Twelve years ago in 1997 a new government came to power in Britain under the leadership of Tony Blair. One of the first acts of the chancellor was to apply double taxation to pension funds, that is; taxing both the contributions and the lump sum on maturity. The government gained £5 billion per annum doing this. For pension funds it was a different matter. They suddenly found a huge hole in their funds and when there was a fairly modest downturn in the market in 2003, many of them went to the wall. The pension companies were faulted for this; it was said that they had not put aside enough money during the good times to cover a downturn. The reality was that government rules meant that if they did any such thing, they would be penalised by punitive amounts of tax. People suddenly found themselves with pension funds that were virtually worthless. Clydeside workers found that their pensions had been reduced in value by 80%. Who was responsible for this? Gordon Brown.
That is why I was so bloody angry to see this article today. We have paid and paid and paid for our pension and old age; it's just that the government regards that money as its own to do anything they please with. Who in their right mind believes that if they hand £20 000 over to the government just now, that they're going to get it back? I don't.
There's a simple and elegant solution to this problem of elderly care. Stop charging double taxation on pension funds. That way, the value of people's savings will go up 22%, it will go to the people who are actually planning for their retirement as opposed to those doing nothing, and as it is a targeted saving, it cannot be shifted or spent somewhere else. Simples, as Alexander would say. But we are not, repeat not, handing over any more money for it to disappear down the long alimentary canal that is the Treasury and have no say on where it ends up. You want a discussion on this guys. You're going to get it, I promise you.
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