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The National Insurance fund. And it's proper use. Plus, please sign my Petition.

(50 Posts)
Ivanhoe Fri 08-Feb-13 14:33:04

Anyone working, or that has worked, either as an employee, an employer or self-employed, know that they pay National Insurance Contributions (their stamp) in good faith and that this will provide the money for their State Pensions, nursing care, and other allied benefits, as and when they retire.

Apart from paying towards the National Health Service, the bulk of these contributions are paid into the National Insurance Fund and was originally ring-fenced so the government could not use this money for anything else.

After paying for any particular year’s benefits, the surplus was put into secure long- term investments for terms of up to twenty years, earning reasonable interest.

At its peak the surplus was in excess of £52 billion although £13 billion was considered a reasonable cushion against any sudden rise in the cost of benefit claims, and now fluctuates between £30 -£40 billion.

These huge surpluses were probably created because, although the National Insurance Contributions went up because of the annual cost of living increases in wages, the State Pension did not, and today the UK has the lowest State pensions compared to major European Union countries, and we have a much older retirement age.

Although governments have not paid anything into this National Insurance Fund for at least the last twenty years, they are using the surplus money for other expenditure (despite the ring-fencing) and have gradually moved the surplus money into Instant Access type of accounts that only pays the current Bank of England bank rate. So over the years governments have not only removed the ring-fencing protection but also drastically lowered the rate of interest the surplus money was earning.

The present Coalition Government is now considering merging these National Insurance Contributions with general taxation, ie income tax, but there must be a worry that should we have another financial banking crisis, or something similar, what guarantee would we have that these State Pensions and other benefits will be safe. Perhaps this is simply to make their current activities legal although they are only copying previous governments, but it does expose a very real danger.

There is also some doubt that this National Insurance Fund actually exists, but it was established in its present form in 1948, the Government Actuary has to value it annually, and it exists to provide the money to pay State Pensions etc, so really the evidence suggests that it is a fact.

We are told that the government is considering a flat rate state pension for everyone who retires after some future date, but this will only apply to pensioners of the future and not include pensioners of today. WHY NOT? Perhaps it is just a ploy to persuade us to accept this merging idea by offering to give us something. Can we trust politicians?

The Blair / Brown Labour Government will go down in history as the government that destroyed the company final salary pension schemes. The Tories under Thatcher, will be remembered as the government that killed our State Pensions? CAN WE AFFORD TO TAKE THE RISK?

Pensioners of today simply want what they have paid in for, a decent State Pension and free nursing care when we need it, and if you remember the slogan at the time, it was `from the cradle to the grave’ cover by the National Health Service.

Please sign my petition to help the elderly. And the young when they are old.

vampirequeen Fri 08-Feb-13 17:47:27

Signed. I agree with you completely. Social care for the elderly is appalling. Residential care should be free and pensions need increasing.

Ivanhoe Fri 08-Feb-13 19:01:57

vampirequeen , Thank you. At last, compassion, understanding, and caring, from someone on this site.


annodomini Fri 08-Feb-13 19:22:53

As if we had not signed many and various petitions reflecting our concerns about the care and welfare of elderly people. What a nerve you have, Ivanhoe to come blundering into G'net assuming that we don't care, that we're complacent. You do not have a monopoly on concern and your political bluster would be so much more convincing if you could give us an explanation of your actual policies for improving the lot of Britain's pensioners.

gillybob Fri 08-Feb-13 19:26:46

That is such an unfair statement Ivanhoe and I am quite annoyed that are saying that GN members do not show compassion or understanding and do not care ! In my opinion it is quite the opposite. angry

Ivanhoe Fri 08-Feb-13 19:41:50

gillybob, Well now, I can only go by what I read. I cant read minds.

Ivanhoe Fri 08-Feb-13 19:47:48

annodomini , If I were PM of this country, I would up rate State pensions to male average earnings or inflation whichever the higher as it used to be, before Thatcher broke the earnings link in 1980, over 30 years ago.

I would also provide full State care with no means testing, for all British pensioners.

I would also abolish pensioners having to pay tax, and council tax would be abolished for everybody.

Anything else ?

Anne58 Fri 08-Feb-13 19:48:41

Your statement in your OP, I agree with wholeheartedly.

However the response you gave to VQ was insulting to the majority of members in terms of compassion, social awareness and intelligence.

Your intention may be honourable and true, but I would guess that you may have alienated many potential supporters.

As many members will know, it is very unlike me to post something like this, I tend towards what might be considered more "frothy, light" posts, however you have changed that.

Elegran Fri 08-Feb-13 19:50:48

You could try reading past threads. There are a lot of threads carrying epetitions, a lot where this subject and similar ones were discussed, a lot where individuals with financial and social problems ask for advice and are guided through the intricacies of the system by people who have had past experience, on both sides of the desk, a lot of political opinions.

Your few days on the forums with your threads have shown you a snapshot of those who know as much as you about the problems, and are asking you for detailed practical ways of solving them, not rhetoric deploring everyone's failure to act, as you consider it. If we are not cast in exactly your mould, are we all completely useless hedonists?

