Pensions Policy

[XFool]

(There is no Pensions Policy board on TLF)

Interesting take on UK pensions:

Pension investment could help transform this country. Pension saving cannot. It’s a fundamental point that has to be understood.
Posted on July 24 2023

Tax Research

Moderator Message:
Moved from Pensions Practical as it was off-topic for that board (chas49)

[Nimrod103]

(There is no Pensions Policy board on TLF)

Interesting take on UK pensions:

Pension investment could help transform this country. Pension saving cannot. It’s a fundamental point that has to be understood.
Posted on July 24 2023

Tax Research

Moderator Message:
Moved from Pensions Practical as it was off-topic for that board (chas49)

That ghastly Richard Murphy again. Only knows how to tax the industrious. Not how to actually make money.

[TedSwippet]

That ghastly Richard Murphy again. Only knows how to tax the industrious. Not how to actually make money.

The man behind Corbynomics: an accountant from leafy Norfolk - The Grauniad

Richard Murphy is a chartered accountant and tax expert from a rural market town in Norfolk. He is also the brains behind Corbynomics, the radical policy platform that has electrified Labour’s leadership campaign – and he is happy for you to know it.

Although it seems that he gave up a couple of years ago, at one time Tim Worstall created something close to a career out of debunking Murphy's bizarre and consistently statist rhetoric.

[enjaminef]

Is there any sense to save money on a pension account anymore?

[funduffer]

Is there any sense to save money on a pension account anymore?

Tax relief!

[scrumpyjack]

Is there any sense to save money on a pension account anymore?

I think pensions will always be a politically acceptable form of capitalist saving, even under the likes of Corbyn, though personally I would invest my pension assets in overseas investments or UK ones that are fundamentally overseas assets/trading. Safer from the dead hand of socialism.

Under the TUC recent proposed wealth tax, pensions are the only asset they do not propose to tax.

[funduffer]

That ghastly Richard Murphy again. Only knows how to tax the industrious. Not how to actually make money.

Why don't you address the argument he is making rather than attacking the man himself?

Encouraging pension funds to invest in productive assets (with suitable safeguards) doesn't seem like a bad idea to me!

FD

[Urbandreamer]

That ghastly Richard Murphy again. Only knows how to tax the industrious. Not how to actually make money.

Why don't you address the argument he is making rather than attacking the man himself?

Encouraging pension funds to invest in productive assets (with suitable safeguards) doesn't seem like a bad idea to me!

FD

To be fair, his arguments in this piece ARE statist, or rather authoritarian.
Some central, all knowing, body should dictate how "pensions" are "invested".
Sure there are good arguments about bonds and equities, UK centric or wider based. This piece assumes one argument, but from there that it should be enforced.

Personally I'm a fan of the "pension freedom" reforms, but many argue that they were bad. People without ability were required to consider what is in their best interest. Well that's the "little old lady" argument that I have been given. To be fair the WASPI women do make it clear that there are people who don't watch the news and think how will that affect me? I actually did think that people can and SHOULD make up their own minds. Even before "pension freedom".

If you want my opinion, I'd just like pensions to stay the same for a while. Not that it should effect me. I'm of an age to draw from DC schemes and my DB scheme, suffering over the years from changing government regulations, should start paying in five years.

BTW, can I draw everyone attention to the final words.

Pension investment could help transform this country. Pension saving cannot. It's a fundamental point that has to be understood.

SO let us be clear, the point of pensions are not to provide for the recipient! No they are for the benefit of the state. Are we serf's?

[XFool]

BTW, can I draw everyone attention to the final words.

Pension investment could help transform this country. Pension saving cannot. It's a fundamental point that has to be understood.

SO let us be clear, the point of pensions are not to provide for the recipient! No they are for the benefit of the state. Are we serf's?

So you identify "this country" exclusively with "the state" ? Interesting. And, by implication: Helping the state cannot possibly help individuals? (This, of course, being a recurring theme amongst at least some TLF posters)

(Not that I hold any brief for Murphy personally)

[Urbandreamer]

BTW, can I draw everyone attention to the final words.

SO let us be clear, the point of pensions are not to provide for the recipient! No they are for the benefit of the state. Are we serf's?

So you identify "this country" exclusively with "the state" ? Interesting.

(Not that I hold any brief for Murphy personally)

Actually I don't. But I do wonder if the author does, or someone from Wales, Scotland or Northern Ireland.

Actually NO I don't wonder that at all. This country IS London! If not, then it's southern England.

Look whatever your point about my words is, pension policy covers England, Northern Ireland, Scotland and Wales. So pension policy ipso facto relates to the state. You can't claim that it relates to "this country" unless you define "this country" and neither you or he doesn't. Again an argument that his views are statist.

