I seem to be running out of steam, I missed last week’s blog due to a combination of things and lost track of where I was.
It has been a worrying and disappointing week, back to the union confrontation, strikes and inflammatory mistruths of Ministers. Unfortunately this is the first strike I felt I could support; teachers and NHS pay good contributions, work hard for a pension that is little better than they would have got without contributions.
Pensions are in a mess, yet all our employees, the Ministers do is hum and haw and tinker round the edges and blame our increased life expectancy. “We live longer and must work longer” is the cry and accepted without question by all the experts and Statesmen (another misnomer).
The Public Sector is the tip of the iceberg, if the retired population grow at five times the rate of the last thirty year and the working population don’t, as projected, then we are all doomed for the workhouse, unless WE do something to support ourselves in old age.
Yet there is a lot of money in the pension system, contributions are high, the total State NI is 23.8%, the main Company and Public Sector schemes are 19% and Private schemes are some 10%, all should support good pensions without taxpayer support. There are 75% of the working population in work and 45% belong to pension schemes. Yet the basic pension is only 70% of the welfare pension credit but the spend of some £53bn should give all contributors that level.
The money needs to work harder, be managed better and retirement needs properly planning, it has to be put aside as pension savings for our individual use, only self sufficiency will give us the retirement we deserve, break age dependency and meet longevity.
The State has not done this with pensions, it has squandered any savings and is now dependent on “pay as you go” with today’s contributions paying today’s pensions. You are paying for your retired neighbour’s pension in the hope that there will be enough money when you retire, the odds are against it.
Teachers and nurses are not well off when they retire, their contributions buy pensions of 25 to 30% of final salary, the 50% includes the basic State pension they should get anyway. The taxpayer pays for the subsidised pensions of the civil service, armed forces, MP’s and others who pay little or no contributions, who the rest of PS also subsidise.
The problems are endemic throughout the whole State system, no one does the simple arithmetic, assess the basic needs, think things through and then modify them to suit the circumstances. They start at the tail end and bodge to try to make the pieces fit. As a mathematician, I was trained to fully assess the problems, find the variables, to check whether there is a solution, then solve it if possible, amending where necessary.
As a society we are lost; we have a negative attitude and are defeated before we begin, becoming dependent on others. As a Nation we have delusions of grandeur attempting to change the world, idealism has replaced realism as we save the world.
We are a small island who’s day has past and yet we still have major attributes of inventiveness and ingenuity, inherent common sense and forward perspective beyond other nations. We embrace a global and green economy before they exist, to our disadvantage on cost, trading and economically; China produces as much CO2 in an hour as we expensively try to save in a year and we are only just re-finding manufacturing.
We need to put our own house in order, create and keep employment rather than make them redundant; make work for school leavers and graduates; sort out education to avoid the mortgage burden; cost up medical and social care and find ways to afford it or trim down; ruthlessly cut system exploitation internally and from abroad and nurture internal charities and social groups. Plan our society!
Pensions are a good place to start, instead of creating envy to reduce all to the poverty level, we should aim to lift all to a high defined benefit level in well managed self sufficient saving schemes, separating welfare at poverty level from earned at a comfortable one, with freedom of choice on saving amounts, retirement age and care. Make saving worthwhile and use the large funds generated for Capital infrastructure and social needs. The over 65 population explosion needs questioning and study.
Savings Annuities Public Sector NHS Teachers Police Local Government Hutton State
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