nobody knows exactly what it will cost.

Take my pension off me though and I’ll stop working on tax compliance bringing in tens of millions of pounds every year and I’ll go to the dark side and help clients keep their money out of the exchequers hands, and probably triple my salary.

It’s the pension and flexi keeping decades of experience from walking out the door because the pay is crap.

I am not talking about the state pension. I am talking about workplace contributions into public sector pensions. Regardless of who is getting the mkbey, they are still getting more of my money into their pension than private sector (ie none)

They should be gradually phased in to the more usual 2-5% employer contribution.

But then apparently they’d all go and work in the private for inflated salaries 🙈

@Katypp why mention state pensions?

You aren’t paying tax into a pot now that is saved for future public sector workers. Your tax is going to current public sector claimants!

Yes and the romping up the payscale, bonus and company car alwsys trotted out in threads like this one 😂

They should be gradually phased in to the more usual 2-5% employer contribution

So you’re fine with current claimants getting final salary at an earlier age but want to make it lower for future beneficiaries? Odd approach when the NHS is already struggling with an ageing population

What’s all this nonsense about teachers retiring at 55? Not one person in my department will be doing that! It’ll likely be 67 for most of us.

Sorry, is there / was there something out there stopping you from going out and getting a public sector job and benefiting from the great pension? Surely this is just a case of all jobs having up-sides and down sides. I work in the private sector and am well aware that I get paid a better salary then if I did the same thing in the public sector.

Or maybe private sector employers can gradually increase their contribution so the achievable pension is a livable amount?

Well good luck finding someone in your local
hospital to treat you. Good luck finding a class size of less than 40 for your kids. Good luck getting your passport or pension processed within 6 months.

Don’t be silly - it’s a race to the bottom!

you have far more than I do in your pension pot - mine is sitting at £80k and as I was a single mom it was hard to contribute early on.

you have time to add extra and build it up and get some tax relief.

when you retire your expenditure goes down considerably and you can reduce your living costs if you wish.

I have a decent standard of living but have a couple fairly passive incomes which means I can have nice holidays and spend on the house

Everyone jealous of public sector pensions you do know the salaries are a lot worse? Plus bonuses are a dirty word we don't even get a tenner towards the xmas meal out. Although due to public sector pay negotiations taking 6 months plus at least se get a back dated pay award around November time which serves as the Christmas bonus.

No, what should happen is private employers raise their contributions.

Look carefully at what you are invested in. The default funds tend to be very cautious which limits your potential for growth. Fees can eat into it too. This far out from retirement yiu might be better off with a passive global equity tracker. Check out the Meaningful Money podcast to learn more.

God forbid that someone "as thick as mince" is able to claim a reasonable pension due to the decisions that they have made.