Tony Blair

hopkinb

Dorset_Boy said:

I've worked in 'the front line' of FS for over 20 years so know a damn site more than an unqualified recruitment consultant (who was barely out of primary school at the time) about the effect of the changes that were made. I lived through them with clients and have been part of their journey since.

Given your use of quote marks to describe what you do, are you one of the people who sit behind a screen in a village branch of HSBC and deposit cheques and count money?

pinkbikini

Dorset_Boy said:

Tony didn't understand the financial side, he left that to the moron Gordon.
Gordon was happy in pretty much his first budget to slap £5 bn pa tax on pension funds creating a savings gap that wasn't there before, and destrying the DB schemes in the process.
Gordon sold gold at the bottom of the market, against sensible advice.
PFI might have had short term benefits but has had long term damage.
Gordon, the BoE & the US kept interest rates artificially low to creat a falso boom, encouraging people to convert short term debt into long term debt, and those policies were a major factor in causing the financial crisis.
Gordon's starting rate of income tax which he then removed was a disaster.
Gordon's tax credit scheme was a disaster for those with variable earnings.

Still Tone was the boss so the buck stops with him, and you can add in Iraq.

Tone inherited the NI peace position - most of the work was already done for him, but he did ensure the deal went through so deserves some credit there. I'm sure there were other good things done too (eg minimum wage).

Overall, he really wasn't that great, though clearly had some charisma.

As Chancellor, Gordon Brown also gained £22.5bn for the government through the sale of the 3G licences in 1999/2000 (height of the tech boom). I remember thinking '"lucky chap, bet that will plug a few holes".

I never minded Tony Blair that much (aside from the Iraq/WMD disaster). Good old Gordon though, hmm...one of the chief architects for what happened in 2008.

Dorset_Boy

hopkinb said:

Dorset_Boy said:

I've worked in 'the front line' of FS for over 20 years so know a damn site more than an unqualified recruitment consultant (who was barely out of primary school at the time) about the effect of the changes that were made. I lived through them with clients and have been part of their journey since.

Given your use of quote marks to describe what you do, are you one of the people who sit behind a screen in a village branch of HSBC and deposit cheques and count money?

rjsterry

hopkinb said:

Dorset_Boy said:

I've worked in 'the front line' of FS for over 20 years so know a damn site more than an unqualified recruitment consultant (who was barely out of primary school at the time) about the effect of the changes that were made. I lived through them with clients and have been part of their journey since.

Given your use of quote marks to describe what you do, are you one of the people who sit behind a screen in a village branch of HSBC and deposit cheques and count money?

Don't be silly; villages don't have bank branches.

surrey_commuter

pangolin said:

Dorset_Boy said:

pangolin said:

Dorset_Boy said:

Why do you keep trying to compare figures today with those from 20+ years ago when we weren't in the middle of a global pandemic? There has also been substantial asset price growth over the last 20 years. Allowing for inflation at 2.5% pa, £1-00 20 years ago would need to be £1.50 today to stand still.

At the time, the £5 bn raid on pensions was huge, and as I said earlier, it created a savings gap that wasn't there beforehand and has only grown since. It was the catalyst for forcing DB schemes to close. Prior to that point the UK had the best pension provision in the western world. The raid changed that.

I've worked in 'the front line' of FS for over 20 years so know a damn site more than an unqualified recruitment consultant (who was barely out of primary school at the time) about the effect of the changes that were made. I lived through them with clients and have been part of their journey since.

Keeping interest rates artificially low caused a housing bubble. People slapped their credit card debt, car loans etc (all short term debt) onto their mortages (long term debt). then add in the encouragement of lending at over 100% of value. The text books (and those with knowledge of things) know that that is a bad thing. Surprised you don't know that. Gain now, pain later.

So the 5 billion back then would be 7.5 billion now?

Still seems pretty trivial against 2 trillion no?

