A Grim Un-Fairy Tale
By Alan Steel
Published on Scot-Buzz Tuesday 8th October 2013
Once Upon A Time hard workers in our then Fair Kingdom were encouraged to save for their twilight years by Governments who made promises and kept them. 40 years ago in what they still called a Budget, when believe it or not hard workers used to receive gifts, a caring Government granted Small Business Owners the same possible Pension benefits that people in big companies had enjoyed for many years.
And there was much rejoicing throughout the land, because everybody now could save with guaranteed tax breaks for their old age. And Wise Men such as Law Lords decreed savers could be assured that they were protected by Law of Contract. And a further safeguard was "The Legitimate Expectation of Benefit", so once you started saving under Rules laid down that was that. So sensible people saved as much as they could within the rules and things went well. The more they were allowed to invest, the more their savings rose, with no tax at all on their returns, until, of course income was paid out, when naturally they would be taxed like everybody else. But an added benefit was a tax free lump sum linked to the total sum saved.
But Governments change and sadly some don't honour their promises. 14 years went by, a plague of Inflation hit the land, so the Government decided to limit future pension benefits just in case. Nobody actually knew what just in case meant, but it didn't matter because they stood by their promises, being aware of savers' "Legitimate Expectation of Benefit". There was again much rejoicing and more were attracted by new rules, being reassured a Promise was a Promise, and the Law was the Law.
As time went by more stringent rules came along because still inflation hit the land although "experts" knew not why. But all earlier promises were kept for early savers and all was well.
Ten further years went by with more tinkering by academic spoilsports with what was once a simple concept. Increasingly pension fund owners needed Philadelphia Lawyers to know where they stood. But early savers were secure thanks to promises made and kept. Then there came a wicked man frae Fife who wanted to squander more than was collected, and pretend taxes stayed low. Look at all this lovely jubbly Dosh sitting in these pension funds he thought. "I'll start off slowly and quietly steal some, and then keep coming back for more if folk don't notice what I'm up to".
And so it came to pass that over the next 16 years these previously secure pension funds, once the envy of the Western world were robbed blind. The wicked thief was found out though and banished from the land, but his successors said "what a wheeze", let's carry on chopping and changing Pension rules so often savers won't know whether they're coming or going. We will call changes "Simplification" when they are anything but, we will announce "A-Days" which sound grand; cap benefits retrospectively; give what looks like better benefits by calling changes "Enhanced", or "Primary"; then later "Fixed Protection" when it isn't fixed. We'll break spirits by slowly strangling returns with even lower "Fixed Protections". And people who don't save, whom we need to vote us back in because they are the majority, won't mind. "Genius"!
"Every year we will make more promises to break, because whatever happens, these folk who swallowed "the theory of non retrospective changes", or "lies", as they're better known don't complain and we'll laugh our way to what's left of the Bank". So year by year, Rules are broken, Maximum fund levels are changed, and as that's happening the amount you can buy as Income, falls. Tax Free cash limits fall, un-noticed, and top rates of Income Tax will be the highest in the land, just for them! Still not satisfied with all this illegality, there's now a suggestion that these law breakers are planning to stop us having Tax Free Cash from our pensions despite promise after promise.
Surely serious savers have had enough like the Law Lords who challenged the Government successfully 7 years ago and won exemption. By the way, they're not the only folks exempt from this illegal activity! Oh yes - Cameron and Osborne are too! A Round Table sits in Europe who enjoy coming down hard on evil cheating Governments. It is known as the "European Court Of Human Rights". Surely it's long overdue for us to say - "Enough's Enough's enough" - and fight for our rights. We should start by telling our MPs we've had enough . Who's with me?