Tag Archives: pensioners

Date set for Judicial Review of state pensions for 50s born women

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Michael Mansfield QC will taking the case of the injustice to 3.8 million 50s born women to judicial review on May 24 and 25.

UPDATE: Since this blog was written the dates for the hearing were changed to June 5 and June 6.

The historic hearing into whether 3.9 million 50s born women have been cheated out of their state pension by the government has been set by the High Court for May 24.

The date is later than expected because the Department for Work and Pensions expected to win the hearing for permission to bring the review on November 30 brought by BackTo60 campaigning group and thought they would stop the process in its tracks.

Now the Department has been allowed more time to prepare its case as all of its initial arguments to stop the review were thrown out by the judge.

The Hon Ms Justice Lang – who is also known as Dame Beverley Ann Macnaughton Lang – ruled in favour of all the issues raised by barristers Catherine Rayner and Michael Mansfield on behalf of the women.

This means the government will have to answer whether the decision to raise the state pension age from 60 to 65 and then 66 amounted to age and equality discrimination. The key point is that the judge decided that although the legislation dated back to 1995 the present effects of the change is causing hardship to a specific group of women who were not able to fully contribute to the national insurance fund.

The original hearing also led the government to admit that further changes introduced by the coalition government in 2011 had been part of an austerity programme and reveal that the private pensions industry is also against the women winning their case as it could have a knock on effect on private occupational pensions that are tied to the state pension age.

The issue of maladministration will not be the main feature of the case as this is being dealt with by the Parliamentary Ombudsman. Cases of discrimination and resulting hardship can still be brought by MPs to the Ombudsman. And recently Ben Lake, the Plaid Cymru MP for Ceredigion filed a case on behalf of a constituent.

Joanne Welch, spokeswoman, said

” BackTo60 .com had a resounding victory on 30th November 2018 and our amazing World Class Legal Team pressed home our advantage for a 2-Day Substantive Hearing.
“The substantial significance of our argument has been recognised by the authorities and the case has been elevated to a higher level for determination – this has necessarily involved an alteration of  hearing dates.
” There will now be a much more thorough and robust review as the case will take on an historic perspective and achieve national significance:  it will be heard, May 2019, at the Divisional Court.
Our collective impetus is working so well, thanks to each one of you.  Long may it be so.”

Boycott this mean Treasury National Savings ISA account that is slashing interest rates for pensioners and the poor

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HM Treasury: Slashing your savings in National Savings

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Over a month ago bank rate rose for only the second time in a decade – promising a bit more money for people who have savings and are seeing their money eroded by inflation.

They would probably hope to get an extra paltry 0.25 per cent interest on their already diminishing  savings – lucky to get just over one per cent on an instant access cash ISA when inflation is running at 2.7 per cent.

However the well paid top mandarins and ministers at the Treasury and National Savings ( their chief exec, ex Barclays banker Ian Ackerley is on a pittance of £185,000 a year plus an annual £69,000 payment into his pension) had other ideas. Why not use the cover of the bank rate rise to slash the interest we already pay out to people who use National Savings as a safe haven but need to access money to meet unexpected bills for a broken boiler or fridge. Everybody will think interest rates will go up, they wouldn’t think anyone would slash them now

So in July when both the Treasury and National Savings knew a bank rate rise was imminent they agreed not to put up the rate of their cash isa but CUT it by 0.25 per cent to just 0.75 per cent. It was though Mark Carney, the governor of the Bank of England was about to announce a bank rate cut not a bank rate rise.

Today the new cut came into effect – just at the point when other banks and building societies are putting their rates on equivalent cash isas UP.

You would think from the blurb on their website that National Savings would do the opposite. Their comment on interest rate changes reads:

 “Can NS&I change the interest rate?

Yes – the rate is variable so we can change it up or down from time to time, for example when the Bank of England base rate changes or when rates in the general savings market change. See the customer agreement (terms and conditions) for more details.”

So we know now  in this case when the bank interest rate goes UP,  the National Savings rate will go DOWN.

