Response to Observer article

Read below the response from Jan Shortt NPC General Secretary to the editor of the Observer regarding the recent Phillip Inman Observer article on pensioners



Sunday Observer – email: observer.letters@observer.co.uk


Dear Editor,


Re: Phillip Inman: ‘It’s the Old that get Benefits, and the Tories the Election Wins’


As one of the Pensioner lobby groups alluded to in Mr. Inman’s article on the validity of income for older people, we set out below our reply to his statements in the interests of those who believe implicitly in equality, fairness and a universal society.


Mr. Inman states that organisations such as ours make false claims about pensioners having paid for their retirement incomes. They have (as he is). They do so by working, paying tax and National Insurance and saving whilst they work. A generation who were told by parents and grandparents to save for their old age.


Pensioners do pay income tax when they reach the relevant threshold. There are around 11.9 million pensioners in the UK. From that number a total of 545,00 pay tax at the two higher rates. From the remainder, less than half pay tax at the rate of 20% and the rest pay no tax at all as their income falls well below the threshold. Older people also contribute around £160 billion a year to the treasury in direct and indirect taxes, free childcare, unpaid caring and volunteering. Older people keep on giving all through their life.


There are currently two state pension schemes. Those who retired prior to April 2016 receive £137.60 per week/£7,155,20 p.a. and those who retired after April 2016 receive £179.60 per week/£9,339.20 p.a. – hardly a king’s ransom by any means. Not every pensioner receives a full state pension, particularly women who have a different life/work style to men. That is why the triple lock was introduced in 2010 – to lift pensioners out of poverty. In spite of that, pensioner poverty has increased and longevity has declined. The gap between earnings and the state pension has increased.


Percentages are used to give commentators like Mr. Inman a reason to manipulate figures. For example, a 2.5% increase on the new state pension is equivalent to £4.49 per week/ £9,572.68 p.a. Whereas the same increase on the average earnings of £29,000 p.a. is £13 plus per week.


Private pensions are completely different as they are paid for by individuals and are entitled to the final payment when they retire. Those who can afford to pay the premium for a £50,000 a year pay-out on retirement are those on the highest earnings and claim tax relief on those payments (although some tax is paid when the pension becomes payable).