Pension Release News from Grove
by Michael Ormond on September 30, 2009
The UK government’s ‘personal accounts’ have been left by the wayside and are due to be delayed by four years.
This is the way that the government are dealing with the current pension deficit. The plan was that employees would make contributions of 4% of their salary, employers to make 3% contributions and the government would top up the final 1%. However there seems to be issues with this system and it is not likely to be ready until 2016 at the very earliest.
Pensioners are struggling to survive with their current pension plans, whether they be personal or state schemes because of the annuity rates crash but the government seem to have simply thrown a wet flannel at a house fire. The government had promised to address several issues with pensions over the last decade, but as yet nothing concrete has been done.
It seems that despite the protestations of the government, ultimately it will fall on the shoulders of pensioners – future and present – to look after their retirement funds. The fact that more tax deductions were made to the pensions industry meant that income that would have been reinvested for the future is no longer available.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on
The UK government have recently put £400,000 into a publicity drive aimed at making UK pensioners aware of the fact that £4.9 billion goes unclaimed in pension credits each year.
1.8 million people are thought to be eligible to the credit, but never claimed them and are obviously losing out on financial aid that no one would say no to right now.
The advertising will go out into bingo halls, local markets, working men’s’ clubs and mobile teashops. The advertising will illustrate how pensioners can apply for pension credits and show them how they can claim.
To many this seems like ‘too little too late’, but at least something is finally being done for those who are looking at another cold winter.
It seems that many pensioners weren’t aware that they could benefit from pension credits and so for years this money has simply been ignored. Hopefully now, pensioners will be getting what they are entitled to.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on September 28, 2009
The total liabilities of the UK Defined Benefit pension schemes, now tops £1 trillion, with the deficit hitting £200 billion.
No one is more concerned than those with pensions whose schemes are being threatened with closure and questions are being asked about whether enough was done to safe guard the retirement funds of the UK population.
It seems as though the UK pension schemes are in real trouble and despite the last 10 years, no one seems to be able to fix the problem.
The finger once again has been pointed at Gordon Brown and what he was doing during his time as Chancellor of Exchequer. What we do know, is that he introduced tax on pensions scheme income. This increased the UK Government’s immediate tax income but it meant that pension schemes were now receiving a reduced vital gross income.
The Government is only now reviewing the public sector arrangements, and defined benefit schemes are once again taking the strain of a dwindling economy.
UK pension schemes are in trouble and need some TLC fast, or pensioners are going to be the ones that suffer.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on
Have you got a pension? If the answer is no, then you should be looking at your plans for retirement. Equally if you have a pension, then you need to make sure that it is going to provide for you in later life.
As you will have heard, many pension schemes in large companies have had to close. The pensions that have been hitting the headlines are final salary schemes in big corporations, many of which are suffering a huge deficit.
It has been estimated that companies in the FTSE100 alone have a massive £96 billion shortfall between them. This has resulted in a number of big employers closing schemes to new staff and some have even closed to existing members.
Public sector pensions are not safe either, with an expected shortfall of £4 billion. Personal pensions are not doing too well either, as falls in the stock market mean that many funds are worth a quarter less than then two years ago.
It is now thought that half of people aged between 20 and 60 are not paying anything into a pension, either because their pension schemes have closed or because they don’t actually have one.
Economic downturn is obviously at the front of this debate, but people are being urged to not stop their contributions. In fact it is time to take stock and try and make up any shortfall or at least review your retirement plans.
Want to safe guard your retirement? Here are some helpful tips and pieces of advice.
What to do if you don’t have a Pension
A pension sounds expensive and it might not actually be the right option for you. If you only have a few years left until retirement, you might not have enough time to build up the funds that you need.
Firstly you should check to see what you are entitled to from your state pension by asking for a ‘Pension Forecast’ from www.thepensionservice.gov.uk. Then if you have a shortfall you can talk about the best way to make up missing amounts.
If you are offered the chance to join a company employer’s scheme, then you definitely look at doing this. This is especially beneficial if you employer makes a contribution too.
Some pensions allow you to stop and re-start contributions, so don’t let that monthly direct debit put you off.
The most important thing to remember is not to delay. You should consider your future; even if you are young and think that this doesn’t affect you. Eventually it will.
Have you got a Personal Pension?
Firstly ask for a valuation and compare this to your expectations. If there is a shortfall, which there is likely to be, then talk to your pension provider or IFA about how much more you would need to contribute to bridge the gap.
Got a Final Salary Pension?
With any luck your final salary scheme is not in deficit, but chances are that it is. Speak to your scheme trustees and find out what their plans are to safe guard your scheme.
You should consider whether the scheme is going to continue to be affordable and whether it would be better to top-up your pension or make additional savings.
Relying on you Public Sector Pension?
If you are relying on a public sector pension to keep you going through retirement, then you might want to reconsider. Public Sector Pensions are under fire and so you might want to consider a 2nd pension or topping yours up.
Got a different type of Employer Pension?
