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Thursday, 12 December, 2002, 07:47 GMT
Feeling 'let down' by the state
Ahead of the government's green paper on pensions, BBC News Online spoke to a pensioner about the challenges of living on a state pension.
"It's certainly a challenge," she says, "and it saddens me that we all paid into a system expecting something better."
Mrs Ower, a sprightly seventy-something from Crowborough, in East Sussex, lives on the £396 ($624) a month state pension.
Her husband died young and there was no big pension so she receives just £30 a week from his former employers.
And, after paying her bills, there is little left over to enjoy life with. As a result, Mrs Ower spends much of her time stuck indoors.
"This is the sort of thing us pensioners find difficult - we're stuck indoors and although we might not be as physically fit as we once were, we're not mentally deficient in any way."
As an intelligent woman who has always worked, travelled and enjoyed life to the full, this is clearly presents a challenge for Mrs Ower.
"There are people a lot worse off than me" she admits.
"But I just feel it is rather sad that we reach an age and everything stops - I didn't expect to be spending my twilight years just sitting here."
And she has harsh words for the government. She recently wrote a letter to Gordon Brown to protest about the proposed increase in the state pension.
"My pension will increase by less than £2 a week and I think this is disgraceful.
"And with rises in council tax and other bills, I'm actually going to be worse off next April."
Mrs Ower's words of advice for the beleaguered chancellor are: "You should return to basing pensions on earnings, not inflation, and give us a reasonable income."
Although she feels that the Labour party has given some help, in particular the £200 heating allowance and free TV licences for over 75s, she says the everyday standard of living has dropped.
To reverse this trend she would like to see the government help by removing the VAT from pensioners' telephone bills.
"When you live alone a telephone is not a luxury any more, and I don't use it much, but so much of my bill is VAT."
Mrs Ower also feels that the government should also get rid of VAT on heating, where pensioners are concerned: "That would make a big difference and I don't think it would cost that much... not when I see that MPs are able to give themselves a 40% pay rise."
But despite her letter writing and helpful suggestions, she feels that pensioners have been let down by successive governments and is not optimistic about change now.
"Since Maggie Thatcher I think every party has let us down. I think we're just a necessary evil as far as they're concerned."
Being an expat in Budapest, I have the opportunity to see another side of life but then again it seems in most countries that pensioners are considered a "necessary evil". Pensioners here suffer the indignity of having to work at fast-food restaurants when in their 70s, 80s etc and having to sell flowers at metro stops - just to make ends meet. Of course, there's more to the story than just those examples but the point is - it seems when you reach retirement age, society casts you aside, be it in the after-effects of communism or a well-established democratic society.
Eddie O'Riordan, United Kingdom
I have total sympathy for Mrs Ower. How can this or any other Government expect to engender a feeling of national well being among a workforce that is over taxed during it's years of employment and looks forward to a cash-strapped retirement? I am 50 years old and have three children who are just starting out on their careers. Although it may not benefit me in my old-age I am doing everything I can to encourage them to build a life for themselves somewhere else in the world where they are offered a better return for their efforts. With any luck I'll be able to afford the fare to join them when I retire!
The British have always treated their pensioners badly. An inadequate state pension with complicated top up benefits makes the elderly feel like second class citizens. This is now compounded by the government washing its hands of its regulatory failure over Equitable life and the stakeholder fiasco. This will lead to another generation of poor Brits.
Many people are under the illusion that the Basic State Pension is a flat-rate benefit, because the media always quote the maximum figure (£75.50 for a single person). In fact, it depends on how many years' contributions you made. If you lived abroad, or studied full time, there will be gaps in your contributions and you will receive less.
At present, the full rate is paid to only 92% of male pensioners, and fewer than half of female pensioners.
The average rate is only £60.11 per week (remember that the maximum is £75.50).
To coin a phrase, not a lot of people know that.
I hope that MPs who gave themselves a 40% pay rise and firefighters that want a similar rise should hang their heads in shame at reading this.
If Gordon Brown doesn't want pensioners to have a rise then maybe giving all over 65's 0% VAT will help them through.
After my mother died my dad had to retire six years later on a full state pension with a child to support. This is all he had to support himself and I. It was a struggle to live and the government didn¿t recognise this situation so no additional benefit was provided.
