These should be Set up REGARDLESS of people Opting out of the Scheme, and
people should contribute to them.
Once they have been set up the GOVERMENT SHOULD put in a Fixed amount, so
that when the Person reaches the required age they will then get a minimum
amount. This should only be done for people who need it (unemployed, Sick,
low incomes), the rest of use should just get the 1% top up.
Then as peoples situation changes, so does the payment. Over time people
who can contribute will get more money back, but at least every one will
get a Pension - without Means Testing.
Over time this will do two things -
1/ People will get use to saving for thier own retirement.
2/ The Goverment will only have to make smaller contributions to the savings,
rather than the large amount at the end.
Personal accounts should also work like Bank Accounts, so if a Person changes
Jobs etc. They can take the SAME Personal Pension Account with them and carry
on making contributions. Employers should be made to Pay into these accounts
the same as what they would pay in to thier own Pension Scheme.
Any Company wishing to run one of these account should only be taking less
tha 1/2% cost. and if Possible even lower. Otherwise all profit will be lost.
JULIE ROUTLEDGE wrote:
I agree with the savings in principal. As a percentage of wages, would
this become another form of National Insurance? At the end of a working
life, this still needs to be able to provide a person with a reasonable
income, not a basic level, as this is akin to a poverty line. It should
also be able to provide a level of support if the person needs care during
their retirement years. Someone who has not been able to achieve a decent
average wage throughout their natural working life, may still find themselves
at a low level of income in retirement - the issues surrounding this
need to be revisited consistantly. As in the current concerns around
those of us who aimed to retiring at 60 (as part of a Civil Service career
- 25 years, so far!), the goalposts cannot be constantly moved.
There will not be a sign-up to long-term changes if peoples expectations
are not respected now. Those at the higher levels of government need
to lead by example by honouring previous agreements, and reflecting
this in their own future pension arangements. Whoever makes the decisions,
needs to fully address peoples concerns - if the average age someone
can expect to die is 75, and if they retire at 60, I think it's reasonable
to give someone 15 years to relax at the end of their life! Health
deteriorates
for us all at some level. I myself have a disability, which may cause
problems for me later. I'd like to think that in this day and age
I will not be forced to be still working at an age where society
can accept
a long working life, deserving of a well deserved break.
James Purnell
responded:
You make a number of interesting points.
Savings in personal accounts will not be another form of National Insurance
as it will go into a funded pension pot designated in your name. The
details have not yet been agreed but there is no way the govt will be
able to access it.
As for the level of the pension people receive in retirement - the state
pension (assuming a reasonably full working life) will provide a solid
foundation on which to base private savings. We estimate life spent working
or caring from 25 to State pension age will give the average person an
income £20 a week above the level of the Guarantee Credit so they
can be secure that they will benefit from any sources of private income
they receive in retirement.
A person who has been on a low income in their working life and not
had the opportunity to make NI contributions or save will be eligible
for Pension Credit. We announced in our WP this would be up rated in
line with average earnings in the long term which means that no one need
live on less than £114 per week.
Life expectancy at age 65 has risen at a rate of three months a year
over the past quarter of a century. Today men spend around 30% of their
lives in retirement. Even with the proposed increase in state pension
age this is projected to stay roughly the same in 2055.
Of course if you have a disability and are unable to work we provide
Incapacity benefit to tide you over until you reach pensionable age.
Colin Lawton wrote:
Those few people who do not save because they are feckless will find some
way to squander their money no matter what compulsion is used. They need
a liveable basic state pension which is not dependent on contributions or
in any way means tested.
The vast majority of people who cannot save are too poor. Forcibly taking
money from the wages of those who cannot afford to save will simply drive
them to despair and anti-social behaviour. Anyone forced to starve or freeze
by state organised theft is entitled to protect themself in any way they
can.
You are proposing something both evil and insane.
James Purnell responded:
Not sure I agree with your last point ....
We estimate around 7 million people are not saving enough and are likely
to be disappointed in their income in retirement.
Our analysis suggest the people most likely to be undersaving for retirement
include:
middle earners with qualifications below degree level
those with low/average levels of numeracy, irrespective of educational
level.
the self-employed
individuals were generally more at risk than couples.
The people who you mention who cannot afford to save are not one of the
groups we are targeting with these sets of reforms. In fact the very poorest
in our society are well protected by our current pension system. The very
poorest are likely to have an income in retirement higher than their income
before retirement.
It is only people who are in work and earning more than around £5,000
per year who will be automatically enrolled into a low-cost, good value
pension. People who wish to do so will be able to opt out of saving. Information
will be provided to allow people to make a decision.
Christine Kenny wrote:
If we are ever to address the pensions timebomb, it must become compulsory
for individuals to save into a personal account or a private pension
scheme - less of the namby-pamby opt-out provision, just bite the bullet.
Pete Wadsworth wrote:
With Regards - Personal accounts
These should be Set up REGARDLESS of people Opting out of the Scheme, and people should contribute to them.
Once they have been set up the GOVERMENT SHOULD put in a Fixed amount, so that when the Person reaches the required age they will then get a minimum amount. This should only be done for people who need it (unemployed, Sick, low incomes), the rest of use should just get the 1% top up.
Then as peoples situation changes, so does the payment. Over time people who can contribute will get more money back, but at least every one will get a Pension - without Means Testing.
Over time this will do two things -
1/ People will get use to saving for thier own retirement.
2/ The Goverment will only have to make smaller contributions to the savings, rather than the large amount at the end.
Personal accounts should also work like Bank Accounts, so if a Person changes Jobs etc. They can take the SAME Personal Pension Account with them and carry on making contributions. Employers should be made to Pay into these accounts the same as what they would pay in to thier own Pension Scheme.
Any Company wishing to run one of these account should only be taking less tha 1/2% cost. and if Possible even lower. Otherwise all profit will be lost.
JULIE ROUTLEDGE wrote:
I agree with the savings in principal. As a percentage of wages, would this become another form of National Insurance? At the end of a working life, this still needs to be able to provide a person with a reasonable income, not a basic level, as this is akin to a poverty line. It should also be able to provide a level of support if the person needs care during their retirement years. Someone who has not been able to achieve a decent average wage throughout their natural working life, may still find themselves at a low level of income in retirement - the issues surrounding this need to be revisited consistantly. As in the current concerns around those of us who aimed to retiring at 60 (as part of a Civil Service career - 25 years, so far!), the goalposts cannot be constantly moved.
There will not be a sign-up to long-term changes if peoples expectations are not respected now. Those at the higher levels of government need to lead by example by honouring previous agreements, and reflecting this in their own future pension arangements. Whoever makes the decisions, needs to fully address peoples concerns - if the average age someone can expect to die is 75, and if they retire at 60, I think it's reasonable to give someone 15 years to relax at the end of their life! Health deteriorates for us all at some level. I myself have a disability, which may cause problems for me later. I'd like to think that in this day and age I will not be forced to be still working at an age where society can accept a long working life, deserving of a well deserved break.
Colin Lawton wrote:
Those few people who do not save because they are feckless will find some way to squander their money no matter what compulsion is used. They need a liveable basic state pension which is not dependent on contributions or in any way means tested.
The vast majority of people who cannot save are too poor. Forcibly taking money from the wages of those who cannot afford to save will simply drive them to despair and anti-social behaviour. Anyone forced to starve or freeze by state organised theft is entitled to protect themself in any way they can.
You are proposing something both evil and insane.
Christine Kenny wrote:
If we are ever to address the pensions timebomb, it must become compulsory for individuals to save into a personal account or a private pension scheme - less of the namby-pamby opt-out provision, just bite the bullet.