42
Drum: ENTERPRISE
a lifetime of toil, we will be rewarded in our dotage.
The promise of a Welfare State that has become an
integral part of the British identity. The promise of
the equitable, caring society that inspired the
Windrush generation to pursue a better future
on these shores.
But this promise, that we have – maybe complacently
– presumed would be kept, is at breaking point.
Many people in their 50s are staring into what has
been dubbed the ‘pensions black hole’, uncertain of
what their immediate future holds, while the
younger generation seem to be sailing into the crisis,
blithely unaware of its implications. Not only is the
state pension under threat, but the private pension
plans that working men and women pay into
birth rates. The Cass report stated that in 1990 there
were four workers to every one pensioner. By 2030,
there are expected to be nearly two pensioners for
every five workers.
However, this situation has been exacerbated by
declining stock market returns, and resolute efforts
by successive governments to encourage more
people to save for their own retirement by
keeping the state pension low – in the
The Government seem’s to favour the option of ‘ encouraging’
us to work for longer, with proposals to raise the retirement
age from 6 5 to 7 0 in the private sector, and 6 0 to 6 5 in the
public sector.
throughout their lives, are facing collapse in both
the public and private sectors.
As I write, Civil Service unions are preparing for
strike action as their members see the pension
benefits they have been led to believe were theirs by
right being stripped back. Allders has become just
the latest company to run into financial problems,
leading them to slash the pension funds their
employees have worked to accumulate. The crisis is
taking on a bewildering momentum of its own, yet
few of us seem to understand how the pensions
industry has managed to get itself into this mess, let
alone what we can do to get ourselves out of it.
There is no single explanation of how the current
situation has developed, but a number of underlying
reasons have been identified. One of the most
common reasons cited is a steady increase in
average life-expectancy, coupled with dwindling
80s, the Conservatives abolished the link between
state pensions and earnings, and Labour have
absolutely no interest in restoring it. The result of
this was many consumers being mis-sold new
pensions that have left them worse off than if they
had stayed with their original scheme. And against
this backdrop of general malaise, the crisis has been
accented by an increasing number of individual
disasters which have eroded public confidence in
the pensions system.
The current situation could spell ruin for millions of
people, but the problem is most abject for women,
with the average retirement income of women only
just over half that of men, and as many as one in
four of those who are single living in poverty. The
state pension is based on National Insurance
Contributions (NICS), and to qualify for the full
state pension, women need to have paid NICS for
39 years. However, with women more likely than