Originally Posted by
Lima Juliet
Vin, once you have earned that pension it is normally protected under AFPS. Hence, pretty much everyone right now is on either AFPS75/15, AFPS75/05/15 or AFPS05/15 terms right now - ie. the pension rights already accrued are protected. Also, the annual pension statement shows you what you have earned so far.
You are right, you can’t take it to ‘do what you like with’, but sometimes we all need protecting from ourselves and frittering away something that we will all need in the future. Also, looking at the crazy money Mrs LJ has invested in civvy pension schemes, and the pittance they currently plan to pay out, then I know where I want my pension pot to reside!
Your pension maybe protected under the Scheme, but only for as long as HMG choose to honour it. As has been said, our pensions are a promise. And hands up who’s been on a promise before only to be disappointed in the end?! (And I’m not just talking about finding out those stockings are actually tights!)
Reading the papers ahead of the budget made me think just how much political risk there is attached to our pensions. There are so many folk out there that utterly resent public sector pensions that the pressure to axe them or at best prune them back massively to the same poor pensions the private sector get is horrific. I’m not going to rehash the arguments about the rights and wrongs, but there is huge risk that we won’t actually get what has been promised. Not necessarily through scrapping them outright, but they could easily change the tax arrangements so that what looked like a comfy pension is suddenly halved by doubling the multiplier for tax purposes. And if Corbyn gets in, we’re doubly screwed being ‘rich’ ie having worked in a half decent job!
Combined with the risk to the State Pension, our eggs really are in one basket. As well as diversifying into ISAs and other areas, it almost makes one consider jumping ship to bank what has already been earned.