It's about time pensioners were afforded more rights to reduced taxes and fuel bills across the board. I would be very surprised if Messrs Blair, Prescott and Brown will be living on the pittance that they grudgingly hand out to the generation who have helped shape this country.
The government have cut back state pension and want future generations to invest in a pension. However at the same time they are taxing pension dividends and not monitoring the pension providers to ensure we are getting a good deal. In addition they are increase indirect taxes and burdens on families.
For example, I am in my 40s with children. In a few years time we will be faced with a choice of continuing to pay into our pension or use the money to help our children at university. We cannot afford both.
I am 31 years old and have been putting away as much as I can afford towards a pension for several years now. Of course pensioners are upset by their paltry income, but don't forget they have had a lifetime to put something aside - did they think they would never grow old?
Coming from a country with a reputation for a poor safety net, I would point out that here the social security system has practically eliminated 'pensioner poverty' - far from being the poorest age group (like in the UK), pensioners are still the wealthiest, by quite a margin. Social security here provides an average $2300 a month.
I'd like to see some large scale affordable government housing projects exclusively for pensioners.
This would have at least three benefits:
Such communities would allow pensioners to pool their resources, saving on heating and phone bills, TV licenses etc. It would give them contact with more people of their own age and more people in general, easing the isolation a lot of pensioners experience and the biggest driving force, is that it would free up hundreds of thousands of homes which are presently occupied by a single person, in a country that has a chronic lack of affordable housing for young families (a major reason for the greying of Britain's population).
My wife and I are in our late 20s and are earning below national average wages. Yet between us - we are putting over £600 a month into our pensions - because we know that we cannot rely on the state. We can ill-afford this investment (which is almost double the cost of our mortgage) but feel that we have no choice in the matter. I have no sympathy whatsoever for people who have put little or nothing aside for their retirement and who expect the state to bail them out. It seems fair that there should be an increased flat rate basic pension of at least £100 a week which everyone should get (rich or poor and regardless of contributions). But to pay for it - I would abolish all means testing, income support and minimum income guarantees etc. This would encourage people to save for the "little extras" which make life more bearable.
I am a new pensioner having reached 60 this year, with almost a full single pension, and a 28hour part time job. Admittedly I have to pay a fair amount of tax but do not pay a stamp so that levels it up a little. I intend to continue working until I am 65. My husband who is three years younger than me, has another seven years to go before he can retire, at present his private pensions do not realise great wealth, so he has no option but to keep ploughing on. However I think the prospect of working until 70 for future pensioners is ludicrous. Redundancy hangs permanently over most people in this day and age, how does the government think that people are going to be employed until this age? All that will happen is that people will be claiming job seekers allowance in their later years and that they will just be shifting the load from one benefit agency to another
Alexandra Collis, England
We pay so much national insurance over the years, why don't we get back what we're owed?
Everybody comes up with suggestions that are just tinkering!
The whole system from cradle to grave needs to be reformed.
Every person in the country should receive a fixed (age-related) sum, regardless of income or history. The amount should be determined annually based on GDP per head. It should be paid for by a fixed rate income tax.
Sounds ridiculous? Not so. It's a well-founded idea that's gaining momentum. It's called "Basic Income", or "Citizen's Income"
Philip Johns, England
Hang on. My mother is a pensioner, living off the basic state pension and she pays no Council Tax at all as her income is so low. Are the people bleating about Council Tax increases actually failing to mention that they have other incomes or assets?
I completely endorse the points made about Council Tax - it is becoming an increasing burden for pensioners whose income is just above means tested benefits level. Another enormous burden is the maintenance of property if you live in your own home. Repairs can be impossibly expensive to which is added VAT.
Some of your correspondents fail to realise that some current pensioners were never in a position to save for a pension, having barely enough to live on at the time. Even if they had saved, they are now means-tested out of it. What happened to the cradle-to-grave care they were promised in their land fit for heroes? Some of the younger contributors need to think back a bit further in time.