And as for other providers- Metro Bank for example, has an equivalent instant access cash isa which was paying less than National Savings at 0.75 per cent. But since the bank rate rise it is now paying more. Its new rate is 0.90 per cent -UP 0.15 per cent while National Savings are DOWN 0.25 per cent to 0.75 per cent. Which Money? has other recommended providers paying more.

So what’s their explanation?

A spokesperson said today :”The decision to reduce the interest rate on Direct ISA was taken in order to deliver positive value for taxpayers. NS&I sets its interest rates to balance the interests of its savers, taxpayers and the stability of the broader financial services sector.

“In order to take this decision, we made a proposal to HM Treasury which was approved. We review the rates on all of our products regularly and recommend changes to HM Treasury when we believe they are appropriate, to ensure that we continue to balance the interests of our savers, taxpayers and the stability of the broader financial services sector.

“We announced the change on 16 July 2018. It is NS&I policy to give customers at least two months’ notice of any detrimental variable rate change on our variable rate accounts, so the rate change will be effective from today, 24 September 2018.”

So basically National Savings are paying lower rates to small savers ( the maximum you can put in the isa is £20,000, the minimum £1) to make sure high rate taxpayers are not having to bear such a burden to fund other public services. No doubt it is linked to the Treasury regretting it has to pay people’s pensions anyway.

 My view is the National Savings Direct ISA should be boycotted because the people who run it appear to  have the Treasury’s interests than yours at heart. The decision also helps other big banks not to increase rates if the state rival is cutting rates – and will boost profits for the major banks.

I took all my money out of this particular National Savings account today. I would not blame other people doing the same – now you can get higher isa rates elsewhere. Your only restriction is that if took out an isa this financial year ( from April) you can’t take out another tax free cash account. But if you did it last year you can and should – rather than leave the Treasury to profit from you.

 

 

 

Revealed: The next bill for the over 40s: Your social care tax

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Without huge coverage MPs from two influential Parliamentary committees yesterday proposed a new tax system to pay for the burgeoning cost of social care.

The proposal could mean a new hike in national insurance contributions, some redistribution of money going to fund your local council, higher council, inheritance and income tax  and/or abolishing some of the existing universal pension benefits, like the heating allowance or cutting future state pension rises.

Significantly it includes making existing pensioners pay more tax particularly if they are still supplementing their pension by working.

This makes this the first serious policy proposal to deliberately tax people differently depending on their age – and exempting the millennials  at the expense of the elderly. In that it feeds into the current  and my view misconceived debate that millennials are being robbed by wealthy pensioners and the system must be changed to tax pensioners more.

The proposals may well prove to be attractive to the present government which has been trying to create an inter generational wedge between the young and old people – as a sop to the younger generation who have been burdened with huge student loan debts by government policy and can’t afford to buy a home.

No one can deny that the present system for social care is in a mess and is underfunded and it is estimated by the report  using  data from the Institute of Fiscal Studies that spending on  care needs to rise by 3.9 per cent a year just to keep the current severely means tested system which means many cannot get help. It will cost billions more if personal care like the NHS became free at the point of use.

At the moment many people are already paying for care through  local council tax. When people ask where is all the council tax  money  is going – anything from 25 pc to 57pc  is going on social care for the young and old. The average of 37.8 pc according to the report.

The government is also transferring a big tranche of business tax revenue from Whitehall  to the councils and at the same time abolishing grants – but not according to the MPs  earmarking any of this money for social care.

The MPs have done a lot of groundwork – suggesting an independent body should supervise the new earmarked tax-  and have used a citizens assembly to advise them of how they could do it-. The report can be read in full here.

MPs need to tread very carefully over their funding proposals because there is no doubt it could make matters worse for a lot of people.

For a start – and it is picked up by people they consulted – 40 year olds will probably have the expense of  large mortgages, or higher rents, the cost of bringing up children and  may find, if they have had successful careers that they are  paid enough to have to pay back student loans. So they may be even more squeezed.

