What Went Wrong with the UK Pension System
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- Опубліковано 27 кві 2024
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The UK is currently facing its worst pension crisis in decades with millions living in relative poverty. So in this video, we'll explain the history of pension policy in the UK, what's gone wrong recently and what can be done to address the problem.
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1 - ageing-better.org.uk/news/50-...
2 - www.jrf.org.uk/savings-debt-a...
3 - ageing-better.org.uk/news/50-...
4 - ifs.org.uk/publications/futur...
5 - data.oecd.org/pension/net-pen...
6 - www.resolutionfoundation.org/...
7 - www.politico.eu/article/georg...
8 - www.ft.com/content/7135dc5e-a...
9 - www.economicsobservatory.com/...
CORRECTION: At 0:55, we imply that the state pension age in the UK is 65, when it actually went up to 66 in 2020.
Some commenters have also questioned our use of "net replacement rate" as a metric of pensioner wealth. For context, net pension replacement rate is defined as net pension entitlement relative to net pre-retirement earnings. To be fair, in certain respects this isn't the bet way of comparing pensions internationally, because countries with lower wages will generally have higher "replacement rates", but equally you wouldn't just want to use an absolute measure, because that would overstate the prosperity of pensioners in countries with higher wages, even if they were relatively poor within those countries.
Anyway, we hope you nonetheless enjoyed the video!
I wouldn't say 'enjoy' is the right description.
No mention that pension ages when the system was created in 1948 with a pension age of just 60 that the average life expectancy of 69.
Even in the US when their pension was introduced, in 1935 the pension ages was 65 and life expectancy was 63.
The idea that you should spend 20-30 years on state pension was never how it was ment to work. It was a chance to take it easy for your last 5-10 years if you were lucky.
Fortnite
@@SaintGerbilUK When LLoyd George introduced the pension in 1909 the qualifying age was 70 for men. The 60 age band was a later rate for women until the recent equalisation for those born after 1954.
You have found your stride as a new anchor.
Each time I watch a TLDR video about the UK I am wondering what the hell I am still doing in this country.
Still one of the highest human development scores in the world
You shouldn't have voted for Brexit
@@Alex-df4ltbro I was 14 😭😭
Things aren't any better here in Canada.
Thats I left uk almost 1 year ago and man I’m glad I did
Tldr: we’re f*cked
Nah nah nah nah nah
We're completely F*cked!
completely f*cked!
We're completely F*cked!
If your poor yes.
But has that not always been the case?
🎯
@@TheWebstaffif you’re outside the 98th percentile of wealth, yes.
@@TheWebstaffwell, yes, it was always problematic when you don't have enough money - but everything's getting more expensive and at the same time people don't get paid enough
It all comes back to a lack of affordable housing.
A lack of affordable housing = couples putting off having kids = smaller number of workers for a larger number of pensioners
To be more accurate, a lack of affordable housing that is acceptable to live in. There is plenty of affordable housing if you don't mind living somewhere that is regularly on fire.
One other factor behind the housing crisis is the very high level of (legal) immigration. That's a heck of a lot of new arrivals each year, with the Home Office's blessing, adding to the demand and therefore pushing up rents further. Whether this factor affects the birthrate among today's in-work taxpaying generation is another question.
@@ChangesOneTim True, but the arrivals won't be much of a problem if there were enough houses for all of them.
@@_tsu_ you can't build enough houses to keep up with the immigrants legal or legal, let alone the native population. Someone worked out a few years ago that you needed to build one every 7 minutes or something ridiculous just to get on top of the shortage. The simple truth is we import far too many people. None of it helps the native population. It is not as if we have huge amounts of empty land like the USA or France. The countryside is needed for food not for housing imports.
That chain tends to fail when you realise we have unemployed who are on benefits rather than in employment. You don't need more breeding in an overcrowded country (we have enough problems due to immigration already) we simply need sufficient workforce to generate the resources needed. Since we have that already, the problem is appalling management of the nation's resources, in particular manpower, not a lack of young people. Sooner or later that 'elephant in the room' needs to be addressed, before nature and events do it for us.
When I was in school my maths teacher warned us not to rely on getting a state pension as it was not mathematically viable. 40 year old me is happy I had a great teacher and am not replying on receiving one in order to retire.
That is a very good math teacher.
Hope you don't fall ill.
Pension system is meant as a safety net. You should aim to fund it your self.
I did sociology in the 90s my teacher was warning about this.
"not mathematically viable"? Wtf does that mean? You realise it was never meant to fund a luxury lifestyle, right? It was only ever meant to provide the most basic support. Those who relied on it entirely have always struggled. Add to that the banking crash of 2008, Brexit, Covid, and Truss' tender ministrations, the result, like Thanos, was inevitable.
Maths and economics have only a tenuous connection, whatever economists (and mathematicians) might tell you.
This is a disgraceful misrepresentation. The destruction of UK pensions was caused by Gordon Brown removing dividend tax credits for pension funds in the late 1990s, lowering UK pension scheme revenues by £5billion per annum leading to the virtual wipe out of final salary pensions. Prior to that Thatcher’s policies had left most pension funds. with significant surpluses
Correct.
Thank you!! Absolutely correct
Quite obviously the issue with Thatcher was what she did to the state pension and what that meant for so many poorer pensioners. But then Thatcher fans aren't exactly known for their sympathy for the rest of the society are they?
@@OnlineEnglish-wl5rp Thatcher saved Britain. But she did do something bad, she quietly revalued SERPS. but Blair Brown trashed a very good personal pension regime, that would have saved the pension crisis we have today. God help millions in the future personal pensions together with private occupational pensions ruined by brown. Add this to the massive growth and reach of the state and mass immigration, Britain has been ruined beyond repair. Thank you brown and Blair
How many years ago was that? Keep deluding yourself, tories have been in power for 14 years.
I have two pensions. I would much rather have had a Roth 401k throughout my working lifetime. 500/month invested from 25 - 65 at 9% is 2.3mil. I hate my job but can't leave because of I won't get my state pension. What do you think about doing a 70/30 stocks bond ratio?
I believe a healthy portfolio has 3 things, at the bare minimum: Exposure to ETFs for increased diversification, Exposure to assets that generate cash flow like dividend stocks, Exposure to market-leading tech.
Do you plan on retiring before 69?
That is what determines it for me. I switched to cash flowing assets because I wanted to retire early
At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an advisor, as this allows you make smarter investing decisions.
Bonds and stocks are two different things these days, but i agree, I think it's brilliant to have a portfolio advisor for investing! The market's instability makes DIY risky. You don't need to find the next NVDA to succeed in investing. I've turned 180k into $20k in quarterly dividends, a major milestone.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
what went wrong with the UK should be your next video
I don't YT would allow a video that lasts that long.
They'd just have to do a livestream in a northern City and a city in the south to know what's wrong with the UK. A picture is worth a thousand words, but in this case a livestream.
Tldr: a series of economic wrong-turns following WW2
Our issue is we keep funding wars in other countries which have nothing to do with us. If we just focused on ourselves we couldve been a great country.
Thank god i live in Switzerland🤗
It's funny how no politicians' million pound pension pots are bever effected.
At this point the whole UK is a crisis 😅
Yep and millions of us never voted Tory EVER.
😊
@@marksandsmith6778its always those who did nothing wrong who are suffering the most in the end
UK had a higher GDP growth rate than Germany or Sweden
its most of the world too sadly
@@gothicgolem2947most of the west. most countries dont have pension program to begin with.
