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.