Unemployed earning more than working households

I'll address a couple of your points:

Yes, I believe that it is. A couple of generations ago it was

*expected* that women would stay at home and look after the house & children. Now, as you say, there is an expectation that *every* adult gets a job. Generations of latchkey children who have had no proper upbringing is the result. During that same time period very few ordinary people would ever dream of owning their own home. Good, affordable rented accomodation was by far the most common form of housing. The result of the illogical imperative to own your own house means that (1) people take on more debt, (2) the cost of housing has risen astronomically and (3) people are more reluctant to move to a more economically viable location. Council housing has also become synonymous with slum estates.

It all depends on the cost of that "good income". If it means that Mum and Dad are working all hours, then what good is all that money if the quality of life is piss-poor for the entire family? It's pretty pointless being the wealthiest corpse in the graveyard, don't you think?

I am very sorry that I had the same philosophy at one time. I had built a yacht and was cruising the World. I had hardly two pennies to rub together, but it was always possible to find a small amount of work to earn enough to buy the little that I needed. It was a fantastic life - but I felt that I had to "settle down" and get a "proper job".

So I stopped cruising and started a business that grew well and earned me loadsamoney. But I cannot say that I have ever been as happy as I was whilst cruising, and I'm now locked into a capitalistic life that is going to be difficult to break out of.

Nice to see an honest answer there. Truth be told, if I could enjoy the kind of life the dole would give me I'd go on it. But the things I want from life (at the moment) require an income many times what the dole can provide so I'm stuck with the grindstone. If I didn't want that life I wouldn't do the work - I see no good reason why I ought to work as I don't really enjoy it.

Unless people die very soon after retirement, most get more out of their pension schemes (job schemes and State Pension) than they have paid in.

It is not a question of me 'using the rules to my advantage' - I simply completed my contract of employment - and so did my employer. Whether or not I will eventually get more out of my pension than I paid in over 30 years is irrelevant. At least I did pay in for 30 years. Many unemployed have never paid a penny to the state for the benefits they are enjoying.

I am not 'playing the system' - any more than any other employee who completes his contract of employment and then receives the pension he has contributed to.

Ret.

Because I have contributed to and earned my pension - many people on the dole have contributed nothing.

Ret.

If you think that working for the same employer for 30 years, paying a significant percentage of your gross income over that period as superannuation contributions, and then drawing the pension you have earned, is the same as leaving school and going straight onto the dole for life, then I disagree.

Ret.

In general that is not true. Don't forget that the employee contributes only a small part of what feeds his pension or superannuation fund, most of it comes directly from the employer instead of indirectly, so what it actually costs an employer to employ someone is much more than the figure quoted as their nominal salary.

Then, of course, the contributions are invested, and returns and growth from these enhance the value of the pension funds. If the funds were to pay out more than what had been paid in (plus what they had earned from investments), then they would go bust.

A similar thing happens in the case of the state pension. Here it is National Insurance contributions which notionally feed the fund from which pensions are paid. Again, the employers contribute more than the employees.

Some people of course do die soon after retirement, others hang on till they get the Queen's telegram. It all averages out somehow, and annuity rates and contribution requirements are always fine tuned to take into account up to date mortality forecasts. Those who die at the notional average age will tend to get out roughly what they paid in (or what was paid in on their behalf). Those who die younger get out less, those who die older, get more. It's how the system was designed to work.

People are tending to live longer than they used to, and this is causing a bit of a pensions crisis because the rate at which the average age at death is going up is apparently faster than contributions can be put up to keep pace.

For once we agree! My older brother once advised me: "Always remember that there is a distinct difference between standard of living and quality of life." It was that mantra that dissuaded me from seeking promotion beyond Inspector. I could see that the demands of the job upon Chief Inspectors and above meant serious incursions into home life and I wasn't prepared to accept that. The role of Inspector gave me a good compromise between standard of living and quality of life. I was earning a good wage - but also could just do my eight hours and go home - without having to do masses of overtime attending out-of-hours meetings, etc.

I think that the 'standard of living/quality of life' compromise is something that too many couples lose sight of and, as you point out, pursue ever increasing levels of income to the detriment of their home life. One of the main reasons for marriage breakdown I fear - which is so rife today.

