In yesterday's Pre Budget Announcement (PBR), Alistair Darling announced the early introduction of the flat rating of the State Second Pension (S2P). The original deadline for this reform was the end of the next parliament, not until around 2014. Bringing this change forward has raided over £2 billion from people's pension funds over the next five years. The change was meant to come into force at the same time that the state pension was re-linked to earnings, raising the income from the basic state pension for all pensioners, but the government has not signaled any plans to bring this forward at the same time. The result will be that hardworking middle earner families will be paying more for a smaller pension. Hundreds of pounds a year that would have gone into their pensions are now going into the government coffers instead.
Commenting on yesterday's announcement, Shadow Secretary of State for Work and Pensions Chris Grayling said:"After the damage that Gordon Brown has done to our pensions system in the past ten years, it beggars belief that his Government would bury another multi-billion pound tax raid on pensions in the small print of its pre-Budget report. This is nothing less than a new stealth tax on retirement, and will mean a pay-cut for large numbers of pensioners at a time when they are already under financial pressure from big increases in their cost of living. The Government obviously thinks it can bury the bad news and get away without people noticing. It won't succeed."
Chris Grayling MP10/10/2007
You've got ask: where does all the money go?
I've said it before and I'll say it again: Gordon Brown knows no shame.