Debt liability & Pensions

NTU income breakdown 2011/12 Tuition fees 52% Funding body grants 36% Other income 9% (e.g. franchise money food) Research grants and contracts 3%

NTU income breakdown 2013/14 Tuition fees 70% Funding council grants 19% (i.e. HEFCE giving money for research) Other income 9% Research grants and contracts 2% NTU has had funding from HEFCE cut in half from 2011, money has therefore come from tuition fees and increased universities total income

The Government 2009/10 spending on education was 6.4% of national income (GDP) 2014/15 expected to be 4.6% Reduction is mainly due to tuition fee increase (current spending on higher education dropping by 40%, capital spend halved)

* Current spending = paying the bills (i.e. wages), capital spending = buying assets (i.e. buildings)

Fees change 2011 - 3,000pa 2012 - 8,500pa 2013 9,000pa (almost all of it) EU/ Outside EU 10,000 NHS subsidies medical degrees as these are expensive Cost to teach a undergraduate 10,000 (9/10 split for teaching) LABOUR PROPOSE FEE CUTS TO 6,000 IF ELECTED US pay at least DOUBLE in fees

IPPR estimate a 40% short fall in student debt repayments

Pensions Basic state pension Second state pension Personal/stakeholders pension Occupational pension Defined contribution - paying in a certain amount every month Defined benefits pay in every month and then Pension Company agree to pay a level of final or average salary. Gives certain proportion of salary for every year worked.

Dangers for Pensions Inflation can make pension worthless (final vs. average salary) Embezzlement can make a pension worthless Incompetency can make a pension worthless

*BT has a pension shortfall of 7.3bn*

Benefits of Pensions Personal pensions not directly tax deductible, occupational pensions effectively are Essentially a tax rebate at 20% so 80 contributed to a pension is broadly worth 100 Limit to this currently 50,000 per year The pension you end up with is still taxable income Main benefit is employer is required to contribute towards the pension Minimum requirement in the private sector is 5% by the employee and 3% by the employer

PUBLIC SECTOR WAGES ARE ALWAYS BELOW PRIVATE SECTOR WAGES

NTU Pension liabilities Academic staff use TPS (unfunded) Non-academic staff use NCCPF (funded)

Funded vs. Un-funded Funded schemes use contributions to buy assets (i.e. invest in shares) There are expected to rise over time faster than inflation. If they dont: In a funded, defined contribution scheme the pension gets less money than put in. In a funded, defined benefit scheme the provider pays out more than they receive. Un-funded schemes do not buy assets - they rely on taxation. Therefore: they are not subject to market fluctuations in asset price, typically linked to inflation, essentially the young paying for the old and theres no need to pay fund managers.

RPI vs. CPI RPI is a higher measure BUT ITS USELESS! Government moving everything to CPI

Overall summary Salary is paid 63% by you (students) 37% current taxpayers Pension is paid 38% current taxpayers, 32% future tax payers, 4% by you (student) and 25% by the person whos pension it is.