Press Release Calling for Compensation and Highlighting Case Studies
by Dr. Ros Altmann
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’THE BIGGEST SOCIAL INJUSTICE OF OUR TIME’’
A STORY PEGGED TO THE SECOND READING OF THE PENSIONS BILL ON MARCH 2ND 2004.
On Tuesday, 2nd March, we have a chance to highlight and change thousands of people’s lives. The Government will come under immense pressure to agree to compensate people who have lost everything, because the law has taken their money away from them, after promising them their money was safe and protected and never warning that this could happen. This is a major news story. The unions are suing the Government, hundreds of people will be protesting outside the Commons with speeches from MP’s and unions before the MP’s debate the Pensions Bill. The opposition are lining up to join Labour backbenchers to force the Government to act. This affects thousands of lives. For example:
John, a steel worker, put a substantial amount of his monthly income into his company pension scheme for over 30 years. He paid thousands of pounds of his own cash because the government and his employers told him to: they promised it was safe and he would get a generous pension if he did. He believed them. John is now retired and should be living comfortably on his £15,000 a year pension . But he is not. Because his company went bust a few months before he retired , he will receive virtually nothing. He and his wife now live on benefits and he had to spend last Xmas stacking the shelves at a local supermarket to make ends meet. Welcome to ‘the most outrageous social injustice of our time.’
John isn’t alone : About 40,000 British workers have lost their pensions due to an anomaly in the law. Under current legislation , if a company goes bust, the pension fund is divided first ONLY between EXISTING pensioners: i.e. those company workers who have ALREADY started receiving a pension from their fund, even if they are not actually retired. That means other workers like John – who may well have been paying into the company scheme all their lives and are just days from retirement – end up with virtually nothing. The new Pensions Bill, which gets its 2nd reading on March 2nd, changes this, but crucially it is not retrospective .That means John, and thousands like him, will remain in poverty. Meanwhile, John’s boss aged 52 – who luckily had the wisdom and foresight to leave the company just before it crashed – enjoys a 2 million pound pension package.
“This is the most outrageous social injustice of our time. It is devastating these people’s lives and affecting their wives, partners and even children. They are watching their money being taken away from them, by law, to buy pensions for someone else.” says Ros Altmann, an independent Pensions Policy Advisor and governor of LSE. “It would cost under £100 million a year to give people like John the rightful pensions they have worked for all their lives . In relative terms, that is a tiny amount. It is not too late for the Pensions Bill to be changed . These people trusted the system, and it let them down. That sends out a terrible message: if you can’t trust the system, who, or what, can you trust? If the Government is serious about restoring confidence in pensions, it has to agree to compensate these people. The unions are organising a mass lobby of Parliament and are suing the Government. This should never get to Court and these poor people should have their pensions restored to them by compensation from the Government NOW. People in Britain have a right to know what has happened to the victims of this disaster and media pressure may help right this terrible wrong. ”
Meanwhile, more and more workers find themselves in the same situation. Last month another two companies went bust, depriving hundreds more of the pensions they had been saving for all their working lives.
Contact : Ros Altmann 0208 343 0055/ 07799 404747. There are many case histories available for interviews, briefings, etc. A couple are attached here, but there are many more, if you’d like to cover them as exclusive interviews or features.
A FEW CASE STUDIES. THESE ARE REAL PEOPLE WITH REAL LIVES WHICH HAVE BEEN DESTROYED BECAUSE THEY TRUSTED THE GOVERNMENT!
My husband is a former employee of Dexion Ltd, having worked there for almost 38 years. He made regular monthly payments from his salary into the pension fund for 36 of those years and we were told we would have a secure pension of about £20,000 a year when he retired in three years time at age 60. …The whole fiasco with the pension fund has just about wiped out our pension and our hoped for happy retirement. …He will probably have to work until he dies if the government do not come up with something sensible as a rescue package. It is very likely now that should he ever retire we will not be able to stay in our home. This is doubly sad as we purchased it with my parents 19 year ago as security for my mother, by my invalid father who died last April. He was desperate to ensure she always had a safe and secure home when he was not there to look after her. I dread the thought of forcing her to move at this stage of her life when she believed she was settled and secure which is what my Father had wanted for her. How we have let them both down.
Probably the saddest thing is James has actually apologised to me because he feels HE is the one who has let me down. For him to feel responsible for the behaviour of the heartless business men involved in this is awful. He did everything right and nothing wrong at all yet he feels guilty. It makes me so very angry and like James I feel devastated too.