Whilst I have no doubt that some pensioners are in dire straits the majority I have met are at least no worst off than they have been all their lives. Sure the ones who had good jobs are better off - but that's because they saved over many years. It is unrealistic to expect a relatively better standard of living in old age than while working...at the end of the day pensions, like healthcare have to be paid for and I for one would not be happy to contribute higher taxes as well as saving for my own old age.
I am not a pensioner, but I think the link between the state pension and earnings should be re-established, and the National Insurance scheme should be reformed so that instead of paying for someone else's pension, your contribution goes into a pot of money for your pension over time just as Beveridge first proposed.
Another reform I would like to see is the abolition of taxes on pensioners, I find it appalling that pensioners are taxed on the little they receive to live on.
And bear in mind there are now more people at age 60 and above than 16 year olds, so if that age group (60 and up) have more disposable income it will help the economy.
All those who say "today's pensioners should have put something away for their pension" should remember that not everyone was (or is) in a job well paid enough to enable them to do so. My father was a builders labourer and my mother stayed home to look after the children. Dad just about had enough money to put food on the table and pay the bills, he had no money for the 'luxury' of any kind of savings.
In Britain we are in a delicate situation. We have a large group of people who have, or are about to retire, who were told that pay your NI contributions, and we will look after you when you retire.
The government promise of a state pension does no longer carry much weight with me, but even on high earnings paying enough to be sure of a decent pension when I retire is more than I can afford to do. I know they feel that they are entitled to a pension as of right. I know they feel cheated. I would too in their position.
A Basic State Pension should be available to anyone making NI contributions over the course of their working life, however this should be on a sliding scale depending on the level of those contributions and should in no way be expected to "fund" pensioners entirely. It is surely reasonable to expect the majority of your post-retirement income to come from personal, company or other pension funds and savings. People deserve to get back what they put in and those who choose not to adequately plan for their future have no right to expect others to bail them out.
In reply to Al, who asks about all the National Insurance that people have paid over the years, it needs to be pointed out that as far as the government is concerned, these contributions are just another revenue stream. They are not placed in a ring-fenced fund to provide pensions, and might well be spent on building roads or buying nuclear missiles. We have to pay our NI stamps, but the government has no responsibility to account for what it does with them. If you were to ask the government exactly how much money has been paid as NI contributions (as opposed to other forms of taxation) over the last fifty years, they would not even be able to tell you. So when they say that they can't afford to pay better state pensions, it is simply that they want to keep government expenditure down. They have no idea how much they really "owe" pensioners, and they don't care either.
Pensioners should be able to decide MPs salaries and you will then hear them scream
My father in-law is now 82 and fiercely independent. He server all through WW2 and now has to survive on a single persons pension after his wife died 2 years ago. He didn't know when he was young that he would need to put money aside as he thought the state would look after him as he got older. He is struggling. Is this how we treat people who gave their youth in the service of their country?
I have paid into a private pension for years - and it is likely to be worth nothing as it is with Equitable Life. Even if I switch, to whom?
Perhaps it's time that pensioners (and those approaching retirement) realised their potential political clout. A national campaign on behalf of whichever political party offers them a better deal could actually make a major difference - and terrify the government of the day!
My household utility bills and food alone exceed today¿s state pension. I'm making a selection of additional arrangements.
Pensioners were happy to vote in successive governments, who did nothing but squander their (very small) pension contributions. Now they want a smaller working population to pay once for their own private pensions, and again to let them live a life of luxury. As they say, they only have themselves to blame.
I'm glad people a re up in arms about the poor level of pension our elderly receive.
However, I bet when it comes to paying for it, most people would be up in arms about paying extra tax. We reap what we sow, and right now everybody just wants to harvest.
After a working life of 48 years, retirement beckons in the early part of 2003. After paying NI for all those years, Graduated Pension contributions when required, SERPS to ease the financial problems anticipated at retirement, and into private funds when I could afford it, I thought I was doing all I needed to do to provide for myself and my wife. Now it is clear the state element of my plans will only provide the very basics for survival, and the annuity I will be forced to buy with my reducing pension funds has such a meagre return that a comfortable retirement seems out of reach. As for providing for my wife.......... It seems to me that the current system seduces the prudent and persuades them to save, and then steals their money. In the meantime, the state is busy winding up the drawbridge and refuses to assist those who have struggled to save and buy their own home. There are many cases of people who have not bought their own homes (for whatever reason) not saved, and thus qualify for a raft of benefits denied those who are just over the savings threshold.