Ret.

Very true. I have worked harder (physically) since I retired seven years ago, than I did when I was at work. The big difference is that I am doing work for myself, that I want to do, instead of working for someone else for a wage.

Ret.

Incorrect. If it were true, how could any pension fund possibly remain solvent? Much of the contribution was notionally made by the employer - but that is effectively paid by the employee insofar that it is money that the employer would otherwise have been able to pay as part of the salary.

Yes - that contract constitutes "the rules". You chose an employer with a particularly favourable set of rules.

The person on the dole is simply taking advantage of the rules set out in the social contract that the government makes with every person who is a citizen of the UK.

Very few people have *never* earned anything in their life. Even if all their earnings are on the black market, they are feeding some of that money into the tax system via VAT.

The system you entered had rules that permitted you to retire earlier than almost any other employed person, at a pension rate that is higher than most other people will enjoy.

Almost everyone considers that they deserve whatever they are getting, and will find ways to justify that belief.

Most unemployed people see themselves as the victim of an injustice, and receiving benefits is inadequate compensation for the wrong that has been done to them.

Because the overall pension pot is invested and constantly earning additional funds. It's not working now - but that's the way that it should work (apart from unfunded public sector pensions of course).

Much of the contribution was notionally made by the

Agreed.

But I didn't join the police because of the pension (although I was aware of the excellent pension scheme of course) and so I can't be accused of 'using the rules'. Certainly I am benefiting fromthe rules that applied to my particular occupation - as any other employee benefits from the rules that apply to theirs. The fact that some occupations have more favourable pension schemes than others is irrelevant. The police pension scheme is not as favourable as that in some other occupations. I doubt if many people begin an occupation because of the pension that it offers at the end of many years of service. Few people think that far ahead. I was in my mid twenties when I joined the police and my pension was far from my thoughts at that time.

A strange way of viewing pension or NI contributions!

That may be - but that does not mean that I am 'playing' any system. I did my job and then claimed my pension. Other people may start a business - sell it when it becomes successful and they are still young, and retire even earlier than I did on the profits.

Every occupation has its perks and downsides. I never had a company car, never had a christmas bonus (or any bonus at all!), never received tips, never received a discount on goods, travel, etc. On the other hand I worked rotating shifts for many years, worked many christmas's, did many very unpleasant jobs, placed my life at risk on several occasions (in fact every time I became involved in a high speed shout or pursuit!). My job did not give me any of the benefits that some workers take for granted - but, because elderly police officers are not the most effective, it did give me early retirement. Of course some police officers join the job later in life and, because ranks below Inspector are forced to retire at 55, they cannot achieve the necessary 30 years in order to obtain a full police pension. These officers are actually disadvantaged by the early retirement requirements of the police service. Are they 'playing the system'?

Ret.

Ret.

So by remaining loyal to the same occupation for 30 years, and paying quite high pension contributions throughout that time - don't you think that I deserve my pension?

*Some* may think that - others may just think that they are onto a good thing. Why are so many foreigners crossing several other countries to get into this one? It's certainly not for the weather is it?

Ret.

11% paid by the taxpayer under the pay agreement when thatcher bought the police to smash the miners. The equivalent of almost a 50% pay rise when the rest of the country was facing 4 million unemployed.

No

34% increase in police precept to pay a shortfall in police pensions last year. I got a 1.5% increase in pay.

Greedy bastards

So? His pension contributions were part of his remuneration package. The cost of them was considdered worth it for his services, the same as any employed person with an occupational pension.

If not, then the fund managers are not entirely on the ball. It's been pretty obvious for over a year that some investments were going to be volatile and others much more stable. Anyone with, say, #100K invested in FTSE-100 companies a year ago who happened to take it out, convert the cash into euros and convert back a couple of weeks ago will be showing a pretty handsome profit, esp compared with the average loss on the FTSE! Of course, that requires a large slice of "luck" ["foresight"], but that's what the fund managers are paid to have ....

