The state pension is to rise by the (unrealistically low) official rate of inflation. ‘Pension credit’ is also to increase, and the Chancellor said the increase in it was above inflation. However, not every pensioner is eligible for pension credit, which is means-tested.
So this year the percentage difference due to means-testing would appear to increase as between those judged to be poor enough and those who have built up some capital by saving to reduce their dependence on retirement.
In the Daily Mail of 25 November 2008, a retired car worker, Bill Jupp, is quoted as saying that pensioners had got ‘next to nothing’ in the Pre-Budget Report.
Bill Jupp added: ‘I’m also very suspicious of the £60 Christmas bonus. I’m sure they’ll be a cut in pensioner’s fuel allowance or something else to pay for it.
‘We are on fixed incomes but our council tax is going up, our food bills are going up and our energy bills are going up. It’s one long nightmare.’
Joe Harris, of lobby group National Pensioners’ Convention, says: ‘Pensioner inflation is double the official figures because older people spend a higher proportion of their income on those items with the fastest rising prices.’
We have heard suggestions that fuel allowances should be targeted towards ‘the poorest’ pensioners who are on ‘pension credit’, and this may well be another way of increasing the percentage difference due to means-testing.
‘The Premier [promised] to hit the middle classes and target the rich if he wins another term’ (Daily Mail 25 November 2008, front page)
When I was thrown out at the end of my ruined ‘education’ with no usable qualification, I was unable to draw income support, and realised that I always would be, unless and until I was able to get back into a proper university career. If I could be recognised as eligible for salaried appointments which it would be possible for me to take up, then I would have been able to draw income support during any hiatus in my career.
But the state pension was supposed to depend on making enough annual payments, even if you were unemployed, so I always paid the annual voluntary contributions for myself and anyone else associated with me, however little income we had.
This, I reckoned, would at least be reducing the disadvantage at which I should be on retirement relative to someone who had been having a proper career as a Professor in physics, philosophy or any other subject.
Soon after reaching normal retirement age I started to hear rumours of pensions ‘withering on the vine’ and a substantial proportion of the annual increases became means-tested, that is, it was allocated to the ‘poorest’ who had spent all their incomes throughout their working lives, which might well have included some who had lived as university professors with full salaries.
In an egalitarian society, it certainly would not do if a person who had shown exceptional foresight and determination in making annual payments, however poor they were, should be able to pat themselves on the back when they reached normal retirement age (although without actually having been able to get started on a salaried career) about an annual inflation-adjusted stipend, however inadequate, rolling in as a reward for all their effort and frugality.