Simon Read: Government gaffes show how out of touch ministers are

Do you think the current PM David Cameron has ever had a need to use a credit card? He appears so out of touch with ordinary folk that it seems increasingly unlikely that he has the remotest clue about how much of a struggle many people face with their finances.

His credit card gaffe this week at the Tory conference showed a total lack of understanding about how or why people use debt or end up in financial woes. As we report on page 62, a quarter of households say they will even be forced to borrow to pay for heating and lighting if energy bills rise another 14 per cent.

So, far from being able to simply pay off their debts – as Cameron tried to suggest before his spin-doctors changed the message – many people are being forced into deeper debt misery by the Coalition cutbacks and rising basic costs.

Of course that doesn't mean that people shouldn't pay off credit card balances. Clearing debt is looking essential if we want to be able to survive the financial miseries ahead. But official figures suggest that those who can afford to cut back on credit have been doing so. In fact the UK's total credit card debt has actually shrunk by £12bn to £57bn in the past five years.

But the latest Conservative cock-up highlights the hits that many members of society are facing. For instance, research from bean counters at PwC published today shows that pension pots have been slashed since the credit crunch, leaving retirement incomes worth almost a third less than they were three years ago.

Meanwhile a side effect of the government's solution to economic woes of further quantitive easing announced on Thursday is that it will lead to another cut in pensioners' income. Gilt yields were already at record lows and are now likely to fall further, hitting those buying an annuity.

The pensions industry is calling for protection for pension funds and changes to the drawdown income rules. But what needs to happen is joined-up thinking from the Government, so a potential solution doesn't lead to misery for millions.