EU to Cut Private Pensions in Britain by 20% as New Report Reveals Our OAPs Are “Worst off in Developed World”
Yet more economic sabotage from the European Union will see private pensions in Britain lose at least 20 percent of their value as three new reports reveal that British old age pensioners are the worst off in the developed world.
In a damning indictment of economic disaster created by decades of Tory and Labour financial mismanagement and both parties’ insistence on partaking in the EU nightmare, a series of new reports have revealed just how dire Britain’s pension crisis has become.
Firstly, a survey of 1,000 blue-chip companies by Pricewaterhouse Coopers (PWC) found that 96 percent of those firms believe their final salary schemes are unsustainable.
Secondly, a study by the Organisation for Economic Cooperation and Development (OECD) has placed Britain at the bottom of a pensions league table for those yet to retire.
Thirdly, research by the Office for National Statistics has confirmed that the state pension is well on its way to becoming utterly worthless.
As if all this was not enough, new EU rules known as ‘Solvency 2,’ which will be enforced in this country by unelected bureaucrats in Brussels, will see the value of private pensions collapse by at least one fifth.
It was Gordon Brown who took away the tax relief on dividends paid into pension funds, costing them around £100 billion. That move set into motion the shutting down of a large number of final salary schemes covering hundreds of thousands of workers.
According to the PWC survey, 16 percent of the firms questioned had already closed their final salary schemes to current members. A further 55 companies said they intended to freeze their schemes for existing members within the next five years.
The OECD report showed that younger British workers will get far less generous state payouts than their counterparts in France, Germany and Spain.
Those entering the labour market today can expect to receive a state pension worth just four times their average annual earnings over the course of their retirement.
In contrast, Germans will receive more than seven times their average salary, while the French will get more than nine times their annual pay.
The ONS figures, which measured how state pensions reflect previous salaries, revealed that Britain has the lowest payout of any OECD country.
To add to this misery, European Union bureaucrats have demanded tighter restrictions on the private retirement funds upon which many rely in their old age.
The new EU rules are due to come into force in 2012 which will destroy the carefully-laid retirement plans of people nearing the end of their working lives.
The EU plan affects schemes where workers pay a proportion of their salary into a pension fund each week or month in return for an annuity on retirement — which pays a fixed income for life.
Under the EU proposals the cost of these annuities are set to increase dramatically. Insurers will have to take a greater account of market risks of annuity investments and will be expected to raise more capital to underwrite potential losses.
Observers have pointed out that the only way to fund the additional burden will be to reduce payments to pensioners, or to put pension cash into safer investment funds such as government bonds. This will also reduce the long-term returns on pension investments.
Mark Wood, chief executive of Paternoster, a pension buy-out group, was quoted in a media report as warning that if the Solvency 2 proposals go through, “then defined contribution pension pots are going to be worth something like 20 percent less.”
The continued impoverishment of the British nation is a direct result of both Labour and Tory parties forcing Britain into the EU, and of decades of incompetence in government circles.
The time has come for change.