"X perfect of pensioners are below the poverty line!"
And how many NON-pensions are below the poverty line?!
If everyone is poor, and the pensioners are also poor, you don't have a problem with the pensions system. You just have a problem.
Pensioners in the UK receive much less pension than they used to earn, so a perfectly well of worker could end up in poverty in retirement
@@tomlxyz Sounds like the most important thing to cover, if you're making a video on the subject.
Yeah pensioners actually have higher disposable incomes than working-age adults on average lol
Almost certain, the illegal immigrants the UK absorbed and who dont qualify for a pension are doing much better
The issue is that pensioners may not be physically able to work a regular job anymore. You can't just tell an 80-year-old "Go get a job!"
One thing you didn't mention is how private pensions can be sold off and devalued, reducing the pot you paid into. It's another scam
Save for your old age, because they’ll try their hardest to make sure you never see your state pension.
Then ask for an NI rebate. After all why pay for something you won’t receive
@@AJ-hi9fd rebates are for overpayments, you cannot opt out of paying NI
Hows about we start reforming public pensions . 2.6 Trillion liabilities . Civil servents retiring early with million pound pension pots but telling the scaffolders & bricklayers they need to work to 67 & up because there is no money . Money for them though . Absolutely disgusting.
Very true. But so many people are so defeatist they'll let the civil servants keep their pensions while the scaffolders and bricklayers get nothing. Ditto with the banks and the bank bailouts
Did you know that in the UK, only 11% of pensioners collect their full pension. The rest goes back to the gov once they die. And you see declining health and well being in this country with our deteriorating healthcare system ...let that sink in, and realise what is really going on here.
When you say "goes back" - what do you mean?
Corruption and greed.
@@eljay5009 Think of the pension fund as a piggy bank: you pay money in for 35 years and the piggy gets fat. Then you take a little money out each month to pay for your retirement.
But UK govt is running a ponzi. Your money is long gone and they want to take money from young people to pay for your retirement.
@@eljay5009 I assume the OP is referring to the State Pension. You might think you'll live a long and happy retirement claiming the state pension for decades, however, you can't claim the pension when you are dead, so if you die after just a few years of claiming it, the government saves money by you popping your clogs after just a few years.
@@simonfrost7094 By "the government", I presume you mean "the taxpayer". State pension is paid for on an ongoing basis from current taxation. The government don't "save" anything. The country is already running a budget deficit and has done for decades - so we already spend more than we take in taxes.
Too many non-deserving people get a UK pension, free health care, accommodation, schooling, disability payments, social care - anything and everything, without paying into the system. Thats bollocks!
correct
How do you get a state pension without paying into the system? You need to put the Daily Mail down and actually try claiming from the social security system. If you're upset about "5 million people on out of work benefits", you might want to remember that the Tories have spent FOURTEEN YEARS blaming people on welfare for the banking crisis caused by their spiv friends in the City and yet after numerous rounds of "reforms" including benefits sanctions and the benefits cap, they still vilify those people when their economics make everyone poorer.
Perhaps you might like to remember that we've had structural unemployment since the early 80s when Thatcher deindustrialised whole swathes of the country. And in the 90s the Major government started the trick of shifting many of those people onto Incapacity Benefit to massage the unemployment figures. Because of course the political Right doesn't want Full Employment because when that occurs people can bargain for better wages and have more choice in the labour market
Why don't you try being a man and stop feeling sorry for yourself? Your housing situation and tuition fees are due to the same financial interests who incite you to blame everyone but those responsible for what makes you so bitter
You might also want to remember that this country was near bankrupted by those interests and yet chaps like you have precious little to say about the trillion pound bailouts they receive
@@williamgould2855 The welfare state was set up on two principles: Full Employment and National Insurance contributions. Which political party was it who got rid of that? It was the Tories in the 1980s when they put millions of people out of work and then spunked the North Sea oil money to pay for the social security payments to stave off mass unrest. You little fellas feeling sorry for yourselves, buying into the notion that a nation''s finances are like a household's might like to try engaging with what was has actually happened in this country
Lowest pension in the western World & they claim they cant afford it . Ridiculous.
No problem with importing the third world and giving them everything free
Hi, the basic problem is it's a Ponzi scheme. They pay out what you pay in, so when you come to claim it they have no money in the bank. This you had better save some money for yourself, ISA anyone?
Or just work until you drop down dead. (No NHS spending on you!) which is the current plan with keep raising the pension age.
Bleak looking! M.
I’m from the UK and moved to Iceland 🇮🇸 14 years ago, not sure why Iceland appears so low in the stats in this video. There are mandatory pensions plus private pension savings. In the years I have worked here my Icelandic pension is ~£2000 per month, which is already better than the full UK State pension, and is on track to afford me a comfortable retirement.
Well it was shown as a share of what people made when they were still working.
@@olivero.1877 so many people in the comments seem to not understand that and idk why
@@olivero.18773:12 where? And Norway is just above UK. And what’s the point of it? Why do I need any share of what I earned? We all need the same when we retire, roof, food, a small holiday. If I earned so much, I put more away. Nothing to do with pension.
@@TheBooban I just tried to explain what the graphic expressed. I do not know „the point“ of that. A system in which retirees get just as much money as they used is probably unaffordable
@@olivero.1877 understand. Just wondering what tldr is thinking. My point is no only is unaffordable, but unnecessary. I don’t need anywhere close to my working wage when I retire. I mean i need just the bare basics. If people think they should be in the lap of luxury, this is a big fuss about nothing. We can’t solve problems when we have the wrong perspective on it.
Seems to me like it’s a mix of bad planning from the government and terrible financial literacy from the general public.
I think most low income earners were taking money out of their pension to survive the rise in cost of living.
UK spent all the money it looted…sad 😢
Nah, this one is solely on the public.
The public are politically and financially incompetent in regards to the majority.
The triple lock as we've just been told isn't enough to tackle pensioner poverty, but the triple lock regardless was still attacked by the left because it helps old people.
The right and left don't have concrete morals. The left loves to talk about safety nets and caring about the vulnerable but dislikes helping pensioners... Unless it's something the right are against like insulation.
The right act as if they are all for the dream of house ownership but have been nonnexistant in destroying crazy building regulations and in forcing councils to approve more building applications.
The public decry governments, but they are just trying to appeal to the public in the short term.
If the left backed the triple lock or going above it, then the Tories would feel like they could gain more votes by pushing it higher.
It's a travesty.
Yep. Never trust anyone who wants to engineer failure under the guise of "freedom." The "sure, take out 25% of your pension tax free" was guaranteed to result in people draining their pensions at unsustainable rates because most people are not financial analysts.
It would be like making all prescription drugs over the counter then being shocked, SHOCKED, when people start dying from medication interactions that any doctor would have known to not prescribe to people.
I don't think the government planning is bad. It's really the public's fault for not saving enough or spending their retirement funds. The same is here in the US. Financially responsible people like Asian Americans usually end up with so much money that most of it is passed down to next generation, in comparison to typical Americans who spend all their money each month then complain about government doesn't give them everything they want.
State pension is currently from 66 not from 65
And 68 if you're a woman. Yay. :(
Corrected in pinned comment
@@SevenEllen Depends on your age.
It depends on when you were born. Mine is 67.
The personal tax allowance being frozen is going to bring pensioners into the tax paying bracket. So how is this going to help pensioners.
May I suggest a new 'pensions lock' here, maybe for Labour to pick up? Make personal tax allowance = full annual state pension always, so allowance goes up in step with the pension.
