Out with pensions unfairness – in with another
Tuesday 26th October 2010, 6:22AM BST.
A standard £140-a-week state retirement pension for all is a beautifully simple idea, writes Peter Rhodes.
But what happens to those of us who are paying into Serps, the earnings-related additional pension?
And what about those stay-at-home mums who fell behind with their NI contributions and paid the state a lump sum to qualify for a full pension? Any refunds, Dave?
It is a golden rule of government that every time you remove one unfairness, you replace it with another.
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Some of us who paid a lump sum to make up our contributions still don’t get a full pension.
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I quite agree about the unfairness on those of us who paid £626 (or the previous £400 or so, before it was hiked by 50%) for each missed year of NI contributions to try to get somewhere towards the pre-April 2010 39 years necessary for a full basic state pension. Completely unfair if this is now not going to make any difference. I paid more than £1,800 out of my savings for this last year, having been told it was the prudent thing to do in the long run. I also have some Serps; will this now be lost? And what about the deferring of one’s pension, which used to lead either to a more than 10% increase in basic pension per deferred year or a lump sum of what was not paid, plus interest 2% on bank base rate. I had been deferring, but why bother now? And wouldn’t it be much safer to take the lump sum (which one can do as long as deferment is for more than a year) rather than trust any government to pay the increased rate of pension from deferral? Also, as a single person, the plan seems to discriminate against the single as it is cheaper to live as a couple in terms of heating, council tax and other costs.
I voted LibDem but am most disinclined to ever do so again. At least the shadow pensions sec Rachel Reeves speaking on Newsnight last night was aware of the unfairness there would be in pensioners losing Serps.
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Then there are those who, when they retired, opted to have a reduced lump sum in return for a higher pension. Now they find that this year their pension increase has been frozen and future increases will be based on the lower Consumer Price Index not the Retail Price Index.
In any other sphere of commerce this would be called fraud
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