Crowdfunded Journalism

Revealed: The £271 billion "rape" of the National Insurance Fund that deprived 50s women of their state pension

David Hencke photo
David HenckeLondon
Revealed: The £271 billion "rape" of the National Insurance Fund that deprived 50s women of their state pension
The Treasury has saved a staggering £271 billion by stopping its contribution to the National Insurance Fund which has left 50s women waiting up to six years for a pension

 The fact that 50s women were robbed of their pensions by raising the pension age is undeniable. But the biggest argument against putting this right has been the cost - a fact perpetually used by the present pensions minister, Guy Oppenman,(pictured above) who quotes the £70 billion plus figure.

Recently I discovered that successive governments had taken a decision NOT to top up the fund as originally proposed by William Beveridge when the welfare state was set up in 1948.

What I did not know was how much money was lost. Now thanks to an extraordinary paper prepared for the National Pensioners Convention by a social security expert Tony Lynes,and still on the web, I now know. And it is staggering. You can read it here.

The paper written 12 years ago by a man I personally knew as a fount of all knowledge on the benefit system when I was social services correspondent on the Guardian. He sadly died, aged 85, in a car accident in 2014. There is an appreciation of him in The Guardianhere.

His calculation from beyond the grave is that for every year that the government decided not to contribute to the fund it was deprived of £11.3 billion. As he says: "Restoring the supplement at its pre-1981 level would bring an extra £11.3 billion a year into the Fund, enough to meet the gross cost of a £109 per week basic pension."

We now know that virtually no money was paid into the fund by the Treasury for around 24 years from 1990 to 2014. I calculate - and this will be a conservative estimate - because it doesn't count the reduced contributions post 1981 - that an amazing £271 billion yes billion extra would have been in the fund.

This would pay more than three times over the money due to the women - and even allowed higher state pensions for everybody else now.

Why this didn't happen is because politicians of all three major parties took a decision not to do this. They took the decision knowing that their Parliamentary and ministerial pension pot would mean they would be some of the wealthiest pensioners in the land when they came to retire. And the taxpayer would foot their bills.

They decided the pain should fall on the electorate instead. In 1995 they knew all the arguments about people living longer and that money paid out in state pensions would go up.

They could have changed the rules and informed the Government Actuary Department that they would deliberately build up a surplus in the fund - so it could pay out as people lived longer without changing the pension age.

Instead they chose the cheapest route - raise the pension age so they won't have to subsidise the fund- but try and keep mum so the women wouldn't realise what they were doing.

The villains are the late Lady Thatcher, John Moore, Kenneth Clarke, Sir John Major, Tony Blair,Gordon Brown, Steve Webb and Guy Opperman. There are many others who stood by and did nothing. That is why 50s women have been left in this situation today.

#50swomen, #state pensions, #national insurance fund, #Treasury savings, #Tony Lynes, #poverty


Norman Porrett

4 months ago

So Women want equality where it benefits them but not when it doesn't?! If women retire 6 years earlier than men and generally live 6 years longer than men, they effectively want 12 years more pension than men. Men, again generally work in more physically demanding roles and wear their bodies out well before 60. Should a 67 year old man keep working in industry while a woman retires 7 years earlier. The utter hypocrisy of women is astounding!