Funded or unfunded doesn't make much difference for public- sector pensions. If the govt defaults on such schemes, then all bets are off [for the entire population, cf Zimbabwe]. Otherwise, effectively the unfunding is a tax cut, recouped decades later when the pension becomes due. If the govt invested the tax cut with a reputable private fund, it would pay around 2%pa more than is needed to fund the pension [based on my own experience and that of friends with private funds], so effectively showing a profit for "us" at the expense of CS pensioners. I expect the usual "couldn't run a whelk stall" nature of governments everywhere means they don't either actually or virtually make that 2%pa profit, but it does give them a decent margin before they make a loss. IOW, I think it is largely a myth that CS pensioners are making a killing at taxpayer expense. [One might claim that the CS, or the public sector in general, is too large and/or too fat, but that's a quite different argument.]

I'm sure that's correct. I gave no thought at all to how my pension pot was progressing until the stage where it suddenly occurred to me that I was within five years of retiring, and that I was going to have to live out the rest of my life on whatever the proceeds were. At that stage, I knew absolutely nothing about the tax laws [and loopholes] governing pensions, nor about S2P, nor even whether I was contracted "in" or "out". From discussions with colleagues -- intelligent and numerate people --, I know that that was absolutely normal, and that it's a steep learning curve. I take *much* more interest today ....

You do spout some nonsense Alan. The police have been tied into a pay agreement (modified over the years) ever since the Edmund Davies enquiry into police pay in 1975. At that time, police officers were leaving in droves because of the poor pay. Edmund Davies linked police pay to the median in white collar pay levels and so pay rises from that point onwards were set and automatic. At the time the pension contributions were increased to 11% the government did not want to pay the police the award they were due under the pay agreement. They had no choice because the 'official side' of the pay body (ie the government side) were party to the pay agreement policy. In order to avoid paying the full amount, the government awarded the pay rise but increased pension contributions. In other words they gave with one hand and took back with the other. The police were not at all happy with this - nor with the fact that the government simultaneously announced a review into the way the pay formula was working. To try and suggest that this particular pay award was some sort of award for the miners strike could not be further from the truth. The police felt that they had been betrayed by the government.

Why am I not surprised?

The fact that you are worse off than me does not make me a greedy bastard. If we all railed against people that our better off than ourselves we would become very bitter (as you clearly are). I might, for example, go on about professional footballers. A bunch of inarticulate, semi-intelligent yahoos, many of whom regularly become involved in yobbish antics, who are paid thousands of pounds every week. Far higher rewards than brain surgeons and almost any other highly educated and highly skilled professionals in the country - and all because they can kick a bloody football. It's outrageous don't you think?

Ret

What a person "deserves" or not is a highly subjective opinion. It is also irrelevant. A person would be pretty stupid not to take whatever they are entitled to, unless it is with a view to gaining more later.

I'm pretty certain that if the government announced that they were going to pay all retired police officers an extra £1000 a month, you would not refuse it on the grounds that you don't "deserve" it, even if a large proportion of the general population were of that opinion.

Do TV celebrities "deserve" £3 million a year? Does Bill Gates "deserve" his vast fortune? I have no doubt whatsoever that there are many people on low salaries who have worked harder and longer than those people.

I thought that it was only children who believed that life was "fair" and that hard work and good deeds will automagically bring benefits whilst laziness and selfishness will result in bad things happening to a person.

Stop your silly Daily Mail hysteria! The vast majority of people who come to the UK as economic immigrants want nothing more than to work hard and earn an honest wage - and most are prepared to work harder for lower pay than a native born UK citizen. It is an *extremely* low number of people who come to the UK with the intention of sponging off the system - and the system is such that most people are severely disappointed if they had that aim.

Agreed - I should have used the word 'entitled' rather than 'deserved'.

Have you seen the front page of the Daily Express today? :

Ret.

We all know that the Daily Express is not the paper it once was, but even that rag should have thought twice about this hyperbolic claim in the story to which you refer:

"The average family with children can claim around £715 a week in benefits in Britain, compared with just £178 in countries such as Poland".

I don't know what the situation is in Poland, but the average UK family may well get that lower figure (or a little more) per week if they have the average number of children and the average size of mortgage (though they won't get any of their mortgage paid for a long time into the claim, reducing the average paid to them per week).

£715 a week for the average family on benefits is a pipe-dream. That's more than most families earn in work.