We've all seen it.
A little murmuring and chatty gossip in the newspapers about some political issue that gets the public used to the idea that something is up; then introduce a new policy or idea in a very small way that gets the public used to the idea; then finally implement a major enhancement of that change so that it is firmly rooted in government policy and completely accepted by the public.
Such is the STATE PENSION.
There has been murmurings over the past two years in newspapers that the state pension is becoming unaffordable because we have an aging population. National Insurance (NI) contributions over the past 50 years have not been ring-fenced but spent, and now there is insufficient young workers to cover the present and near-future demands of our soon-to-be state pensioners.
Yesterday in the Spring budget, the chancellor Jeremy Hunt cut NI payments; a good thing you might think. However he rather sinisterly introduced the idea of abolishing NI contributions altogether and merging it into income tax.
So what you may say; what difference does it make whether money is collected by the government in two ways or one way?
Well, it makes a very big difference to those approaching retirement age.
State pensioners do not pay NI. But they do pay income tax. So if you replace NI with income tax, pensioners will see their whole income (state pension included) taxed at a much higher rate than before.
All of this ties in with the freezing of tax-free allowances until 2028 at the earliest. More income subject to tax as a result of there being no allowance for the effects of inflation over the next four years.
This is a huge betrayal of future pensioners by the government.
What the government is seeking to do here is first break the link between paying NI contributions and the state pension. That way they can rid themselves of the shackles of promises by previous governments.
No longer will it matter whether you paid at least 35 contributory years of NI payments; instead the government will be free to do whatever it sees fit with regard to how much state pension is paid, and who is entitled to it. No matter if you made additional voluntary contributions to top up your pension. Those will be forgotten and will not be reimbursed.
The final aim of the government will be to turn the state pension into a form of benefit. There may continue to be a minimum pension payout for all, but eventually this will be reduced to a very low limit, before being completely abolished, whilst most money will be paid to those with little income.
The betrayal of those soon-to-be state pensioners is beyond belief. It is cruel. it is a scam; a heist; the biggest financial scam of all time. And it will not be carried out by criminals acting illegally, but by your own government acting legally. Legally because they makes the rules.
And do not think it matters whether we have a Conservative or Labour government. Both parties will sign up to this agreement, because it matters not who is in power. Whoever it is, will have to find a way to reduce the state pension burden and help the younger generation progress in their lives.
Those claiming state pension within the next seven years should be very afraid.
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