No, because asset prices have risen substantially more than inflation.

I'm confused - that was the growth you quoted. Why mention it if it's wrong.

Anyway, we're arguing the toss. The point stands. Asset growth of around 7% leads to around 20 billion. Still a ways off 2 trillion.

finally somebody who understands compound growth

according to Einstein that puts you in an elite group

DeVlaeminck

TheBigBean said:

Dorset_Boy said:

Do you think PFI was a good thing?

Yes, very, which is why it was copied all around the world.

PFI under Blair was mostly about maximising the product for a certain price rather than minimising the price for a certain product. That was probably a mistake.

Most of what I've seen considers it a failure. In 2018 Phillip Hammond said he'd never sign a PFI contract.

surrey_commuter

DeVlaeminck said:

TheBigBean said:

Dorset_Boy said:

Do you think PFI was a good thing?

Yes, very, which is why it was copied all around the world.

PFI under Blair was mostly about maximising the product for a certain price rather than minimising the price for a certain product. That was probably a mistake.

Most of what I've seen considers it a failure. In 2018 Phillip Hammond said he'd never sign a PFI contract.

Many consider it to be a good idea poorly executed

Dorset_Boy

pangolin said:

Dorset_Boy said:

pangolin said:

Dorset_Boy said:

Why do you keep trying to compare figures today with those from 20+ years ago when we weren't in the middle of a global pandemic? There has also been substantial asset price growth over the last 20 years. Allowing for inflation at 2.5% pa, £1-00 20 years ago would need to be £1.50 today to stand still.

At the time, the £5 bn raid on pensions was huge, and as I said earlier, it created a savings gap that wasn't there beforehand and has only grown since. It was the catalyst for forcing DB schemes to close. Prior to that point the UK had the best pension provision in the western world. The raid changed that.

I've worked in 'the front line' of FS for over 20 years so know a damn site more than an unqualified recruitment consultant (who was barely out of primary school at the time) about the effect of the changes that were made. I lived through them with clients and have been part of their journey since.

Keeping interest rates artificially low caused a housing bubble. People slapped their credit card debt, car loans etc (all short term debt) onto their mortages (long term debt). then add in the encouragement of lending at over 100% of value. The text books (and those with knowledge of things) know that that is a bad thing. Surprised you don't know that. Gain now, pain later.

So the 5 billion back then would be 7.5 billion now?

Still seems pretty trivial against 2 trillion no?

No, because asset prices have risen substantially more than inflation.

I'm confused - that was the growth you quoted. Why mention it if it's wrong.

Anyway, we're arguing the toss. The point stands. Asset growth of around 7% leads to around 20 billion. Still a ways off 2 trillion.

I quoted the impact of inflation.

You are now confusing the size of the savings gap with the overall size of pension funds. They are not the same thing.

If the gap is say £20 bn (A), then if current total savings are £20 trillion (B), you would need total savings to equal (A) + (B) to close the gap (shortfall).

Put it another way, you want to buy a bike that will cost £5,000, but you only have £4,500. you have a shortfall, or gap of £500.

Hopefully that is bit clearer.

Someone also mentioned the gap getting 'inflated away' - that only occurs if the cost of providing the required income from the funds reduces. It has actually become a lot more expensive to provide the income. Hence annuity rates having fallen significantly over the last 20 years.

mrfpb

Jezyboy said:

surrey_commuter said:

skyblueamateur said:

Best Prime Minister in my life-time by a country mile

****dons tin hat********

I may be older than you but would have him alongside Maggie

In that they both ended up wreaking their parties electoral chances for a long time?

Ten years in power leaves you with no one else to blame when the election comes around. Ask any party what they will "pay" politically for ten years in no 10, they won't mind if their successors get dealt a s**t hand..

rick_chasey

Dorset_Boy said:

Why do you keep trying to compare figures today with those from 20+ years ago when we weren't in the middle of a global pandemic? There has also been substantial asset price growth over the last 20 years. Allowing for inflation at 2.5% pa, £1-00 20 years ago would need to be £1.50 today to stand still.

