RAF veteran Mark Mead and his wife Cynthia may have found a solution to their housing dilemma having been caught up in the Equitable Life scandal

A happy ending – of sorts – could be in sight for RAF veteran Mark Mead and his wife Cynthia, whose plight was featured in Guardian Money a fortnight ago.

As we reported, just before his 90th birthday Mark, and Cynthia, 83, were facing having to sell their bungalow and move to a smaller property after their retirement income plummeted as a result of the Equitable Life scandal.

Our report sparked much debate among readers, and led to a multimillionaire making the family a business proposal. While they decided not to take up the offer, it prompted them to come up with a similar solution. A family member is to buy a share of the small mews cottage in Edenbridge, Kent, that will soon be the Mead's new home – which should give them more capital to top up their diminished income.

Mead saw distinguished service during the war and has plane was shot down over Belgium in 1942. He was captured and sent to the infamous Stalag VIII-B camp at Lamsdorf on the Polish/German border.

In early 1945, he was one of thousands of prisoners forced on the "Long March", when Hitler decreed that all allied PoWs should be moved closer to Berlin from the camps in central Europe, despite the wintry conditions.

Some readers have asked how he survived a firing squad. Mead recalls that he and his fellow prisoners had to walk almost 600 miles with virtually nothing to eat. In his memoirs, he relates how, towards the end of the march, he was put in front of a firing squad after trying to steal some turnips from a passing farm cart. "Peter [Blaskey, a fellow PoW] and I were tied with our hands behind our backs to small trees ... Presently, the officer reappeared with three of his soldier guards and took up a position in front of us. He snapped out a command, and the three lifted their rifles, aiming straight at us, from a distance of about 20 feet. I was terrified. There was total silence. Then he snapped out another command, and the soldiers put down their rifles. The officer came over and cut the ropes around our wrists and we re-joined our companions."

Do MPs who lose their seats go with gold-plated pensions? Or face a fragile financial future? It is a myth that life after the House of Commons is easy, writes Conal Gregory, MP for York from 1983 to 1992

Life is not a bed of roses when an MP leaves parliament. A small minority enjoy a new and exciting career. For far more, it's time to resume an earlier career, to engage in local or regional politics, or accept retirement gracefully – if they're able to financially.

In the 1992 election, I was MP for York, one of the most marginal Conservative-held seats in the country with a wafer-thin majority of just 147. You hope that a personal vote will swing the balance but, against a national wave, the ballot papers can stack up against you.

As a family, we thought positively about what would happen if I lost the seat. But, in truth, you cannot plan ahead. The day after defeat, my wife decided to return to full-time work as a community physiotherapist. This was a great help to the family finances – which were hardly lavish. During my two terms as MP for York (1983-92), the annual salary rose from £15,308 – which was well below my earnings pre-parliament – to £30,854.

Today's rate of £64,766 is well below the scale for a senior executive, health service manager or even half the rate for a local authority chief.

Aspiring politicians would be wise to keep up their professional qualifications and business interests outside Westminster. I maintained this as a Master of Wine (including sitting on its Institute Council) and by journalism. After all, contact by MPs with the world of commerce keeps them in touch with reality.

As for a graceful retirement, much is written about the generous "gold-plated" final salary pension scheme enjoyed by former MPs. Contributions paid by the taxpayer amount to 27% of an MP's salary, around double the typical level of employers' contributions in the private sector. Fears of escalating costs to the taxpayer prompted Gordon Brown last year to order a review of the scheme.

But the reality is rather different. The average annual pension (excluding widow/widowers pension) is £18,000, as estimated by the Government Actuary's Department (up from £15,700 in 2005). MPs pay in between one-tenth (40th accrual) and 6% (50th accrual) of salary. New members have the option of electing for the 50th accrual rate within three months of being elected.

The return on underlying pension funds has not been great, either. Comparing performance over three years to 31 March 2008, the Parliamentary Pension Fund achieved 9.3%, while the FTSE All Share Index Capital Return was 19.1% and Total Return 31.3%.

When MPs lose their seat, they do qualify for a resettlement grant to help with the cost of adjusting to non-parliamentary life. The amount is based on age and length of service, and varies between half and full annual salary at the time of the dissolution.

Joe Ashton, Labour MP for Bassetlaw from 1968-2001, gives a salutary reminder of the harsh reality of the system: "The day after the count, they [defeated MPs] were handed a black plastic sack, then escorted to their desk by a junior clerk, relieved of their pass, then escorted out."

Politics is virtually the only job where you can be sacked publicly. Even in one's own social circle, you quickly find who are truly genuine friends, and the support from them is very much appreciated.

A defeated Conservative MP in 1997 revealed: "People I dealt with as a minister never returned my calls. I became a non-person." This was echoed by a Labour MP who lost his seat in 1987: "I felt I was yesterday's man."

In the three general elections between 1987-97, more than 500 MPs left the House, either by losing their seat or standing down. Professor Ken Theakston, from the School of Politics and International Studies at the University of Leeds, carried out research on former MPs in 2007. He found many of those defeated felt shocked, angry and emotional.

A third of his sample of 184 – 63 – reported having to look for work. Usually there is no help from their party, though, curiously, another party may look benignly on the situation.

On average, retiring MPs served 20.9 years, with 43 years the highest, while defeated MPs clocked up 12.1 years on average.

Lobbying is a route taken by a few, either for an agency or as the voice of a company or trade association, on salaries significantly higher than those of an MP. Angela Knight, a junior Treasury minister under chancellor Ken Clarke, has become an effective lobbyist. She is now the highly paid head of the British Bankers' Association, but might return to Westminster as a possible City minister to succeed Lord Myners in a Conservative government.

