Wednesday, 23 February 2011

Britain's 'Privileged' Society



I'm surprised little said in the blogosphere last week about the £billions pensioners lost during the 12 years of Labour government when they fiddled the figures in order to rob us of over £80billion and I wonder if that's because few so bloggers are of pensionable age.  This week the MSM are reporting pensioners are 'privileged'.  Next week we may be proclaimed wealthy because the basic pension is a maximum of £97.65 a week.

Last week the Bank of England's February inflation report showed the Consumer Prices Index between 1997 and 2009 was 0.3% a year higher than official figures had previously stated.  Experts say this miscalculation by the Office for National Statistics cost the average final salary pension holder hundreds of pounds a year.

According to John Broome Saunders, actuarial director of BDO Investment Management: "Had the inflation calculation been done correctly many final salary scheme members would now find themselves entitled to a pension around four per cent higher".

The CPI error stemmed from the misreporting of clothing prices.  The inflation report said: 'Previous collection methods may have biased down estimates of CPI clothing prices'.

Not only did Gordon Brown steal a large chunk of our pensions when he was Chancellor, he was in residence at No 11 when these incorrect projections were published.  A typical 65 year old, after working all their adult life, is now entering retirement with a private pension of just £7,666 a year.  For women it is much less because they were unable to transfer superannuation until the 80s and many cashed in when they moved employers.  Short-sighted?  Yes of course, but it was a valuable and welcome sum to the family finances.  In my own case, I cashed in a few pensions and these days I feel far less guilty than I did prior to my retirement.  At least my young family had the benefit of the cash rather than the government of recent years.

This week pensioners have been called 'privileged' because the Institute of Economic Affairs (IEA) has suggested that we should lose a series of benefits, including free TV licences for the over 75s and the winter fuel allowance.  The idea is to ease the financial squeeze on younger people.

Whilst I understand the need for balancing the books, the IEA needs to look back 50 years and see who were the people responsible for rebuilding Britain after WW11.  These are the pensioners of today who paid willingly for the education of children and care of the elderly throughout their own working lives.

Throughout my lifetime it was understood part of the UK's need for taxation was to provide a basic income for those too old to work.  In recent years pensioners have received additional benefits irrespective of income and the fact that these have not been means-tested has caused the IEA to say some more financially comfortable pensioners are privileged.

I agree with free television licences for over 75s but free bus passes should be means-tested.  I know many reasonably well off pensioners who holiday in Scotland, regularly using their bus passes, but I also know others who would become more or less housebound because they couldn't afford public transport costs with one. Asking younger pensioners to contribute towards the cost of their pass may be worth investigating.

The winter fuel allowance has been a boon to many in the past two years when our winters were severe.  For most on an average to low income it has given them the confidence to know they will be able to pay for keeping the heating on overnight when the temperature was well below zero for many weeks.  Much more discussion is required as to how we can keep our older people warm and to give additional help to those who need it most.

The IEA's report appears to be pitting one generation against the other and that's not the answer.  The generations should be working together to resolve the issue and once the younger generations realise just how much many of today's pensioners have been robbed, as mentioned at the start of this post, they may be more sympathetic to their anxieties.

source

23 comments:

Joe Public said...

"Throughout my lifetime it was understood part of the UK's need for taxation was to provide a basic income for those too old to work."

There's a slight misapprehension there SR.

Part of the UK's need for taxation is to provide a basic income for those too lazy to work, and, for those who fiddle their expenses.

English Pensioner said...

Add to this the fact that independent surveys show that inflation for pensioners is higher than for the average citizen as both the RPI and CPI include white goods and all the modern electronic gadgets (which tend to be coming down in price in real terms) but which are not major items in the pensioners' budgets.
Interestingly, in Canada a few years ago, a broad survey showed that when the general public faced cuts, they felt that it was the services to the young which should be cut on the basis that the elderly had done their bit for the country and deserved a comfortable retirement. I wonder, if at heart,this country is any different.

Mr. Mxyzptlk said...

subrosa

why dont the elderly just go off and die seems to be Camerons and co new mantra.



sorry for the tardy response but what happened to my nephew was 100% true...

he is back in Afghanistan now

CrazyDaisy said...

Shocking madame,

Those that have worked and paid into NI for a pension on retirement are more than entitled.

There are plenty workshy types who have bucked the system from day 1, I have a relative, not by blood, who has never worked or paid 1 jot into the system and has all her medical needs attended too, prolonging her life - for no valid reason other than it's humane and the right thing to do in a civilised society. I say why doesn't all the bairns she banged oot, and you paid for, do their bit?

Take take take nowadays - nothing is given back, even by those that ought to knwo better. Charities on the blag, I could drone on and on! etc etc etc.

We live in difficult times. I dislike intensely those that feel somehow "entitled" to everything.

CD

Edward Spalton said...