Malcolm Reavell

7 months ago

I have seen this article repeatedly posted on Facebook and it needs to be debunked. It is bollocks.
There probably has been a 'rape' of an accrual fund of money set aside in a jar marked 'pensions', but in reality there is no way a fiat currency issuing government can actually save money since it is the issuer of that money. If you are the creator of a fiat currency you can't save it, you can only ever spend it. It is spent into existence and taxed out of existence.
This article is based totally on the myth that taxes fund government spending. They don't. Believing that myth allows the government to plead poverty, claim that things are unaffordable, and that it has financial constraints on its spending like a household. The UK government has no financial constraint on its spending power. The taxes it takes in are currency that it first had to spend into the economy. The spending had to happen first, and therefore there is no way that taxes can ever fund government spending in this monetary system that we use.
The government can never run out of money, never default on its debt, and never go bust. Ever.
There is no real pension pot for state pensions. All government spending is newly created currency at the point of spending. The currency it spends into the economy circulates in the economy, passes through accounts as income, and is eventually returned to the government as it is becomes liable to tax, and those taxes just eliminate the currency created.
Whatever the article says about a 'pension fund' is purely an accounting convention whereby some taxes are not returned to the government account and deleted from the ledger, but instead held in a separate account. But the deficit that created that money in the first place still exists in the government ledger. This supposed pension fund offsets it. It may as well have just been returned to the government's consolidated account and reduced the deficit. The government can then spend new currency into existence to pay pensions.
That is how public service pensions are paid, they are what is known as 'unfunded'. The NHS Pensions Scheme is an unfunded occupational scheme backed by the Exchequer. The money is paid by government. It is created as needed.
Exactly the same could be applied to state pensions. It is a political choice, not an economic necessity. This business of hypothcating the NI contributions is a convention. Not and economic necessity since taxes are not needed to fund government spending.
So getting angry about this 'rape' of National Insurance fund is complete crap. It is getting angry for the wrong reason. It still plays into the 'taxes fund spending' narrative and allows the government to avoid the political responsibility they have to pay a decent state pension on teh grounds they cannot 'afford' it. It's a total lie. When there is a debt to be paid in the government's currency it has absolutely NO excuse for not paying it. The state pension is affordable.
Anything for sale in the UK for £ is affordable to the UK government. There is no excuse for not paying a decent state pension. Taxes do not fund government spending.

Diane Howells

10 months ago

If we had known in 1997 why would nearly every woman in this country be complaining, load of rubbish. I left my permanent full time job when I was aged 56 years old I decided to go part time until I was 60 as I thought then was when I would retire, No I didn't find out until I was 58, If they had added on 2 years on I could have excepted that but No 6 more years I find it torture I long to be at home. My husband as delayed his retirement because we had planned to be together it as totally wrecked our plans we had made. If only we had been informed. Most people will not be allowed to spend time together either one or both will have a illness or die before collecting their state pension. This government needs to feel ashamed what they have allowed to happen, ROBBERS!!! The stories about people who have had to sell up to give them some income because they are to ill to be forced to work. Ashamed of this Country.

Jean Williams

1 year ago

The whole pension debacle is an absolute disgrace, this has brought misery to millions of 1950's women, but also to millions of 1960's women who similarly have had no notice, and seen their retirement ages rise as high as 67, this will drop millions of 1960's women into similar situations as many 1950's women in as much as no time to prepare that is even if indeed they could afford to, the whole thing is a national disgrace and it's time the government did the honourable thing and bite the bullet and give the 1950's women thier pensions with immediate effect and either compensate them or offer a higher rate so they are comfortable the rest of their lives, and reinstate the 1960's women back thier original retirement age of 60. This is nothing short of daylight robbery. And we 1950's and 1960's women are not going to go quietly till we get justice... take note those in power there are far more of us than you !

Stephen Lewin

2 years ago

This has been common knowledge since 1997 why are people questioning it now, 20 years later? Surely what they are doing is protesting their own misunderstanding or ignorance. Isn't equality to be treated the same as men what women want ? Maybe its not equality but special treatment. My wife drew her State pension at 62 and 3 months but she knew that and did not protest so what is so special about these whiners?


