Pension prudence? More like pension robbery

13th July 2010

The steps taken will cut the pensions of millions in retirement, reduce the value for those saving in these schemes already and cut things back for those who move employers and change schemes, all from next year.

It affects 12 million people. The cuts will be anywhere from 10% to 25%, partly depending on how long you live.

Webb has done this by changing the regulations so that the pensions must only link to the Consumer Price Index not, as previously, the Retail Price Index which includes housing costs and is higher in most years.

The views from the message boards fall into several camps.

One is that we can't afford these schemes and the younger generation should not have to pay.

Here is IAN35772 on The Telegraph site last week, saying as much.

"Most pensioners don't have mortgages so it makes perfect sense to exclude mortgage costs from their inflation measure.

"It is morally wrong to expect future generations to pay for an ever increasing older population, and the current model is not sustainable given the country is currently bankrupt."

Sick of shouldering the burden

He is opposed by Richard from Spain.  He has a few issues particular to ex-pats but it sums up the divide.

"My generation paid for the pensions of my parents' generation to which they made no contributions. Then we paid for our own State pensions, company pensions and made sacrifices to save for our future.

"Gordon Brown decimated out private pensions in 1997, he reduced the interest on our savings to zero and just for a laugh, for those of us who have retired abroad, his quantitative easing (euphemism if ever I heard one) devalued the pound against other currencies.

"I wouldn't be surprised if the interest rate went up in the future but I'm afraid that by then, there will be no capital left on which to accrue interest.

"Then what? I certainly didn't expect this sort of behaviour from a Tory government. I don't have a vote but if I had one, it would have gone to the Tories. What a let down."

A dangerous precedent

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