AI bots and trolls aside, this is a really important issue. At 58, and on a low income, I suspect that I'll be tapping into my pension before I retire. In the long term, I suspect we'll be back to pre state pension days where you'll only retire if you have the funds to do so - assuming there's actually any work that'll be available for someone in their late 60s. It's a miserable state of affairs, and the fact that pension funds invest in the stock markets means we suddenly need capitalism to succeed, even as it erodes the rights of workers.
What so you mean “suddenly” need capitalism to succeed? We always need it, makes the money go around. What do you expect? More imported workers to pay for you? You should have been saving for your pension since your first job. I’m 50 too and old folks don’t need alot of money. I’ve got 200k euros in stocks (almost tax free) and am fine with that. I live in Sweden.
@@TheBooban it means that not all people are fine with pension funds investing in weapons industry,oil and gas etc.
Also not all are fine with pension funds forcing privatization of infrastructure and public wealth and resources like water.
I guess it all depends on each person's ethics or lack thereof.
@@georgesos don’t you get to choose your fund? You’ll probably end up with less money “ethically” investing, but how does the nature of the world owe pensioners anything?
Capital is the solution when labour is failing to secure econmic growth
@@georgesos,
I would not call a system of believes which keeps you poor, freezing and defenseless ethical but socialists will never learn their lessons
Is anything actually working here?
brexit🤣 they not changing that, no matter how bad it gets, fun fact - a lot of pensioners voted for that
NO
@@aurelijus1 yes and they voted Tory to bring us here. The young people were too cool to bother voting. Now there's no point in voting.
@@aurelijus1the door is open. Now England just has to walk through.
Social services in the UK definitely are not. I would say some things work, it´s easier to get a job for young people than it is in a lot of countries and there are sectors of the UK economy that work quite well, but I definitely wouldn´t advise anyone to adopt our economic model.
You missed 2 massive events. In 1978 there was a 2% rise in NI to fund the State Earnings Related Pension Scheme (SERPS). This meant that everyone working 40 years would get 50% of their final salary each year on top of the static state pension. If you wished, you could divert this additional NI contribution to a company final salary pension scheme (a DBS) and potentially get 66% of your final salary. If your company didn't run such a scheme you could divert this 2% and additional contributions from you and/or your company into a pension pot (a DCS or SIPP). Nobody who has worked from 1978 onwards should get only the basic state pension. As mentioned below, Gordon Brown introduced Dividend tax which massively curtailed the growth of pension pots. It was Gordon who is responsible for pension poverty. The 2016 legislation meant that anyone with a pension pot did not have to convert it into an annuity, which was the only option for most pension pots. You suggest that the 2016 legislation introduced the 25% tax free lump sum, but that was always possible when converting a pension pot to an annuity. Not only possible, but most common. I think you need to restudy the last 50 years.
TLDR just proving their left wing credentials, I thought it was a bit strange that they jumped from ‘it’s all Thatchers fault’, even though she hasn’t been pm for nearly 35 years (probably none of them were even born then) to George Osborne opening up pensions, maybe they don’t know Liebour were in power for 12+ years and didn’t do anything to reverse the issue they are talking about, just made it worse!
" No-one who worked from 1978 onwards should be on the basic State Pension"
That assumption went out of the window on 6/4/2016 when IDS introduced the "New" State Pension. Those who retired prior to that date were left on the old "Basic" Pension. He also introduced a much lauded "Minimum Income Guarantee" under which no pensioner would be allowed to fall. And to pay for it he robbed Basic Pensioners of their SERPS, their Graduated Pensions and some of any private pension they had accumulated.
the New Pension is £221.20 pw
The Basic Pension is £169.50 pw
The Minimum Income Guarantee for Pensioners is £218.15 per week.
And under the new MIG rules, SERPS, GP and Private Pensions are counted as "other income".
In other words those on Basic Pension now receive those additional pensions - WHICH THEY PAID FOR on the understanding they would get them IN ADDITION TO STATE PENSION now get them INSTEAD OF State Pension.
To give an example a pensioner with SERPS, GP and small private pension totalling £54.40 pw, which she paid for and believed she would get in addition to state pension, now has an actual income of £3.05 pw above the current State Pension.
@@eaglerider11 I'm sure you're right that there are people who didn't gain much. But huge numbers got enhanced DBS, DCS and SIPP pensions over and above the Basic State Pension before 2016 and after 2016 you got a hike to the BSP with the additional DBS, DCS or SIPP.
@@john_dx SERPS was protected after 2016. It didn't just disappear. I had built up a SIPP whilst contracted out for a while, and some SERPS entitlement whilst contracted in. I retired after 2016 so was on the new pension, but because my SERPS + the old pension was greater than the new pension then that amount was protected. It didn't just disappear and put me on the new scheme plus nothing. The point I'm making is that no one should just be on the old level and no more. They should be on the old level plus either a DBS, DCS, SIPP or SERPS because of the 1978 legislation with no need for a top up. The awful bit is if it was a DCS or SIPP, the majority had no choice before 2016 other than to convert a pot to an annuity.
@@peterholt4806 You miss the point. The point is that when people paid into these pensions they were told they would get them in addition to State pension. Now they get them instead of state pension. It's a breach of promise, and those on lowest incomes who needed them most have lost out most.
Basically, raise the pension age until there's no more people left alive to claim pension, problem solved. Literally what they are doing.
In my country is tied to life expectancy.
Unfortunately ss pension wasn’t made to last a long time but life expectancy increases and everything got fd, some are going to be retired for the same amount of time they worked
And who's giving all the boat people a pension when they are old?
No mention of Gordon Brown taxing dividend income, killing off final salary pensions in the private sector.
CORRECT THAT S LABOUR FOR YOU IT FUCKED MY PENSION SCHEME UP AND COUNTLESS OTHERS BUT HIS PENSION IS CAST IRON ISNT IT
would have been nice to get an explanation of what the net pension replacement rate is within the video
Damn right. I have just asked this: "This is one of the most suspect presentations I have seen on TLDR, which is usually pretty good.
What the heck is the "Net Pension Replacement Rate" and why was it chosen as the preferred measure here? Without explanation the graphic makes it look as though the UK has lower pensions than Colombia, Mexico and Costa Rica. Does it?
I suspect the ""Net Pension Replacement Rate" means the percentage of the workers original wage that is received in pensions after retirement. If so, a poor wage with a 100% "Net Pension Replacement Rate" would still be a poor income, but would look good on this highly selective graphic.
There is also a lot of talk about "relative poverty" and absolutely none about "absolute poverty". I am in relative poverty compared to a millionaire, but still doing adequately. What we need to know is how many people are in absolute poverty."
The Net Pension Replacement Rate (NPRR) is defined as :
“the percentage of a worker's pre-retirement income that is paid out by a pension program after the worker retires” (source: Investopedia)
Basically, a rate of 100% means that you get the same amount from your pension as you got from your employment. A 50% rate means you get half of your working income.
@@markaxworthy2508 relative poverty is defined in relation to cost of living, not relative to millionaires. If someone earns a lot but also has to spend it all just to live then they're in relative poverty
Net replacement rate is how many percent of what you used to earn you're getting when you get into retirement. I thought this was common knowledge? It more or less tells how much you have to adjust your living standards once you retire
@@tomlxyz The lesson here is not to make assumptions, as the presenter/writer clearly did. Furthermore, it still doesn't explain why this particular measure was chosen. A poor wage with a 100% "Net Pension Replacement Rate" would still be a poor income, but would look good on this highly selective graphic.
