Playing games with the pension pot

November 6, 2019

There’s a repugnant meme circulating just now, challenging you to share the ‘fact’ that illegal immigrants and refugees in the United Kingdom are all given £29,900 per annum while our pensioners struggle on £6000 despite having paid tax and contributions for 45 years.

That is, of course, nonsense and I’m disappointed it wasn’t pointed out that those money-grabbing Johnny Foreigners have also stolen all our unicorns.

The author of this claim does not explain how illegal immigrants receive their £29,900. I can only imagine you just turn up at the Post Office and, in broken English, say you have no proof of ID and, bingo… you’re quids in.

Given my father was, I suppose, a refugee and had to have his application for British naturalisation displayed on the front page of his local newspaper, the ‘alien’ in our midst is not a new concept. The right wing agenda of division, hatred and xenophobia is well recognised and, while it is vile, my personal condemnation, though consistent, is unlikely change those who hold those views.

But, the pension issue? That’s a different matter. The level of the state pension is a disgrace, and that's down to Establishment greed and reluctance to regulate. The gap between the haves and have-nots is not narrowing. The squirming over Minimum Wage and Living Wage is an embarrassment. We seem rooted into a philosophy that the only way the poorest can ever improve their lot is for the rich to increase their wealth and then for some of those riches to be cascaded down in a mood of benevolence.

I understand that to criticise this can be swept away as simplistic socialist idealism, a desire to make everyone poorer, but it is not. A fairer distribution of wealth is generally accepted as necessary for capitalism to continue to deliver profit. Rejecting that can surely only nurture a climate of resentment? And better to have that resentment directed at vulnerable scapegoats than those who harvest those profits.

It certainly says something about our core values that we may grumble but tolerate starving children across the UK but will staunchly defend the right for the country to continue to create more and more billionaires.

Socialism is now a dirty word, yet there are socialist ideals any decent human being would embrace – education for all, health care, support for the vulnerable... I’d even wager there is a growing number who would support instances of nationalisation, especially if it meant the trains running on time, never mind with enough carriages, or a banking system that didn't need a public bale-out whenever its bloated belly bursts.

And then there is the state pension. Now funded by contributions it is part of the common weal, everyone contributing to a pot that benefits society. It is a system we introduced and have supported. Our political representatives were meant to ensure it ran through efficient and functioning machinery. Unfortunately, exploitation, greed, illegal wars, corruption, abuse of power etc do tend to clog up the cogs somewhat.

And full employment now seems to be a discarded goal, replaced by extended employment with some even suggesting the notion of retirement only being available once you are in your 70s. Surely that is an unacceptable move in the wrong direction?

So perhaps it suits some agendas to claim your lifetime’s contributions are being given away without check to scroungers, and, to incite even more divisiveness, huge wads of it going to foreigners.

So maybe it’s worth remembering why the pension was first grudgingly introduced, when scapegoats were harder to find, and when the rich-poor divide was reaching new levels of obscenity, bringing rumblings of revolution.

At the dawn of the 20th century the British Empire was the greatest that history had ever known, exercising its power over nearly quarter of the world’s land mass and a quarter of the global population.

It was a time when vast, unimaginable fortunes were made, and it was also a time of horrific poverty.

While hailed as “the empire on which the sun never sets”, as its sphere of control meant some domain was always in daylight, the hardship among millions of ordinary folk in the home of this economic powerhouse was brutal.

To be penniless, desperate or destitute was viewed as either your deserved station in life or your proven membership of a criminal sub-class. Does that sound familiar?

But times were changing. Political diversity, a growing awareness of abhorrent conditions, and social unrest were key factors in the slow but sure moves toward social reform.

And in January 1909 an event occurred which transformed overnight the lives of hundreds of the oldest and most deprived in every community – the arrival of the old age pension.

Some professions had already introduced a small annuity for its retirees, but these were few and far between. The average worker, when no longer able to support him or herself, usually had to throw themselves on the mercy of family in their autumn years.

In Scotland, that was particularly true for the fishing and crofting communities, so those first pensions literally transformed lives.

What was the first tentative step towards a national social security system took place with the passing of the Old-Age Pensions Act 1908. This provided a maximum of five shillings (25p) for those aged 70 and over who earned less than £31 10s per annum.