It is clear that the pension arrangements for this country are a mish-mash of misleading and inadequate benefits, and no government has ever had the bottle to sort things out. No wonder people leave the UK.
As an expat living in the USA for just one year now I have to question Steve Foley's figures of an average of $2300 per month social security. I see many elderly people (70+) working in supermarkets here and doing menial jobs elsewhere. Maybe they are just bored staying at home! My own brother and sister in law who worked all their lives have only $1200 together per month to live on. She also has to pay for some of her medicines herself. I think he is mixing up social security with a work related pension, two entirely different things as in the UK.
In response to those accusing pensioners of a lack of forethought in not planning for their retirement, my partner (in his 40s) has paid significant sums into his own pension plan all his working life, but now faces a limited prospect of a pension from it as the scheme is/was run by Equitable Life. Is he to be accused of lack of forethought also, despite doing without some pleasures when he was younger to pay for his pension? I doubt he is alone, either in his own generation, or in the current generation of pensioners, in believing he had made adequate provision for himself, only to have the rug pulled out from under.
I am fed up with hearing people complaining about paying into the NI system for all their lives and having so little to show for it. They have not paid a penny to the government for their pensions, their contributions went to pay the pensions of those who had already retired. In the Beveridge Plan it was never foreseen that the working population would decline and life expectancy would increase the way it has even though there was plenty of evidence to indicate that it would. The current pension situation is a direct result of the post war voters electing to reward themselves with health care, housing and national assistance whilst at the same time trying to maintain the illusion of being a great power. So shut up whingeing about pensions and the state of our social services, we asked for it.
After the war, the UK was uniquely placed to take advantage of the greatest sellers market ever but we chose to invest in the social system and not in rebuilding our industrial and commercial base. Had we done so we could have been able to afford the pensions and social benefits that people want.
Why on earth should the state pension be linked to earnings instead of inflation? If the state pension is too low, then raise it, but don't link it to something it's got nothing to do with.
And the Government MUST do something to make today's workers provide for their own retirement. Compulsory state-run pensions, tax breaks, whatever it takes. We have to pay today for our own retirement, or the country will be crippled in future for the sake of good living today. I'm not expecting to get a penny of state pension ever, and I want to be sure of a comfortable retirement, even if that means the occasional squeeze today.
I am 30 and worried about what the state of pensions will be like in the future - fortunately I have a very good pension through work (although I am not so naive to trust that this will remain the case) and my husband and I are putting extra aside in other ways and hope to invest in a holiday property to make us some savings too. This is all very well but what really worries me is my mother who is a few years off retirement, having returned to work ten years ago after my father ran off with another woman. He had stopped her returning to work when we were young children arguing he was the provider, and now she is left with very little and a low level of NI contributions. She is OK while she is working but when she retires, I feel much of the burden will fall to myself and my younger siblings, I should finish paying my student loan next year, but my siblings are still saddled with student debt, and I'd like to start a family of my own soon - another expense. Who should pay! t! o look after the elderly? Many people here have suggested it is up to the individual to think ahead - that is all very well now, and we are all reminded to look after our financial future, but years ago people believed in the system and it has let them down. I don't believe information was clear then as it is now, and I also believe that women have been particularly let down as years ago they relied on their husbands and stayed at home to look after them and the children and now as a result get less to live on, and generally have to live longer on less.
It never ceases to amaze me the number individuals who believe the government has a huge stash of cash it¿s keeping all to itself. A lot of people who have expressed views here complain that they¿re over taxed, then go on to complain that pensions are too low. Unbelievable! You cant have it both ways. You either pay higher taxes and get a higher pension or visa versa. I do accept that governments have a major responsibility to educate and make us all aware of what we will receive when we retire if we don¿t pay into our own pension plans.
Those of us in our mid-20s are being told to pay off our debts as fast as we can AND put as much money as we can into a pension before we're 30 or else. With the cost of living going through the roof and salaries stagnant due to the economic downturn, just how are we meant to enjoy our younger years at all? We're turning into a nation of young fogies.