Edited for the following.
I actually happen to agree with the investment argument made in this article (rather than by the chancellor). I just question if it shouldn't be a personal choice. I.E should Doctors pensions be invested in Tobacco? It's happened in other countries. I STRONGLY dispute the top down argument of the author.

After all, some regard us as a rich country. Maybe they should invest in poorer countries.

[XFool]

So you identify "this country" exclusively with "the state" ? Interesting.

(Not that I hold any brief for Murphy personally)

Actually I don't. But I do wonder if the author does, or someone from Wales, Scotland or Northern Ireland.

Actually NO I don't wonder that at all. This country IS London! If not, then it's southern England.

Look whatever your point about my words is, pension policy covers England, Northern Ireland, Scotland and Wales. So pension policy ipso facto relates to the state. You can't claim that it relates to "this country" unless you define "this country" and he doesn't. Again an argument that his views are statist.

My point being that "this country" includes the people in this country, not just "the state". But then, I hold that the state has duties (well, it used to...) to it's population and can be a boon to them, not just a penalty (as some like to insist) - eg. The State Pension. The NHS. State education...

[Urbandreamer]

My point being that "this country" includes the people in this country, not just "the state". But then, I hold that the state has duties (well, it used to...) to it's population and can be a boon to them, not just a penalty (as some like to insist) - eg. The State Pension. The NHS. State education...

Sorry, my edit crossed your post. FWIW, I accept the argument that you make in this post, but feel that the detriments of the state may outweigh the benefits to such an extent that it might be better to do without.

Ps we could go down a rabbet hole about education, but this is the economy board.

[Nimrod103]

That ghastly Richard Murphy again. Only knows how to tax the industrious. Not how to actually make money.

Why don't you address the argument he is making rather than attacking the man himself?

Encouraging pension funds to invest in productive assets (with suitable safeguards) doesn't seem like a bad idea to me!

FD

Because AIUI Murphy's central thesis is that British companies and well off British people don't pay enough tax, and are (shudder) always looking for ways to avoid and evade tax. In essence, it's an egalitarian argument that the rich should be milked to subsidize the idle and feckless.

Personally by contrast I take the view that the British private sector and well off British investors keep this country afloat, and there should be enough incentives in the tax system for those people and companies to work harder, be innovative and industrious, and that success should be rewarded.

Back on topic, I have just received a letter from one of my minor pension policy managers (Aviva) to the effect that unless I kick up a fuss, in future they will be refusing to invest my pension money in companies involved in coal mining, arms manufacture and tobacco. I do not think this is right. It is up to me to make moral judgments for myself, not Aviva. I think it is highly immoral to starve arms companies of funds when they are trying to help save Ukraine and Western Democracy, Aviva are just hypocrites, and tomorrow I will be telling them so. I might even suffer the Farage effect of having my pension fund terminated?

[Steveam]

Why don't you address the argument he is making rather than attacking the man himself?

Encouraging pension funds to invest in productive assets (with suitable safeguards) doesn't seem like a bad idea to me!

FD

Because AIUI Murphy's central thesis is that British companies and well off British people don't pay enough tax, and are (shudder) always looking for ways to avoid and evade tax. In essence, it's an egalitarian argument that the rich should be milked to subsidize the idle and feckless.

Personally by contrast I take the view that the British private sector and well off British investors keep this country afloat, and there should be enough incentives in the tax system for those people and companies to work harder, be innovative and industrious, and that success should be rewarded.

Back on topic, I have just received a letter from one of my minor pension policy managers (Aviva) to the effect that unless I kick up a fuss, in future they will be refusing to invest my pension money in companies involved in coal mining, arms manufacture and tobacco. I do not think this is right. It is up to me to make moral judgments for myself, not Aviva. I think it is highly immoral to starve arms companies of funds when they are trying to help save Ukraine and Western Democracy, Aviva are just hypocrites, and tomorrow I will be telling them so. I might even suffer the Farage effect of having my pension fund terminated?

You would have done (much) better to have read the original linked article. You may or may not be right about Murphy’s central thesis but it is certainly not the subject of this article. He is making the point that much of “pension savings” does not add to the wealth of the country. One needs the savings to be used for investment. Murphy does not say how this should be done.

He does talk about and believe in the inter generational social contract and that our pensions model is flawed. (Buying shares on the secondary market or speculation are not adding to the sum of U.K. wealth - this is also relevant to your Aviva issue)

Although not relevant to this thread you use language such as idle and feckless (bad) rather than disabled and unfortunate (good). You skip over rich as a positive whereas I see rich as a graduation which for some (many) has become a pathology. [I was recently buying a new suitcase and saw prices up to about £1,000 - to pay this for a suitcase seems to me to indicate a wealth inequality which is obscene. But, of course, I digress].