Elegran Fri 08-Feb-13 19:52:36

Your answer of 19:47:48 is incomplete. Where would the money come from for this? From male average wage-earners with families to feed?

Anne58 Fri 08-Feb-13 19:58:30

"Abolish council tax" ? So how will services be funded?

Elegran Fri 08-Feb-13 19:59:59

With no council tax, how will councils raise the money to pay for essential services?

"In 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. By 1980, the support ratio dropped to 5.1 and by 2010 it was 4.1. It is projected to reach just 2.1 by 2050. The average ratio for the EU was 3.5 in 2010 and is projected to reach 1.8 by 2050.[4] Examples of support ratios for selected countries in 1970, 2010, and projected for 2050" Wikipedia.

If at a VERY rough estimate, half those between 20 and 65 are male adult woekers earning an average wage, then ALL of what each adult male earned would have to go in tax to give each pensioner the same wage as each of them.

Elegran Fri 08-Feb-13 20:09:42

Hold on. In another thread, you say that pensions used to be linked to the average adult male wage, until M Thatcher changed things. . Here you say you would "rate State pensions to male average earnings or inflation whichever the higher "

Do you mean you would give them an equal income the same as an average adult male worker, or link rises to the rise in the average wage? there is a difference.

Galen Fri 08-Feb-13 20:11:15

I don't think he reads other threads. He's probably just joine to have soapbox having exhausted other avenues.

janeainsworth Fri 08-Feb-13 20:20:11

Dear Phoenix don't ever change.
I love your contributions to the light, frothy threads smile
Have you tried saying 'frothy threads' out loud grin

Elegran Fri 08-Feb-13 20:23:59

He posts on other threads, so he must read them! He is soapboxing on both threads simultaneously, without answering any questions about the other side of the equation - raising the dosh so that it can be paid out. There are replies on both threads, repeatedly asking him to engage in debate, not rhetoric.

Without success.

Ana Fri 08-Feb-13 20:28:26

Ivanhoe seems to just want us all to agree with him, grab our placards and march in the streets demanding a 100% rise in the basic state pension immediately. If we did do that, what's the first question the average man or woman in the street (never mind the average politician) is going to ask us?

Where would this extra money come from? Ivanhoe can't seem to grasp this point, and considers it somehow insulting to even ask!

Ivanhoe Fri 08-Feb-13 20:36:20

Ana, ""Ivanhoe seems to just want us all to agree with him, grab our placards and march in the streets demanding a 100% rise in the basic state pension immediately"".

At last you have the idea. I think our war veterans particularly deserve the support of their country.

Elegran Fri 08-Feb-13 20:39:16

Proportion of earners to pensioners

Country..........1970 .......2010 ...... 2050 (projected)
United States..... 5.3 ..........4.5 ........ 2.6
Japan ............... 8.5 ......... 2.6 ........ 1.2
Britain .............. 4.3 ......... 3.6 ......... 2.4
Germany .......... 4.1 ......... 3.0 ......... 1.6
France .............. 4.2 ......... 3.5 ....... . 1.9
Netherlands ...... 5.3 .......... 4.0 ........ 2.1


I would not like to be a youngster just starting work in Japan.

Elegran Fri 08-Feb-13 20:42:39

You still have not told us how that will be financed, Ivanhoe ? More taxes? and how will councils fund anything at all without council tax or an equivalent?

The government has no money of its own, only what it can get from the working citizens.

NfkDumpling Fri 08-Feb-13 20:52:03

I've signed simply because this is something which needs to be brought into the public eye, not because Ivanhoe's solutions to the nations problems are necessarily right. This is something which needs to be debated and not slide through surreptitiously.

However, I too feel rather insulted by Ivanhoe's remark about the lack of compassion, caring and understanding of Gransnetters. I only assume he posted this without thinking and didn't really mean to hurt.

Anne58 Fri 08-Feb-13 20:58:13

Ivanhoe you are doing it again! How very dare you respond to Ana's post of 20.28 by saying "at last you have the idea" !!

I would like to respectfully point out that you are actually corresponding with adults here, so far I have actually managed to do that, as in point out things "respectfully", but I may not be able to do so for much longer.

Ana Fri 08-Feb-13 21:00:55

It's a complete waste of time. There seems to be no thinking behind the repetitive rebel-rousing mantra....

Ivanhoe Fri 08-Feb-13 21:06:13

NfkDumpling, ""I only assume he posted this without thinking and didn't really mean to hurt""

Thank you. Yes of course. I am a very sensitive person.

Elegran Fri 08-Feb-13 21:18:21

So are we sensitive, Ivanhoe, so are we, all of us. Indeed we were before you in discussing this issue and signing previous petitions about it. However, we also have brains (surprise, surprise, we are not fluffy-brained little women who don't understand you) and we like to know the other half of the problem.

How will it be paid for because if the funding is not in place, any plan will not be viable and it won't work