PENSIONS

[Stanley]

PENSIONS

15 March 2006

I am sat here listening to a government spokesman wriggling on the hook as he is interviewed about a decision issued by the Ombudsman which states that the government leaflet advising people to invest in employer’s pension schemes was inaccurate and that the government should consider paying compensation of up to £5billion to those who followed the advice and saw their pensions liquidated as the funds backing them were reduced by falling stock market prices. I have every sympathy with these unfortunate people, it’s not so bad being poor in old age but having what you thought was a cast-iron guaranteed income stolen from you by the incompetence of the fund managers must be terrible. However, no mention is made of another pensions scandal which I believe is even more shocking, probably because I was hit by it. I am one of the generation who worked all their lives in low paid employment without company benefits. Due to low pay I couldn’t afford to make private provision, the money had to go towards supporting my family. Late in my career I found myself earning a better wage so, following the advice of my government, I took out a small pension and paid into it for about seven years until my income fell again and I had to convert it to a ‘paid-up’ scheme. No problem, at least I was guaranteed a return which would supplement my state pension.
In 2000 I was declared disabled and retired a year early. I was on sick pay for that last year and qualified for Income Support. I claimed it but was forced by the benefits agency to cash in my pension a year early. This had two effects, it lost me a years worth of increment on my small pension fund and the small increase in my income took me above the level at which I qualified for Income Support, I lost out both ways.
My point is that like the losers under company pension schemes, nobody pointed out to me when I was advised to start a private pension fund that the government had the power to claw it back off me to save them paying me my due under the benefits system into which I had been paying for 45 years. I was defrauded by the government but I don’t hear anyone saying anything about it. I am still angry about this short-sighted treatment and my advice to anyone thinking of trying to help themselves on a low income is beware, you may not be getting the benefit you are entitled to if your income is so low that when you come to claim the pension the government can set the pension against your qualifications for benefit.
15 March 2006