First comes an article from David Willetts of the Conservative Party. Its actually a good point. The post post World War II generation is going to get hammered from all ends. It (and I am included in that), has to pay for mortgages without any tax relief, I do not have any marriage tax relief, I have to pay for my own medical stuff if I need to get any kind of proper and prompt medical care, I have to put aside money for my pension, I have to pay for my children's education - starting from school to university, I have to pay for my parent's retirement, and I have to pay taxes and and and and...
I am lucky that I am a higher rate taxpayer, but for the vast majority, it is simply getting too expensive to get on the housing ladder, to put aside money for pensions, etc.. Pensions -don't even get me started on it. If you pay 40% of your salary to your mortgage, 25% on your pension, almost 10% on critical illness cover, redundancy cover, insurance for your fridge to car to home to microwave to DVD, council tax, VAT, etc. etc. how much discretionary income do you really have left? Not much. So the older generation are definitely better off compared to us.
Which brings me to the proposal from the LibDems who want the pensions of the public sector employees to be re-thought. I have a defined contribution or money purchase pension, which means that my pension pot depends upon the amount of money I put aside and the returns I get. Most if not all public sector pensions are defined benefit pensions, which means that they get a proportion of their final salary. So besides being almost like inflation and return proof, that money is going to be paid through taxation on my current income and my pension income. Quite a curious situation for the taxpayer, no?
I really do not mind paying for public sector pensions provided I am not taken for a mug. Very soon, (as people have already found out in the private sector and has led to the closure of all final salary defined benefit schemes) people are going to wake up and ask some horribly hard questions. The fact that the Conservatives and Liberal Democrats are thinking about it is a good sign.
All this to be taken with a grain of piquant salt!!
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