As many in the UK will know, there has been a recent budget announcement from George Osbourne, who is Chancellor of the Exchequer for the Conservative led coalition with the Liberal Democrats of the United Kingdom. Full details of it can be read at the government’s website: “http://cdn.hm-treasury.gov.uk/2011budget_complete.pdf” and one of the contentious issues that has been commentated on is regarding pensioners and the 2011 budget flat rate tax objective. In the document, it reads: “This Budget sets out the next steps in realising the Government’s vision of a fair, simple and efficient tax, benefit and pensions system which rewards work, saving and personal responsibility.”
Perhaps no doubt with economic times being difficult in the UK there has been an outcry from various people that pensioners are being disadvantaged.
The government further goes on to say that by reforming the state pension system that for those who receive pensions in future it will give a: “simple” additionally, “contributory, flat-rate support”, as well as being over the means tested “Guarantee Credit” and furthermore importantly states that in a short while they will create a Green Paper that will make a suggestion for: “a single tier pension, currently estimated to be worth around £140 a week.”
Moreover, they go on to say that they by moving to a single tier type of provision that this could simplify to a large extent personal returns for the tax system. In addition, apparently the government intends to look at the effect on those who are employees and also schemes for the private and additionally public sectors as well as saying that they will continue providing for those under the current scheme.
Looking at some of the reaction to this news that has been around on the web, for example, in an article written in the Guardian newspaper, which can be viewed at: “http://www.guardian.co.uk/uk/2011/mar/23/budget-2011-pensioners-angry-flat-rate” it has been reported that for those receiving existing pensions, the single flat rate pensions will not be applicable to them. Furthermore, the Guardian reports that this change could take some years to bring into existence. George Osborne is reported as saying that the system would be more simple and that it would be based upon people’s contributions and that it is going to have a flat rate methodology: “so people know what to expect.”
Additionally, he is recorded as saying that it would not cost more than is currently required by the present system. It is said that the general secretary of the NPC who is called: “Dot Gibson” has observed that it will leave citizens who are of pensionable age with how they describe: “one of the worst pensions in Europe”
in addition to a “complicated means-tested system”
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For instance, one reader of the online Guardian article who goes by the username “JanChan” asks regarding their friend who has just reached a pension age and has not started claiming it yet: “Is he classed as a ‘pensioner’ now, and thus unable to get the £140 amount even if he has deferred having payments until after the new scheme has started?”
This news has also been covered on the widely popular BBC news website at the web address “http://www.bbc.co.uk/news/business-12835656” where they report that: “But significantly, he said the new system would not apply to the millions of people already being paid a state pension.”
Furthermore, they report that: “The government gave no details in its Budget document – known as the red book – about how a single, flat-rate, state pension would be brought in.”
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Other negative news coverage for example comes from the Mirror newspaper: “http://www.mirror.co.uk/news/politics/2011/03/24/more-workers-face-toiling-until-they-drop-to-pay-for-140-flat-rate-pensions-115875-23011523/” which reports that: “Neil Duncan-Jordan, of the National Pensioners Convention, said the poor will foot the bill but many won’t benefit.”
In the Telegraph, it is reported that it is expected to have about £140 for each week and that: “This is significantly higher than the current basic pension, which pays just less than £100 a week to a single pensioner.”
in an article by Emma Simons and one commentator who had the username “adams” writes: “because I am retired already I will be left on the old pension scale while women who have made negligible contributions will get a lot more money . I contributed 43 years in NI and will stay on less”
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