A pensioner holding an empty purse

Pensions

In Germany in almost the final decade of the 19th century, Bismark’s social reforms, amongst other things, introduced the old age pension. These German Insurance Acts, although not all embracing, can be regarded as a social landmark. Adults who were young enough thought they might benefit later in life from the German state’s largess. Consequently, fertility fell as young couples did not feel the need of children as a prop to support them in old age. Many of the new state’s more mature subjects aspired to reach the age of seventy, the starting point for the state pension.

Are there accurate actuarial tables for this period? After all this was a relatively newly unified state? Or are any such tables even in existence?

Historians of the European period in question, we’ve read, estimate the average life span of German subjects at this time to be fifty to fifty-five years of age. Otto von must have been chuckling at having pulled the wool over the eyes of his common folk. However, not for long. The German Royal Family despite their Chancellor’s, Otto Von Bismark, valiant efforts to stabilise their hold on power threw the count away like an old glove once they were certain of their security. There was a downside to this social evolution. The entrenched elite were not too happy at Germany’s decline in population.

Cannon fodder was obviously in short supply as a result of this fall in the number of the Reich’s subjects. However, on the plus side, it gave the population a false sense of security. This contentment had benign political consequences for the ruling family and its minions. All set for the Great War – or as we now know it – World War One. Nevertheless, acknowledging the current state of medical knowledge, bridging the gap between the average life span of Germany’s subjects and the state pension age, considering the perils all flesh is heir to, was well-nigh impossible. Scam or scheme – you decide!

Germany’s improvement of its social services was noted by Great Britain. Some years later, Lloyd George, chancellor in Asquiths’ Liberal cabinet, presented his People’s Budget. Asquith had already had a go in the pensions area. Whilst encompassing more than Germany’s social action had carried out, this British effort came into being some twenty years later.

Lloyd George’s Old Age Pension was in effect the initial disbursement of Great Britain’s public funds which did not hinge upon evidence of absolute impoverishment. The Liberals, let it be said, were also under pressure from the Labour Party and its MPs. Quite naturally the House of Lords, composed of landed gentry, a majority of made up of Tory aristos, was incensed by this loosening of the nation’s purse strings. Their lordships in parliament rejected the Budget in1909. This then was a constitutional crisis. However, the hereditary Chamber was given a talking-to by the monarch and put in its place. Their lordships’ veto was overridden. And for those in Great Britain who reached the grand old age of seventy these survivors became accredited OAPs. And, as a precaution, the level of the pension was deliberately set low – below the Benjamin S Rowntree poverty line. And besides pensioners had to prove they were of good character. Yes, we know. Seventy years of age. But the old jokes are the best! The UK pension age is at present rising. By 2030 it will be nearly 70. Who’s had the last laugh?

Of course by the time of the eighteen century pensions had become something of a familiar topic. If you were the king’s favourite, or the one of favourites of the favourite, you were in line to be awarded a pension. Think of it – a baroness was ‘the sweeper of the Mall in the Park, and Lord William Bentinck was “clerk of the Pipe,” whose duties included waiting upon the man who held up the Lord Chancellor’s robe on State occasions. Of course these low-ranking tasks were assigned to unfortunates who were paid the equivalent of today’s zero hours contract. Things don’t change that much really.

Shortly after Lord Bute became George III’s chief favourite the pensions list was discovered to record sixty-three Macs, twenty-five Campbells, a vague number of Hamiltons, and a fair number of other Scots names. You just can’t be too careful. It’s not the Scots. All the upper-classes were, and are, at it!

Surely you remember when Maggie and her Tory government offered the great British public the option of retaining their state pension or taking a flyer by cashing in their state earnings related pension and purchasing a personal private pension from an insurance company. Awesome! You can’t bring it to mind. Shame. You can’t keep up the payments. Now that’s a problem. Your problem, mate! Yes, the scheme, note scheme, went down the plug-hole. NO the Tories sacked Maggie because she wouldn’t change her mind on the poll tax. Nothing to do with old age pensions. So, Maggie spent her last few years at the Ritz. Granted free board and lodging too. Who said there is no such thing as a free lunch. In fact, we understand Maggie was a special case.

Returning to Teresa May’s version of the old age pension, now the PM’s promising a dual lock instead of a triple lock pension. Teresa May was in the Tory government or Tory coalition that gave us the OAP linked to Consumer Prices Index rather than the original benchmark – the Retail Prices Index bequeathed by the Labour Party . Makes sense if you’re a Tory – saves money. It makes a lot of difference else the Tories wouldn’t have bothered. Still, before she was elected as a Tory MP, Teresa worked for the Bank of England for twelve or more years. Now, that’s hard graft right there. Surely she’s due an occupational pension. We leave the problem to some whiz kid in maths to do the hard work. Approximation will do. Her hubby may have done this already. After all he’s an expert in financial matters.

Getting back to the UK state pension, we’ve all heard of the 75 pence increase awarded by Gordon Brown. The Tories never tire of mentioning it forgetting to mention that poorer pensioners were given state benefits by another route.

Well, forgetting the facts of the case, guess how much this Tory government with Teresa May as Prime Minster has compensated the state pensioner with? Yes, lower than 75 pence a week? Yes! Higher than zero? Not much, though! For Heaven’s Sake, just guess, will you!

And get this. The Tories are promising to put in their electoral manifesto a commitment that they will prevent employers underfunding pension funds. Labour is green with envy. Are they serious? NO, don’t laugh! This is serious.

This scam had the unfortunate effect of restricting Germany’s population. However, it also gave the population a false sense of security. Living to qualify for an old age pension was vital. Bridging the gap depended on surviving all the perils that flesh is heir to.

By Hugh

Tory Liam Fox calls for savage cuts to pensioner benefits

 

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