MILLIONS of workers, as of yesterday, have been hit for six. The amount that comes out of their wages in pension contributions now triples from 1% to 3%. This massive hike in contributions began yesterday, the start of the new tax year.
Rebecca Goldring, a tax manager at accountancy firm Blick Rothenberg, said: ‘For many, this increase will feel like a harsh jolt.’ This must be the understatement of the year! Rents are spiralling out of control, food prices are rising, and gas, electricity and council tax rises have all gone through the roof. Meanwhile, wages have been frozen for years. Now they rise by just half a per cent or one per cent, much less than inflation, in other words, a further pay cut.
It is in this situation that workers have now been whacked again, a further pay cut, an extra 2% of their wages seized as pension contributions. Someone earning an average salary of £27,000, up until yesterday, paid £250 a year in pension contributions; that amount has now risen to £750. Ever since the global banking crash of 2007/8, workers have been paying for the economic crisis. Now there is no end in sight. The capitalist rulers of Britain are determined to make the working class pay for their crisis-ridden system.
When the average life expectancy went up, the government said that the age you retire must go up as well. Now, those who through trade union struggle won the right to secure pension schemes are also having their pensions attacked.
The University of South Wales (USW), has announced new members of staff will not be directly employed by the institution any longer. The university will outsource all those working in I.T., examinations, academic registry, libraries, estates, accommodation and student support to a private company. The company will then take all workers off the Local Government Pension Scheme (LGPS) and put them onto an inferior scheme.
Dan Beard, Unison USW branch secretary, said: ‘Pensions are deferred wages which people have worked hard to receive. Preventing new employees from joining the current pension scheme effectively destabilises and devalues it.’ Unison has vowed to fight against this plan and says that strike action is on the cards.
Meanwhile, over 60 universities have already been hit with 14 days of strikes which began in February. Lecturers are fighting to save their pensions. Lecturers are on the Universities Superannuation Scheme (USS) and it is this which the universities want to smash.
One of the most vicious attacks on workers’ pensions took place last year in what is left of the steel industry. Last January, steel workers at Port Talbot voted for a deal agreed between Tata and the unions. The workers were on the British Steel Pension Fund, secured when the steel industry was still nationalised.
Under private ownership it had a black hole of £650m. This is despite steel workers paying vast sums of money into the scheme their entire lives. In March last year, the union leaders agreed to Tata closing its pension scheme to future employees. Last September, Tata reached an agreement to merge its European steel business with the German steel manufacturer Thyssenkrupp. The deal was only struck with the proviso that Thyssenkrupp and Tata could wipe their hands of all pension liabilities. The entire scheme was thrown into the government’s, Pension Protection Plan (PPP) which led to a 10% cut in pension benefits.
Pension sharks then targeted the steel workers at the factory gates. Rogue financial advisers made 700-mile round trips to lure steelworkers into transferring their pension funds into their schemes.
Some workers reported even cashing their pensions in with these companies, with the money then being moved into little-known investment funds that levy high charges, causing the workers to lose tens of thousands of pounds.
This is the ruthless nature of capitalism: steel workers having their pension scheme thrown into the PPP, pension sharks then smelling blood, travelling half way across the country to dupe workers into transferring what is left of their pensions over to their dubious companies. Literally thrown to the wolves!
Capitalism cannot provide workers with a future. It is a system which squeezes every drop of human labour out of your body and when you are too old to work, condemns you to live your last remaining years in poverty. This is a system that is historically bankrupt, it must be put an end to and buried. Marx famously said that the working class is the gravedigger of capitalism.
This ongoing war on pensions affects millions of workers. Those millions must be immediately organised in a general strike to bring this government down and put an end to the capitalist system through a socialist revolution. Under communism, with capitalism and its ruling class parasites abolished, and a planned economy, working not for profits, but to satisfy people’s needs, the real history of humankind will begin – up to now we have experienced just its pre-history.