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Pension Payment Certainty no matter outcome of Referendum

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Liberal Democratic Minister for Pensions, Steve Webb MP, has confirmed that no matter the out come of the referendum vote on 18 September that anyone who has paid National Insurance and built up an entitlement to a UK state pension will receive this from the United Kingdom government.




If the vote is Yes and Scotland becomes an independent country (will also apply in the future if Shetland voted to become an independent country at some future date) then everyone who has retired before the split in March 2016 will still receive in full the State Pension from the United Kingdom country.


Those who retire after that date will get a pension from the United Kingdom Government based upon their contributions at this date. How much will that be will depend upon what the prevailing rate for state pension is at the time they retire plus number of years contributions. The link below to Government web page gives indicative values




Currently the cost of pensions in Scotland is estimated to be around £6.3 billion a year which the UK Government pays out of current UK tax receipts will continue to pay. There is no magical pension pot.




The UK currently pays the state pension to people living all over the world as Government link below explains. Entitlement to payment is based upon contribution made not country you live in at retirement or your nationality.




In the last year of details available tax collected in the UK attributable to Scotland was £56.9 billion whilst spend by Holyrood Parliament was only £33.7 billion. This therefore leaves £23.2 billion to spend on items such as social security spend (which includes pensions) and other costs currently managed by Westminster.






These initial pension costs will not be borne as a cost against the new Scottish state but pension expenditure will grow over time. The initial "windfall" of not paying the historic pension liabilities can be used to top up the UK state pension (one of the lowest in Europe), create a pension fund by putting NI contributions being received in to a real pension fund like companies have to for private pensions to fund the future payments rather than funding out of current taxation receipts as is the current scenario in the United Kingdom or a combination of these two options.


That surely answers definitively the Pension payments the United Kingdom Government continued commitment and clears up at least one answered question?

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I don't think that the pensions 'issue' was ever in any doubt.


As you pointed out, (and like 'private' pensions) pensions are due to those who contributed and not the country they choose to live in.

I cant find it now but in a speach made recently by Gordon Brown he suggested that Scotland couldnt afford Pensions so on the face of it seems like another climb down buy the No Campaign bit stupid really as if you contribute to the state pension your entitled to it no matter where you live

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As someone who has basically had his company pension raided by Gordon Brown, to the point where a good final salary scheme has been wound up leaving the potential of a 75% cut in what I had been promised, I think it is naive to think that any pension is 100% safe. Especially if it is in the hands of a foreign right-wing state.

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As someone who has basically had his company pension raided by Gordon Brown, to the point where a good final salary scheme has been wound up leaving the potential of a 75% cut in what I had been promised, I think it is naive to think that any pension is 100% safe. Especially if it is in the hands of a foreign right-wing state.


Very true but, it was a 'left winger' who took (roughly) 100Bn out of the pot in the first place...  You can't trust any of them.

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Talking to BAE staff, I have found out that if there is a Yes Vote and Scotland does become stand alone, it will render the employees of BAE in Scotland overseas workers, this in turn will affect their pension both North of the border and also for those South. Overseas Pension funds have to be self funding, BAE will not be able to push funds north, the pensioners in Scotland will see their pension pots dwindle quite quickly. The other issue there is that the BAE Pension fund owns quite a large chunk if the infrastructure in Lancashire. This was transferred to them to keep the fund fluid. With the current proposals to turn both Samlesbury and Warton sites into EZs this will boost the funds to a huge level, yet none will be transferred. So those who work for a company whose pension is based in England, Wales or Cornwall and live and work in Scotland would need to think on how this could affect their own funds. Also with the GOV wanting folk to be able to pull their pot from the fund and invest how they see fit could add additional burdens.

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Cross border pension schemes are what you are referring to and the Pension Regulator explains these EU rules in the following link.




The UK has the highest level of cross border pension schemes mostly with the Republic of Ireland but not exclusively.


The EU rules are aimed at ensuring private sector pension pots are fully funded to meet their obligations as estimated by a professional actuarial calculation. This place an obligation on the employer to fully fund the pension gap of the fund.


The only issue for a pension scheme, which is a problem irrespective of the referendum, is when they are not fully funded to meet their obligations. Now some of these companies will blame Gordon Brown for his pension fund raid that has netted the Treasury somewhere between £118 billion to £225 billion






As with a lot of issues sensible discussion about funding agreeing recovery timescales and not overnight will be required to put cross border pension scheme back on a stable financial footing and irrespective of the outcome of the referendum the UK Government should be having discussions with all private pension funds to agree a formal timescale for them to get back in to balance with out putting the company out of business.


The number of defined benefit (usually referred to as final salary pension) in the private sector has been following for a number of years as the Private Sector cannot afford them.


The pension auto enrolment scheme is all about re-establishing individual's holding their own pension and relying less on the state to fund pensions.




I note in the article in the Telegraph BAE systems gave a £1 billion back to its shareholders the question the workers and union members at BAE should be asking is why this not used to fund the £1.1 billion fund gap in its defined benefit scheme that led it to closing the scheme to new members?





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  • 1 month later...

The debate needs to be open, transparent and honest so disappointing to see the official letter from the local Better Together group spinning the pension myth yet again that was clarified clearly by the UK government back in on 7 May 2014 and covered in the posts above and was also covered by the national media.


The Westminster committee was captured on video, as is standard and the relevant section can be viewed on you tube. The whole committee session is available.



The ICAS report the letter refers to covered in link below was released on 3 February 2014.




Hopefully before the local better together group release another joint letter they will do the appropriate research to inform the debate rather than inadvertently misdirect the people of Shetland


However the big problem with the Scotland cannot afford to survive as an independent country fundamentally challenges the current UK economic model. UK government figures as used by Labour in the recent devolution paper show that Scotland is the 3rd richest region of the UK after London and South East of England. These as the Financial Times also illustrated are the only 3 regions above the UK average. Therefore for this mantra of pooling and sharing of resources that Scotland is an alleged beneficiary of to work it extremely unstable and not sustainable in the long term for the rest of the UK to dependent on the future of London and the South East of England funding and carrying the rest of the UK.

Edited by Who Knows
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The value of the UK state pension compared to our peer countries is also a shocking inditment of our values and priorities.


Last year both the Daily Mail and Daily Express highlighted how in relative terms compared to other countries the UK is the worst in Europe and overall internationally only Mexio is apparently the only member of the OECD top 32 countries in the world that is below the UK.


You can read these articles in the links below






Striving to address what the a Daily Mail refers to as our shame is the only way to resolve both pensioner's overall poverty and especially the fuel poverty that exists on Shetland.


Ask both sides how they are going to tackle and permanently solve this issue.

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  • 1 month later...

Nicola Sturgeon was talking about disability benefits on Radio Scotland this morning.


In event of an independent Scotland:

DLA is to remain for the time being - they are not going to go down the PIP road. {phew!}


She doesn't see why people who are not likely to get better, e.g. MS / motor neurone etc. and have been awarded disability benefits "indefinitely" are being stressed out with complete back-to-the-beginning assessments, 

she said that Scotland will look after its vulnerable people - elderly, & disabled.


Must admit that has answered a lot of my questions.

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