One reason why people aged 55 --> state pension age use the option to withdraw private pension savings is that they have to pay for private healthcare because the NHS waiting lists are endless.
'People aren't saving enough for retirement'. Some are, but there are also some AWFUL private pension providers out there. My father retired in 2016. When he checked one of his several private pensions, he found that it was actually LOSING more money each month than he was putting in. In my experience the fees charged by some providers are nothing short of scandalous (and far from transparent). The regulation of private pensions seems to only be concerned with either money laundering or what people choose to do with their pensions AFTER they retire. There is IMO, wholesale THEFT going on in the private pension sector. Sky high fees being charged REGARDLESS of performance (which I've seen in my own private pension). How can that be right? Also if these private pension funds are being used by these companies to invest in UK property, that will naturally have an inflationary effect, often times negating any 'gains' made by the pensioner (especially after pension provider fees). This inflation, especially around housing also makes life difficult for youngsters to afford ever rising rents or property prices. Also the tax burden on many pensioners is much higher than you would think. On one of my father private pensions, the govt takes almost 50% of what he gets each month (and it isn't a lot isn't a lot). My father worked EVERY DAY of his life since the age of 15 till 66. My mother is even worse off as she had no private pension and her state pension is affected by the time she took out of work raising myself and my brother until we went to school. If she were unmarried, she'd be destitute. Yet we apparently have unlimited funds for hotels etc etc for anybody with the brass-neck to just turn up in a dinghy.....
Couldn't agree more. These videos always bring out the little libertarian fellas who are so quick to lecture everyone else about "financial responsibility" yet they NEVER have anything to say about the issues you raise.
It’s a huge scam to be sure. Pensions are ridiculously complex and replete with jargon . I shouldn’t need a pension advisor I should be able to tap in my NI number and see all my pensions come up with I go about fees and performance. This is so obvious it beggars belief that it’s not in place already….
The reason that Thatcher's reforms were reversed is because the private pensions which emerged from it were a disaster. All sorts of absurd claims were made for just how good private pensions would be but, even with tax concessions, the returns were paltry. This is due to the failure of the economy to live up to expectations and (generally unreported) abuses within the pensions industry. It's certainly the case that anyone investing in property since the time of Thatcher would have done much, much better. You could have invested in just about anything and done better - tins of sardines, for example!
Well, she was a neoliberal so what should we have expected? Neoliberalism isn't really about the power of the market, it's a class project to ensure that a tiny group of people get ever wealthier at the expense of everyone else. And we can say that categorically because just like at what's happened with the periodic banking crises
The same problem with everything else in the UK.
Unchecked corruption and greed.
Don't rely on government for your pension
Perhaps the State pension is so low is because so much government money is going to pay extremely generous civil service salaries and pensions.
Yep this. Notice that Gordon Brown raided pensions in the private sector - but left the generous civil service pensions alone. Funny that.
2.6 trillion Public pension liabilities but we are told the big problem is the measly pittance state pension. Gold plated civil service pensions.......nothing to see here
The problem is multifaceted.
1. State pension is an unfunded scheme - meaning it is paid for out of current taxation (in essence a glorified ponzi scheme).
2. The Baby Boom generation is retiring - meaning there are more pensioners coming into the system.
3. The birth rate dropped after the baby boom, meaning there are proportionately less people of working age paying tax.
4. Life expectancy has increased massively (from 71 in 1970 to over 80 today) - so people entering retirement age are drawing their pensions for longer.
5. State pension age has not increased commensurately with the increase in life expectancy.
So basically scrap it and let people save their money themselves. I like that.
Could it have something to do with the government giving full pensions to people who didn't contribute anything to the system?
A state pension is just over £221 a week. My private pension goes down in value, inflation and costs, so I take out what I can, so I can enjoy it now, I am in my late 50’s and have various health issues, so I really don’t care!
if your private pension is not beating inflation then it's an awful fund
@@Makalon102 inflation is high, interest rates are low. Just glad I no longer have a mortgage to pay.
It's supposed be invested in stocks and such that don't go down with inflation
@@tomlxyzEven the value of stocks can fluctuate. The portfolio should include bonds, especially when people get closer to retirement age.
You assume that people are on the new State Pension. My State Pension is £170 a week, slightly higher than the worst off.
Love how increasing pension contributions is not mentioned as an option alongside the others...
Well clearly when wages have been repressed for 45 years and the Tories are talking about abolishing National Insurance we're talking about a system which is steadily trying to cut whole swathes of the population out of having a decent retirement
So many errors in this:
- The graph in the intro only uses state pension and ignores occupational & private pension provision.
- 0:54 No, there are three types: Pillar 1 (state pension), Pillar 2 (occupational pensions) and Pillar 3 (private pensions).
- The state pension age isn't 65 anymore, it;' currently 66 years & 10 months.
- Pillar 2 & 3 pensions aren't subsidised by the government. Personal contributions are considered to be deferred income so are under the Exempt, Exempt, Taxed basis vs ISAs for example that are Taxed, Exempt, Exempt.
- The Thatcher government recognised that the then current system was unsustainable and it had to change. The impact on poverty was baked in. The graph ignores the impact of SERPS. The point of large numbers of pensioners being in poverty is true, but that was also true beforehand.
- Before Auto Enrolment, 10m workers had no pension beyond the state pension which meant they were guaranteed to be in poverty oat retirement. This was the most second most important change this century. The most important being Labour's changes to occupational pensions: Brown's tax raid (which has pulled hundred of billions out of occupational pensions) and the EU requirement for Mark to Market, changing the valuation of bonds & gilts. These led to schemes being unaffordable, driving the closure of defined benefit schemes. It also led to schemes pulling out of UK equities from 2006, which is the initial driver of the collapse in listings on the UK stock market.
- The Triple Lock was only signed off because it was a temporary policy meant to only last for the term of the coalition government and cost a few hundred million pounds. It actually cost £7.7bn over that period and the costs have grown exponentially. Money isn't infinite so we can have a higher pension but start it later or take less and have a slower increase in pension age.
- Some UK pensioners are in relative but not absolute poverty. The distinction is important.
- 3:33 The point of people not saving enough is true. The AE savings rate needs to increase to at least 12% and remove the ability to opt-out. Those 10m that first joined a pension with AE in 2012 don't have the time or contribution levels to save enough.
- The Pensions Freedom comments are just extraordinarily wrong. The 25% tax free withdrawal was not in any way introduced by Osborne, he removed the obligation for pensioners to buy an annuity at retirement, very few of which obtained an even reasonable deal. At the time the average pension pot was worth around £25k but retirees also typically had around the same amount in debt. Osborne set up a system allowing people to manage their money in a way that suited them. The fascist!
To add to the above vs. the much more mature system in Australia:
- Currently 11% in Australia, *all* employer contribution, *on top* of wages. That 11%, going up 0.5% until 12% in 2025. Also if you voluntarily contribute on top, it is taxed at 15% and not at income tax, so for most it is an automatic 17.5% return on investment.
- The pension investment account is tied to you and not the company so you have full labour mobility
- Australia's a lot more regulated, mature and the investment returns are more than any UK scheme as well.
- A lot of your pension funds were invested in gilts…what a joke.
They, as proven, are not the safe haven people think they are as, as proven, they are one dumb Tory budget away from spooking everyone and killing off literally hundreds of millions from the people.
In contrast, Australian pension funds own 40% of the Australian stock market.
