Julian Knight: The state pension kiss of life is followed by the kiss of death
Sunday 03 August 2008
The state pension turned 100 last week. When introduced by David Lloyd George, the benefit of five shillings a week was available only to people over 70. In time, though, the age of entitlement fell and the state pension grew into the cornerstone of many Britons' retirement.
But in 1980, with government finances near bankruptcy, Margaret Thatcher ended the link between the state pension and earnings; it was now to increase in line with prices. In effect, it was being left to wither on the vine; we were all meant to save privately.
Now, however, Labour is overhauling the state system and the earnings link will be back in a few years – although, ironically, earnings are rising more slowly than prices at the moment. But in return people will have to wait until they're 68 for payday.
All sensible stuff but the Government's plans to get us to save alongside the state pension into personal accounts have a big gaping hole in them.
The problem is that many of those who contribute to the accounts will only build up a pension pot big enough to bar them from claiming state benefits such as the pension credit. In other words, they will be in the same position whether they have personal accounts or not. Ministers have been told they're storing up trouble, but they won't listen.
The system has only to be tweaked to make it work – far less of a leap of the imagination than that made by Lloyd George.
Liverpool Victoria friendly society (or LV=, as it now likes to market itself) has been around even longer than the state pension – 165 years. But in that time there probably hasn't been as shameful an episode as that seen last week. The banking arm of LV= was fined £840,000 by the Financial Services Authority for among other things pressuring customers into taking out payment protection insurance on personal loans.
What's really sad about this latest mis-selling scandal is that it's a friendly society involved (albeit one worth a few billion quid). These are supposed to be the good guys of the financial industry. They were started to help poor people save for a burial and have been run for the benefit of members ever since – not a shareholder in sight.
Of course, friendly societies have fallen foul of regulators a few times but only for poor admin or a genuine error – never for trying to squeeze as much out of customers as possible and blow the consequences.
LV= is a cuckoo in the friendly society nest – many are tiny operations – and its rush to ape the banking and insurance giants has tarnished the image of an industry that may not mean much to people now but still has a distinguished history.
- 1 I was a Woman Against Feminism too
- 2 Fifty Shades of Grey movie trailer released: First look at Jamie Dornan as Christian Grey
- 3 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 4 Students offered grants if they tweet pro-Israeli propaganda
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...
competitive: Progressive Recruitment: This really is a fantastic chance to joi...
£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...
£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...
Day In a Page
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar