British airways pension to close.
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It's much harder with property in the current market, we bought ours right at the bottom which makes the yields respectable. Paying £300k for a rental won't reap the rewards required to justify the risk or hassle. Commercial property isn't a bad shout but it's all about the covenant in much the same way as private. You take all the risk and the treasury takes a big chunk of the rewards. Great ay!
I've just been offered a share in a rather nice speed boat. It won't appreciate in value, the wife hates boats and the kids are both too young....but it'll help me forget about all this aggro!
I've just been offered a share in a rather nice speed boat. It won't appreciate in value, the wife hates boats and the kids are both too young....but it'll help me forget about all this aggro!
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An interesting letter sent out to 600 SFOs from the CFO today. At least they recognise this group is taking an enormous hit with these proposals. I suspect something is going to have to change. 600 seriously hacked off new Captains who will hold a grudge against their employer for the rest of their careers is surely not a great way to maximise profit.
I loved the condescending bit suggesting those 600 SFOs could already have commands if they wanted them, so they have brought it upon themselves. Oh really? So we have got 600 below NAPS juniority Captains have we? What a daft argument to make.
I loved the condescending bit suggesting those 600 SFOs could already have commands if they wanted them, so they have brought it upon themselves. Oh really? So we have got 600 below NAPS juniority Captains have we? What a daft argument to make.
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Yes....I had a cursory glance at that as it landed in my inbox. Interesting read. 
As I've said above and indeed elsewhere, I really hope we pull together over this, in whatever direction that may be.
As I've said above and indeed elsewhere, I really hope we pull together over this, in whatever direction that may be.
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No money
Pensions in most sectors, not just aviation are taking a beating and I think anyone with an ok pension in the future will be taxed so massively by our governments (to provide for those with no pension) that im not sure a typical pension fund is the best use of ones money anymore. The only folks that will escape this will be the 1% that have 99% of the money, and of course the self serving politicians making up the rules.
I have a simple quick calculation that I have used for years to give a rough Idea of how much funds you need in a pension pot (any pension pot as they all follow the same pattern, but some you have to pay into and some your employer does) to give you an annual pension figure. So for example if you have a pot of 100,000, take off a zero and divide by 2 then knock 15% off, this gives you a reasonable idea for the majority of savers. So 100k will give you approx 4.25k per year before tax as a pension,and thats generous on the calculations! I dont bother with inflation as most funds account for this but the buying power will be more or less the same today as in 20 years, just the numbers will be higher. If for example, you want to take a pension today and need say 20k as a yearly pension, then you will need around about 460k in a pot to get that! Most people, even well paid pilots will never save that amount so theres definitely going to be higher tax and lower returns in future. Dont put all your eggs in one basket and good hard cash saved will help.
Also a posters earlier mentioned about property and putting 300k into one. Theres two ways of doing property, the first is to buy looking for the value of the property to increase over time. This is risky but can offer good returns in the long run and only if your in a fantastic area for investment. Ie London etc. The second is to buy in a area that is way cheaper and commands a better monthly yield over the cost of ownership. The value of these properties doesn't go up so much over time but the the monthly rental and yield is often better and provides a monthly income thats affordable between tenants. MTW
I have a simple quick calculation that I have used for years to give a rough Idea of how much funds you need in a pension pot (any pension pot as they all follow the same pattern, but some you have to pay into and some your employer does) to give you an annual pension figure. So for example if you have a pot of 100,000, take off a zero and divide by 2 then knock 15% off, this gives you a reasonable idea for the majority of savers. So 100k will give you approx 4.25k per year before tax as a pension,and thats generous on the calculations! I dont bother with inflation as most funds account for this but the buying power will be more or less the same today as in 20 years, just the numbers will be higher. If for example, you want to take a pension today and need say 20k as a yearly pension, then you will need around about 460k in a pot to get that! Most people, even well paid pilots will never save that amount so theres definitely going to be higher tax and lower returns in future. Dont put all your eggs in one basket and good hard cash saved will help.
Also a posters earlier mentioned about property and putting 300k into one. Theres two ways of doing property, the first is to buy looking for the value of the property to increase over time. This is risky but can offer good returns in the long run and only if your in a fantastic area for investment. Ie London etc. The second is to buy in a area that is way cheaper and commands a better monthly yield over the cost of ownership. The value of these properties doesn't go up so much over time but the the monthly rental and yield is often better and provides a monthly income thats affordable between tenants. MTW
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A slighty more accurate way would be to use the BALPA shortfall calculator
1.Put in what you have currently accrued
2.Put in what you would like as a pension
3.look at pension shortfall
4.Take out a large glass from drinks cabinet and fill with Scotch.