- I have looked into the holdings makeup a lot of your funds. They are a joke. E.g. the BT Pension Scheme, second largest in the UK… 25% corporate bonds!? Only 14% equities!? Are you serious!?
- The Tories old proposed changes to your system no political party would get away with in Australia. In fact, the previous *right wing* government here introduced legislation to bring down investment fees and tighten up frivolous spending and poor returns, while the Tories are doing the opposite for their London finance friends.
2% performance fee bonuses for getting over 8% pa returns…are you f’n kidding Tories? No such performance fee BS here.
Thank you for pointing all of these out. I felt the same while watching the video... one of the worst ones I have seen on this channel so far. So many mistakes in explaining what is actually happening...
@paulwood6729 very well said. This video is a very poor account of how the pension system actually works and what the issues with it are.
3:13 this statistic is seriously misleading, and you haven't explained what Net Pension Replacement Rates are. Suggesting that retirees in Costa Rica or Colombia are better off in terms of implied quality of life than in the UK is laughable. When the average wage in the UK is so much higher than these countries, it's far harder to replace close to 100% of someone's salary with a state pension. We couldn't even remotely afford to pay UK retirees 100% of their wage as a pension. It's telling that other countries usually lauded for their high standard of living Germany, Norway and Iceland are almost identical to the UK on this graph.
The video is a complete joke. It's a biased piece of pseudo-journalism.
NPRR is supposed to iron-out variances in different countries, on the assumption that the cost of living as a percentage of the income of a person should be fairly similar. The person in Costa Rica might only earn half what a person in the UK does, but we assume that the cost of living (say 60% of income) is roughly the same. Costa Ricans earn less, but it costs less to live there. The NPRR then adjusts for that.
If you need 60% (or whatever the true figure is) of your working income to live above the poverty line whilst working, and 40% of your working income post-retirement, then you need an NPRR of >40%, regardless of what your working income was.
Of course, the weakness there is the assumption that the cost of living in Costa Rica (or wherever) is proportional to the cost of living in the UK. If it’s not, then the core assumption of the NPRR is flawed for international comparison.
@@slashnburn9234 totally agree. Also the quality of living, not just cost of living. If the pensions and costs of living are proportional, but the standard of living is not the same, then it isn't a good comparison either.
Very true
The video focuses on comparable economies
if you only have a state pension, youve always lived in poverty, why should you suddenly be rich on money youve never paid in, are millenials and gen z meant to pay for this, were already poor
Don't worry. The NHS is bumping off older people.
no mention of public sector pensions this is where the problem is. .
Most rich people stay rich by spending like the poor and investing without stopping then most poor people stay poor by spending like the rich yet not investing like the rich but impressing them
People prefer to spend money on liabilities, Rather than investing in assets and be very profitable
You are so correct! Save, invest and spend for necessities and a few small luxuries relatives to one's total assets ratio.
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This completely ignores the pension credit benefits that all discussions around pensions seem to ignore.
What's the problem ? British pensioners will always be able to go and live out their last years in some poorer country where life costs less, like Spain or Portugal, since there is still freedom of moveme... Oh no wait!!!
Why should the burden of extremely old pensioners with multiple health problems be the problem of those aforementioned countries?
@@MyNewLeng freedom of movement simply doesn't exist, if the British don't let in anyone unless they have a job, what makes you think that other nations will behave differently?
..and those countries are no longer poorer..
Absence of freedom of movement has never been much of a barrier to preventing British or other European people from retiring in Thailand, the Philippines or some other cheap place.
We aren’t cheap anymore 😂
I and my wife worked for years, paying both national insurance and company pensions so we could have a reasonably comfortable life when we retired, now if I claim all my personal pensions I will pay tax on money I have already paid tax on, they claim government pension is taxed but it counts towards tax, that sounds like a taxable item to me, this is just hiding tax and makes life a lot harder than we were lead to beleive
Im 35 now and I've extrapolated my pension out, and, even though I have a reasonably good salary, if I were to put in 20% of my salary into my pension per year (which I can't afford) and look to retire before 65 then I will be below minimum wage at retirement. I've been speaking with most of my colleagues who are about to retire and every one of them have nearly 350k more in their pension pot than I will at retirement. I don't think enough young people are considering how bad/unbalanced the pension schemes are now or how poor they will be at retirement.
You're colleagues that are retiring with 350k in their pot are absolutely fucked if they don't own their own house
@r4vik they have £350k MORE than I will when at retirement. Some of them have nearly £750k but more are easily over £500k. I won't touch those numbers without investing elsewhere or getting very lucky.
Why stress about it? Just make sure your mortgage is paid off or downsize when you hit retirement.
If you're in a workplace pension and invest in your company's default pension fund, then yep, you can expect it to perform pretty badly.
Try dying younger or you will live until 80 with no money
Yolo im i right?😂
Everyone says the next video should be what went wrong with the UK, but it'd be a quick video consisting of two words:
Margret Thatcher.
She ruined everything that evil woman
In the case of pensions though, the negative role of Nu Labour and Brown is also worth pointing out.
No mention that the government taxes pensions after paying tax on our earnings the government has taxed it again whilst mps retire early with golden handshakes
0:30 It´s worth mentioning also that some public service jobs have higher pensions, i.e teacher pensions are a bit higher as are civil service pensions, Also, it needs to be put into context that in the UK you can qualify for other benefits as a pensioner, i.e you can qualify for housing benefit.
But basically it´s right. I really hate Thatcherite mentalities, it does seem to me to make more sense to require us to pay more tax, but then we get more services.
The thing is, you can´t guarantee in EU countries either that there won´t be a hardline Thatcherite government in power some day. It´s worth making extra provisions for retirement because you never know how things might be.
Agreed. I worked for the Post Office for 11 years in the 80s and 90s.
Every time pay negotiations came around we got very poor annual increases, but were told: "The annual pay increase isn't generous but you have a copper-bottomed government pension to look forward to, with guaranteed annual indexing."
Whenever i hear of a political problem at home, i am truly gratefull for the british. They always give me the feeling of: Even though its bad here, it could be worse
Where you from?
@@Emsworth377 Austria mate
Perhaps you need to be more introspective, like the British? Self awareness is a wonderful thing! Historically, it has not been Austria's strong point. For example, was Austria Hitler's first victim, or first collaborator?
@teddyzaehmer been to Vienna once. It was nice. So, no massive problems over there?
@@teddyzaehmer I like Austria. But what happened with the jab there. Govt seemed to go a bit authoritarian.
Net pension replacement doesn't really tell you a lot, depending on whether this is for previously high earners or previously low earners. State pensions should be fairly flat, so a net pension replacement of 100% isn't at all desirable, since it just means subsidising already wealthy people. Simultaneously, a country can have a fairly high net pension replacement, but by one means or another fail exactly at those that would need government pensions the most, depending on how they are calculated. In general, in a country with fairly high gaps between the rich, let alone super rich, and the poor, averages tell you very little. Median would be better, but still fairly basic, while low % quantils may actually come closer to telling the actual story.
3:08 Everyone under 35...
"Looks like I'm going to be taking an extended trip to Portugal"
BTW, in Portugal pension age (w/o penalty) is linked automatically to average life expectancy since mid 2000's, so the graph is constantly being updated as each year, pension age is advancing and getting harder to achieve w/o penalty (current, 66y and 4 months).
Many won't even venture as far as the next town to find a job so it seems rather unlikely that they'll emigrate.
