Letter: Pensions, the forgotten lottery
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Your support makes all the difference.Sir: The future financial outlook for millions is grim. I am sickened by the numbers of ashen-faced constituents who tell me their private pensions pay out only a fraction of what the salesman promised. Why are pensions the forgotten political issue?
A huge number of people in their 20s and 30s pay no pension contributions. To get a decent pension, at least 15 per cent of salary should be paid throughout the full working life. How can that generation afford 30 per cent payments in their 40s and 50s ?
Only 7,000 of the 1,500,000 who were mis-sold dodgy personal pensions have been helped.
The safety net of the basic state pension has been slashed annually to a total cost of pounds 1,000 per pensioner. Without new action, in the next century its value will be nugatory.
Private "money purchase" pensions are a lottery. Between 25 per cent and 50 per cent of cash paid in disappears in commission, profits and administration. Falling annuity rates slashed the value of these privatised pensions between 1990 and 1994 by 30 per cent. Serps, the state-run second pension scheme, uses only 2 per cent in charges and is delivering superb value index-linked pay outs.
Pensions should be a major election issue. We can easily afford to beef up basic pensions and create real choice with a new, efficient, good-value state second pension scheme.
PAUL FLYNN MP
(Newport West, Lab)
House of Commons,London SW1
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