Gordon Brown deliberately wrecked Britain's private occupational pension system - far superior to anything else in Europe where the state systems were all approaching bankruptcy.

At the same time he presided over a massive increase in public sector jobs which carry open ended, inflation-proofed pensions - something now beyond the reach of private occupational systems. His moral compass decided that tax eaters were preferable to taxable wealth creators.

With my own small company, I put as much into pension provision as I could and, thanks to Gordon and other circumstances, I reckon I'm getting about half (probably less) of what I reasonably expected at the time I paid for it.

Still, I'm better off than most - but I was robbed. This government is now plundering. the thrifty for the benefit of the feckless by interest rates far below inflation - and then having the gall to tax even the piss-poor rate of interest the banks pay.

This is hitting what used to be called "the respectable working class" more than anyone else - the people with a little bit put by in the Post Office and so on. Just as it was most needed, the government withdrew inflation-proofed savings accounts.

The moderately well off may do better with shares or unit trusts (or not) and the super rich can do superlatively better with hedge funds and "non domicile" etc.

If the stock market had kept going up for ever, as "prudent" Brown seems to have believed it would, everything might have been lovely. But - what a prat to believe his own propaganda!

The present government is, if anything, worse, equivalent to medieval coin clippers. But as it's called "quantitative easing" it's become remarkable respectable.

subrosa said...

Joe, that's not what my social sciences teacher taught me you know.

subrosa said...

I believe that is the policy in Vancouver EP as I have a family member who has lived there for many years. He wouldn't return here for love or money.

When did we change?

subrosa said...

Thanks Niko. It appeared to be true because it wasn't something anyone could make up really. Must make ours very stressed out working alongside people of such different values.

It's a paradox Niko. The NHS want to keep us alive and the government really want us just to lie down and die. Choices, choices...

subrosa said...

Evening Sir. We certainly live in different times CD. Did all this happen when the word 'respect' dropped from our dictionary?

JRB said...

Geriatrician - one who studies the diseases of the elderly.

Gerontologist – one who studies the social, psychological and biological aspects of aging.

But …
what is the name for someone who hates the ‘elderly’ - Philip Booth.

He is the editorial director at the Institute of Economic Affairs, and author of such senior citizen friendly titles as –
“The Way Out Of The Pension Quagmire”
“Pension Provision: Government Failure Around The World”
“The young held to ransom - a public choice analysis of the UK state pension system”
“The Impossibility of Progress - a public choice analysis of state pension provision”

Elinor McKenzie, chair of the Scottish Pensioners’ Forum condemned Mr Booth’s and the IEA’s proposals, and David Manion, chief executive of Age Scotland was totally scathing when he stated that –
“Suggesting that all older people enjoy a ‘privileged’ economic position shows total ignorance of the reality of life for the majority of over-65s. In fact the UK has one of the lowest state pensions in Europe, with 1.8 million pensioners living in poverty and many more surviving just above the breadline.”

I am sure if Mr P Booth were to have his way, he would issue everyone of pensionable age with a one way ticket to Switzerland and a discount voucher for Dignitas.

subrosa said...

Thank you for your post Edward. I should have also mentioned the endowment mortgages which were greatly affected. I took one out in the 80s and another top-up in the 90s. They were 22% short at pay out. One didn't even pay out the equivalent of the input.

I've no problem with those who have shares etc., but some do have a problem with older people being comfortable and living in the family home once they're retired. When asked what they suggest we do they don't reply.

subrosa said...

Ah so you know of Philip Booth then John. I had heard the name but knew little about him and I thank you for your information.

It's troubling to think the likes of Mr Booth has the ear of our elected representatives though and many of them have little interest in gerontology I should think.

PS A neighbour of mine (well she lives within walking distance) is a gerontologist. When I first discovered her vocation I asked if she was pleased to retire. She swiftly replied 'no', following that with, 'because I've now become a study myself'. Lovely woman.

Leg-iron said...

What baffles me is why politicians heads aren't exploding all over the place.

They have the Dreadful Arnott and that revolting Shenker character,along with some suited monkey from the BMA, telling them we must be prevented from eating, drinking and smoking so we'll live longer.

Then they have this Booth bloke telling them we're living too long.

Which do they want? It seems, in a masterstroke of doublethink, they actually believe they can have it all.

As I've said before, there's nothing wrong with our government that couldn't be fixed with a couple of hand grenades and a shotgun.

Well, it's currently working for other countries...

Crinkly & Ragged Arsed Philosophers said...

Philip Booth is a right wing Nazi whose only claim to fame is he's proved even idiots can write.

He, and his IEA doctrinal think sump, has neither concern for the old, or the young nor anybody in between other than those who have AAA credit ratings.

Which pretty much puts them on par with the spivs we now have in Westminster.

