The Dickensian truth ‘income £1, expenditure nine shillings and sixpence – result happiness; income £1, expenditure £1 and sixpence, result misery’, became out-dated when financial institutions began to fuel an illusion of ‘buy to-day, pay next month/year’, regardless of lenders’ income, therefore repayment ability.
This ‘easy money’ created a booming economy and housing market. Political leaders of both sides of the House encouraged it. Why? High interest income on loans, created high profits for lenders which, in turn, meant increased tax income.
Alas, escalating repayment defaults emptied the coffers, resulting in the 2008 collapse. The government used our money (taxes) to safe-guard our savings/investments by bailing out the banks. This then is the background to our dilemma, the rest is history.
Every one of us is paying the price of the consequences of financial institutions bluffing people that living a champagne life style on a beer income was easy because ‘your flexible friend’, the credit card was their gift to you. The consequences of years of this bluff is now most keenly felt by pensioners, the sick and the disabled.
Now our politicians try to bluff us that ‘those who did the right things’, worked hard and saved, trusting them with our money since 1948 in return for a decent pension, have the government on their side.
Let’s take a look at the PM’s guarantee to ‘triple lock ‘our pension to ensure it does not fall below 2.5%.
Does this promise secure my loyalty? No! This smoke and mirror promise hides the already quietly made statement that, after 2015 election Winter Fuel Allowance, TV licence for the over 75 and possibly bus passes may have to be withdrawn or be subjected to means testing.
In short, if a 2.5% pension increase, somewhere around £179.95 pa, is set alongside a loss of £300 Winter Fuel Allowance and a loss of £145 TV licence this guaranteed increase turns, in effect, into a net loss about £265.00 each year to pensioners, plus a possible further £200+ loss of bus fare concessions.
Lastly, the Deputy PM’s already implemented freeze on the age enhanced Personal Allowance also means that any increased income and that includes our pensions, will also increase your tax bill; further taking away with one hand what has been ‘so generously’ given with the other.
The official inflation figures too are another smoke and mirror calculation because they exclude the increased cost of many other essential expenditures. It certainly makes you think.