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The pros and cons of state pension schemes - Basic and SERPS (State Earnings Related Pensions)

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      08.11.2009 23:40
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      If people laugh at you for being a sensible nerd, let them- you will have the last laugh.

      I wish people would stop complaining that the state pension is not only getting further away. but also that they will never be able to afford to retire, because the state pension is so low. Yes, it is true that we have. compared to many other countries a poor pension scheme., but this is not a new fact, I have known the pension scheme was going to be a help, but not a solution since the day I started paying my national insurance stamps. And yes, when I started it was just that- STAMPS!

      I am not by any means well off, but I live realistically, knowing that I am not only earning a living for the times I am at work, but that I also need to provide for my retirement.

      The problem is, we have all come to expect too much, we want what we want, rather than need what we need.

      Quality of life is important, but if I can only afford 5 nights instead of 7 for a holiday, because the other expenditure goes into my pension pot, then so be it.

      If I watch the news rather than buy a paper, if I price compare and don't buy a new handbag, until the current one has worn out, if I don't have satellite TV, if I, If I, if I.... well so what?

      There will be some people who are living on or below the poverty line, and I am not targeting them with my comments. However, I am getting upset because I hate that financial education in this country is so lacking. I want people to have a quality of life and, if their desire is to retire before they drop, I want them to have the wherewithal to do it.

      Please look at the state pension, as finance that will assist you in your retirement- but it will not allow you to live. It is always better to start saving when you are younger, but however old you are it is never too late to start.

      You can go onto DIRECTGOV and get a pension forecast and I suggest you do, and then have a look at your own budget, and you may find you feel somewhat concerned. State pensions will soon be linked to earnings, a benefit that was removed under a former government, and this will help. However, it will not be a miracle cure. You will need more money and you will need to be doing something about it now. If you have other pensions then add them up and decide what your shortfall is, chances are you won't be able to plug the gap, but you can help it remain as a gap, rather than a canyon.

      I am well aware how pension funds have lost a fortune during the recession, and so a cash ISA might be a sensible secure plan- but as long as you do something. I have had the comment that my shares have lost value, and I point out that whilst it is true that they have, they are still worth more than the zero holding that the person making the comment has.

      Trust me on this one, unless you are in a job that you love and will be able to do as you get older, then chances are, you will want to retire at the earliest opportunity. Do not be a would have, should have, could have person. - you can make changes now. If you don't think you can afford a penny, then do my favourite money saving tip- write down every penny you spend in a month and I defy you not to find some non essentials. Always get rid of debts first, (unless you have interest free debts), and then start planning for the future.

      Life is not a rehearsal; don't let the final act spoil the show.

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        07.07.2009 21:13
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        Taking candy from a baby

        If work doesn't kill you, more work will
        ~~~~~~~~~~~~~~~~~~~~~~~~

        I've never been one of those people who looks kindly on the day I can retire, yet I don't blame people who do. The fact that no-one can afford to retire today is a reckless fiasco that has been inbuilt in our greed bitten society for too long. The right to retire is part of our liberty surely. By taking those rights away is bringing in a poorer state of liberty to all individuals who want to. It doesn't surprise me that the powers of be have told their flock to retire at 70 years instead. It isn't our fault that the UK economy is now diminishing at an alarming rate. It has posed many problems which has nevertheless been ignored by our authoritarians for many years, now the people have to suffer to counter-act the mistakes many have made across the financial sectors. I sought after many governmental quests over the last twelve years that deemed as insightful money making schemes that would make the UK a mountain of cash. I didn't believe in any of them. The 768 Million money pit of the Millennium Dome which was to spurge huge successes in business beyond the Capital was a sham as the monument wasted so much cash that the only way out was to sell it to private firms as business space. In my mind the seed of waste was upon our nation and quite frankly I knew worse was to come as now 768 Million is barely a dip in the ocean. Our very own credit system is marred with flaws that baffle economic experts who have consistently been screaming for twenty five years that the UK is the epicenter for an imminent financial crash. Plus you can bet the financial markets will not be the ones to get the nation out of the tide of money that is regularly squandered due to waste and non regulatory guides to help our democratic processes along - which now is non existent along with every-ones pension pots. Our very own liberties have been sold off due to the crazed GDP syndrome that has plunged citizens into debt that is immeasurable. There is no point in being careful now; as subjectively our elected bodies have forfeited their opportunities to bring stability into the realm of normal thinking. You cannot trust a system that is non democratic within its processes. Reforming isn't the answer, when it comes down to just editing law makes paragraphs but there is an epidemic of small filters within their bureaucratic ideologies.