Time I think for all pensioners to get themselves down to the Job Centre's - 'We need a job in order to survive.' That would raise the unemployed figures through the roof. But, with this lot the problem could be they stop the pension and put all the applicants on Job Seeker Allowance!

This vortex of self-serving stupid capitalism is failing a huge majority in this country of ours in order to protect and benefit the few. It really is time we threw it out and by doing so give the majority of the young a real chance to create a better more egalitarian society for them and the generations to come.

We let them down by allowing this idiocy to happen; we have a duty to stop it.

subrosa said...

The reason is LI because this bloke is listened to by the coalition. Very true. They are determined to keep us alive as clones yet control our every move - unless you're part of the 5% elite of course.

subrosa said...

Crinkly, you're not far off the mark there. I know a pensioner who decided she wanted to work again having been retired for only a year. The Job Centre said her state pension would be 'held in her account' if that was the case. It would be released only when she stopped working.

They don't want us to work because, as you rightly say, it would put the unemployment figures up in the sky.

William said...

"IEA needs to look back 50 years and see who were the people responsible for rebuilding Britain after WW11."

*cough*

With all respect, SR, I find the idea of the vacuous, selfish Sixties generation (which is basically what we're talking about) hiding behind the sacrifices of those who actually fought in the two Wars richly comic.

The Sixties generation enjoyed free University education, plenty council housing, free school milk, etc. and then voted to get rid of it when it was their turn to pay for it for the next generations.

With all respect, SR, there is a considerable argument that the Sixties generation was the worst generation ever inflicted on the United Kingdom of Great Britain and Northern Ireland. It has done more to destroy this country than any other.

Everyone under 40 just now will come to despise that generation more than any other, in the years to come.

subrosa said...

That was not my intention William, but if that's the way you see it then it's ok with me.

'The 60s generation enjoyed free university education'. Yes they did. But only around 5% of school leavers attended university in those days because families couldn't afford to lose income. So that argument really isn't valid.

'Free school milk then voted to get rid of it'. I certainly didn't and I don't know anyone of my generation who did.

You have a bitter image of those born during/after WW2 William. We contributed our taxes without complaint and also ensured our children received what we thought was a better quality of childhood than we did. Perhaps that's where we made the mistake; working our socks off for the sake of improving our children's future.

When today's under 40s reach retirement age, they may then realise just how much my generation tried to do for them.

One point I will concede. We made a real hash of electing governments and stuck our heads in the sand far too much.

Crinkly & Ragged Arsed Philosophers said...

William I have difficulty with your concept that a generation can be 'inflicted' on a country?

Where did this 'infliction' spring from?

We need to know because it needs to be isolated, exterminated and prevented from ever happening again.

William said...

My apologies, SR. I got carried away earlier on.

However, you're being disingenuous with regards to University education. It was free and now kids have to pay for it. You could also throw in voting to join the European Union, voting to get rid of the nation's assets for short-term profit, voting for mutual organisations to be broken up for short-term profit, first generation to enjoy the Welfare State from cradle to grave and then moaning when the bill comes, wasting the oil money for 40 years with nothing to show for it, buying all the council houses on the cheap.

All of that wasn't your fault, SR, but I think your generation has had a good crack at it. No generation is entirely to blame but I just think we've been run badly for so long that no-one can be proud of the decisions they've made.

Yep, Brown is a swine and raiding pension funds was utterly despicable. Old people shouldn't be targeted, specifically, and we shouldn't be singling anyone out for vindictive cuts.

"Where did this 'infliction' spring from?"

God, probably. We had the best generation in WWII that defended our country so we had to accept the worst afterwards in order to balance the universe up. I imagine.

subrosa said...

Your fact is correct William about university education but you're missing the point. I reiterate, less than 5% of the population went to uni in the 50s; now we have 50%. 45% more if I do the sums for you.

No we didn't vote to join the EU, we voted to join the Common Market, a different organisation altogether.

I never voted labour in my life and Gordon Brown's destruction of our assets is one of the most disgraceful acts any politician has done in my lifetime; other than Iraq and Afghanistan of course.

Yes we are the first to enjoy the NHS most of our lives and the next generation are the second. I'm not moaning, it's the younger generations we're told.

Can't disagree with your comment regarding NS oil though and I also agree that council houses shouldn't have been sold so cheaply if sold at all.

We did our best William. We thought we were improving life for our children. Unfortunately the far lefties and the extreme liberals took over with their ludicrous policies about education and other aspects of daily life and people like myself didn't complain. Now we're paying for it because we have children who don't understand self discipline and are poorly educated.

Oh,by the way, it was Crinkly who asked the question not me. He may respond himself.

Crinkly & Ragged Arsed Philosophers said...

Rosa: It's not for me to argue with anybody who has a direct line to you know who!

subrosa said...

I suppose I too am wasting my breathe Crinkly. :)

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