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There are few issues that matter so much to so many people as pensions and all the signs are that the number of us who can look forward to a financially comfortable retirement is getting steadily smaller.
Once, 23 per cent of the workforce, nearly one in four, were in what is known as a final salary scheme, which typically provided between a third and a half of an individual's salary on retirement.
In 2003, only 12 per cent of people enjoyed that benefit. Now, most large companies are closing their final salary schemes not just to new recruits but also to existing employees.
A survey of 157 companies by the accountants PricewaterhouseCoopers found that almost all those who responded said that the scheme was "unsustainable" and 16 per cent had closed it to current employees.
The effect of this change can be seen in another report from the insurance company Prudential, which says that those who have a defined contribution pension scheme, as most private sector workers do, will receive only a quarter of the income of those on final salary pensions.
And what about state pensions? A report from the Organisation for Economic Co-operation and Development shows that British state pensions are the least generous in the developed world, a disgraceful situation given that almost a decade of growth preceded the recession.
And the downturn has hit pensioners hard, because a large proportion of their income is spent on food and fuel, where prices have risen.
The most striking aspect of this situation is that the increasing gulf between public sector and private sector workers. This is the real divide between the pensions-rich and the pensions-poor.
Final salary schemes are still commonly enjoyed in the public sector, which, obviously, all taxpayers have to fund. And the disparity between the two groups is increasingly resented by private sector workers, whose job security is far less than those in state or local government employment.
The Government has avoided confronting this growing inequality. It cannot avoid doing so for much longer.
Lessons for the Met
Our interview today with the former Assistant Commissioner of the Metropolitan Police, Andy Hayman, the man who led the country's anti-terrorism operations, is revelatory.
Many of us will be unsettled to learn that not a single year since 2003 has passed without an al Qaeda attack, or thwarted attack.
And his judgment, that it is very probable that there will be a terror attack on the Olympics is high and that the budget for anti-terrorism operations is too low, is grounds for real concern.
But perhaps the most interesting element of his interview relates to knife crime.
He recalls a dispute about tactics between the former Met Commissioner, Sir Ian Blair, and the former Assistant Commissioner, Tarique Ghaffur, which resulted in Sir Ian insisting that policing should be widely dispersed in wards rather than focused, as Mr Ghaffur wanted, in his Specialist Crime Directorate.
As a direct result of that change, knife and gun crime soared in London. The lesson is that specialist, intelligence-led police units are crucial. It will not be lost on the present Met Commissioner, Sir Paul Stephenson.
Policing tactics matter: if they are misdirected, crime increases. We all have a stake in the leadership of the Met.
London's in fashion
There is exuberant optimism surrounding the 25th anniversary celebrations for London Fashion week in September as some of the most exciting fashion houses return to London from abroad.
Today, Jonathan Saunders announced that he will be coming home from New York.
He follows other big names, including Burberry, Matthew Williamson and Pringle, who will be showing here.
Fashion is one of London's most important industries: here at least we have a record to be proud of.
Reader views (3)
Never mind about final salary versus 'money pot' pension schemes, what about the 'stolen generation' who have moved to countries that never get indexation increases, and have to rely on handouts from their country of residence. The money that has been filched by UK MPs would go a long way to correcting this iniquitous situation, and the huge savings in health and other costs associated with this group not relying on the NHS.
- Mike, Bongaree, Australia
It's time to make civil servants pay a commensurate amount into their final salary pensions. If they want to continue receiving a decent pension in retirement, they should divert the relevant percentage of their salary on a monthly basis.
The exemptions should be front-line armed forces and MPs: the former should get a final salary pension depending on number of years served and they should pay a minimum amount of their salary into their pot; MPs should get no final salary pension and should be forced to buy a money-purchase pension like they seem to be happy for the majority of us to do.
- Nobby Clark, Perth, the Scottish one
It certainly is time to bridge the pension gap! The biggest gap is between frozen pensions and indexed pensions. This is unfairness at its most unkind and has been painfully highlighted by the recent publicity given to the greed and dishonesty of many MPs who could be working to use the National Insurance Fund to unfreeze frozen state pensions.
- Dian Elvin, Witney, Oxfordshire, UK