At the time, the £5 bn raid on pensions was huge, and as I said earlier, it created a savings gap that wasn't there beforehand and has only grown since. It was the catalyst for forcing DB schemes to close. Prior to that point the UK had the best pension provision in the western world. The raid changed that.

I've worked in 'the front line' of FS for over 20 years so know a damn site more than an unqualified recruitment consultant (who was barely out of primary school at the time) about the effect of the changes that were made. I lived through them with clients and have been part of their journey since.

Keeping interest rates artificially low caused a housing bubble. People slapped their credit card debt, car loans etc (all short term debt) onto their mortages (long term debt). then add in the encouragement of lending at over 100% of value. The text books (and those with knowledge of things) know that that is a bad thing. Surprised you don't know that. Gain now, pain later.

OK chip on your shoulder aside, I'm making comparisons to illustrate how standards have changed.

Half of Johnson's cabinet would have already resigned 20 years ago for the behaviour they are showing, but standards about behaviour have changed.

Low rate environments are something the whole of the western world have seen and all the empirical evidence is that having an independent body manage rates improves economic and financial stability and general economic performance over having it managed by politicians. If you want to argue labour should have wrestled control back off the BoE, then be my guest, but the economics world disagrees with you about rates.

DB schemes around the world are closing and have been for some time and that isn't really to do with a specific tax raid by a government. DB schemes are massively unsustainable and the arrogance of people who have them to moan about anything to do with them is stunning.

kingstongraham

hopkinb said:

I came here expecting 4 pages on this:



Not blah blah Iraq, catholic conversion, pensions raid, financial crisis, selling gold, PFI, EUSSR, blah blah blah That's all been rehashed since 2008.

This is now. This is worse.

Imagine him in a wind tunnel, like an OAP Michael Jackson in the Earth Song video.

Dorset_Boy

Rick - most private sector DB schemes in the UK were still open in 1998 to both new members and to future accrual.
They started to close from c2001 and now none are open to new members in the UK and only a handful to future accrual.

The reasons for closure in the UK are:
The Gordon Brown tax raid
Increasing longevity
The burden of cost falling on the employer
Legislation that didn't permit over funding in good times

They have become unsustainable for the above reasons.

Why the need for this statement though?: DB schemes are massively unsustainable and the arrogance of people who have them to moan about anything to do with them is stunning.

pblakeney

Dorset_Boy said:

Hence annuity rates having fallen significantly over the last 20 years.

Does anyone take annuities these days? Last example I was given showed that I'd break even if I lived to 110 compared to drawdown. And that's before counting for growth in the remaining pot.

Dorset_Boy

pblakeney said:

Dorset_Boy said:

Hence annuity rates having fallen significantly over the last 20 years.

Does anyone take annuities these days? Last example I was given showed that I'd break even if I lived to 110 compared to drawdown. And that's before counting for growth in the remaining pot.

Yes, but significantly less than pre-2015. They still have a place for some.

Not sure how old you are, but that seems a late b/e point, but maybe you're just a youngster!!

surrey_commuter

Jezyboy said:

If the assets rise miles beyond inflation, does the black hole not get inflated away?

the liabilities of the pension scheme are partly a function of future inflation expectations. High inflation today is likely to result in raised inflation expectations over the next decade and so widen the deficit.

The inverse is true for gilt (interest) rates

shirley_basso

Dorset_Boy said:

Rick - most private sector DB schemes in the UK were still open in 1998 to both new members and to future accrual.
They started to close from c2001 and now none are open to new members in the UK and only a handful to future accrual.

The reasons for closure in the UK are:
The Gordon Brown tax raid
Increasing longevity
The burden of cost falling on the employer
Legislation that didn't permit over funding in good times

They have become unsustainable for the above reasons.

