Pension crisis: the background
How did this happen? Dr Ros Altmann of the Pensions Action Group explains
Can you imagine what it is like to save for more than 30 years, be relying on your pension for a decent retirement and then find it taken away from you, by laws which were supposed to protect it? Not just that, but some of your state pension taken too?
This is exactly what has happened in the biggest UK pension scandal of all time.
More than 100,000 people have been stripped of their pensions by Government rules. Despite desperate pleas for compensation, Ministers have refused. The Financial ‘Assistance’ Scheme, which was supposed to help those in most urgent need, has turned out to be just political spin. Of the thousands who are struggling without any pension, fewer than 200 have received assistance.
These loyal, hard-working, people need help – and Saga has decided to join their battle. What happened?After the Maxwell scandal, new laws were introduced, from 1997, which were supposed to protect pensions. Unfortunately, Government negligence in implementing these new laws and a flawed pensions policy have now created a scandal far worse than Maxwell’s. The 32,000 Maxwell pensioners received their pensions, today’s scandal means there are some 100,000 people left without.
Yet Government encouraged them to put their money into their company scheme, prevented them from having any other pension and assured them their pensions would be safe. It failed to warn of hidden risks which had been created, even though it knew members and trustees were unaware of them. Other countries protected such pensions, the UK did not.
The Parliamentary Ombudsman has found the Government is responsible and should compensate, but Ministers have refused. The Parliamentary Public Administration Select Committee, in another damning report, has also said the Government should compensate. Yet again, Ministers have ignored their verdict.
This is totally unprecedented. It is unfair, unconstitutional and an affront to our democracy. This scandal is no longer about 100,000 people and their families, it is about all of us.
Why? Because it undermines our core British values of justice and fair play. If you can’t trust the Government and the law, what can you trust? In ignoring both the Ombudsman and the Select committee, Government is flouting our democratic safeguards; it’s constitutionally dangerous.
The Government even tried to frighten MPs into believing the compensation bill would be £15bn. Later, it admitted that the real figure was only about £3bn, spread over 60 years.
Since the Treasury has taken more than that sum from pension schemes every year since 1997, compensation is certainly not ‘unaffordable’.
The Pensions Action Group is delighted that Saga is publicly backing our campaign for justice.
We welcome Saga on board and are asking you to support this fight to uphold our Parliamentary democracy.
Those affected have suffered serious health problems due to the anxiety of their financial situation. Some have already died, some have even committed suicide.
They should not have to wait any longer. Please help right this dreadful wrong.
This article was created: 8 August 2006.
This article was last edited: 13 November 2006.
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