The difference between private sector and public sector pension arrangements?
The release of Lord Hutton's report into public sector pension schemes perfectly illustrates how an explosion in the number of public-sector workers in the UK has contributed to an ever-growing liability for UK taxpayers. The vast majority of public-sector pension arrangements are based on an employee's final salary which can often bear little or no resemblance to the potential investment return on the pension funds in question. So why is there such a big difference between the private sector and the public sector pension setup?
The truth is that the public sector is guaranteed by the UK taxpayer and boom and bust periods in the UK economy have no impact upon funding arrangements. However, boom and bust scenarios have a major impact upon private companies which can in many cases lead to pension fund deficits and cash flow problems. When you also take into account the fact that private pension funds are invested in the stock market in the UK and worldwide assets for the future, thereby exposing them to the varying rates of return, this can and does have a major impact upon the final funding available to each and every pension scheme member.
Final salary pension schemes are few and far between in the private sector today despite the fact they are commonplace in the public sector. The UK government needs to reduce the difference between public sector pension payments and private sector pension payments otherwise more and more UK taxpayers will be funding public sector arrangements while they struggle to arrange their own funding for the future.
How do I get a Pension?
This is not a question enough young people are asking. A lack of awareness is a major contributing factor to the fact that so many people are ill-equipped for their retirement. People are typically ignoring or failing to realise the importance of making sure they have a pension plan in place from a young age, and as such are set to struggle when they reach retirement age.
How you get a...Read More
Blue-chip pension schemes receive record £17.5 billion contribution
The UK's top 100 blue-chip companies last year pumped a record £17.5 billion into their struggling pension schemes which allowed the deficit to be almost halved, currently standing at around £51 billion when taking into account income and investment gains. Records indicate that Royal Dutch Shell injected around £3.3 billion into its own flagging scheme with the likes of Lloyds bank, Royal Bank...Read More
12% of people predicted to cash in pension
28/10/2014 200,000 people may cash in their pension pots simultaneously next year, when the Governments new pension reforms come in. From April next year, everyone over the age of 55 will be able to cash in their pension fund. A survey has predicted that 12% of people are set to do this, but a large number of these people are unsure of the tax implications of this. Only 38% of people knew h...Read More
Getting rid of free bus passes would cost economy £1.7 billion
09/09/2014 A study has show that removing free bus passes for disabled people and pensioners would actually cost the economy in excess of £1.7 billion a year. The study, conducted by Greener Journeys, has found that every £1 spent on the government provided bus pass generates over £2.87 of benefits. This is through helping pensioners and disabled people to contribute more actively as volu...Read More
Pensions under attack
On Thursday the 30th June 2011, the British government will face the biggest outbreak of industrial action since it came to power as civil servants join teachers and lecturers in a major strike over pension reforms.
The Tory-led coalition wants to alter the pension age, change the way that pensions are calculated and increase worker's contributions
Over 750,000 public sector wor...Read More