Are you a member of a defined contribution scheme? Or perhaps you have a stakeholder scheme or a different type of pension that your employer contributes to? Either way the value is likely to have been affected as the stock market took a dive.
Your best bet is to ask for a valuation of your scheme, so that you know how much, at this stage, you are likely to receive. Then again seek advice on the best way to boost your retirement fund.
Have you got several pensions?
These days you are less likely to stick in one job for life. With this in mind you might have several pensions that have been left with previous employers and have been forgotten about.
Make sure that you track down any pensions that you might have floating around. Think about taking all of your existing pensions and putting them into one manageable plan. This could be a low cost stake holder pension.
It is also worth considering that some pensions might be better off where they are, so make sure that you do your research and seek financial advice.
Whatever type of pension, you should be weighing up your options and considering what the best course of action is for your retirement.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on September 17, 2009
The joint general secretary of Unite, Derek Simpson declared in an interview with the Daily Mirror that Gordon Brown is the only choice to handle the recession and to lead Britain forward after the next election, adding that he has his full support.
Mr Simpson continued:”Gordon Brown has chartered a steady course through the recession, but it is now time to be robust and radical to stop a Tory government which would dash any hopes of a recovery and wreck Great Britain’s economy.”
He stressed that committing to the current progressive stance with pensions, employee benefits, jobs and public services, the government can take major steps towards a brighter future for UK. The Government must however draw a clear line between itself and the Conservatives, ensuring that it is understood that Tory opposition to homeowner support or banking intervention is wrong for the country, and that the Tory position over Britain’s public finances threatens to shatter any fragile recovery.
Recently, Unite was also calling on the Phoenix Four to pay up the promised £2.5 million each into a trust for the workers as well as money which was raised from the sale of assets including Studley Castle and MG Sports Tools. The decision to delay the payments into the trust was taken after the inspectors’ investigation took place into the actions of the former owners of MG Rover.
Unite’s Tony Woodley said: “What we are calling for now is the release of the money promised to workers and for it to be distributed fairly and evenly. We are asking the Phoenix Four and the bank concerned to act urgently.”
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on
Unions have stepped in to stop Corus closing its pension scheme to new entrants.
Delegates at the TUC conference have backed these efforts to stop the steelmaker from closing its pensions and bonus schemes.
The Community union was called in and said that it was unhappy about the proposed plans and so have been looking to the TUC to protect the final salary schemes.
Corus have been unable to comment as the situation is ongoing and nothing as yet, has been resolved.
Corus already cut more than 4,500 jobs this year from its UK plants and now it seems that their pension schemes are the next to face the chop. Corus have even been accused as using the recession as an opportunity to cut the benefits of workers and alter their agreed terms and conditions of work.
Community’s general secretary Michael Leahy is calling on the TUC to defend the final salary pension scheme, explaining that these pension schemes will mean the difference between comfortable retirement and poverty in old age.
The Community Union is looking to firmly draw a line in the sand and ensure that no further cuts are made, suggesting that many of these cuts could be kneejerk reactions to what is happening globally.
The members were all meeting on Thursday to discuss moving forward, but at this stage striking was not being ruled out.
The Community would also be meeting on Tuesday to discuss the Corus Teesside Cast Products factory closure and saving the 2,000 jobs there. A change of heart by an international consortium that had planned to embark on a 10 year deal to buy steel is forcing the hands of CEOs and members of the Community are hoping to be able to step in.
The Government will also be looked upon to give greater support to the steel manufacturers, as one of the UKs only remaining traditional industries.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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by Michael Ormond on September 15, 2009
The analysis of official private sector pensions statistics, published on the eve of the Congress debate on pensions, has revealed that the proportion of the working population in the private sector who were members of defined contribution benefit scheme fell by 5.1%, from 18.6% to 13.5% between 2005 and 2008.
As a result, according to data from the Trades Union Congress (TUC), – which is holding its annual congress in Liverpool this week-, the proportion of the UK’s private sector workforce without any employer-funded pension scheme has been rising steadily every year from 54.6 per cent in 2000 to 62.6 per cent in 2008.
The defined contribution (DC) schemes are not growing fast enough to cover the gap left by the continuing closure of defined benefit (DB) schemes. As a result, two-thirds of the private sector workforce is being left without a pension.
This survey also reveals that less than half of DC schemes have employer contributions greater than 8%, which means there are still more people in private sector pensions building up a decent pension through a DB scheme than through a DC scheme.
Nevertheless the TUC highlighted that according to most experts, a decent pension that begins to be comparable to that offered by DB schemes requires the combined employer and employee contributions of 15% of salary.
General Secretary TUC Brendan Barber declared: “Many seem to think that the hole left by the closure of private sector salary-related pension schemes is being plugged to some extent by new money-purchase DC schemes, albeit of lower quality. But these figures show that this is not true.”
From 2012, every employer will have to auto-enrol staff in a pension and make a contribution.
But the general secretary warned: “People should not think that the 2012 contribution levels will build up the kind of pension that most expect,”
Michael Ormond is a Financial Advisor specialising in Pension Release services.
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