Reply to: Gordon Brown Saves The World

[ASB]

Absolutely laughable!! Brown has take out 5 Billion every year since 1997, and compounded, that is over 100 Billion pounds. That is slightly more than administration fees would be, especially if you have a low cost SIPP.

Laughable ? yes your comment is.

The raid comprised of removing tax relief on dividends. Now given an invented (but reasonably accurate) average equity yield of 4% this is going to reduce the overall yield on said investment by 0.8%. It would actually be quite a cheap fund that had a total expense ratio any where near this low. Granted you could probably keep it to this in a SIPP.

However that not to say the effect of this is not significant. In simple figures 100k invested to yield 6% over 30 years will produce 575k, the same @ 6.8% will produce 720k thus it will result in a pension about 20% lower.

[AlfredJPruffock]

Unfortunately it appears that govts the world over fell into the same trap that bankers and individuals did, in thinking that the good times will roll on forever. Like us they should have balanced their budgets and 'saved' some money away for a rainy day, instead of running up huge deficits.

I haven't been putting money away for a pension (yet) and I have no expectation of tge govt having any money to pay me even a minimum pension in retirement.

But then again I have no desire or expectation to 'retire' at 65 and play golf until I die. The entire concept of 'retirement' is fast becoming outdated and impractical.

The concept of having a retirement nest egg that is tied to the sharemarket always seemed pretty risky to me

Good for you - I share your views completely.

The whole idea of 'retirement' to me is a non-sense - in fact have you noticed how many people die shortly after 'retirement' - it appears as is nature sees that you are doing nothing in the World then it takes you out to let new life progress.

As for pensions - utter hogwash - your best bet is to have a high interest savings account, perhaps a wee hoose that is yours, not the banks - and keep on working!



I was digging in the yard today
When a letter came from Southampton way
Keep on working
Keep on working
I must admit I was a bit in the red
But if you never have pleasure then you could be dead

Keep on working
Keep on working

But there's on thing
They can't take away
Hear the sea sing
See a smiling face
I think we're OK
Though we all could be mad
That's what they say
We just can't all be bad

I got something now to think about
I'll work all day but not to pay it out
Keep on working
Keep on working
Don't care if they say where a dying race
I'd rather be here than any other place
Keep on working
Keep on working

And there's another whirl
They can't ever touch
Just need a boy and girl
It don't cost you much
And if your luck is in
you might have kids at play
To make you laugh and sing
When you're old and gray

[ace00]

But then again I have no desire or expectation to 'retire' at 65 and play golf until I die. ........

Me neither. I don't like golf and want to retire at about 45.

[Stan.goodvibes]

Unfortunately it appears that govts the world over fell into the same trap that bankers and individuals did, in thinking that the good times will roll on forever. Like us they should have balanced their budgets and 'saved' some money away for a rainy day, instead of running up huge deficits.

I haven't been putting money away for a pension (yet) and I have no expectation of tge govt having any money to pay me even a minimum pension in retirement.

But then again I have no desire or expectation to 'retire' at 65 and play golf until I die. The entire concept of 'retirement' is fast becoming outdated and impractical.

The concept of having a retirement nest egg that is tied to the sharemarket always seemed pretty risky to me

[Cyberman]

OK I know I shouldn't feed it, but:

I dod NOT say it's "OK to raid people's pensions" because admin fees are high. What I did say is that it was not Brown's tax change that shredded your pension. Whether it was right or wrong, it was not actually significant compared to other effects.

I know that annuities "get worse" because of increased longevity: I was not talking about this continuous foreseeable trend, but about the extrame variability that can mean that you will get less at some random times than at others.

I am not out of touch, you are failing to read.

Absolutely laughable!! Brown has take out 5 Billion every year since 1997, and compounded, that is over 100 Billion pounds. That is slightly more than administration fees would be, especially if you have a low cost SIPP.

[Stan.goodvibes]

You are Threaded and I claim my 5 Krugerrands!

Que?

[expat]

How you can say that it's ok to raid people's pensions because admin fees are high beggars belief... that is an argument NOT to tax them so highly.

People will be very poor in old age thanks to GB, except for public sector workers who are heavily subsidised by those very poor. The private sector already have to work five years more than those in the public sector. That is scandalous.

Annuities have been getting worse for years because of increased longevity. You didn't know this ?

You're so out of touch Expat.

OK I know I shouldn't feed it, but:

I dod NOT say it's "OK to raid people's pensions" because admin fees are high. What I did say is that it was not Brown's tax change that shredded your pension. Whether it was right or wrong, it was not actually significant compared to other effects.

I know that annuities "get worse" because of increased longevity: I was not talking about this continuous foreseeable trend, but about the extrame variability that can mean that you will get less at some random times than at others.

