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.