I can truly understand how he must feel. He so loved his job and it made him feel very good about himself. He is dyslexic and always felt he would never amount to much in the world of employment having been written off as a boy by most of his teachers. At Dexion he shone! He knew everything about the products and had designed a large percentage of them. He wrote all the necessary manuals and computer programs, most of the people there knew him as the man to see when a problem came along. Now he feels lost and worthless.
We had made a few plans for how to enjoy our retirement before old age set in with a vengeance, but everything seems to have been smashed apart now. I am very worried about James he really is extremely depressed and very uncommunicative. We do not talk much any more. Sometimes I feel this whole horrible business will wreck our marriage too.
I have to deal with all of this Dexion Pension business as my husband is so shell shocked. It is as though everything he has done in the whole of his working life has been wiped away and the last 38 years have accounted for nothing in his eyes. I try to point out to him that we have three great grown up offspring and we are now lucky enough to have one shining beacon of joy in our lives in the form of a delightful new Granddaughter just 6 months old.
I spend a lot of time these days writing to anyone I think might be able to offer us a light at the end of the tunnel!
I would love to be able to ask Mr. Blair and those in Government what on earth they think we should do now but of course it is not possible to talk with such loft folk, I can not even get him to read the letters I send.
My husband worked at Dexion for 34 years. He was due to retire in September when he reached 62 although he could have retired at age 60 but decided to stay another two years after being told his skills were still needed. If he had had any inkling of the coming situation or the possibility of losing his pension there is no way he would have carried on!
We have been told whatever little pension he does get will not be for another three years and it may be less than the State pension he would have had if he had never paid into the Dexion scheme.
He has had to try and find work, at 62 that is no easy task. His health has deteriorated over this past year and he does not feel physically able to go back into factory work. He is a very proud man and has worked so hard all his life that it broke my heart to see him stacking shelves in a supermarket for three months. That was only temporary and he has been out of work since the new year although another shelf stacking job may be imminent.
I lie awake at night worrying about the future. We still have a mortgage which runs until he is 65 and another option is to sell our house, but to raise any capital we would have to move away to buy a cheaper property and I could not bear to be far away from my family, they are all that keep me going!
All our plans have been shattered. We had hoped to spend some money on the house this year but that is now out of the question. We cannot plan any holidays and worst of all we have to think carefully before we can buy anything for our three grandchildren.
I try to be positive and believe as long as we all have our health that is most important buy sometimes it all gets too much and I cry myself to sleep.
This has affected the entire family and we all find it heart breaking to see Dads health deteriorating, whilst he struggles to find work and Mum worries terribly about the future (even though she tries to hide it).
I have 2 young daughters and my husband is self employed, so we have our hands full, financially. Even if my parents would allow us to help them, there would be very little we could do.
My parents have worked hard all their life and I cannot bear to think that they will not have anything to look forward to in what future they have left. They have done their very best to provide for us, apart from getting into debt ourselves, who will provide for them?
IRENE and DAVE
Dave Tipton now age 61 worked for BUSM for 40 years until he was made redundant in 1999. He had hoped to retire aged 56 at that point but was unable to do so because a change in the rules meant losing 32% of his pension, and he would not be able to live on this. His wife Irene also worked at BUSM for 8 years.
He has an endowment mortgage which will continue after he is 65 and the idea was that this was to be paid by his pension. Now that his pension has gone and the endowment is performing badly, he is working a 48 hour week. He is going to have to sell his house. It is impossible to imagine the stress he is under.
There are many many other people from BUSM who have spent over 40 years working with the company and have now lost their pensions. Their situation is dire. BUSM is an old established shoe company which started in business in 1899. In the 1960’s it employed 3000 people and exported to 50 countries around the world. Typically it took on apprentices at 16 and they progressed until retirement 44 years later, when they could take a full pension. Many people had fathers sons or wives working there. Every month several retired with 44 years service.
Over the years, the company cut back on recruitment which meant that when it went into administration in October 2000, it had an unusually large number of older people in their 50’s and 60’s. The East Midlands as a whole pays significantly lower wages than most of the country and BUSM although offering an excellent pension was never overly generous.
Few shop floor people have savings for retirement but fortunately it wouldn’t be needed would it? What will these people live on now?