They have completely ignored the plight of  3.9 million 50s women. – many being forced to work for up to six years – and would now have to pay extra insurance or tax just at the point when they find it difficult to get a highly paid job.

Also by extending national insurance contributions at a higher rate for those who still have a job after turning 65 could well hit people who have taken part time low paid jobs to make ends meet. The MPs also suggest the premium should apply to unearned income and investments held by pensioners – which amounts to a tax on pensioners savings.

The committee talks of  setting an income threshold to make sure some pensioners are exempt – but does not state what this threshold should be.

To my mind there are too many questions  that have not been answered or evaluated for the government to go ahead with this. People should remember that everybody who drew up this report was on an MPs salary of  £77,000 a year, way above many people’s incomes.

Yes we need a debate on how to fund social care – but it shouldn’t be used as part of way to drive a wedge between generations- and we shouldn’t rush into  yet another use for the National Insurance Fund when  they are so many women who have been robbed of a decent pension by the existing system.

 

 

 

 

 

The 3.3 million women “pensioners” who can’t get a penny from Theresa May

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Today I am putting up on my website a  documentary film  released today made by the Backto60 campaign who have interviewed women now in their early 60s who suddenly found that they weren’t going to get their pension when they retired at 60. Some of them sadly have committed suicide, some have thought of committing suicide.

They are angry at both the coalition and present Tory government decided to change the pension age without any notice so they can plan. They are the people who have worked all their loves and brought up families, often sacrificing their opportunity to work. Some have even put extra money into their pension, only to find they won’t get it until they are 66.

The government shows no sign of giving in to them – in fact ministers like David Gauke, the  works and pensions secretary, have frozen other benefits instead- and if the Tories had a majority now would be pressing to end winter fuel allowances, free bus passes and the triple lock that guarantees pensions will  rise by 2.5 per cent a year.

There is a  contribution from Ken Loach, the radical film maker and pensioner himself, who made the searing film, I, Daniel Blake, about the trials and tribulations of being on social security after you have lost your job.

Iain Duncan Smith’s election present for the Golden Oldies: Bye Bye bus pass and fuel payments

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Iain Duncan Smith's endangered species the free bus pass

Iain Duncan Smith’s endangered speciesthe free bus pass

George Osborne has made a lot of noise about how  pensioners  with spare cash are going to get  a fabulous deal under the Coalition – high interest pensioner bonds and the chance to spend, spend their pension  pot.

 All this is seen by political commentators as a  brilliant move by the  Chancellor to get the grey vote out for the Tories next year – with many of the measures timed for the election.

He also made it clear that pensions were going to be exempt from the new welfare cap – which will hit everyone else from lone parents, the disabled.and the working poor on housing benefit.

Sounds too good to be true for  the elderly. And guess what, it is.

Hidden in the specialist publication The House Magazine today is an interview with Works and Pensions Secretary, Iain Duncan Smith by journalist Paul Waugh. And he asks: What’s your latest thinking about benefits such as winter fuel allowance and other universal, non-pension benefits for the elderly?

 The answer is : “The Chancellor has made it clear that they go into the [welfare] cap. So straight away they will be looked at in the same way as other benefits. Whether we have a specific view on those is a matter for the manifesto. It’s already very clear that they will be part of the overall balance of expenditure within the department for the benefit cap.”

So this broad brush promise on Budget Day is not true. Bus passes, TV licences, fuel payments, all available universally will join the rest of the benefits facing the chop.

What he doesn’t say – but everybody in Westminster  knows – is that the scale of cuts planned after the 2015 will make the last five years look like tiny by comparison. So it is my bet that we will see the end  of free bus passes and most fuel payments – because the size of cuts required will dictate it. And if you take the fact that Labour under Ed Balls is already committed to means testing fuel payments and the Liberal Democrats under Nick Clegg want to do the same to free bus passes. there is no escape.

And the poorer elderly  will find their social care all but disappear – as a fresh wave of local government cuts come into force.

Great policy from the coalition. Splash out your pension fund on a Lamborghini – but if you can’t afford to pay the full bus fares take up your zimmer frame and walk!