The Great State Pension Fiasco


 

There is a saying that a week in politics is a long time meaning that often events and circumstances can change so rapidly that it can be difficult to predict longer term trends. The UK still has a relatively new coalition Government busy slashing costs to the bone and then coming back for the bone itself. Trying to predict who is likely to win the next general election which could still be another four years away may seem like an impossible crystal ball gazing task. This coupled with a poor choice of political parties, none of which at the moment appear fit for purpose.

However it would appear that in the last few days, the coalition government has already sown the seeds of its own destruction by announcing the creation of a new two-tier old age state pension system. The new pensions to be introduced in 2015 or 2016 will only apply to those individuals that retire after the introduction of the new scheme. Anyone retiring even 24 hours prior to the introduction of the new scheme will not be eligible. The problem being that new retirees will get about 50% more pension a week that existing pensioners many of who are desperate need now. Apart from saying that existing retirees will not be eligible, no other announcement has been made about their already paltry pensions.

It  is not be difficult to see this will create massive resentment from those already retired and living on state pensions that woefully lag behind most other European countries. With its usual blinkered approach, the Government appears to underestimated the massive voting power of the “Grey-vote”, and it is the grey-vote that is likely to decide the outcome of the next election whenever it may be.

It is more than likely the Government will find itself faced with an ever-increasing dilemma the nearer the next election approaches. It does not take a soothe-sayer to forecast that the political party that promises to extend the new state pension scheme to all will be the party that will win the next election.

The Conservative Party will be in great difficulty promising this as they are the ones proposing the two-tier system. They have already done many U-turns in their less than a year in power, however to do a U-turn on state pensions would be an admission they were completely wrong. The Liberal Party would also be in great difficulty promising the same state pension for all following the University fees debacle. Having made an election pledge which their leader even signed only to break it within a few weeks of coming to power is likely to mean the electorate will never believe any Liberal Party promise again. This only effectively leaves the Labour Party who at the moment have remained silent on equal new state pensions for all.

My guess is none of these blinkered politicians have not yet foreseen anything past their next week in politics and their forthcoming extensive holiday break, but my guess is the penny will soon drop on this election winning promise with the Labour Party soon climbing on the band-wagon.

 

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