A TWO TIER STATE PENSION?

Iain Duncan Smith ~ just one of the 'strip wealthier pensioners' brigade

 

AT THE END of my post titled "Europe's Poor Relations" I suggested that the recent threats by high ranking political figures to strip “wealthier” UK pensioners of their bus passes, winter fuel allowances, TV licences and free eye tests, was an attempt to divide and rule. By creating a ‘them and us’ culture within the pensioner community, the politicians appear to be hoping that we’ll be left squabbling among ourselves. That, in turn, would prevent us uniting under a common objective and realising our full potential as an election-winning voting bloc.

Sadly, this politically driven, divide-and-rule ploy doesn’t end with the bus pass/winter fuel allowance/TV licence/eye test issue. On the contrary, the recently announced flat-rate state pension proposed for April 2017 “at the earliest” can also be seen to have divide-and-rule at its core. In fact, the proposals, as they stand, threaten the creation of an even more divisive ‘them and us’ … ‘haves and have nots’ … culture within the post-2017 UK pensioner community.

Here are the ‘flat-rate pension’ proposals in simple English: only new pensioners will be eligible, so existing pensioners and anyone who qualifies for a state pension before 2017 will continue to be paid under the present system. This can be topped up with pension credit and other means tested benefits where circumstances demand. In other words, tthose of us who are already drawing a state pension by the end of 2016 will continue to do so under the proposed changes, but those retiring from 2017 onwards will be paid the equivalent of £144 per week in today’s money.

In the Long Run

Rowena Crawford at The Institute for Fiscal Studies (IFS) goes further. She said that the Government’s proposals for a flat rate £144 a week state pension from 2017, “imply a cut in pension entitlements for most people in the long run. The main effect will be to reduce pensions for the vast majority of people, while increasing the rights for some particular groups: most notably the self-employed.”

Ms Crawford then went-on to say that the proposals were, “a welcome simplification. There will be a fairly complex pattern of winners and losers from the reform in the short-term, but the main effect, in the long run, will be to reduce pensions for the vast majority of people.”

So, according to a very highly placed and respected spokeswoman, the 2017 flat-rate pension proposals will eventually amount to a cut in pension for the vast majority. She actually uses the phrase “in the long run” twice which, in plain English, translates to “as today’s pensioners die off (that’s you and me folks) so the flat-rate pension becomes the norm”. Here I must refer back to another point I made in my "Europe's Poor Relations" article, namely: when expressed as a percentage of a nation’s average weekly wage, UK pensioners are already paid one of the LOWEST state pensions in the EU. That, in turn, raises one simple question. Are the powers that be suggesting we should be at the very bottom of the state pension pile beyond 2017?

Political Inertia

Some might call it crying over spilt milk, but the fact remains that the immediate post World War II governments should have seen, and acted upon, what any self-respecting anthropologist could have predicted for Britain from the 2010s onwards. But they didn’t.  Consequently all of the surviving members of the Post War Bulge … the original Baby Boomer generation … are arriving at retirement age at the same time, and they’re being blamed for the mess successive post war governments have caused through lack of vision and forethought. Indeed, it’s ironic to think that married couples were actively encouraged by the government of the time to have babies as soon as World War II ended, in an effort to restore the UK population to its pre-war levels. Hence the Post War Bulge … the Baby Boomers.

Clearly the damage was done by political inertia more than sixty years ago and, regrettably, that’s all water under the bridge. However, our life styles have changed dramatically since the Post War austerity of the 1950s, so there’s still time to remedy the situation and, in doing so, provide all UK pensioners with a decent single-tier state pension that places us near the top of the EU pensions league, instead of at or close to the bottom.

Solution?

So, how might that be achieved?  Simples! Suspend or scrap altogether our bloated, and largely discredited, Overseas Aid hand-outs and use the savings to put our own house in order FIRST … i.e. pensions, NHS, education, infrastructure, law and order, etc … before trying to assist other nation states with their problems.  After all, every penny frittered away in Overseas Aid has its origins in the UK taxpayers’ pockets!