Gordon Brown shows his contempt for British workers again

I believe part of their solution to the pensions crisis is this winters big freeze plan where the gas'll go off and many pensioners will simply die thus allieviating the problem.

As Chancellor of the Exchequer, Brown will receive 50% of his pay from the moment he leaves office, whether that is 55 or 75. His pension will rise in line with the pay of future Chancellor's. He hasn't paid a penny in contributions.

Never a truer word spoken in jest as the Bard said and its a fact that most of us would put nothing beyond this cynical government.

Brown stooge Ed Balls gave the game away making it clear that Browns policy is to ensure that people who have contributed nothing to this country; layabouts, scroungers, and even someone who has just arrived here from another country will receive as much if not more from the State in old age as every Briton who has worked here all their life and paid into the system. .......

"...Labour MP Ed Balls, the chancellor's close ally and former chief economic adviser, told the BBC that people needed a "sense of perspective" and said it was not a case of rejecting the entire Turner Report.

He said the report should spark a debate lasting months or years about how the UK can best provide a "fair and affordable" pensions system.

The restoration of the pensions link to earnings had been rejected over the past decade, in favour of the more affordable system of targeting help at the poorest pensioners, he said..."

Ah!, that's more like it :-))

mogga wrote

I foiled the bastards and bought some smokeless fuel for my open fire today. I have some logs stacked up as well.....

Don't forget bird flu .

Jest? No I'm naturally cynical.

Apparently one of brown's brothers works for the bbc and one for some french nuclear place.

You'd rather a system which was `unaffordable`? How would that benefit British workers?

They are only "unaffordable" according to Brown. I presume Turner and co did actually look into the cost of their recommendations.

If the recommendations are as I've seen before - a Citizen's pension of the MIG level (about 109 a week), payable to everyone regardless of NI contributions, increasing in line with earnings, payable from 67, and abolition SERPS/S2P, then it's not likely to cost much at all, in fact it may even save money.

Those at the bottom end won't benefit at all, since they'd get the MIG anyway which already increases in line with earnings. In fact they'd lose as the pension would start getting paid later.

Those on average earnings and above would probably be worse off, as they'd lose out on SERPS/S2P/contracted out rebates which would likely be more than the extra basic pension they'd get.

Even people on low incomes could be worse off, as S2P is quite generous to low earners - under the *current* S2P rules someone with a full working life earning under 12,000 in today's terms would get about 60 pw in S2P, compared to an extra about 27 under the Citizen's pension. The same would apply to eligible carers, who get treated the same as low earners.

However a Citizen's pension *without* abolishing SERPS/S2P would be very costly...

"Andy Pandy" wrote

If they abolished SERPS/S2P, then wouldn't they need to reduce NI conts to compensate?

If they did abolish SERPS/S2P and reduce NI, how do the figures then stack up?

Need to? The government can do what they like with NI rates. They increased the rates a couple of years ago with no increase in any benefits derived from NI conts.

Politically, they'd probably argue that the rates would stay the same because they are replacing SERPS/S2P with a much more generous basic pension.

Then they'd need to find a lot of extra money from somewhere to fund the more generous basic pension. Sounds very costly.

"Andy Pandy" wrote

For "need", read "be pressured" ;-)

"Andy Pandy" wrote

Of course they can, but then it is more and more just another *tax* - which the govt seem very keen to say that NI isn't! ["We promised not to increase tax rates, and haven't." ... "But you increased NI!" ... "Ah, but NI isn't a tax...".]

"Andy Pandy" wrote

That's not 'like-for-like' -- NI varies with earnings (like SERPS/S2P), but basic pension does not.

People would be paying different contributions for the same pension!

"Andy Pandy" wrote

Exactly!

Yes, but that's not exactly a new concept, the majority of contributory benefits which depend on your NI record are paid flat rate. You get the same JSA whether you previously earned 4,500 or 45,000.

In fact, under *current* S2P rules, someone earning 4,500 would get the same S2P as someone earning 12,000.

"Andy Pandy" wrote

But how would they explain the effective "percentage increase in tax paid" - ie that part of NI contributions which previously funded SERPS/S2P, which are still being collected?

It would be very plain to those that had been "contracted-out" into an approved personal pension - suddenly, they'd still be paying the same NI but would not receive the percentage rebates back...

Also, how would you deal with people currently contracted-out in an occupational scheme, who currently pay lower NI contributions?

They wouldn't - it'd be a concept that passes over most peoples' heads. They've already done it anyway, to a lesser extent, when SERPS replaced S2P.

I think this is the main reason the govt probably won't do it - because it'd grind final salary occupational pensions further into the ground (as they get the biggest rebates currently).

They'd lose the contracted out rebate.

"Andy Pandy" wrote

Eh? - FS schemes receiving rebates? After the members have paid lower NI??

They pay less and get more benefits???!!

"Andy Pandy" wrote

But they don't get rebates (that's a MAPP/COMP) - they (currently) pay lower NI instead...

Do you mean that you'd increase their NI contributions, without any increase in benefits?

FS schemes get a 3.5% employer's NI rebate and a 1.6% employees NI rebate. Money purchase schemes only get a 1% employer's NI rebate.

They do get a rebate, as defined in the link above. Though the rebate is in their pay not the pension, the result is less net NI payable and the rebate is not shown seperately, but it's still a rebate. The 1.6% rebate is actually on earnings between the LEL (82pw) and UEL, whereas NI doesn't become payable till you get to the PT (94). So you can get negative NI I think.

Me? It's not my proposal, it's been floated for some time. I can see it being very tempting for the govt - it's an apparent increase in the BSP, restoration of the earnings link, it will be of benefit to mainly women, it will give higher BSP to the lowest earners without actually costing that much (as in many cases it'll simply replace means testing), and it'll be simple. Transition could be handled fairly simply to. See:

"Andy Pandy" wrote

Of course - instead of the govt raising the money to pay for the extra benefits from taxation, they'll raise the money by ... ermmmm ... taxation, but just call it NI. [The money raised from the tax we call NI - which used to fund SERPS/S2P - will begin to fund the new basic pension instead.]

What they should really do is "rename" NI, and tell us what it really is - TAX!

Well in recent decades that's (almost) exactly what it has been. It bears far more relation to a tax than to an "insurance".