Its effect was, arguably, most dramatic in the Highlands and Islands where life for ordinary folk had fused into the bastard child of feudalism and serfdom. So dramatic the social impact of the pension that the Western Isles, and in particular Lewis, attracted the attention of the national press, and provides an insight into how the rest of the country would have responded.

When it was announced the first payments would be made in January 1909, it was reckoned that the number of applicants in Lewis would stand at around 1450, 1300 of whom came from crofting districts outwith Stornoway.

The Scotsman of November 26, 1908, reported: “A striking feature in connection with the Lews is that in all but a very few of the cases so far dealt with the applicants were found entitled to the maximum pension, and doubtless the same will hold true for those cases yet to be adjudicated upon. Crofters, qualified as regards age, are applying en masse throughout the island.

“As a rule, the holdings in Lewis are small, and, so far from there being a bar to the tenant’s claim for a pension, it is believed that the causes will be few indeed where the maximum will not be allowed.

“A noteworthy fact with regard to the Lews is that instances are very numerous where husband and wife are entitled to pensions, and in several cases three persons in one house will probably be granted the maximum amounts. In the great majority of cases where aged couples will be allowed 10s, it will mean to them a larger steady income than they en­joyed even in their prime. 

“With reference to the claims already disposed of, it is interesting to note that the average age of the applicants is slightly over 76 years, while 66 are over 80, and four over 90 years of age.”

Of course there were no major employers or industries in Lewis then so the only ‘professional’ pensions already in place were those granted to those who had enlisted in the Royal Navy Reserve, and then that was only around £12 a year.

The government would have to budget approximately £17,000 per annum for those in Lewis entitled to claim. And this would have an impact on the extended family system that operated across the Highlands and Islands. Sons and daughters for generations had supported and cared for their elders, providing food and board through the years of growing frailty with no regular financial contribution to the daily housekeeping.

That domestic arrangement would continue but that weekly guaranteed five or 10 shillings was literally life changing.

The Scotsman report continued: “It is a melancholy reflection on the practical results of the agrarian system that the crofters qualified by age are applying almost without exception; that the majority of the applicants are so poor that they are entitled to the full pension; and that in this typical island of crofter tenure most of the aged crofting population will be better off in respect of money with a State grant of five shillings a week assured than they have been at any time in their youth and prime.”

So, on Saturday, January 2, 1909, these old crofters across the islands kept the first of what would be a weekly appointment – the pension queue.

“It was a memorable day in the Lews,” said The Scotsman on the Monday. “At the post offices throughout the island over 1300 aged people drew their first State pension, and wended their way homeward with unwonted lightness of heart, for, as far as material comfort is concerned, the remaining years for the great majority will be brighter and better than the days that have been.

“One cannot realise how large a sum 5s a week is in the eyes of hundreds of old people in the crofting districts without knowing how small has been the amount of money they have handled even in their prime, to say nothing of the mere pittance that had to suffice since their working days were done.

“At the Stornoway post office the day was an extremely busy one. From early forenoon the stream of over 200 pensioners from the town and surrounding villages flowed steadily in. With rare exceptions the receipts took the form of little unsteady crosses made on the orders. This involved, of course, witnessing, and each transaction necessarily occupied longer than would otherwise be the case.

“It was a scene of pathetic interest. Some entered the office as if uncertain of the reality of the proceeding, and not till the silver was passed over the counter to them did they seem to realise that it was not all a dream. All the payments at this office were for 5s pensions. Impressions of gratitude in Gaelic and invocations of blessing were not wanting.

“The postmaster of Storno­way had made complete arrangements to cope with the special circumstances. Silver to the value of £370 was distributed to the sub-offices throughout the island to meet the demands of each district. In many of these over 100 pensioners were paid on Saturday, and until the silver begins to collect in the rural parts the requisite supply will have to be forwarded weekly.”

The pension system would evolve with the next major change coming in 1925 with the retirement age set at 65 and a contributory scheme being introduced for employee and employer. Though this would provide the model for today’s pensions, that first Saturday in 1909 was a significant step to easing the poverty endured by the elderly for centuries.

Now it seems, even through a contributory and flat rate system that has developed for nearly a century, our elderly are again on the poverty line and the retirement age is creeping up.

It is disgraceful a fairer distribution of wealth hasn’t evolved but how could it, with all those refugees and illegal immigrants? Are we supposed to be grateful for those tax havens and tax avoidance schemes that allow the very wealthiest to store away the funds for when times get really tough?

If you want to change things, there is an election coming...