May I thank Sidney Thorpe for correcting me in his letter (Oxford Mail, June 6) with regard to the 3.6 per cent increase in pensions this year?

I was unaware of the increase, as I couldn't recall seeing anything about it in the press at the time of the Budget.

I can well remember the high interest rates he refers to and it was a struggle for all home owners. I, like many others, bought my council house under the right-to-buy scheme.

If I remember correctly, after buying your house, you could sell it after four years without having to give back to the council a percentage of the discount you were entitled to, depending on length of tenancy when you applied to buy.

Many people sold and bought bigger and better houses, or improved and or extended and thus borrowed up to the hilt.

They then found themselves in the negative equity trap when things got bad and I feel sorry for those who had their homes repossessed.

Repossessions are still happening even today what with house prices soaring and interest rates slowly rising again, with more on the way.

The 3.6 per cent rise is not a lot on the basic state pension.

There was a four per cent plus increase in council tax on April 1, so a good part of the pension increase was taken away before it took effect.

As for the two per cent increase in income tax promised next year, I did read some years ago that one per cent on income tax was worth £3.25bn to the Treasury, so two per cent would be £6.5bn, quite a hole in the economy.

How will the Government plug that hole? In what way will we have to pay to compensate?

Being 60, I, too, benefit from the £200 winter payment, free prescriptions and free bus travel and am very grateful.

However, having worked all their lives, people should be entitled to these benefits, especially when you consider that under EU laws, immigrants are entitled to this and that before they have to pay anything into the system.

MICHAEL CLARKE, Lewell Avenue, Old Marston, Oxford.