Could the tax relief currently given on pension savings be modified to encourage investment in productive assets to generate greater capital for future generations?

Best wishes, Steve

[scotview]

He is making the point that much of “pension savings” does not add to the wealth of the country. One needs the savings to be used for investment.
Best wishes, Steve

Here's a wee thought. It might be a nice incentive (for the private sector) if the liabilities of the entire public sector, civil service and MPs pensions were quantified, then wholly transferred as DC schemes into established but more importantly "start up" UK companies who are solely doing business within the UK economy.

The success of this approach could be monitored by the Private Sector pension industry over a few years to observe the success or otherwise of this approach then decide on whether or not to follow suit.

[TedSwippet]

Back on topic, I have just received a letter from one of my minor pension policy managers (Aviva) to the effect that unless I kick up a fuss, in future they will be refusing to invest my pension money in companies involved in coal mining, arms manufacture and tobacco. I do not think this is right. It is up to me to make moral judgments for myself, not Aviva.

Hmm. Just received the same letter.

Not only have Aviva taken it upon themselves to unilaterally make moral judgments on my behalf, but they also apparently plan to charge me 0.04% or so of assets for doing this ("... one-off costs ... which are being paid from the funds"). The first is irritating. The second, to my mind, seems unacceptable.

[ursaminortaur]

He is making the point that much of “pension savings” does not add to the wealth of the country. One needs the savings to be used for investment.
Best wishes, Steve

Here's a wee thought. It might be a nice incentive (for the private sector) if the liabilities of the entire public sector, civil service and MPs pensions were quantified, then wholly transferred as DC schemes into established but more importantly "start up" UK companies who are solely doing business within the UK economy.

The success of this approach could be monitored by the Private Sector pension industry over a few years to observe the success or otherwise of this approach then decide on whether or not to follow suit.

Most public sector pension schemes are pay-as-you go schemes where the government just takes and spends employee contributions and the employer contribution is not really made but is just a notional contribution. If these were moved to DC schemes then the government would actually have to pay the employee contributions into the employee's pension fund and also have to start paying real employer contributions into the fund. Those in the current schemes though have built up benefits in those schemes so the government would still need to pay out pensions to those already retired and those who retired in the future. Hence a switch from public sector pay as you go DB schemes to DC schemes would mean that the government would need, at least in the short to medium term, to find more money which means that they would have to raise taxed, borrow more, or print more money.

Also since the government take the employee contributions in the current pay as you go DB schemes and use them for its general spending they can already decide where to direct those contributions (and the savings they make from not making real employer contributions) and hence could spend them on extra government investment in UK industry if they wished.

[spasmodicus]

Back on topic, I have just received a letter from one of my minor pension policy managers (Aviva) to the effect that unless I kick up a fuss, in future they will be refusing to invest my pension money in companies involved in coal mining, arms manufacture and tobacco. I do not think this is right. It is up to me to make moral judgments for myself, not Aviva.

Hmm. Just received the same letter.

Not only have Aviva taken it upon themselves to unilaterally make moral judgments on my behalf, but they also apparently plan to charge me 0.04% or so of assets for doing this ("... one-off costs ... which are being paid from the funds"). The first is irritating. The second, to my mind, seems unacceptable.

Almost everybody on these boards decries fund managers as parasites who skim off our hard earned savings and often provide very little in return. Pension funds are just the same. Stick the dosh in a SIPP and then at least you get to decide on your own (brilliant or otherwise) investments. I would much rather make investment mistakes myself than pay someone else to make them for me.

As for governments investing my money for me, any given political party's investment proposals often seem to be more like thinly disguised bribes to their own supporters rather than sound investments.
S

[scotview]

Britain’s largest pension scheme (NEST) to invest billions in high growth private companies (high risk ?) in boost for savers. It's happening.

Story in Telegraph today. A lot of concern being seen in the comments section.

https://www.telegraph.co.uk/business/20 ... s-private/

[gryffron]

Britain’s largest pension scheme (NEST) to invest billions in high growth private companies (high risk ?) in boost for savers. It's happening.

From my own experiences with Venture Capitalists, I know it takes a great deal of expertise to sort the successful future companies from the chaff. And even the VC experts expect A LOT of their investments to fail. If the govt is expecting to pump billions into the industry, and based on the experiences of Covid ppe, I expect to see a whole heap of scam startups pocketing all the NEST cash

Gryff