I am not out of touch, you are failing to read.

[Bob Dalek]

Scandinavian countries tend to have decent public services for their taxes, rather than expensive government IT projects (ahem.)

I thought suicides balanced the books?

[Old Greg]

I don't think either taxes or interest rates are that high. Interest rates have been low for the 2 years or more until quite recently, and when I was a kid (during the Thatcher era) weren't they at 10-15%? And Scandinavian countries have much higher taxes I thought?

Scandinavian countries tend to have decent public services for their taxes, rather than expensive government IT projects (ahem.)

[Cyberman]

I don't think either taxes or interest rates are that high. Interest rates have been low for the 2 years or more until quite recently, and when I was a kid (during the Thatcher era) weren't they at 10-15%? And Scandinavian countries have much higher taxes I thought?

Tell that to people on SVRs at 7%

[d000hg]

I don't think either taxes or interest rates are that high. Interest rates have been low for the 2 years or more until quite recently, and when I was a kid (during the Thatcher era) weren't they at 10-15%? And Scandinavian countries have much higher taxes I thought?

[Cyberman]

No fan of the man, but to be honest I see a lot of the same people pointing fingers at him now to fix the mess, and a lot of these are the same people that profited from the runaway conditions that have prevailed for the last ten years.

I am starting to settle for him because TBTH I dont see anybody better, in Europe or the US to pragamatically deal with this.


And if I had to chose between Bliar and Brown, I would take Brown.

Unfortunately, Brown is now a proven liar on radio at the time of the F1 donation scandal. He would resign if he had any honour.

[Cyberman]

The entire world is reeling, this isn't a domestic issue... so blaming GB for everything doesn't make sense. And as for encouraging borrowing, isn't it the Tories who started the whole "everyone should own their own house ideal"?
Making flat "it's X's fault" statements is either naive or simple trolling.

Much of it is a domestic issue, and due to poor regulation brought on by changes to the FSA and BofE that GB made.

High taxes that are helping to bring on recession are Gordon's fault, and massive debt(100 Billion spending deficit, excluding the banks 'bail-out') that will occur over the next year is his fault. He should be in a position to cut taxes but he cannot because spending is out of control.

High interest rates are also his fault. They should be 1% lower than they are now because people need money in their pockets to stave off recession, but he gave away some of his strongest powers to the MPC.

[Cyberman]

As usual, 1 rant = many points. I'll try some of them:

1. The tax changes to pension funds' dividends are really a drop in the bucket compared to e.g. the fund managers' fees, not to mention their ability to destroy wealth big time (a fund manager is someone who invests your money until it is all gone; a broker is someone who makes you broker). Arguably the relief was unfair, now it is not. But at any rate, though it may grab headlines (because of the single-figure total), it did not shred your pension (because the % is very low).

2. A month ago annuities were unrealistically inflated, now they are not. I'm sorry, I know that no-one likes bad news, but it is so.

3. It is unfortunate that people's pensions depend so much on the value of an annuity, and the variability of that depending on when it is taken. This is an old argument in the financial sector (see e.g. years and years of anti-annuity rants on the Motley Fool) and is hardly Gordon Brown's fault.

4. At the time I believed that you were right about NR. You might well be, but I am less sure now. Anyway, that's one unlucky investment, not your whole pension.

How you can say that it's ok to raid people's pensions because admin fees are high beggars belief... that is an argument NOT to tax them so highly.

People will be very poor in old age thanks to GB, except for public sector workers who are heavily subsidised by those very poor. The private sector already have to work five years more than those in the public sector. That is scandalous.

Annuities have been getting worse for years because of increased longevity. You didn't know this ?

You're so out of touch Expat.

[clangers272]

Let's give Gordon a bit of credit for once. Clearly he's played a leading role in attemtping to begin to address this mess. The UK recapitalisation plan was the most coherent although not without huge questions.

He has however along with the majority of other political leaders been responsible for this disaster. Let's not forget NuLab have won the two previous elections on the back of sound fiscal management and the wealth created from the economic boom.

NuLab will now spin furiously attempting to explain the huge hole in our public finances as being a consequence of the credit crunch. It wasn't, our public account deficit was already significant due to their public sector splurge over the last six years.

Trouble is for NuLab that unless Gordon can create a financial crisis on a weekly basis between now and the next election he's not actually going to be able to appear too statesman like on the back of a significant recession. Lot's of job losses and reposessions.

That's assuming that the crisis in the financial markets is over and frankly I don't believe it is. We're probably just witnessing a rally in a bear market

We're already in recession and are now being warned that if we're lucky we might get away with one only a serious as 91/92.