Mr Steve Foleys comment that the average social security payment in the USA is in excess of $2300 is incorrect . The average Social Security payment is a little over $1000 per month
As a single person in my mid-twenties earning above the average national salary, I would be perfectly happy to pay higher taxes if I thought my money would be well spent and there would be something to show for it. The plight of pensioners these days is deeply worrying, but I can't say unreservedly that I'd be willing to pay more tax, directly or indirectly, because I have no confidence that my money will be spent on pensions (or schools or hospitals) (rather than, for example, on a seemingly unnecessary war).
I, like many people my age, take no account of the state pension in planning for my future as I simply don't believe that, in 40 years' time, if I will be eligible for a pension, it will amount to anything more than pocket money. I have no doubt that twenty-somethings in this country forty years from now will be contributing less to my pension than I am contributing now to today's pensioners.
I am not alone in my age group in feeling this way, but this attitude among today's young will be a great loss to this country - a nation that undervalues its elders will very rapidly lose its social cohesion. The elderly play a vital role in our lives, contributing in ways that young people simply cannot.
So if the government earns my confidence that it will spend my money looking after the elderly and building schools and hospitals, I'll pay more taxes. But unfortunately, until they do so, I'm afraid I am going to have to put that money towards looking after my and my family's future, possibly outside this country.
I think its sad old people struggle - my own mother is on flat basic pension an is always in a panic about a bill - I know I help but with 3 daughters at Uni - need I say more!
Its all very well saying they should have saved - they were not supposed to have had to - that was the whole point of NI and stamps.
Shame on Tony Blair - still at least he can sell 2 flats when he retires !
Kathryn, UK - living in Austria
The problems being faced by pensioners of today are just the tip of the iceberg. The concept of the workers of today paying for the pensioners of yesterday no longer holds true. In Britain we have an ageing population which means in 20 years time there are going to be even more pensioners per head of the working population. Just saying that the government should increase pensions or exempt pensioners from various taxes is somewhat naive. We need a complete overall of the means by which we provide for our retirements. Personally I favour a three tier system such as they have here in Switzerland. Tier 1 - State pension provides the basics to survive. Tier 2 - Company pension provides the funds to maintain the living standard that you had when you were in employment. Tier 3 - Personal savings pay for luxuries.
Paul Lockwood writes that we should have seen "the writing on the wall" - My husband and I did and saved towards our future, BUT 3 years unemployment during the 80's recession put paid to our dreams and his subsequent early death certainly put paid to mine!!
Those who call for pensioners to be given cheap travel, VAT relief, subsidised phones etc. do themselves and pensioners a dis-service.
The basic pension should be high enough for pensioners to pay for these amenities if they wish and to determine how they spend their money.
Means-tested and age-related discounts are demeaning and have no place in a modern society, not least because a proportion of potential claimants will be too proud to put out the begging bowl.
I have read the comments made so far with interest. I feel the younger people have no idea what life was like in the past. When a woman who got married could lose her job. Most people of my generation paid our taxes stayed at home to look after our families, Some bought their own home like us and then encouraged their children to better themselves and go to university, then spent their savings and went out to work to keep them there. Private pensions were not even talked about until my husband was 50years old, not much time to save for a wonderful retirement. Then I had to leave work in my daughters last year in Uni with MS, husband became my carer, no money for pension funds. Think carefully young people before you condemn pensioners who only want a living wage, your life is just beginning and you do not know what is in store for you, but at least our sacrifice has meant that our children with degrees and hard work can afford to pay for a pension for the future if the pension providers pay a decent return for their money
Anyone who blames the pensioners themselves for their predicament are mad!!! My Grandmother is 80, a widow and barely manages. My Grandfather was a para in WW2 and my grandmother stayed at home with her 7 children. Of course she deserves better than this - as do ALL pensioners - they have contributed in many ways to our way of life and should not have to end it in poverty.