1.Put in what you have currently accrued
2.Put in what you would like as a pension
3.look at pension shortfall
4.Take out a large glass from drinks cabinet and fill with Scotch.
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Scotch
Stormin norman - probably better off keeping that scotch instead of drinking it, although having a large one does sound good! A decent bottle unopened left in the attic for a few years will gain value as the supply of that drop drys up. Theres a Massive demand for quality scotch and is getting bigger all the time. Hard not to drink a good bottle though and need a few in the attic to really make money, but just knowing you have a rare bottle of 50 year old to drink when your pension fails you is comforting.
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The second part of the sentence is more important. Even if you just tracked indices over the last 10 years the returns would have been good, going forward looks more uncertain and the possibility of malicious government taxation is worrying. The big trick is keeping the pot intact until retirement!
Captains have just received a NINE page letter!
.." in the middle..
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We can’t do much about government raids, but we don’t have to vote for this. Unless the new DC scheme is significantly improved from the initial offering I know what I’ll be voting when the time comes.
Cripes. Interesting read. As co-jo in the yellow peril T1e , my Captain's pre-take off quiz included "How much do you need to have invested in your BA pension (we were just about to be absorbed into BARD) in order to enjoy 2/3rds of your current salary when you retire at 55 ?" Well, look, just secured my BA 100% endowment mortgage, wifey expecting number two and consequently traded in my beloved yellow (NE colours, of course) Spitfire Mark 4 for a Citroen Ami 8, my mind could not have been less focused on pensions. The answer was something like a million !(1975). Left BARD & joined the Laker Airways Pension Scheme (oooops).
Seemed to have done ok though. Oh and 2&2, "speedboats" ? I am just about to fold away me Lidle's inflateable for the winter. Good for another season though and lovely neighbours are going to help me cover the pool for the winter.
Just love being a penshi and dear Phillip looks set to raise my State Pension by 5% next year. Stop worrying lads & lasses. It'll all be ok.
Seemed to have done ok though. Oh and 2&2, "speedboats" ? I am just about to fold away me Lidle's inflateable for the winter. Good for another season though and lovely neighbours are going to help me cover the pool for the winter.
Just love being a penshi and dear Phillip looks set to raise my State Pension by 5% next year. Stop worrying lads & lasses. It'll all be ok.
I completely understand those who express themselves as 'I was promised' because it will feel particularly hard, but what you were promised was upon a particular set of circumstances which have changed radically and you've not been paying enough to match the new reality.
You certainly do have every right to complain that you werent advised early enough of the changed circumstances, but if there isnt enough money, there isnt enough money and no government is going to bail you out completely. Even if you were told early enough, there simply isnt enough money in defined benefit pension schemes to fund all the promises and an employer going to the wall to try and fund some of the shortfall isnt going to happen either. Most people simply couldnt afford the payments to get the same level as a defined benefit scheme.
Personally I had a decent offer to buy out my final salary pension scheme
at 55 years old which was particularly good so I took it but there's no way i would buy an annuity as those are even worse.
There isnt a company on the planet that can afford to replace the shortfall on pensions schemes. The simple fact is that defined benefit schemes were from a bygone age and have not changed the reflect the longer lives of people and the lower returns available in the market.
Tesco have done very well wiping a large chunk off the defecit just by adjusting life expectancy down to something more realistic and making assumptions that their returns on investments will be considerably better than current Gilt rates.
I have to disagree. Some companies are managing to fund their DB pensions. According to the figures we have been shown by BA approx 22% of companies are not in arrears. Makes you wonder why.
Tesco have done very well wiping a large chunk off the defecit just by adjusting life expectancy down to something more realistic and making assumptions that their returns on investments will be considerably better than current Gilt rates.
Tesco have done very well wiping a large chunk off the defecit just by adjusting life expectancy down to something more realistic and making assumptions that their returns on investments will be considerably better than current Gilt rates.
22% means 78% have not, so it would be fair to conclude that the effect hasnt hit the other 22%. They may well be newer schemes with few 'takers' and lots of 'payers' on very large payments. Its hard to tell but the key is that only 1 in 5 is okay - for now. Five years ago, the 22% number was probably 30% - and every year, reality bites and more pensions chemes slip into arrears simply because;
People live longer
Returns are lower
People dont pay enough
Unless these three factors alter, no pension scheme in the 22% will survive.
Adjusting life expectancy and changing assumptions changes nothing. You can make any pension fund solvent by assuming everyone dies aged 68 and you get 15% return every year. I would be very surprised if the majority of Tescio staff are on DB ! I imagine some older staff are but what is the ratio 9:1 in favou of DC ?
That doesnt mean there is enough money in the real world. I would have though people were wise to this kind of jiggery pokery nonsense by now !