Retired may be able to sell their pensions.

[Osem]

http://www.bbc.co.uk/news/uk-politics-30670639

I have grave reservations about all of this. At a time when personal debt is huge because most people would rather spend than save, I don't see the wisdom in allowing people to cash in their guaranteed pension entitlements. I agree that in theory it seems right to give people the choice but all those who're already funding their lives through borrowing are already doing that and heading towards retirement in debt as opposed to surplus. Furthermore, given the financial sector's rather dubious history concerning the miss-selling of PPI, personal pensions and the like, I can see a whole lot of vulnerable people becoming the victims of sharp practice and having their major (non property related) asset frittered away in commissions/charges, failed investments or spent with too little regard for what happens when it's all gone.

[Escapee]

Originally Posted by Osem

http://www.bbc.co.uk/news/uk-politics-30670639

I have grave reservations about all of this. At a time when personal debt is huge because most people would rather spend than save, I don't see the wisdom in allowing people to cash in their guaranteed pension entitlements. I agree that in theory it seems right to give people the choice but all those who're already funding their lives through borrowing are already doing that and heading towards retirement in debt as opposed to surplus. Furthermore, given the financial sector's rather dubious history concerning the miss-selling of PPI, personal pensions and the like, I can see a whole lot of vulnerable people becoming the victims of sharp practice and having their major (non property related) asset frittered away in commissions/charges, failed investments or spent with too little regard for what happens when it's all gone.

I think it sounds like a good idea myself, I have worked all my adult life and since the age of 20 and paid a pension. (apart from the odd gap when changing jobs) I increased my contributions to the maximum allowed in my company pension scheme about 4-5 years ago. Perhaps when I retire I should blow the lot and live off the state like many have been doing whilst I have been getting up for work every morning.

Perhaps it's finally the working persons chance to scrounge off the state for a change

[Ignitionnet]

I think you're missing out on what the actual plan here is - keeping house prices high relative to incomes.

The previous wheeze had this in mind, this is just an extension of that masterplan.

---------- Post added at 12:43 ---------- Previous post was at 12:39 ----------

Originally Posted by Escapee

Perhaps it's finally the working persons chance to scrounge off the state for a change

You'd be surprised how many working people do 'scrounge off the state' as they or their household draw more in services than they pay in taxes on an ongoing basis let alone during retirement.

Pensioners have been the only demographic to see incomes rise during this government and they and near-retirees the only demographics to see home ownership rates increase.

With an ageing population, expensive housing and a constant attack on their entitlements the young probably have quite enough to deal with for now without those people who will inevitably do as you suggest.

Originally Posted by Ignitionnet

I think you're missing out on what the actual plan here is - keeping house prices high relative to incomes.

The previous wheeze had this in mind, this is just an extension of that masterplan.

They can't do this forever though. At some point they'll run out of schemes to get prices high and there will be a correction. I imagine that as long as they can keep it going until the election then they'll be content.

Originally Posted by Ignitionnet

I think you're missing out on what the actual plan here is - keeping house prices high relative to incomes.

The previous wheeze had this in mind, this is just an extension of that masterplan.

---------- Post added at 12:43 ---------- Previous post was at 12:39 ----------



You'd be surprised how many working people do 'scrounge off the state' as they or their household draw more in services than they pay in taxes on an ongoing basis let alone during retirement.

Pensioners have been the only demographic to see incomes rise during this government and they and near-retirees the only demographics to see home ownership rates increase.

With an ageing population, expensive housing and a constant attack on their entitlements the young probably have quite enough to deal with for now without those people who will inevitably do as you suggest.

Interesting article in the Telegraph earlier this year about that - http://www.telegraph.co.uk/finance/p...-get-back.html

Interesting point from the article

The IFS said that in 1980 the top 1pc of earners paid 11pc of all income tax, a proportion that has leapt to 30pc.

[Osem]

Originally Posted by Escapee

I think it sounds like a good idea myself, I have worked all my adult life and since the age of 20 and paid a pension. (apart from the odd gap when changing jobs) I increased my contributions to the maximum allowed in my company pension scheme about 4-5 years ago. Perhaps when I retire I should blow the lot and live off the state like many have been doing whilst I have been getting up for work every morning.

Perhaps it's finally the working persons chance to scrounge off the state for a change

It may be a very good idea for those who'll use the money wisely and are able to provide a decent standard of living for themselves but for those who don't or fall prey to the same suits who've ripped many of us off before it could be a disaster. It may be nice to make a point by divesting yourself of all your assets and deciding to "live off the state" but I think the resulting sense of satisfaction might be very short lived as life surviving on the basics the elderly are entitled to dawns...

[Ignitionnet]

Originally Posted by Hugh

Interesting article in the Telegraph earlier this year about that - http://www.telegraph.co.uk/finance/p...-get-back.html

Interesting point from the article

Indeed - incomes have become dramatically more imbalanced at the extremes, due in no small part to the prevalence of financial services and the disproportionately high incomes received by some employed there relative to other occupations whose incomes in real terms have largely stagnated or at very least grown far more slowly in the past 30-35 years.

It's also entirely true that 40% of households do not make a contribution to the state at all, and this rises to 60% once health, education and other associated services are added to the mix. This is on a current basis and ignores the inevitable very high net receipt of state services and cash that they will have during retirement.

The idea that 'workers' are contributing to the state purely because they are working rather than 'scrounging' by not working is, sadly, quite wrong these days, and it's also interesting to note that the poorest 10% are not the biggest net recipients, but the following two deciles.

