Expert Q&A: 6 things you need to know about pensions

I’m 66 and I’ve worked for 50 years, it’s not unusual?

The only injustice I can see is the ludicrously short working lives of those in the public sector.
They should be brought into line with the private sector pension age with immediate effect, — and have their gold plated pensions reduced.

What a shame that Stephen doesn’t want to work until he is 65 like everybody else. I am also 66 and worked for 50 years. If more people put in their fair share of work the country might not be in the situation that it is now.

I have to object to the comment on public sector workers/pensions. I work in a part of the public sector where our wages are way below other public sector workers such as teachers, police, nurses, etc. (about 25-30% less at entry level with no automatic incremental increases). In return for this Margaret Thatcher, who was not known for giving things away, agreed that the government would pay more into our pensions. The current and previous government have now frozen our pay and now we are expected to pay more into our pensions and get less out in the end. As for the retirement age, I can retire at 60 if I wish (and if this is not changed), but will still not receive my state pension (yes we pay NI and tax like everybody else) until I am 65-68 depending on what age the government decide on.
The people I feel sorry for are people who work in parts of the public sector that earn even less than I do!

It was Thatcher that robbed me of £40 a week or some £15,000 at the very least – do I get that back while the CON-DEMS are power? I’ve had to live with ever diminishing pensions because both my pensions started in-line with average earnings – until Thatcher

As for the so called benefit frauds – may I point out it was your DUTY to report them to the authorities. – so YOU are to blame Plus a great many of those on benefits were/are on benefits for perfectly sound reasons that you know nothing about

Please stop picking on them – they have a hard enough time already. Even under the best benefits they only get the minimum required to live normally – not at some subsistent level.

We live in a welfare state.that means we should pay to keep everyone on a normal standard of living through our taxes.

If you know of a fraud – REPORT IT – not whinge about.

Sorry but I am sick and tired of hearing about benefit fraud that has no foundation.

If the WORKING wage is £7.60 per hour x 40 =£304……why do pensioners get £117 per week to live on

It’s a good question Bert and perhaps you will have an opportunity over the coming weeks to ask a politician to justify it.

The easy answers are –

a. The state pension is based on a contribution record and was not intended to provide all one’s living expenses – additional personal provision has always been necessary to secure a better standard of living.

b. Tax will take a slice off the working person’s income whereas the state penion is below the first tax band.

c. Working people have travel-to-work and other expenses which cut into their after-tax income.

d. Pensioners with no more than the basic state pension qualify for several other benefits not available to working people.

Although it doesn’t seem to be a significant issue at the forthcoming general election there is a widespread feeling that the state retirement pension is inadequate to lift people from dependency and relative poverty. You have compared the state pension with the working wage; others draw attention to the allowances made for bringing up children. The high costs of heating and home maintenance affect pensioners badly [especially if a couple becomes a single-person household] whereas having a child requires little extra household expenditure beyond food and clothing. Lots of suggestions have been made for raising pensions substantially but the stumbling block has been where the money would come from. At least the state pension will go up by considerably more than inflation in the next year or two and help reduce the differential with wages.

That’s another good question to put to your Parliamentary candidates. And don’t forget to mention the gold-plated teachers’ pension scheme which will outstrip anything in the private sector for a comparable position.

Heateachers are at the top of a multi-layered pyramid that almost guarantees highly-progressive remuneration. Comparisons with private sector jobs are not straightforward, nevertheless, on the face of it the rewards look disproportionate.

These sort of comments are frequently dismissed by politicians as the “politics of envy” but they are legitimate questions that they need to face up to. They should not under-estimate how much ‘relativities’ mean to people in considering their personal well-being and the fairness of society.

Private Eye reports that Nottingham Trent University comes 84th for research excellence, 57th for student satisfaction, and 1st for vice chancellors salary – £623 000 – no doubt with a suitable pension. It’s not the politics of envy, is just madness.

Malcolm – I agree that this is ridiculous that university VC salaries re too high but they are minor compared with the salaries in the highest paid jobs in industry. When I wrote to the CEO of Marks and Spencer to complain about music in M&S stores I remember learning that his salary and bonus was in excess of two million pounds.

It does not matter whether we are considering the public sector, the private sector or universities – which fit in neither. The public has to foot the bill.

We should not have excessive remuneration (salaries + bonuses + various perks) in any sector, but surely the priority should be to start by tackling the biggest problems, which lie in industry.

Christine , if your husband gets a private pension , as I do, and the combined amount goes over a certain value he, like me , will be taxed on it depending on the amount over , it also removes some state benefits you could be getting . To me I feel I am being taxed twice on it . If you are above your taxable allowance which will include your additional (private) pension +shares+ investments in property (other than your home ) and even gain from savings . Now think of all the large conglomerates with slick City lawyers + City accountants paying a pittance in tax compared to their £Billions of income towards this country , its always the small person that suffers.

It might seem like double taxation on pension income but in most cases there was tax relief on contributions to occupational pension schemes. Obviously, once the scheme pays out the beneficiary pays tax on any income that exceeds their tax allowances.

The state retirement pension is based solely on contributory years and cannot be affected by a private pension. But, as Duncan points out, income tax can have a slight levelling effect.