Why the need for this statement though?: DB schemes are massively unsustainable and the arrogance of people who have them to moan about anything to do with them is stunning.

are the answers, not gordon brown.

Dorset_Boy

shirley_basso said:

Dorset_Boy said:

Rick - most private sector DB schemes in the UK were still open in 1998 to both new members and to future accrual.
They started to close from c2001 and now none are open to new members in the UK and only a handful to future accrual.

The reasons for closure in the UK are:
The Gordon Brown tax raid
Increasing longevity
The burden of cost falling on the employer
Legislation that didn't permit over funding in good times

They have become unsustainable for the above reasons.

Why the need for this statement though?: DB schemes are massively unsustainable and the arrogance of people who have them to moan about anything to do with them is stunning.

are the answers, not gordon brown.

No, all 4 are the answers. Increasing longevity was known about 10 years earlier, but schemes were not closing then. Schemes only started to close when Gordon raided the pension funds. They were in the most part still afforable before then. It was one of the nails in the coffin.
The raid also didn't only affect DB schemes. It affected DC / Money Purchase schemes too.

TheBigBean

DeVlaeminck said:

TheBigBean said:

Dorset_Boy said:

Do you think PFI was a good thing?

Yes, very, which is why it was copied all around the world.

PFI under Blair was mostly about maximising the product for a certain price rather than minimising the price for a certain product. That was probably a mistake.

Most of what I've seen considers it a failure. In 2018 Phillip Hammond said he'd never sign a PFI contract.

That's just politics though.

The NAO wrote a scathing report on PFI. I think they got carried away with the idea of holding government to account, and as a result wrote something that was a bit financially illiterate. In one section, they acknowledge that the public sector did not have to pay anything as a result of the walls falling down in Scottish schools, and that this was a benefit of PFI; however, I have now written more words on the subject in this post than they did in their entire report. In contrast, they devoted pages to the fact that insurance costs are now lower, and had this been a public sector responsibility they would now be better off. Once the outcome of a risk is known, it is very easy to decide what should have happened.

pblakeney

Dorset_Boy said:

pblakeney said:

Dorset_Boy said:

Hence annuity rates having fallen significantly over the last 20 years.

Does anyone take annuities these days? Last example I was given showed that I'd break even if I lived to 110 compared to drawdown. And that's before counting for growth in the remaining pot.

Yes, but significantly less than pre-2015. They still have a place for some.

Not sure how old you are, but that seems a late b/e point, but maybe you're just a youngster!!

Not a youngster but planning on retiring early.
Still seems a rip off as both methods are based on the same pot.

Dorset_Boy

pblakeney said:

Dorset_Boy said:

pblakeney said:

Dorset_Boy said:

Hence annuity rates having fallen significantly over the last 20 years.

Does anyone take annuities these days? Last example I was given showed that I'd break even if I lived to 110 compared to drawdown. And that's before counting for growth in the remaining pot.

Yes, but significantly less than pre-2015. They still have a place for some.

Not sure how old you are, but that seems a late b/e point, but maybe you're just a youngster!!

Not a youngster but planning on retiring early.
Still seems a rip off as both methods are based on the same pot.

Cost of certainly vs risk to a degree, plus the legislation that requires fixed interest to under pin annuities, which is not an asset class you want to have the bulk of your exposure to over a 30+ year time horizon. Certainly annuities don't tend to make sense if you are retiring early as you will need flexibility, and by definition, you will have a decent sized pot.

rick_chasey

Dorset_Boy said:

Rick - most private sector DB schemes in the UK were still open in 1998 to both new members and to future accrual.
They started to close from c2001 and now none are open to new members in the UK and only a handful to future accrual.

The reasons for closure in the UK are:
The Gordon Brown tax raid
Increasing longevity
The burden of cost falling on the employer
Legislation that didn't permit over funding in good times

They have become unsustainable for the above reasons.