But if they weren't working, the imbalance would be even more pronounced...

[Ignitionnet]

Originally Posted by Hugh

But if they weren't working, the imbalance would be even more pronounced...

Wouldn't be an economy to be balanced.

EDIT: Incidentally no complaints for me personally. Given our household income for me to whinge would be extremely churlish.

[Escapee]

Originally Posted by Ignitionnet

You'd be surprised how many working people do 'scrounge off the state' as they or their household draw more in services than they pay in taxes on an ongoing basis let alone during retirement.

Pensioners have been the only demographic to see incomes rise during this government and they and near-retirees the only demographics to see home ownership rates increase.

With an ageing population, expensive housing and a constant attack on their entitlements the young probably have quite enough to deal with for now without those people who will inevitably do as you suggest.

I think the workers that are 'scrounging' off the state are doing so because of:
a. The negative impacts of the minimum wage. (There is also a positive impact)
b. The 16 hour brigade encouraged by the previous government.

My parents have become pensioners in recent years, mother about 6 years ago and my father about a year ago. They are now better off financially than they have been for many years.

Whilst at my partners house over the holidays we were invited around the neighbours for a drink, we were tod not to bother bringing any because there was plenty of booze for all. It was the same story, he was on benefits not worked for 18 years and she has a part time cleaning job. Both have very recently become pensioners, he said it's great now. He no longer has the bedroom tax threat to worry about, he gets x amount for his disability, x amount pension and doesn't pay rent or council tax. We were amazed adding it up, they are most likely after tax left with about the same as a working couple wold net earning about £50k between them after paying their rent and council tax.

Now I understand why they are able to arrive home with 12 x 1 litre bottles of whiskey and nice joints of meat when they do their fortnightly shopping.

---------- Post added at 13:21 ---------- Previous post was at 13:16 ----------

Originally Posted by Osem

It may be a very good idea for those who'll use the money wisely and are able to provide a decent standard of living for themselves but for those who don't or fall prey to the same suits who've ripped many of us off before it could be a disaster. It may be nice to make a point by divesting yourself of all your assets and deciding to "live off the state" but I think the resulting sense of satisfaction might be very short lived as life surviving on the basics the elderly are entitled to dawns...

It's most likely that people have with a conscience who have saved to prepare for their future are unlikely to lose their conscience when they reach retirement age. I do wonder if it's worth it though when some have not contributed or worried about the future and are provided for by those that have.

---------- Post added at 13:23 ---------- Previous post was at 13:21 ----------

Originally Posted by Ignitionnet

Indeed - incomes have become dramatically more imbalanced at the extremes, due in no small part to the prevalence of financial services and the disproportionately high incomes received by some employed there relative to other occupations whose incomes in real terms have largely stagnated or at very least grown far more slowly in the past 30-35 years.

It's also entirely true that 40% of households do not make a contribution to the state at all, and this rises to 60% once health, education and other associated services are added to the mix. This is on a current basis and ignores the inevitable very high net receipt of state services and cash that they will have during retirement.

The idea that 'workers' are contributing to the state purely because they are working rather than 'scrounging' by not working is, sadly, quite wrong these days, and it's also interesting to note that the poorest 10% are not the biggest net recipients, but the following two deciles.

It's very scary when you look at those figures and then take away the figure for those who work directly or indirectly for the state.

[Osem]

I may trust the Tories with the economy far more than Same Old Labour (not that that's necessarily saying much) but I can't see that this can turn out to be yet another financial disaster to add to all the others. Surely what's required is for people to be encouraged, even forced, to make some form of additional long term provision, not encouraged to cash it in at the very point they're otherwise reliant on the state.

[Ignitionnet]

Originally Posted by Escapee

It's very scary when you look at those figures and then take away the figure for those who work directly or indirectly for the state.

Their salaries, etc, are already taken care of by the outgoing side of the ledger, and their taxes by the incoming one.

Deducting them from the ledger entirely is silly as they supply services which carry value in return for their payments from the state.

---------- Post added at 13:40 ---------- Previous post was at 13:39 ----------

Originally Posted by Osem

I may trust the Tories with the economy far more than Same Old Labour (not that that's necessarily saying much) but I can't see that this can turn out to be yet another financial disaster to add to all the others. Surely what's required is for people to be encouraged, even forced, to make some form of additional long term provision, not encouraged to cash it in at the very point they're otherwise reliant on the state.

The Long Term Economic Plan is built around the premise of ever-expanding private debt. Always was (see OBR forecasts from 2010 for public and private debt). Sit back and enjoy the ride.

[Osem]

That sounds a bit like the plan for an ever increasing population to 'solve' the problems the existing population creates...

[Ignitionnet]

Originally Posted by Osem

That sounds a bit like the plan for an ever increasing population to 'solve' the problems the existing population creates...

Check the figures for GDP growth and then the figures for GDP per capita.

While you're at it also do check how much GDP 'growth' is coming from imputed rents.

Ya.

[Escapee]

Originally Posted by Ignitionnet

Their salaries, etc, are already taken care of by the outgoing side of the ledger, and their taxes by the incoming one.

Deducting them from the ledger entirely is silly as they supply services which carry value in return for their payments from the state.

My point is that it highlights the scary percentage of people working the 'true' private sector. I work for a company that receives all it's work from the government, so I am not technically a true provate sector worker, this is certainly a big problem for Wales. (Not while London and the South East are propping us up though)