There have been major discussions in the past week on the welfare cuts, however I was appalled and dismayed by the continuous reference across all parties and experts of State pensions being the major part of the welfare cost.
No reference is made to the large income generated by National Insurance contributions or its main purpose or intention, it is lost in the coffers of the Exchequer as a revenue source, and the same attitude has been applied to the recently aquired Post Office Pension Funds.
This is no different to the action being taken in Cyprus by the EU in the taxation on savings held by the Banks; it is straight forward theft of people’s hard earned savings and shows the same greed and lack of respect for other people’s money that occurred with the major Banks.
Yet the farce of a State contributory pension scheme continues, the high contributions are collected assiduously; recorded; applied to establish entitlement and then squandered or forgotten.
If you fail to meet the minimum contribution level, you can make extra contributions to entitle you to the full basic pension, now at the princely level of £110 per week or £5,600 per year, if you have paid more you could also be entitled to the State second pension.
Of course, if you do not meet these contribution limits or fail to make any payments at all, you will be forced on to the welfare Pension Credit, part of the true welfare cost. This will entitle you to a minimum income of £142.70 per week, some £7,500 per year, in addition you will be automatically entitled to free optical and dental treatment, free prescriptions, Housing and Council tax benefits.
The individual choice is an obvious one, you can work hard, pay your NI and be some £2,000 per year or more worse off or join the welfare mob, where you don’t even have to worry about retirement age as benefit comes from an early age, as soon as you leave school.
It is an upside down world, made even worse when those in charge cannot distinguish between benefits earned by a life time of contributions and true welfare benefits. If the State cannot put this money aside as individual personal savings and manage them to accumulate and grow, then they should pass it on to someone who can.
The same situation applies to the much maligned Public Sector pensions, which are only gold plated for a select few, whilst the majority pay even more contributions for a meagre and uncertain return.
It is time for a change, the increasing and changing nature of the retired population needs to be self sufficient, with their contributions, whether NI or private, put away and made to work. The next General election campaign has already begun, a strong lobby for a fair pension system could be a strong vote winner, even possibly see a return of common sense to politics.
The side benefits are large, present State pension costs could be halved, large investment funds released to secure jobs, create work and mend our failing infrastructure. Some 30 million in work would see their retirement future secured not as a benefit payment, but as a pension pot designed for their individual use.
Such a change is possible and the initial cost could be met by the discrepancies that already occur in State pension spending, which equals £10,000 per pensioner every year, with apparently no one knowing where the money goes as only half ends up in pension payments.
In 2016, we can all look forward to the big bonus of the single tier pension, when the basic State pension is brought close to the pension credit level, without of course the side benefits. The downside however is that this welfare payment will be it, with no second pension and no 5% SERPS rebate towards a private pension, which will therefore also reduce. Hurrah for creative accounting.
No comments:
Post a Comment