Oolite Bulletins

Drew - as I don't read the Evening Standard (I don't read any newspapers) I don't know if you're having a go or not...

When I started with the MOD in 1995, I started on £12K, my friends started with BAe Systems and Vickers on £16K and £17K respectively - the reason for my lower pay (as stated in my Job interview when I queried the starting salary) was that I had a better pension scheme. Of course what's happened since then, and not just in the defence industry, is that the Government has run out of money, so 1) it can't pay the parasitic Defence Contractors as much any more, so they can't pay their staff as much any more, 2) better health care means these damnable Civil Servants aren't dying off and actually want the pension they were promised all those years ago when they started on lower wages...

As far as I can tell every private pension scheme must show that it's sustainable, that money in from current members equals output to past members drawing a pension. The Government doesn't do that and never has, it collects contributions from the Public Servants and gives it to the Treasury where it becomes part of the normal income and it pays out pensions as part of the stuff it has to pay for. That's not the way to run a pension scheme - because the private sector isn't allowed to do this!

As I said earlier the NHS has been refused permission to go it alone - because their current scheme means more pay in than draw out (because sadly lots of Health Workers get icky stuff and die early on in their pensions) - and why has the NHS been refused permission to refuse to manage it's own pension? Because the Treasury/Government would lose revenue.

The slide towards Average Salary, guaranteed benefit pensions is inevitable and fair, but only if all other things are fair and not for those who accepted a lower salary 20/30/40 years ago because the carrot on the end of a very long stick was a (good) guaranteed pension.

heehee (or rather:sigh)

the story of low pay but decent pension sounds eerily familiar. so does the cutting down on said pension.

DaddyHoggy wrote:

Drew - as I don't read the Evening Standard (I don't read any newspapers) I don't know if you're having a go or not...

Nope, I agree with you. I read the Evening standard because it's free at the train station when I go home. It's not bad, but virtually every day there is a pop at 'public sector gold plated pensions' which makes me assume they have an agenda of their own. I'm seeing a lot of this 'divide and conquer' stuff at the moment: Public vs. Private Sector, BabyBoomers vs. Gen X and Y, Employed vs. Unemployed. Makes you wonder who stands to benefit from all the resultant infighting.

Pensions are a problem though and sympathise with you accepting a lower initial salary with the promise of a better pension.

I started work in 1988 on £7k/year with no advice other than get yourself a pension. My employer at the time had already pulled up the drawbridge of final salary schemes by that point, so like many of my co-workers we had the dubious charms of the investment pensions and later stakeholder pensions. I've never had a final salary scheme as an option. I now have seven pension 'funds' all but one tied, irrevocably, to the whims of various parts of the stock market.

In 2008 £30k (about 40%) of my pension simply evaporated as a result of the downturn. I have absolutely no idea what my pension will be when I retire. If the stock market turns down just before I retire I'm stuffed, alternatively if there's a boom, I might be sitting pretty. I'd be happy to pay more to get some certainty (which is why I intend to stay with my current employer's CARE scheme for as long as possible).

Additionally one of my funds has recently gone into administration. Fortunately the pension itself is protected, but it now needs to be handled by another company, and (surprise surprise) their management fees will be higher, so my fund will grow less each year as a result. Some of my co-workers were unlucky enough be exclusively with Equitable life - 10 years of their pension disappeared entirely. Press space, commander. That could happen to me at age 64.5 - that's the trouble with pensions which aren't 'defined benefit'.

My alternative strategy is to save whatever I have left into stocks and shares ISAs for a some measure of predictable income later on (can't do cash as it simple doesn't grow as fast as inflation - so pointless). I've got, just enough, spare cash at the moment to do that a little (though it's dropping fast given inflation). Most folks already don't, so I hear.

Looks like we're all going to have to pay more and get less. My future income is a total grey fog. I'm just hoping to pay off the mortgage in the next ten years so at least we'll have some measure of security.

Cheers,

Drew.

Drew wrote:

I'm just hoping to pay off the mortgage in the next ten years

Ironically, the above-target rate of inflation is also helping to pay down your mortgage (all other things being equal). I think this is also the tack that the Bank of England is taking with the sovereign debt.

drew wrote:

My alternative strategy is to save whatever I have left into stocks and shares ISAs for a some measure of predictable income later on

well you made a good call so far. I pulled out most of my stocks and shares in mid-2009 thinking that the move upwards since the late 2008 early 2009 crash was just a 'dead cat bounce'. At that time the FTSE100 was at around 4800. Imagine how I laughed (not) when it kept on climbing right back over 6000. On the up-side, I did make a good investment decision to offset that so it could have been worse. I am still a bit nervous that the main equity indices are still in a bit of a bubble when I try to reconcile against the state of the economy generally and all the global 'headwinds' we hear endlessly about. I put it down to a side-effect of quantitative easing.

Do you remember the whole fanfare when Stakeholder Pensions came in - 'low fees!' was the cry. My wife got a letter a few weeks ago from her Stakeholder provider, saying that the gov't has recently removed the Stakeholder fee cap, so they're [the provider] taking advantage and upping the fees they charge. Well, we got about a decade of cheap fees. Probably can't expect much more these days.

strewth, I sound like a grumpy old fart!

