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British Households Prepare To Pony Up To Right Local Government Pensions

by Jim ONeil on December 17, 2010

in Personal Finance News

According to some figures, every British household will have to pay £200 per year to seal the black hole that is currently the local government pension system. Over the past three years, the deficit in England’s Local Government Pension Schemes has more than doubled, reaching £100 billion.

To plug this gap during the next twenty years, scheme members and taxpayers will need to pay £4 billion per year.

This effort equates to a two-thirds annual increase in pension contributions for each British household. Citizens should be prepared to increase their contributions from £300 to £500 annually if they expect the gap to be plugged.

Pension consultants attribute the widening deficient in pension schemes to poor stock market performances. Local government pension commitments cannot be realized without taxpayers making additional contributions.

Pensions experts say that final salary schemes tend to be characterized by suddenly-appearing deficits. They are not surprised that these plans are being replaced by pensions that feature employer-controllable costs. There are currently four million members, 1.7 million of whom are currently working, in the Local Government Pension Scheme. This scheme promises to pay out a pension upon retirement.

Increasingly, the Local Government Scheme is being replaced with defined contribution schemes based on stock market performance. Former Labour pensions minister Lord Hutton is reviewing changes to the scheme and other large schemes within the public sector. Early this year, Lord Hutton recommended that more pension contributions should be made by public sector scheme members.

Currently, each household that pays council tax is contributing one-quarter of their payments to the costs of local government pensions, says Communities Secretary Eric Pickles. Taxpayers cannot afford to pay more and this money is being diverted from purposes like street cleaning, emptying trash bins, and running libraries.

Experts say that a new system, fair to council workers, and taxpayers, is necessary.

vogel, charles

AMASS are unregulated and non expert with regard to Uk pensions law. You can acheive encashment if you left the UK before 6 April 2005.

But if you left the UK after that we have a new scheme which enables you to access a lump sum which in value terms is up to 50% of your fund value. This is through a process called pensions reciprocation.

Hope this further helps you all.

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pizi kana

worse, they don't even realize that society fails when the workers stop allowing themselves to be taxed. the entitlement mentality has become so entrenched.

We just need one united party to sucede. It can even be the shittiest state and as long as it has freedom, we could rebuild a better UK than this coalition are heading for.

bunion the cat

Have a talk with the Halifax. My son started some sort of plan with them when he was 22 (now 38) he puts an amount away each month which he has increased as he has become richer. He intends to use this for a pension when he is 55. it is never too early to start. Old age creeps up on you quite quickly.
Bunion how's your back ? Why are you not digging.

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