The TUC has worked out that the richest folk in the land get subsidised massively in their old age by the rest of us. No change there, then. £37bn is set aside by the Treasury as tax relief for pension funds. This tax break is, of course, worth much more to those on the higher rate of income tax. They get their hands on 60% of the £37bn. Of this sum, nearly £10bn is grabbed by the top 1% of the population, people on more than £150,000 a year.
In the meantime, these rich people are for the most part top managers, company executives and bosom buddies of the capitalist class. And they’re busy shredding other people’s pension rights because ‘we can’t afford it any more.’
Executive pensions are costing a lot of money, and it’s employees who are paying the price. Todd Stitzer, CEO of Cadbury, needs his pot bumping up another £3.7m to fund his retirement income of £1.2m. The reason is that pension funds are punted on shares and other financial assets that haven’t been doing too well lately. So the company will have to cough up the extra because, you see, they promised Stitzer £1.2m a year, and that comes before anything else. It’s the same story over at the National Grid, where they’ll have to find another £4m to keep their boss on a pension in the style to which he has become accustomed. Where will the money come from? Where else could it possibly come from, but from the unpaid labour of the working class?
Directors managed an average 23% increase in pensions in the year of economic crisis 2008. That makes their pension worth 30 times that of a shop floor worker in the firms they run. Their pension pots were worth an average £3-4m, according to the TUC. That should pay out nearly £250,000 a year. Meanwhile the same managers are closing the good private company final salary schemes for their employees. These have all but become a thing of the past.
So it’s nice to see the rich are all right (as usual). What about the rest of us? Heartwood Wealth Management has conducted a survey showing that over 55s intend to soldier on for more than 6 years extra on average, and 2 million reckon they will have to work till the day they die. Almost 2 million in that age group are ‘semi-retired’, which means they are scuffling round looking for paid work. A million women over 60 and 400,000 men over 65 are still working full time.
No wonder. Nearly two thirds of over 50s are worrying that pension and savings are just not enough to see them through retirement. Half of us retire on £8,500 a year according to Aviva. That comes as a nasty shock when average earnings for those in work are about £25,000. The credit crunch has decimated people’s savings that retired workers were relying on to make up the gap. For many of us it looks like you have to work till you drop. We are being treated by the system like pack animals.
The future looks grimmer than the present on account of the crisis in government finances. The National Institute for Economic and Social Research has called for the government to raise the pension age to rise to 70 in response to the crisis. Even this painful choice, said Mr Barrell of the NIESR, would not bring public spending back to a sustainable level. Clearly an even more vicious programme of attacks will be needed. They won’t get away with looting our pensions to pay for their crisis!
This article first appeared on Socialist Appeal.
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This post was written by Eric Hollies