SOME 50,000 pensioners had their income cut by 20 percent last week. The announcement came from one of Britain's biggest insurance companies, Equitable Life. Yet New Labour still wants to make us all rely on private pensions. The average Equitable pension, built up by people saving for many years, is £6,000 a year.
That will drop to £4,800 a year, and could go much lower. 'This is a nuclear bomb for pensioners. I fear that some people might have to sell their houses because they cannot afford to maintain their standard of living,' said Paul Braithwaite, general secretary of the Equitable Life Members' Group.
The rules of the fund prevent these pensioners from switching companies once they have bought their policy. The 50,000 pensioners affected include thousands of public sector workers who were lured into private pensions by the promise of easy money.
In July last year Equitable cut the pensions of a different set of customers. Then one million people saw their incomes crash by 16 percent. The majority of firms that used to run guaranteed 'final salary' pension schemes have closed them to new entrants. Workers will now be pitched into pensions that depend on the stockmarket casino.
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