There's no simple solution to the pension woes

Angry readers took us to task for over-simplifying state pension issues with many feeling let down by MPs

Proper pension planning has been impossible for years as MPs have made political capital out of retirement savings. That's the view of the many Independent readers who wrote in response to an editorial comment last week criticising the Coalition for delaying the introduction of a flat-rate state pension for "political expediency".

Many feel cheated by the proposed flat-rate pension as it will penalise those who planned ahead by building up additional pensions through Serps or S2P. "These are not the preserve of the rich, as you imply," wrote Emrys Williams.

Alex Garbut said criticising the Coalition for delaying is missing the point. "Every government since Barbara Castle introduced Serps has exacted higher rates of NI contributions from those not contracted out in return for the promise of a corresponding pension," he said. "People have been planning since 1978 on this basis so the flat-rate proposal would cost some thousands a year."

Mr Garbut is angry. "On the scale of broken promises and breaches of faith by a government it would be right up there with the most cynical and dishonest," he said. "If a private pension provider tried anything like it, you would be screaming with indignation."

Others expressed similar sentiments. "If your pension provider told you that your pension had to be reduced because it had decided to share it with people who hadn't contributed, you'd be pretty upset and would sue," said Mr Williams.

Neil Bloomer of Wakefield said: "The proposed flat-rate pension is unfair to pensioners who have had to suffer the consequences of the recent economic turmoil but will not themselves receive the increase. It is yet another signal that responsibility is not rewarded."

Rob Edwards of Harrogate also mentioned unfairness. "It means that I have effectively lost all the extra contributions that were used to increase my Serps benefit. Those of us that made decisions 30 years ago should not now find that the rules have changed."

James Burgess is a former chartered financial planner who retired at the age of 50. "A move to a new flat-rate pension set at any level lower than the highest accumulated/accrued Serps/S2P benefit inevitably means that some people will lose part of their currently promised benefit," he said.

He believes that politicians will be forced to delay any changes. "They will use the trick that has been played with the raising of the state pension age. They'll introduce the change creating an army of losers, but make it many years hence, to give people time to plan their finances. That will avoid the problem of people voting in anger at the next election," he said.

Other readers demanded clarification. "I am disappointed that there has as yet been no serious discussion of the problems that will arise in trying to implement the proposals," said Vaughan Clarke.

Iain Smith of Rugby has been a pensioner for four years. "Will pensioners such as me lose out?" he asked. With so many unanswered questions, there must be more clarity. Your Money will seek answers from MPs and pension experts.

Independent Partners: 10 top tips for retirement. Get your free guide here

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