Unless you go live in the middle of nowhere or have a higher pension you are fd😂 we have uk prices with Eastern Europe incomes worse Eastern Europe is winning.
You can go to Algarve and watch your countrymen not being able to handle alcohol and trow up on the floor 😂
In other words run away rather than fight
Gordon brown raided the pension pot when he was chancellor
"Triple lock" is the worst financial decision ever. Most certain route to Government ruin ever imagined.
Meanwhile Swiss people just voted for a 13th month pension. But Switzerland is a 'real' democracy where citizens have a say, no Royals, no unelected lords, no aristocracy owning half of England area.. And Swiss are hard-working folks, while in UK: « Britain is among the least work-oriented countries in the world, according to the research by the Policy Institute at King’s College London. » 7 Sep 2023
And even conservatives are more socialist in swiss than many social democrats in other European countries
Switzerland also is a tax haven and money laundering hub that parasitically benefits from its larger neighbours, passing on some of the proceeds to its citizens.
"Britain is among the least work-oriented countries in the world, according to the research by the Policy Institute at King’s College London. » 7 Sep 2023"
Really so why are British people employed all over the world in various sectors from education to security to finance to sport? The only possible truth to your spiteful little claim - which you wrote to make yourself feel superior - is the dire productivity figures. Productivity has collapsed because of mass immigration - companies prefer cheap labour to investing in proper productive capacity and the banks want to continually expand the debt bubble
But of course facts like that would get in the way of your superiority complex
@@OnlineEnglish-wl5rp Bobby Duffy, director of the Policy Institute at King’s College London: "Of 24 nations included in a study by the Policy Institute at King’s College London, people in the UK emerge as the least likely to say work is important in their life. Around one in four of those surveyed in the U.K. said work is very or rather important to them. That’s a much lower proportion than in the U.S. and France, where 80% and 94% said the same, respectively. "
Dominic Raab: "British workers are 'among the worst idlers in the world'. "
« Liz Truss was heard criticising the British work ethic, suggesting people lacked the 'skill and application' of foreign workers.. »
@@OnlineEnglish-wl5rp IMF 2024 GDP per capita PPP United Kingdom 58,880 Switzerland 91,930
PPP Purchasing Power Parity is the true indicator of wealth & overall well-being in a country, it accounts for price differences across countries, allowing economists to compare standards of living between countries.
"This had a lot to do with Margaret Thatcher's government...", Why am I not surprised.
That many pensioners choose to take our 25% is ultimately their call. Their money, they can spend it on what they want. Yes, some pensioners, and too many people working, are having to borrow to fund their life, but too often they need to look at their expenses and income, and make different decisions. I know this is harsh, but otherwise we introduce moral hazard, and it's not on me or other taxpayers to fund your poor choices or lack of desire to improve your situation.
For those of us still working, I reckon at this stage we should just assume we won't get the state pension. Plan accordingly.
This video broadly, for me, is further justification that we need to tax wealth, not primarily income. You already have the top 20% of earners paying 80% of the tax, and that's only getting worse. When 1 in 4 people is the ratio, which will be more like 3 in 10 once we include unemployed, sick, etc, you're looking at perhaps 10% of people being net payers into the tax system. That surely is unsustainable, and those 1 in 10 aren't going to be happy for long remaining in the UK.
Some people, including pensioners, are sitting on valuable assets that are being used inefficiently whilst anybody with about £300K in wealth will "earn" more in a year than the average UK worker will earn after taxes, It's increasingly hard to become wealthy, but easy to remain wealthy, and if we keep taxing only those earning and producing value add output, we're making it work.
In other words you've bought into all the neoliberal propaganda put out by the financial interests which are parasitising this country and the rest of the West.
"moral hazard" LOL like when the banks crash? Sure, they really pay for their bad decisions don't they?
"it's not on me or other taxpayers to fund your poor choices or lack of desire to improve your situation" You clearly didn't watch the video at all did you? It's about systemic failure over decades not "muh individual choices"
"You already have the top 20% of earners paying 80% of the tax" That's a lie - the top few per cent have every means of avoiding paying income tax. We've had forty five years of wage repression so people like you created the rest of that situation: pay people better wages and they can pay more tax. Simple. But you don't want that, do you
LOL "those 1 in 10 aren't going to be happy for long remaining in the UK" The same old lies trotted out again and again. The top few per cent in Britain are protected like no other - we bail out their bad investments, our taxes are funnelled to all the outsourcing companies they own, our taxes prop up the pitiful wages they pay and rents they charge - why on earth would they leave such a good deal behind?
Why do you little fellas all have avatars like a teenager would have?
Firstly, thank you all for the great explanations of many complicated aspects of politics and social policies.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
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I did sociology in the 90s my teacher was warning about this.
The pension structure is changed with every government if not more often. Sometimes contract in, sometimes contract out. Some contract out pensions disappeared with the companies. A embarrassing amount of people die before getting anywhere near pension age, as retirement age increases it will get worse. Why save for a pension you probably won't collect on . Governments have created a job market where 'good' jobs are a rarity. Many people are living hand to mouth. It is getting worse.
It's disgusting the distrust they've sown between young people and old people - this all started with David Willet's book "The Pinch" which just so happened to be published in 2010 after the financial crisis in 2008. Because of course "the party of personal responsibility" can't ever take responsibility for their neoliberal economics and their spiv friends in the City
This is one of the most suspect presentations I have seen on TLDR, which is usually pretty good.
What the heck is the "Net Pension Replacement Rate" and why was it chosen as the preferred measure here? Without explanation the graphic makes it look as though the UK has lower pensions than Colombia, Mexico and Costa Rica. Does it?
I suspect the ""Net Pension Replacement Rate" means the percentage of the workers original wage that is received in pensions after retirement. If so, a poor wage with a 100% "Net Pension Replacement Rate" would still be a poor income, but would look good on this highly selective graphic.
There is also a lot of talk about "relative poverty" and absolutely none about "absolute poverty". I am in relative poverty compared to a millionaire, but still doing adequately. What we need to know is how many people are in absolute poverty.
I agree, It seems half the stuff that comes out is propaganda for TLDR
Relative poverty is important, as it shows things aren´t being shared fairly.
@@Letsthinkaboutit-mb7nn Relative poverty is of sociological interest, but it does not have the real world importance of absolute poverty. Relative poverty is more of a grudge issue, whereas absolute poverty is a life-or-death matter. This presentation chose the grudge approach for reasons best known to itself. TLDR has lost its way with this presenter.
@@markaxworthy2508 do you think you could argue with a Single mother who cant afford school Equipment for her Kids or any birthday presents, who is legitemitly scared how to put anything on the table next week and cant safe a dime for any emergency that they are not poor because they are still healthy enough to swipe away the flys around them ?
Many tried to argue that poverty and poverty in comparison isnt the same, but none of them showed any insight or Empathy in any social topic, all they did earn by right was contempt. Thats why i would strongly advise that you think about your Arguments one more time
@@teddyzaehmer Absolute poverty is a subset of relative poverty that kills. Nobody ever dies just of "relative poverty", but they do when they pass into absolute poverty. Talking only about just one or the other, as in this video, is a choice and often a political one.
That felt more bias than usual
As soon as I started work, I followed my banker Grandfather's advice and put in the maximum amount I could into my private pension. Given its getting topped up to 20% by my company, I feel comfortable with what I have. I am surprised many others don't do the same because its almost like they forget it reduces your income tax bill too.
Annuity rates plummeted making it impossible to live off private pension funds as returns are to low.