        There is one thing which sure deems as true dementia is that all of the mistakes come down to the normal UK citizens, and pension system is the biggest sword in the authoritarian's make-up box. Pensions are a gift for all the hard work that individuals give through-out their working life. It is a wondrous thing to have so many people who reach that milestone to reap the rewards of a decent pension pot, but now due to huge greed and a marred financial institution many pensioners are suffering, many of them don't have families, many of them don't have the energy anymore to fight for their own rights, these are the rights they are owed already.

        The recession was brought on by banks wayward gun-slinging of credit, that created toxic debt so vast that it appears regulating the current system wont un-block the plug-hole. Along with a global downturn the financial storm is bring misery to hard-hit pensioners the difference is they have saved for a rainy day just to find their roofs have caved-in. - Their state pension rise of just 5% in April this year won't touch the service especially as the house-hold inflation figure on average has hit 7%, it isn't even a silver-lining. Mean-while state owned banks are still offering huge bonuses to CEO's and top executives for doing a poor job; basically the state won't let you retire until the state owned bank CEO's get their over inflated bonuses.

        The problems are highlighted to four simple points.

        * We're not saving nearly enough
        * The money we do save isn't performing as well as we hoped or expected
        * We are living longer and that means more years of retirement to support from savings over a given working life
        * Those expecting to rely on state benefits are not going to escape this demographic time bomb

        Before the financial crisis the UK were not saving enough, so now the evidence has concluded a worse forecast than ever predicted. For individuals who were saving for retirement, a huge 70% of would be pensioners had to stop as their own inflation increased so they had to re-use their funding for other matters than retirement purposes. What is outrageous is 29% of would be pensioners have to defer retiring altogether, as the economy falters and yet more unemployed litter the benefit system as jobs are lost at an estimated 2,000 a day. The facts are frightening by themselves for pensioners, let alone what may disperse in the Winter months that could descend into utter turmoil. - Would be pensioners off to work at greater risk at contracting flu and ill health; the ever ready Swine flu type has the potential to mutate to a stronger form that could cause major concerns for the already compromised elderly. The underlining tones deem fretful and highly unfair for the cash-strapped pensioner, who require the extra income to just survive. This is the thanks we give to our elderly. Many of which do not know what is available to them as they do not have internet connectivity or are logged onto governmental forums that state what is available. That is if the elderly would want to sift through fifty pages of total bureaucracy in which many wouldn't understand or could even read the small print; even if they wanted to be informed.

        In 2012 our present government is proposing retirement accounts that will supposedly help the elderly top up their pension pots to a reasonable level; it is also open for working individuals who do not have occupational pensions. The accounts are there to take 8% of your salary every month to help with any shortfalls. The problem I will have with these type of pension pots is the security and whether it just may become another black-hole which the government can dip their greedy hands in, just like they've done with last months expense scandals. Or if the size of the GDP doesn't decline within the next few years and actually increases the cost of living will surely cater for these types of accounts, if they have included pension credits in their figures relating to GDP. What I also have found completely baffling is the lack of TV advertising concerning pension credits, if the government wants to diminish pension poverty seriously they should direct pension credits to them directly. It is like they don't want the elderly to know about what is available to them. This no-doubt will be an option that will be cut completely out before the next budget, along with many other cuts across the spectrum as well as the freezing of public sector salaries.

