A NEW COMPULSORY LEVY FROM NICE MR BROWN
You gotta love Gordon Brown - the man who stole our old age pensions.
You see for Gordon it's just not enough that he virtually single-handedly wrecked British pension provisions when he was Chancellor Prudence but now he has dreamed up a new plan that would take the form of a compulsory levy to force people to cover the cost of care home places in the last stages of their lives. The ageing tax is a central plank of a consultation launched by the Prime Minister in the face of a growing crisis over who should meet the bills for the care of the elderly. But the proposals raise the prospect of the modestly well-off having to pay twice. They include no guarantee of ending the hugely unpopular system which forces elderly people to sell their homes to meet care home bills and deny their children an inheritance. Instead, the consultation paper said, means tests will stay and working people who pay the planned tax will continue to meet the bills of those "in need" - many of whom have no savings or property because they have never worked or saved. Got that last bit? Yes, those who make no provision at all for their old age, and who choose not to work, will be funded by a double whammy tax onslaught on the going-to-work classes.
David Vance
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I would suggest that this is all part and parcel of the same disease that caused the credit crunch.
The concept of low interest rates, which is fine for borrowers, whether private or commercial, is a disaster for those who are prudent and wish to save for their dotage. Why save, when the interest rate received is lower than the real rate of inflation? Savers are supposed to be prudent, not stupid.
So instead of saving, we were encouraged to 'invest', but the overly indebted corporation is now the norm rather than the exception it was a few years ago, and poor returns are the norm. I am well aware that some companies do provide a good long term return, but they are in the minority, and who has foresight that good?
Now we have 'vulture' boards of directors to contend with, (a.k.a. Private equity or Hedge funds), as well as corporate taxation and personal taxation on any dividends received, which are themselves invariably only a little above the rates received on interest.
That is where the old pension rules came into play, enabling returns on investments to be 'tax free' until the point of conversion to an annuity, the advantage being that earnings were compounded, year on year. That was until Brown worked his 'magic'...
The effect of stopping tax relief on pension investments, was to substantially diminish the amount of the expected 'pension fund', and as it was backdated to 'day one', thus destroyed the 'compounding effect' and the whole idea of the original pension plan. That alone impoverished many pensioners to-be.
In case anyone thinks that such pensions were 'tax free', they were not - when drawn, 'as pension income' they were taxed in pretty much the same way as any other investment income.
The replacement schemes for such savings, ISA's, SIPP's. SERP's, etc, all wonderfully acronymistic, while not being a patch on the old, well tried and proven original scheme for providing for the 'golden years'. They do have some tax advantage, but nothing like the original.
I would mention that the destruction of pensions was an idea originally mooted by the Major government, and Brown saw no reason, or possibly was totally unaware, of the damage it would cause. Now he is having to concoct yet another scam to remedy the effect of the first.
Wait for the excuses to come, as with the banking fiasco, - 'We made mistakes, but we are learning from them!' - and they want a raise?... somehow, I think I prefer Morecambe and Wise for my comedy....
As a follow up to the news that personal allowances are to be raised -' for this year only', as a means of rectifying the gaff over the 10% starter rate of tax, it is noted that, as yet another snub to pensioners, that it is only available to those under age 65.
Now that really does send a message to those trying to provide for their 'golden years'!
Pensioners who continue to work after age 65 will not be eligible, even though they are among those who suffered a loss when the 10% was discontinued. Of course that same group also recently had their personal allowance cut, making them among some of the highest taxed, 'percentage wise' in the country.
Perhaps Darling is forgetting that pensioners also have a vote, and are more likely than most to use it come election time.
How much more contemptuous of the public can they be?
And they want a payrise!! - which will cost, in the long term, a similar amount to this boondoggle, - what a sad, pathetic pair they are!!...
"Socialism, - the opiate of the masses, - and of the elites"...
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