No mention of looking to Australia to solve your crisis, especially when your government is supposed to looking at the Australian system of superannuation. Superannuation is a mandatory contribution started in 1990s for ALL workers.
Yeah means test . The Bizarre system that penalises people who bother to work by taking their state pension off them if they work & save for retirement . Why would anybody work & save to give it all to the Government at retirement? Probably why Gen Z are all on the sick . Zero incentive to work .
Yeah tell people if they work & save too much they get no state pension. What a great idea to discourage work & bankrupt the country.
It seems as though superannuation - for some reason - is not deemed politically feasible or acceptable in most of the world. I'm guessing it's because it involves employer contributions and in most countries employers don't want to pay into this. Other than that I really struggle to understand how this relatively straightforward and successful scheme hasn't found favour elsewhere.
Didn’t the uk had the opportunity to have a wealth fund like Norway?
Yeah let's discourage Work & saving , only dolescroungers get pensions.
What is a net replacement rate?
The porcentaje of pre-retirement money (after taxes of contributions) a worker gets when he retires. A net retirement rate of 70% means that for each 100 pounds the worker got as income his retirement would be 70 pounds.
@@EduardoEscarezthat sounds too good. Is it expected that we get 70% of their income back when retired? Why? Old folks don’t need that much. Why is it tied to what they used to work for? What’s the point of that? So govt. takes, say, 30% in taxes and supposed to return 70% back? Uh?
@@TheBooban The 70% was an example, according to the latest OECD data the UK has a 54.4% net replacement rate
@@EduardoEscarez I understand that. Just following your example to illustrate mine. What you need to retire is irrelevant for what you earned. Unless you make the system where that connection actually works. For example, in my country, my company puts a % my salary into my retirement account. I put the same amount in. And its my account. So upon my retirement, I expect i get it all back to me.
Public pension liabilities is 2.6 Trillion but the problem is the state pension . Please , this is farcical .
"...there are two ways the government could relive this pressure." - This is quite the false dichotomy, no? Not just a simplification but it's missing out on logical alternatives (irrespective of political practicality). The most obvious is to increase the amount of money coming in from earners vs those using their state pension. More tax from workers. Yes, that could mean workers paying more (you didn't mention contribution rates when comparing pre to post Thatcher), but it could also mean increasing the number of younger people. Addressing the reasons people are having fewer children, increasing immigration for younger people (gasp!)...
People are having fewer children because of the cost of living in the UK. A way around that is to provide assistance for new parents but then people whinge that others should not be subsidised for a lifestyle choice like having children. These same people whinge about the level of immigration and unsurprisingly have no answer to the question of how we increase the workforce in order to generate enough tax revenue to fund pensions and healthcare in the future. The problem with increasing the birthrate is that it will take at least 17 years before those babies grow into adults and can start earning money and paying tax, but we need to increase productivity now hence immigration which brings new workers in immediately, not 17 years in the future.
"More taxes from workers": at a time when UK workers are already under the burden of the highest level of taxation since the end of WW2?
"Pay a greater share of your income towards taxes and contributions so that Mr. Boomer who retired at 60 while making much smaller contributions during their working life can continue to enjoy their retirement": how great does that sound? Income taxes in the UK are not low, you really need to understand that.
We could have done with an explanation as to how countries like Portugal, Greece, Spain and Italy can afford such extravagant pensions when countries like Britain, Germany and the USA cannot? It’s not like the British Government isn’t spending money. Taxes are at a near 80 year high yet despite that the Government is still borrowing vast sums of money every year.
Here in the Netherlands I am forced to pay 13percent of my gross income towards my pension. Every month for the coming 40 years. I cannot withdraw that money , I can not opt out of payment.
My employer also pays his parts for my pension.
Also there is government pension bit it's really low.
This is how we pay for our pension.
Wrong assumption but it is not your fault, the video presents it in a misleading way(replacement rate).
In Greece for example the 80% replacement means you get 80% of 680 euros which is the basic salary. You need to be 67 of course.
People without pensions get the state mi imum pension ofn200 euros.
If this sounds enough to live,it's not.
they can't
In Portugal you can't opt out of the pension and you have to contribute 11% IIRC, then the employer needs to contribute even more, I don't know how much from the top of my head. This and the high taxing of salaries is what makes employees having very low salaries in Portugal. Employers pay a lot for those employees.
Portugal is a great country for retiring, not for making money
Interesting comments regarding how these extravagant pensions in other EU countries are funded. Next time I see someone moaning about the UK state pension I'll ask if they would have preferred to have 11-13% of their entire lifetime earnings deducted for a pension they might not ever benefit from anyway...
Its pretty obvious,it simply isn't enough.
Love the fresh angle you bring to what you cover
What happened!? It went from 25 workers per retire for 5 years; to about 8 workers per retire for 30 years. State pension equals bust.
Private pensions are just as broken. They require ever increasing stock market performance, which isn't healthy for the stock market. If a company needs to spend money on R AND D it's profits drop and thus it's stock prices.
Problem is that we didn't have enough kids or create enough jobs. In 2008 we allowed money printing, which is pumped into the stock market causing inflation.
LMFAO THE BOTS IN THE COMMENTS
So much passion 😉😉😉
I'm familiar with russian bots and the ones related to climate change, but what would a bot/troll say about the state of UK pensions?
You mean someone who doesn’t agree with your point of view?
George Osborne's reform was the right thing to do: People should be free to spend, save or invest their own money as they see fit
*_This is why I don't watch the news._*
Now you're all gonna be *_scared, worrying_* about a few decades from now. For all you know, we could be prosperous. Or extinct. Or you could be a millionaire. Or dead. Or chugging along just fine.
My milennial generation grew up through world wars, recessions, pandemics and all the apocalypses. Magically, we're roughly doing as ok as anyone else. Oh but now apparently our future's doomed - be scared again!
*_The new isn't a profitless charity, it's a business and 'news' is the product. They need to sell it so that you consume more = more business. These videos are the result. Chill and enjoy your life, otherwise what's the point in living?_*
Why does the government need to subsidise the private pensions.
I can only assume this is when businesses were using pension pots to fund projects and then replacing the money.
The video definitely didn't correctly report the issue.
So insurance executive's can afford quality cocaine
Because it leads to higher pensions
Depends how you define subsidise. You get tax relief on pension contributions. So if paying into a pension via your salary, the deductions are made before tax and NI contributions are calculated. If paying into one directly the pension company claims the tax relief at the basic rate automatically. Higher rate payers can claim the higher amount via their tax return.
The U.K. has one of the worst pension systems in the world? What utter nonsense. 😂
they dont want anyone to get a state pension
44 years of Income Tax and NI contributions, my state pension is my money and I expect to be paid my money back when I retire.
It's not though - sorry. There is no pension pot with your name on that you pay into. Also - most people wouldn't pay in nearly enough to fund their own state pension even if it did work that way. The threshold for qualifying NI years is very low.
@@eljay5009 Call up National Insurance and you will see that you will get an estimate of what you will receive when you retire and the contributions you need to make to get it.
Are pension funds a pyramid scheme in the sense that if the contributing population grows at a lower rate than the withdrawing population it becomes unstable?
They're not a pyramid scheme. A pyramid scheme requires ever growing contributors without significantly increasing the amount of people benefiting
The *state* pensions have effectively turned into a ponsy scheme: the money isn't ring fenced, and the government dips into the nominal pot, and in the long term will have to cover any short falls. The big problem being that nowhere near enough was being put to one side to cover an ~30% growth in life expectancy since the baby boom generation was born including the added health care related costs which also come out of national insurance, all of which has been combined with a significant drop in the birth rates reducing the labour pool.
