Friday 23 August 2013

John’s Blog No. 139 – Pensions –Pensioners 2


The question arises of whose money is it, it apparently no longer belongs to you; NI contributions are treated by the State as tax income; there is already a move in hand to do this, effectively to cancel the National Insurance Act. The single tier pension at or below welfare level is the first step towards this, All are equal, regardless.

Of course a basic rate of tax at 43% would be extremely popular! I don’t think, particularly with no firm return of pensions, unemployment benefit, job creation, etc, Why bother to work? The only ray of hope is the forthcoming general election, it would make a good platform for defeat.

There is a common attitude with many pension providers and administrators, who treat contributions as their money to be played with on the markets, but pass on the losses to members, which is the basis of defined contribution schemes. Annuities are even worse, are subject to daily market fluctuations, making it a gamble when you retire.

They were supposed to be tied to a stable Gilt and Bond base, with the State guaranteeing the outcome, but were then thrown into the market casino and no longer give good value for money or reflect the diligent years of saving. They are basically out dated and need replacing by a group scheme alive and active through work and retirement.

The basic problem is that pensions are no longer your personal entitlement, earned from many years of prudent saving, but a largesse to be dispensed unwillingly and begrudgingly, as from a charitable fund. No care is taken with your money, in fact it is no longer yours, but belongs to a faceless group or the Exchequer.

If you have the audacity to ask for a statement, you need to check it like Bank or Credit cards as mistakes are often made, the rules are changed without consultation or agreement and forward estimates decrease as retirement approaches, too late to correct.

The State is the worst offender, both in State and Public Sector pensions, you have no rights and should accept without question the “benefits” the State provides. The main aim is to reduce the amount paid out to prop up a failing system, which successive Governments have mismanaged and abused.

Careful plans, made over 40 years,  to retire at a given date with an adequate amount to enjoy the active years of retirement are thrown into confusion; the date is delayed by two years and the amount reduced sometimes halved. Pensions are an area where choice no longer exists, you are urged to choose doctor, hospital, schools etc. but not retirement; fairness has also gone out of the window, when you are better off on welfare.

Let us face it at 65, or is it 67, you are a liability; the system has squeezed out all the juice and wants to discard the shrivelled remains. Yet you are a force to be reckoned with and need to voice your displeasure, so they sit up and take note and improve the system.

Pensioners are now one sixth of Population and are the largest proportion who bother to go out and vote in an election, with the low turnout numbers that occur today, they are the majority. In spite of the low pensions, they are still a major spending power and with time on their hands they are an influence in the local community.

So sit up and take note and show a little respect to the old fogeys, who are not yet over the hills. In addition all in work, see their future in the pensioners and it is in their interest to see they get a good deal. In any case they earn their meagre State pension, paying substantial contributions.

A person in work, on the average wage of £500 pw, with their Employer pay 20% of that wage as NI, with 80% of the total income collected paying the State basic and second pensions. If you put that 16% into a good funded scheme you would expect to receive a pension of half that wage, not the measley fifth (20%) the State pays out.

The single tier pension announced and accepted by the experts as a great step forward, replaces all other State pension provision including the second pension and SERPs. In exchange you will get a large increase in your basic pension, bringing you up to the welfare Pension Credit level, without of course all the side benefits.

You know it makes sense, bringing all up to the democratic Socialist ideal of equality for all, regardless of whether you contribute or not; we all starve together and work hard to ensure it.

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