My 25yr ISA with Legal and General, which I've been paying into for 13 years and is managed by them is growing less fast than if I'd directly stuffed the cash under my mattress. (i.e. in 13 years they've carefully managed to turn £15K of my cash into £11K worth of stocks and shares)

I don't have a pension ... I'm saving up bottletops and banking on the fall of civilisation.

Disembodied wrote:

I don't have a pension ... I'm saving up bottletops and banking on the fall of civilisation.

You should be fine then...

(August 2nd onwards anyway)

Disembodied wrote:

I don't have a pension ... I'm saving up bottletops and banking on the fall of civilisation.

Canned foods and ammunition will be the currency of the future.

I think you're right, fronclynne, especially about the food. I don't personally believe in an apocalyptic Y2K like situation (I'm a Christian, so I believe in Revelations (and not the October 2011 version)...not trying to spark a debate, tho, as its beside the point.)

However, whether you believe in a nuclear holocaust, a post-rapture world, or any other end-of-world situation, the point is that governments and the world economy will eventually collapse, especially with how unstable things are now. And when that happens, it goes to follow that luxuries will have little value, and food, ammunition, clothes, fuel, medicine, and shelter will become the most valuable. Revelations says somewhere that a loaf of bread will buy a bag of gold, and whether you believe the Bible or not, that makes perfect logical sense when you think about obvious human priorities.

Of course, there is the theory that we'll stay here forever, but can you honestly imagine things staying stable for another millennium? Even if the world didn't end ever, the government system as it is will collapse sooner or later and be recreated, as it has many times over the centuries.

Things have never been stable, and the global economy has always fluctuated, and collapsed, and come back again, and fallen over again. Countries and empires have risen and fallen. Stuff, in short, has happened. But we are interconnected, and interdependent, in ways which are unprecedented in human history. We have never before had the destructive capabilities which we now possess, nor had the sheer numbers of people, nor the scale of impact on the environment. And we're running it all with brains designed for jogging around the savannah in extended family groups. However, like the man said,

Niels Bohr wrote:

"Prediction is very difficult, especially about the future."

DaddyHoggy wrote:

My 25yr ISA with Legal and General, which I've been paying into for 13 years and is managed by them is growing less fast than if I'd directly stuffed the cash under my mattress. (i.e. in 13 years they've carefully managed to turn £15K of my cash into £11K worth of stocks and shares)

This all depends when you started to stuff it under the mattress. In real live I deal among others with precious metals. Last weak I bought about 1200 Dutch silver guilders to rework it to pure silver. (1200 guilders is equivalent to € 540.-) I paid over € 4000 for it. The last dutch silver guilder was pressed in 1976, so they must have been stuffed away for over 35 years. It looks a good profit for that person, but when he had bought shares for that money in that period, he would have gained more from it during that time.

Eric Walch wrote:

DaddyHoggy wrote:

My 25yr ISA with Legal and General, which I've been paying into for 13 years and is managed by them is growing less fast than if I'd directly stuffed the cash under my mattress. (i.e. in 13 years they've carefully managed to turn £15K of my cash into £11K worth of stocks and shares)

This all depends when you started to stuff it under the mattress. In real live I deal among others with precious metals. Last weak I bought about 1200 Dutch silver guilders to rework it to pure silver. (1200 guilders is equivalent to € 540.-) I paid over € 4000 for it. The last dutch silver guilder was pressed in 1976, so they must have been stuffed away for over 35 years. It looks a good profit for that person, but when he had bought shares for that money in that period, he would have gained more from it during that time.

People on this forum have very interesting RL(tm)s...



(If I'd been buying gold at £100 per month worth for the last 13 years - I'd be doing very well now - would have been buying 8-10g a month 13 years ago, only 3g now)

Gold...

A teacher in inorganic chemistry once told me that there is no scientist or scientific theory that is able to explain - why gold is like it is.

But one thing is for certain: you cannot eat it.
However - I have been drinking liquors that included gold.

Heard a story once that is supposed to come from India.
If this is true then some mythological beings have got more "western" names.
But... here it comes:

The devil was out and tortured a holy white cow.
Then God suddenly showed up and banned him to darkness.
The devil was troubled and said:
- But now I have nothing. After all I am a powerful being so... Please. At least give me something.
And God said: - Okay. I give you the metal Gold. From now on it is yours and you have the control over it.

DaddyHoggy wrote:

My 25yr ISA with Legal and General is growing less fast than if I'd directly stuffed the cash under my mattress.

funnily enought, it was L&G who upped their fees on my wife's Stakeholder pension.

Eric Walch wrote:

This all depends when you started to stuff it under the mattress.

Agreed. And silver price seems very volatile. A few months ago, it dropped something like 30% of its value in a few days. Put it under the mattress on Monday, and by the end of Tuesday it's worth only 2/3 of what it was the day before. Scary.

DaddyHoggy wrote:

If I'd been buying gold at £100 per month worth for the last 13 years - I'd be doing very well now

despite indications that at least one tradition seems to view it as the Devil's own metal gold does have the benefit of being a more objective store of value than a lot of the fiat currencies knocking about these days. It would be difficult for a government to vote into existence another trillion's worth of gold ex-nihilo, for example. Gotta love it for that reason. But when you see a price chart going like this / it makes you wonder whether it's a good time to buy, or whether it's about time for the chart to start going like this \

I get all my financial advice from parrots. With global food prices soaring, all those biscuits are going to make me a fortune ...