@@samuelturnballthat only holds for *private* pensions, and you have to hope the funds last long enough to cover the still rising life expectancy...
Similar, but the inner mechanisms are slightly different. But it will collapse if the ratio flips to hard.
Thatcher was right: State pensions are not the solution and the UK can be glad that it'sn't in as a miserable state as most first world countries.
Yeah because private pensions have worked out so well. In a financial system which has near bankrupted the country on at least two occasions
"It seems the most vulnerable of society will be getting the short end of the stick."
That's literally all of human history since the rise of the first cities.
I never want to retire! When you add up all the periods, I've been unemployed/ unable to get a job for four years. So that instantly means I'll be working til 71.
Being out of work is HELL!
Mistake in the first minute: the state pension age in the UK is 67, not 65.
It doesn't inspire confidence, does it?
It's actually 66, going up to 67 between 2026-2028, on a kind of sliding scale depending on when you were born
You obviously didn't watch the whole video.
Gonna be 68 for me
They talk about that later
Oh dear, TLDR, it’s all down to the Tories again, did you forget to mention Gordon Browns tax raid on pensions or deliberately omit it?
How much money would we save if MP,s wages were capped at the minimum wage limit, with no golden handshakes, no second third fourth fifth jobs, handouts from rich people and companies buying their loyalty. No expenses etc, you the people can not get expenses paid out at 1% of what an MP claims.
So they spent all their money and now it’s our problem. Not on my watch.
With an aging population, medical technology advancements, and adverse psychological effects of retirement ... maybe we should abandon the concept and go for half-in half-out retirement in terms of mandatory pension funds (I'm not British thankfully, so I don't know how the British system works) with voluntary contributions if you want to aim for 100% retirement.
Half in half out is a growing reality, working part time to make up the difference between pension and cost of living into your 70s. I know dozens of people who do this.
"What went wrong with..."
Greedy Tories. Everytime. Without fail.
Not just greed. But refusing to do anything to upset old people who vote for them. Free fuel, travel etc even if a millionaire.
Honestly, I don't most people under the age of 40 will ever get to "retire".
We can't afford it ...and by the ~2060 medicine will most likely be good enough to let us continue to work.
Or by 2060 we will have access to medicine allowing us to um... "un-alive" ourselves. Because it will come down to a choice between that or a lifetime of miserable employment or poverty while being retired.
And add on to my last comment, we don't own our own home, we were never in a position to buy so we have to pay increasingly higher rents, we are not eligible to rent through a local housing we are moved further and further down the list while people coming into the country are given priority
Me clicking play on this video: Thatcherism. I bet it was Thatcherism and the selfish "me and my own only " attitudes that came from it.
The video: "It all started with Margret Thatcher..."
Me: Yep, called it.
We need to finally put her way of politics to bed. Yes it's great for people to build themselves up and stand on their own two feet. But the point of government and a public pot of money (funded by taxation) is that everyone has a moment in their lives when they can't stand on their own two feet or can't afford to do what needs to be done. Even if you are the wealthiest person in the world, you still need the systems of health care and education we have in place in this country to help you at your worst. Without them you'd be dead a lot sooner. After all, who do you think does that medical research for the drug you didn't need in your 20s and spends a lifetime to learn to be a nurse (despite the low pay) so they can look after you in your old age. If we scrapped all of this and became right wing socio-economic islands we wouldn't have anything worth while and even the wealthiest in society would be at a loss as to what to do when things go wrong.
Do your best in life, pay into the public purse and help others do their best to do the same. But, understand that everyone is different and that sometimes people need more support to be their best.
Be kind to one another. Have a lovely day.
UK pensions would have been even worse if the government had relied even more on state pensions. Pls..
@@Jonas_M_M You just can't accept that the ideology you worship has failed. Even when the banks cost this country trillions, you still keep trotting out the same BS
Prior to 1997, the UK had one of the best pension environments in the world with the pension funds (and other UK institutional investors) owning almost 50% of all the shares quoted in the UK. What caused this? Gordon Brown's decision to remove the dividend tax credits paid to pension funds. This tax credit meant that if £8 was paid as dividends from UK shares, the pension fund got back £2 as a tax credit. Meaning £10 was invested for every £8 paid in.
This removal of the ability of pension funds to reclaim tax paid was slipped into Gordon Brown's first Budget in 1997. It was done without fanfare, the public not realising the implications. However, those implications were massive then and have grown since. In the first year alone, the pension funds (yours and mine), lost over £4 billion. Since then, it is estimated pension funds have lost nearly £300 billion. Putting that another way, pensioners' incomes are down due to reduced fund growth those reinvested dividends would have achieved had Brown not taken them.
Since then, successive Governments have attacked pensions and pension funds, but done so in quiet, underhanded ways meaning the average individual has to either save more for retirement or go without in retirement.
One final point, well, a little ditty really: In relation to your pension, if you're relying on the State you'll be in a state.
Oh please everyone knows the UK pension industry is riddled with fraud and malpractice - it's part of a financial system which regularly requires trillion pound bail outs
Need to have compulsory superannuation as we have in Australia. It does mean that everyone is an indirect or even direct investor in the stock market, and if there's a crash everyone suddenly gets much less to retire on. But the core idea is good.
Since when was National insurance & taxes optional ? We have a compulsory pensions system but unfortunately the Government spend it on 4 stat hotels for illegals
@@stuartregan1627 I would guess the expenditure on hotels for asylum seekers is lest than 0.5% of national income. Also, it's not the asylum seekers fault. The Tories should fund the processing system to accept or reject applications much faster. Don't blame people trying to find a better life.
Also NI is a very different system.
answer = conservative government
slightly longer answer = its probably something Thatcher did that has since then been compounded.
Answer is everyone is only interested in living today.
Most people today will spend all the money on a leased car and nothing on a pension.
*corruptervatives
@@user-tt6il2up4o Like the traders and bankers who speculate day in day out leaving the national and global economy completely at the mercy of their activities? Right wingers basically boil everything down to the most simplistic statements ever don't they - and yet oddly they are entirely selective with their "personal responsibility" credo
If you've had a good 70 years to figure shit out, how's it not your own fault if you're left with no private savings?
You might not want to assume that others have been as fortunate as you. There are plenty of circumstances where somebody, in spite of their best efforts, might be in a position where their retirement funds are a pittance. You might want to use your imagination.
@@talideon fortunate? I grew up on free school meals and my parents on benefits. There are plenty of circumstances where somebody could end up in that position and in most of those circumstances it's bad financial planning and/or laziness. I fully intend to retire and live without touching a state pension, if only more people had that base minimum level of pride.
The very tenor of your comment reveals that you haven't thought at all about the issues and are just proclaiming your superiority to everyone. Quite obviously the private pension industry has failed to live up to the promises made by individualists such as yourselves. It is a sector riddled with fraud and malpractice
@@Eltener123 Oh please you sad narcissist. Did you preach your great superiority to the bankers and hedge fund boys when their casino operations nearly collapsed not just the British economy but the global economy as well? Trillions of pounds in bailouts and lost growth those fellas cost this country. Remember when Truss nearly tipped over the public-private debt pile? The pension funds caught up in that faced collapse because of the actions of a tiny coterie of free market fanatics. So quite clearly people can make good choices only for others to wreck them
You don't have any pride, you're just a delusional little men talking himself up on the internet