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.
http://epetitions.direct.gov.uk/petitions/40711
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