        Age Concern has showered scorn over the treatment of the poorest pensioners since the beginning of 2008. The measures are not enough when it comes to protecting the most vulnerable in our society. In my own experience I've taken direct action against firms who outlandishly make fraudulent acts that scare the wit out of my own Grand Mother. I naturally take the high line and resolve all her problems. Not all pensioners have that support though. They do not want to be a burden and want to just sneak off into their tidy existence without too much to worry about. To be honest they've done enough worrying for a life-time and don't need the concerns that throw them into cold sweats and sleep deprivation.

        What is disgusting is Darlings standard £250.00 Winter fuel allowance. This is not depending on the over-inflated fuel costs that the elderly have to fork-out for, it is a set fee. It should be based on a percentage of what the actual fuel bills are. The basic state pension is set to rise to 2.5% this next year; so if your house-hold inflation is 7%; you will still be worse off, as stated earlier. The pensioner has no hand-outs and that is after knowing the house-hold inflation will rise. The only slight recognition is within the pension credit scheme, the savings limit is to be set at 10,000 GBP but then again the government is planning to cut these schemes in the near future.

        What Westminster wants is more revenue from our aging population. They've balls-up the every regulatory requirement for a stabilizing economy and the fad is to up the retirement age to 70 years of age. I happen to confess the problem isn't with the increasing elderly population but with the governments 'knee jerk' policy reforms that carry no clout and purpose. Yet they still hit the vulnerable. The scary fact is that over 2.8 Billion Pounds are left unclaimed in pension credits is a huge symbol of lack of communication and care to our wonderful elders; a further Hundreds of Thousands of pensioners miss out on Council Tax and Housing Benefits. These wonderful people live on 95.25 GBP per week (single person ) and for a couple 152.30 GBP per week. Many of these same individuals are care workers at home devoted to their spouses, saving the benefits system further. Yet the government continues to compromise their liberties for their own shortfalls.

        Copyright - 07 - 2009 0 1st2thebar

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          26.04.2002 07:03
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          I am amazed to find that I am the first to broach this topic, maybe I am the only old codger using DooYoo. But State Pensions - HMMM. When whatever bunch decided that pensions should only be tied to the retail price index, ie inflation, at a stroke they decided that whatever increased properity the rest of the population enjoyed, those on pension were excluded. The theory was that having established a standard of living, the best pensioners could hope for was that the pension would maintain that standard and the RPI was to be the measure of that. Whatever one thinks of Gordon Brown's policies in general, I do believe he has tried to make some (repeat SOME) amends for this situation and lucky us, we have received a couple of years' increases above the level of inflation. We should also remember the £200 per year per household winter fuel allowance and the £10 Christmas present (a figure which has been fixed since it was introduced). However, GB has made one extraordinary admission - the pension is inadequate even after his little fiddles. How do we know that he thinks this? Easy, he has introduced a means-tested "Minimum income guarantee". Under this provision, the level of the increase a basic pensioner will receive is £16.65, for a couple it is £19.20. This is not much less than the amount my SERPS contributions (made in years when I was not contracted out) have earned me - AND I PAID, they get it free! Fortunately, I made other provision and my wife and I enjoy other pensions including one related to my service in the RAF and another to that of my wife as a teacher, so we have a decent if not expansive life-style. Another provision is that I occasionally write here on DooYoo and the £100 or so that I have earned so far has been very useful. I could rabbit on for ever about, for instance, how pensions are paid - ours are paid direct to the bank, but they insist on doing
          this 4 weekly instead of calendar monthly which, since everything else is monthly, is a real pain. One month a year you get 2 lots, and some may regard this as some sort of bonus, which it is not, you've waited a year for it. Is it beyond the wit of the DSS to pay calendar monthly? It would seem so. For the record, the basic single pension 65-79 inc is now £75.50 and for a couple £120.20. Minimum income guarantee is £92.15/£140.55. Next question, how does the government equate these figures with the National Minumum Wage? Let's see, 40 hour week at £4.10, that's £164.00 whatever your personal circumstances. So if you are a pensioner, you need less to live on . . . . ! Very logical, I'm sure.

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