Pensions put out to pasture

Since the 1980s, the ruling class in Britain has been discussing how the various pensions schemes aimed at the working class have been too generous and unaffordable. Even at their peak, final salary schemes were generally only available to workers at the largest companies, leaving millions of workers dependent on the state pension or to be ‘mis-sold’ dodgy private pensions. In the years since, under governments of right and left, the state pension has been steadily eroded while ‘final salary’ schemes have been replaced with far less generous ‘defined contribution’ arrangements that reduced benefits to workers.

The efforts of the LibCon Coalition to tackle public sector pensions are thus in complete continuity with the previous Labour administration, which had presided over the more or less complete abolition of final salary pensions in the private sector. In the spirit of tying up loose ends, the Coalition are proposing to end National Insurance rebates that currently support final salary pensions schemes. This “will almost certainly see the end of final salary pensions” (Financial Times 24/3/11).

In this context, it must seem strange that the coalition is actually considering putting up the state pension, even if it is only to £155 per week. In practice, it means little more than abolishing the hated means-testing (which was so onerous many pensioners simply didn’t bother) which largely pays for itself by cutting the state’s administration costs. But what capitalism gives with one hand, it takes with the other. For those pushed over income tax allowance thresholds by the change, taxation will eat up the gains. Also to be taken into account is the acceleration of raising the pension age to 66. Previously planned for 2026 this is now happening in 2020.

The ruling class have been trying to promote the idea of working longer as a positive for some time. For example, the ending of mandatory retirement ages has been presented as an attack on age ‘discrimination’. Whatever the ruling class may plan for the future, the ‘working pensioner’ has already been a reality for some time. In 2006 more than half the jobs created were filled by people above the state pension age.

But while certain supermarket chains present us with the image of the plucky oldster happily continuing with his exploitation, the reality for many is that ill-health will eventually spoil this pretty picture. Another inconvenience is that while poverty may force pensioners to continue selling their labour, they face the same prospect as everyone else – the likelihood of unemployment - although the bourgeoisie will not count them as unemployed, of course.

The bourgeoisie talk as though employment is more than an aspiration – as though people only have to decide to work and they are home and dry. ‘Working until we drop’ is going to be the least of our worries because the same economic crisis which has created the pension problem also creates mass unemployment. Furthermore, admirable as it is that some older people can show that they are still capable of looking out for themselves in the labour market, if the elderly continue to take up jobs at the same kind of rate as they did in 2006, that actually makes it even more difficult for the young to get jobs. For about a million young workers there is not much chance of getting into the labour market at all – much less of getting paid a rate that would allow them to contribute to a ‘defined contribution’ scheme or any other type of savings scheme. To ‘work until they drop’ would actually be a step up for those in the front line of crisis-ridden capitalism’s brutal assault on the working class.  

Hardin 1/4/11