Pension problems

Tuesday, 01 May 2012

In recent times pension problems have been very much in the news, from the furore over new tax rules for pensioners, to the demands of the NHS, Teachers, local government employees, or retention of their current pensions. Are we being selfish and unrealistic? I am frequently at loggerheads with my contemporaries (I am 82) when I suggest that we are perhaps selfish in our attitude to the current tax proposals.

I am aware of the crass stupidity of a chancellor who wants more from the pensioners and less from the super rich in the same budget. Leaving that aside, do we consider the overall effect of our pensions at a time when the younger generation are also having financial concerns. Many of them have not had a wage increase for 2-3 years, they also suffer with low interest rates and their cost of living is also affected. We should remember that it is the young who have to bear the burden of future pension payments.

Perhaps it will be of interest to consider some of the background to our pensions history:

• In 1928/30 the life expectations for Men was 56 and Women was 59, in 2010/11 it was 78 for Men and 82 for Women.
• In 1928 the School leaving age was 14, in 2011 it was 16+
• In 1928 the Retirement age was 65, in 2011 it was 65
• In 1928+ the Contributory Years for a Full Pension for Men was 44 years, in 2011 it was 39 years

* it is interesting to note that the Retirement age of 60 in the civil service dates back to 1850  

** I am not a statistician or an academic and the statistics I have quoted are gleaned from various sources (including government records) on Google: "A brief guide to the history of pensions in the UK".

The 1908 Old Age Pensions Act introduced first general old age pension paying a non-contributory amount of between 10p (2 shillings) and 25p (5 shillings) a week, from age 70, on a means-tested basis.

The 1925 Contributory Pensions Act set up a contributory State scheme for manual workers and others earning up to £250 a year. The pension was 10 shillings (50p) a week from age 65.

I get a little ‘cheesed off’ with the argument 'I paid for my pension'. That is not the way it works in this country, but supposing it was, at the age of 82 and having retired at 65 I wonder how long it took for our contributions to be used up? I suppose we would all like our pensions to be increased, but do we take into account the benefits that are available for those on the basic retirement benefit? Pension Credit, Savings Credit, Winter Fuel Allowance, Severe weather allowance, Warm House Discount, Bus Passes etc. Governments of all parties have shied clear of the pension issues, including the accepted time bomb of pensions for the public service employees. It is obvious that instead of playing party politics, there is an urgent need for an all parties commission to agree a policy for the future and for any government to be statutorily required to implement the findings.

You may not share my sentiments, but it would be interesting to hear other viewpoints.

by Jim Davis, by email