Helen Martin: Pensions in need of level playing field
Depending on your age it might not, for who is to say there will even be such things as pensions in a few decades?
But for now, we are searching through boxes, files and cupboards to lay hands on telephone numbers or documents which will yield some clue as to how much of our life-long savings have disappeared into a financial abyss.
The Department of Work and Pensions is quite straightforward and within a few days of a phone call comes up with retiral dates, basic pension, graduated or SERPS pension and what it all amounts to per week.
Work pensions are a different matter. Projections take ages to come through, requiring permission from the trustees for the information to be graciously given to the person whose pension it is. In 42 years, I have worked for seven different companies and been a member of three different pension schemes each of which had gone through several metamorphoses. I have rafts of paperwork, now irrelevant, referring to “opted in”, “opted out”, final salary and stakeholder from several administering firms which don’t now have anything to do with it.
There’s no chance of keeping up with it because pensions are built on shifting sands. There’s another big change now with “automatic enrolment” although I am told I am old enough to opt out of that.
All this would be irritating and worrying enough were it not for the vast amount of money we all pay for other people’s pensions. The last time I wrote about this, one-third of our council tax in Scotland went to pay for gold-plated council pensions schemes. Today, that has risen to more than a half.
Public sector workers’ contributions are also up by as much as six per cent but the situation is clearly unsustainable if it’s eating up 54 per cent of council tax. No wonder we are on fortnightly bin collections.
Before you get pen and Basildon Bond out to word a caustic letter to council chief executive Sue Bruce, keep some ink and a few more pages for your MP. He or she was expected to increase contributions to their pension (which is also underwritten by the public) by 1.85 per cent in a couple of months. That’s been dropped so it is our tax which now has to make up the £2 million gap.
There are all sorts of strings to this arrangement in that the public already pays more for MPs’ pensions than those of teachers, policemen, nurses, or anyone else. MPs pay in less and for fewer years.
Yet these same MPs have the gall to lecture us on “the pensions timebomb”, the need for us to save more for our futures and the irresponsibility of expecting to rely on a state pension. And we haven’t even factored in MSPs yet,
Neither individuals who have their own pensions to maintain, nor the public purse by way of taxation, can carry on like this.
When the chips were down, private sector pension schemes didn’t do well. The very least we should expect is that public sector schemes should be performance linked to the private sector rather than protected and subsidised and that we should all pay the same amount in, public or private, relative to our earnings. . . with no exceptions.
There’s nothing to stop anyone with more money left over from investing, collecting antiques, buying gold or blowing it down the bookies as the mood takes them. At least they’ll only have themselves to blame.
No justice – just us
THERE are so many reasons why the iniquitous bedroom tax cutting the housing benefit of those with an extra room should be dumped. But one is certainly that it works against families and young people.
In the best of times, young adults flit between flats and the family home, before they finally set up independently for good. These days they are even more likely to turn up back on the home doorstep when they get made redundant or their employer goes bust and they can’t afford their own rent.
Good parents don’t want to clip their wings by begging them not to leave for their own financial reasons, nor do they want to down-size knowing their kids will have nowhere to come back to if it all goes wrong.
It’s been introduced far too quickly to be fair and reasonable. There’s little likelihood that if a tenant asked for a smaller house or flat, they would get one, which leaves them no room for manoeuvre at all.
The inevitable result is greater debt carried by the poorest to add to their existing struggle to meet fuel and food bills.