10 months ago

Stephen, what a disappointing response. Let`s start with equality, this should have happened at both ends of people`s careers. Women in the 70`s were paid at a lower rate for the same roles, were overlooked for promotion, were asked in interviews about having children, were not allowed to join company pension schemes or have their own mortgage. Many women chose to work part-time to look after school aged children, to run the household and to be carers to elderly parents. Equality should actually have been to let men retire at 60, the people who have generally had a more physical job and statistically die younger. Perhaps this is what men should have been fighting for. As for whiners, really? Can 3.8 million women really have got it so wrong? You cannot misunderstand something you haven`t been told. If we are ignorant it is because successive governments failed to ensure that we were informed. I knew nothing of this in 1997, in 2010 I took early retirement to look after my father, had I known what was to come I would not have done this. In 2011 I found out my pension age was going up to 65. I have been doing part-time work up until getting cancer last year at age 62. These years of part time work will not count towards my SP as I have made insufficient contributions, but I`ve still had to pay in. More robbery! The money was in the pension fund to pay us, it was stripped. I have some money from my work pension but spare a thought for the poorly paid, the sick, the widowed and single some of whom have had to downsize/sell their homes, give up their rented accommodation, move in with their children or are sleeping in their car

David Knowles

1 year ago

The problem is the same excuse would have pop up no matter which time the government chose equalisation with men, women would lose out. You don't need more notice to know that you have to work longer for pension, it has absolutely no negativity apart from growing all the other pension pots you have.

Ann Roper

2 years ago

Perhaps instead of displaying your obvious ignorance you should read up on exactly what the problem regarding 1950's women is! It has nothing to with being treated the same as men, we are not against equalisation of the state pension age. It is about the way the Government broke their contract with 50's women with no, or insufficient notice, of the changes, and then brought forward changes again in 2015 which resulted in pension ages being changed twice. I should have had the pension I paid all my working life for at age 60. Your wife is lucky if she was able to get her pension at 62 instead of having to wait yet another four years till 66.

Christina Bailey

2 years ago

I was born in 1955 and have to wait six years to get my pension. I'm not always in good health either, it's just disgusting what they have done to us it seems hard working , law abiding , British women have been chosen for this theft. Shame on you all.

Norma Miller

2 years ago

Theft at its highest level.
Disgusted at what governments can do to the common people who worked hard all of their lives and then rules were changed without notice.
How can the government think this is ok

Janice Bryan

2 years ago

I've lost 6 years of my Pension. Born in 1954 so in the year where 3 long years are added. No phase in for my year of birth. In manual work so carrying on into my 60's caused 3 broken bones, deteriation in Heart problems (just getting over a Heart Op). Amongst other Disabilities that go with being other 60. Was a Carer for my Mother, left money and therefore couldn't get financial help for being unable to work. The Savings limit is £6,000 (same as a youngest). So lived off my inheritance which was for my Retirement. Failed Medical! Full of lies. Taken to Court but had a breakdown so couldn't attend! Won case anyway. Left on £9.99 for 8 months E.S.A. in error. No wonder I had a breakdown! Finally only an M.P. got me the correct ESA. Health terrible now, don't feel like I will survive my 2020 Pension. Received my Pension For at only to find my Graduated Pension I paid into for years has gone. Apparently because I receive the full Pension amount from 2016 I don't receive Graduated Pension, you can't receive above that amount. They say it's as simulated in but it's stolen! The contracted out system has confused the Pension amount,,so people will think one covers the other but it doesn't. It's so difficult to analysis that people who were contracted out will think they are OK. I can add up and the breakdown shows they kept the difference. Ladies with full Pension and no contracted out periods will simply not receive the extra money they paid in. New Law. It's not simply a case of loosing 6 years of Pension it's also loss of Graduated Pension and most Disabled women not being given any ESA till their Savings are none existent. Also the terrible health issues of working longer (often in manual type jobs because we stayed at home taking care of our children and parents etc). And the terrible stress the whole thing causes!!!!!

David Hencke

2 years ago

Yes really sorry to hear this - but it does seem new system just gives the full pension but no longer pays the extra money you contributed. All part of the policy to limit payments while claiming we have got this shiny new pension. The whole system is really nasty ansd the disabled seem to get the worse deal

Debra Davidge

2 years ago

The Government of now and past should all be investigated. This is deliberate misdirection of funds legitimately die to the 50s women. Where are their Human Rights in this case. It's disgusting and the Givernment/s are once again only concerned wirh their own welfare and not those of the Electorate. I hope someone with enough clout and determination investigates this and open up the can of worms for all to see!