I have read the comments made so far with interest. I feel the younger people have no idea what life was like in the past. When a woman who got married could lose her job. Most people of my generation paid our taxes stayed at home to look after our families, Some bought their own home like us and then encouraged their children to better themselves and go to university, then spent their savings and went out to work to keep them there. Private pensions were not even talked about until my husband was 50years old, not much time to save for a wonderful retirement. Then I had to leave work in my daughters last year in Uni with MS, husband became my carer, no money for pension funds. Think carefully young people before you condemn pensioners who only want a living wage, your life is just beginning and you do not know what is in store for you, but at least our sacrifice has meant that our children with degrees and hard work can afford to pay for a pension for the future if the pension ! providers pay a decent return for their money
The only sure thing in all of this, you never see a politician suffering from poor pay or benefits. Its time for the pensioners and those of use nearing the age to exercise our voting power and send them a warning shot across their bows
I am approaching 52 and am well aware that retirement is looming for me. I was married for 20 years during which my ex husband earned very little and then was on unemployment benefit. During that time I struggled to bring up two children on limited means while he looked for and failed to find a job. I eventually worked and served my country in the TA for a number of years and another number in regular service to try and stabilise our financial situation. Being TA I am not entitled to a military pension for the TA period of service. When I left after Gulf War service in 1991, I went to university to try and gain a qualification which would allow me a job where I could earn higher and afford to put money away for things like pensions. Unfortunately, my health has severely deteriorated since my return from the Gulf to the extent that I can no longer work and am on long term sickness benefit. I have had no extra money in the past to pay into pensions schemes and have none ! no! w. So I face many struggles to survive. I have no partner and I also have an autistic son. I can greatly sympathise with Mrs Ower, since in her face I see my future struggles.
What price serving your country? A land fit for heroes? The government has shown no sympathy and offered no help for veterans in the past, and has certainly offered none to those veterans of today, who are sick and dying. I suppose I could have managed about 50 pence from my finances to put towards a pension. I have no magical solution as proffered in those previous comments, but I do feel for the lady.
The only practical way to ensure you have enough money when you retire is too invest it in housing. The bottom line is people will always need somewhere to live and thus houses will continue to rise in value over the 'long term'. Once you decide to retire you can then sell your property and buy a much cheaper one somewhere else in Europe. You can then enjoy a better standard of living in say a hot country like Spain where you won't have crippling heating/council tax bills. If you find that you currently spend everything you earn and can't afford to buy a house, you are simply deceiving yourself and should go and live somewhere else in Europe where you can obtain a better standard of living.
Pensioners have been badly let down by successive governments. Promises have been broken, and goal posts moved with monotonous regularity. Non-pensioners are expected to make additional provisions out of their taxable income, only to be means tested out of benefits. Then, to top it all, they have their homes stolen from them to pay for a care home. What incentive does anyone in this country have to save for the future when the financial institutions take our money and rob us blind?
Half the reason why pensioners in the UK get such a raw deal is because the government wastes so much money on people who are to lazy to work, single mothers and of course all these so called asylum seekers who regard our country as the land of milk and honey,, until this and other governments gets it priorities right pensioners will never have a fair deal
Kathryn thinks that Governments have been plundering the National Insurance fund, and should have invested it. The NI fund is a 'pay-as-you-go' system where today's workers pay the pensions of today's pensioners. If the NI fund was a 'funded' arrangement, then pensioners would not have received anything when the basic State Pension was introduced, as they would not have paid in any contributions to be invested.
If the Government made the NI fund move to a 'funded' basis, then today's workers would have to pay double - for their retirement and for the retirement of today's pensioners. That would not be fair.
Another twist is that a state pension may not be subject to periodic increase if one lives overseas. Jullian Macgee missed the point a great number of us did make provision in the form of graduated pension, State Earnings Related Pension and basic pension all of which were ripped off to pay for his welfare, roads and other social excesses over the past 20 years, and this will become worse in the coming years with money pouring out to help any oddball cause. We should not be diversive on the pensions issue
I am not a pensioner but my mother who has recently been widowed is. My mother has no reason to complain at the moment. She applied for the Mininum income guarantee which is £140 a week. She gets her other benefits as well having very little savings. She is like Mrs Ower and is not very mobile so she applied for attendance allowance to help with daily living. In total she gets £176 per week plus benefits. We feel this is quite good for a 77 year old.
Are you a pensioner who feels the same as Mrs Ower? Or, maybe you think pensioners are better off under Labour? What should the government do to raise living standards among older people?
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