Why the need for this statement though?: DB schemes are massively unsustainable and the arrogance of people who have them to moan about anything to do with them is stunning.

And the DB closures around the world at more or less the same time are to do with?

And why the final statement about DB schemes? It's the equivalent of the millionaire complaining his 50s won't fit in his wallet.

Dorset_Boy

rick_chasey said:

Dorset_Boy said:

Rick - most private sector DB schemes in the UK were still open in 1998 to both new members and to future accrual.
They started to close from c2001 and now none are open to new members in the UK and only a handful to future accrual.

The reasons for closure in the UK are:
The Gordon Brown tax raid
Increasing longevity
The burden of cost falling on the employer
Legislation that didn't permit over funding in good times

They have become unsustainable for the above reasons.

Why the need for this statement though?: DB schemes are massively unsustainable and the arrogance of people who have them to moan about anything to do with them is stunning.

And the DB closures around the world at more or less the same time are to do with?

And why the final statement about DB schemes? It's the equivalent of the millionaire complaining his 50s won't fit in his wallet.

Sounds more like anger and jealousy tbh. I haven't seen anyone here with a DB scheme moaning about it.
And no, I don't have one.
And yes, they are unsustainable, hence why they are no longer available in the private sector, and many public sector schemes have been amended.
Those who are members did the right thing in joining their employer's pension and funding their retirements. It's not their fault DB schemes were the order of the day, yet you seem to make out it is their fault.

rick_chasey

I'm not blaming people with DB schemes for having them. The moaning about them, especially to people like me, I find just amazingly ignorant.

It happens. A lot.

rjsterry

I think the idea that you could work for 30-ish years and then live at a similar standard of living for another 30-ish years without working has always struck me as slightly mad. I mean where on earth was all that going to come from? I'm surprised it lasted as late as the late '90s.

surrey_commuter

rjsterry said:

I think the idea that you could work for 30-ish years and then live at a similar standard of living for another 30-ish years without working has always struck me as slightly mad. I mean where on earth was all that going to come from? I'm surprised it lasted as late as the late '90s.

I keep trying to do the sums and if you take out the cost of kids, mortgage, commuting etc, pension contributions, savings and then look at net amounts I reckon that you need an income of about 40% of pre retirement earnings.

rick_chasey

I just find it remarkable that Brown is apparently responsible for the simultaneous switch from DB to DC schemes across the world.

rjsterry

surrey_commuter said:

rjsterry said:

I think the idea that you could work for 30-ish years and then live at a similar standard of living for another 30-ish years without working has always struck me as slightly mad. I mean where on earth was all that going to come from? I'm surprised it lasted as late as the late '90s.

I keep trying to do the sums and if you take out the cost of kids, mortgage, commuting etc, pension contributions, savings and then look at net amounts I reckon that you need an income of about 40% of pre retirement earnings.

If you are retiring in your 50s you are still quite likely to be funding any children through university. But even taking your 40%, it hardly seems feasible.

surrey_commuter

rjsterry said:

surrey_commuter said:

rjsterry said:

I think the idea that you could work for 30-ish years and then live at a similar standard of living for another 30-ish years without working has always struck me as slightly mad. I mean where on earth was all that going to come from? I'm surprised it lasted as late as the late '90s.

I keep trying to do the sums and if you take out the cost of kids, mortgage, commuting etc, pension contributions, savings and then look at net amounts I reckon that you need an income of about 40% of pre retirement earnings.

If you are retiring in your 50s you are still quite likely to be funding any children through university. But even taking your 40%, it hardly seems feasible.

assume I am losing half of the 60% to tax/NI and pension contributions, no take off the mortgage and cost of kids and work. I reckon I am bang on

elbowloh

The online guides say to aim for 60-70% of your working income in retirement.

First.Aspect

elbowloh said:

The online guides say to aim for 60-70% of your working income in retirement.

Oh fuck