“Pensions Deception”

This follows on from the previous blog “Illusion turns to Deception”.  They are part of a thread I have been writing about ever since the current Government announced its radical move to a £140 ooops! £155 state pension.  All the posts on this theme can be found by clicking on “Pensions” in the Topics list.

Both Iain Duncan-Smith, the Secretary of State for Works and Pensions and Steve Webb, the Pensions Minister have for the last four years been deliberately trying to mislead pensioners into believing that the Government is going to give them a Bonanza boost to their state pension after 2016.   The illusion has been gradually unravelling ever since it was first announced:-

  • First of all, it became clear that existing pensioners would not be included.  Leaving them on the current significantly lower state pension (currently £113.10 per week).
  • Secondly, the new pension would not be introduced until, initially 2015 and now 2016 and then only for new pensioners.


  • To qualify for the full pension you have to have 35 years of full contributions, whereas you only need 30 years to qualify for a full pension currently.
  • Including National Insurance Contributions.  At the full rate.
  • People with Final Salary schemes and others who contracted out through SERPS will not qualify for the new full pension because they were allowed to pay reduced National Insurance Contributions.

An investigation by the Daily Mail’s Money Mail, has found that in 2016, when the new £155 pension is introduced, only 58% of new pensioners will qualify for the new pension.  Given that pensioners who retired before 2014 are not included at all in the new scheme, it means that only 250,000 new pensioners in 2016 will receive the maximum weekly amount.   So even in 10 years’ time more than a quarter of all pensions will still not be receiving the new pension.

One final sting in the tail yet to come is that the Government has remained remarkably quiet on the subject of the additional allowances —– winter fuel allowances, cold weather payments, free TV licences, etc. —– that pensioners receive currently.   So there is probably more bad news yet to be uncovered.

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4 Responses to “Pensions Deception”

  1. earnestern says:

    Deliberately mislead? Perhaps, perhaps not. However it seems from what you’re saying that they’ve been doing what every politician does; accentuate the positives and brush the negatives under the carpet. Perhaps all policy announcements need to be, by law, concluded by one if those quickly spoken “investments may go down as well as up…. home is at risk if you do not.. terms and conditions apply….” statements that you get with radio advertising 🙂

    • john graham says:

      Welcome to GrumbleSmiles. It is a good point you make, but I think politicians choose their words very carefully so they can back out of any perceived commitment they make.
      Therefore any disclaimer is almost unnecessary. I would like to get back to old-fashioned plain speaking.

      • earnestern says:

        Can’t argue with that. I think that’s the appeal of politicians like Boris Johnson, who appear to speak more plainly than their colleagues.

  2. John, Earnestern, the above comments and responses attached to this blog are noted.
    John in all his wisdom is brutally correct, as is Earestern with his comments that the politicians only highlight the positives. So far so good.
    I wish to make further observations with respect to those persons on a fixed income, and pension rights and savings that are now in that twilight age of over 55.
    Above Pensionable age however one defines it is on a limited budget and unless fortunate to inherit, money/win the lottery or live off an ancient Trust fund of unimaginable wealth, and being mortgage and debit free, then ones assets are determinable, and limited. HMRC with various taxes takes an interest in ones affairs, and one has out going utility bills for heat , light, and power, plus communications (TV and telephone), and entertainment, and then there is the local council tax to pay. On top of this is the cost of food and sustenance and clothing/ Why do I mention this, well as a retired person, ones banking costs are relative to ones outgoings and ones savings accounts are at this point in time relative dismal, and non inspiring unless one squirrels away money for at least a 10 year period? So can one live when one is 10 years into a pensionable income, and still save for a rainy day and have a modest return on ones capital? The cost of living just escalates, and is ever increasing beyond pension increases, and bank interest rate paynent for savers.
    A property is an asset but once sold it is subject to taxes etc, and can one replace the money raised within the same time frame it took the original property value to accumulate? (Answers on a post card Please? Can I have my life a second time around?).
    It is all a conundrum and while Earnestern may point to the positives John I believe highlights the need for forward thinking while one is relatively young (less than 40 years old?), or accept the future as one is faced with it.
    UK PLC in the next few years and for a generation will or maybe have a greater number of persons on pensionable income, than on a working income? It takes a generation to procreate a working population with the indigenous population, unless one encourages immigration to swell the active workforce? Here one has to consider who and whom one encourages to immigrate to UK PLC? Creed Colour, Sex and family beliefs enter this arena.
    The men and women in grey suits in Whitehall with research by academia maybe study and anticipate these scenarios and then it is for our friendly politicians to sell the ideas to all of us at an election time, or through legislation in parliament.
    Whatever one’s beliefs it is for all of us to vote and I feel I must trust our politicians to be truthful, honest and with religious beliefs that Hold a family together through good times and bad times. The solution is not simple, however as a pensioner I must now be holding to others to full fill my wishes, my duty is to vote, and I look for a few home truths as well and the polished and emphasised advantages Mr Earestern.

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