Thatcher ended the best pension scheme the UK has ever had, and pensions have never recovered from the consequent decline as constant mis-selling scandals continue abundantly to demonstrate. Barbara Castle’s SERPS schme in the 1970s was generous particularly to the low-paid and to women, highly popular, and provided universal protection against poverty in retirement. Thatcher reduced its generosity by cutting the accrual rate, gave individuals an incentive to opt out of SERPS into personal pensions which turned out to be much poorer quality, broke the link between earnings and the basic State pension, and allowed individuals to opt out of occupational schemes which had previously been a key element of the social wage. These opt-outs led to a great mis-selling scandal as commission-hunting salesman persuaded many to shift to poor defined contribution (money purchase) schemes. The State retreated from guaranteeing earnings-related retirement income to merely providing a low means-tested safety net, and as the State basic pension steadily declined relative to earnings it inevitably led to a large rise in pensioners subject to means-tested benefits. Continue reading →