On reaching 44, John Watson made a deliberate decision to leave Westminster "for better hours, more pay and less monotony". After representing Skipton from 1979-87, he felt there was more to achieve in life. Previously employed in the printing and plastics industries, he become a headhunter, chief executive of both Bradford City Challenge and Bradford Community NHS Trust.

Some have used their pension to travel the world. Sir David Mitchell used his wine experience (gained in the family El Vino company) to lecture on cruise ships.

Others develop profitable hobbies in retirement. Tim, now Lord Renton, was both a Conservative minister and chief whip . In place of four fields let for sheep-grazing, he planted a five-acre vineyard at their home near Offham in East Sussex.

There is an association of former MPs established in 2001, which now has 340 members, including 80 in the House of Lords. Part of their function is to provide the support so many retiring MPs feel they need.

There is, after all, no comparable job anywhere.

National insurance contributions are paid by both employers and employees. By doing so employees are entitled to certain benefits, including the state pension. The amount you pay depends on how much you earn and whether you are self-employed or not.

What are the contributions for?

NI payments were introduced in 1911 to provide a safety net for workers who fall on hard times. NI is now used to pay for the NHS, sickness and disability allowances, the state pension and unemployment benefit. The revenue is ring-fenced and is meant to be only used for these areas. However, the government can borrow money from the NI fund to pay for other projects.

Your entitlement to some benefits depends on how much you, your spouse or civil partner have paid in contributions.

To receive the full basic state pension you need to have made a set amount of contributions for a certain amount of years. This is 30 years for both men and women. You can calculate what you will be entitled to on the government's State Pension profiler.

Other benefits that can in part be based on your NI contributions include jobseeker's allowance, incapacity benefit, employment and support allowance, widowed parents' allowance, and the bereavement payment. There are other benefits not based on your NI contributions, such as child benefit, working tax credit, pension credit, and carer's allowance.

Making contributions

Everyone who is aged between 16 and the state retirement age and earning over a certain level pays contributions. The different types of NI contributions are called "classes".

Employees pay class one contributions, which are equal to 11% of their earnings between £110 and £844 a week, and then 1% on earnings above £844 a week.

Contributions are deducted from wages by employers through pay as you earn (PAYE), in the same way as income tax. However, unlike income tax, which is based on your earnings across the year, employee NI contributions are based on the amount you are paid on each payslip.

It is possible to pay a lower amount if you are a member of your employer's contracted out pension scheme, but this means you will lose some entitlements. Married women and widows also used to be able to pay a reduced rate, however only those who have been doing this since before 1977 can now do this.

Employers also pay NI contributions, which are 12.8% on your earnings and the value of any benefits you get with your job, for example a company car.

NI for the self-employed

If you work for yourself you will be asked to pay two types of contributions: class two and class four.

Class two contributions are charged at a flat rate of £2.40 a week. Those earning less than £5,075 may be entitled to the small earnings exception, which means they do not have to pay this.

Class four contributions are charged on the profits from your business. The current rate for these contributions is 8% on annual taxable profits between £5,715 and £43,875, and 1% on any profits over this amount.

Voluntary contributions

People who want to top-up their contributions because they have not paid enough in a year to count for entitlement to some benefits can opt to do so. These voluntary payments are class three contributions.

You might choose to pay class three contributions if you have low earnings, are living abroad, or are not working. However, if you cannot work because you are ill or caring for someone you may qualify for NI credits to cover your contributions.

You are also counted as making contributions if you earn between £97 and £110 a week, even though you do not pay contributions.

Your NI number

Everyone working in the UK should have a NI number, which is used to make sure contributions are properly recorded. The unique reference number, which you keep for your whole life, is made up of a combination of letters and numbers in this style: AB 12 34 56 C. You will see it on official paperwork, such as a P60, payslip or annual tax return.

You should give it to your employer when you start work. It is also needed when you open an Isa, start claiming housing benefit or apply for a student loan.

If you live in the UK and your parents/guardians claim child benefit in your name, your NI card will be sent to you automatically before your 16th birthday. If you haven't received a number of need to apply for a number you can contact the National Insurance Registrations Helpline on 0845 915 7006. If you lose your card you can only receive one replacement in your lifetime, however you do not need to have a card as long as you know your number.

Like Patricia Sutherland (Letters, 21 April), I was alarmed when I received a communication from the Scottish Public Pensions Agency (SPPA) informing me that my teaching pension had been frozen until further notice on the advice of HM Treasury.

On inquiring further I found that this was because the increase in RPI for the 12 months to September 2009 was negative (-1.4%). The index-linking has not been broken and presumably next year's increase will reflect the current rates of inflation.

I complained to the SPPA about the misleading wording of its letter and received an anodyne reply. If I were a suspicious person I might wonder whether its SNP political masters put pressure on the agency to present the issue in the most damaging way possible to the present government.

Robert Cairns

Harrietfeld, Perthshire

• With regards to Patricia Sutherland's letter, the reason no public pension holder (including myself) had a rise this year is because, over the 12-month period used to measure price movements, there was deflation, and hence no inflation. This is how inflation-proof mechanisms work, but our pensions weren't reduced, which theoretically would be logical.

Sutherland might remember that in spring 2009 we received an increase greater than the pay rise of the then employees, merely because the previous 12-month period happened to be one of highish inflation, and hence, you might argue, worked in our favour.

Roger Perry

Wighill, North Yorkshire

As practitioners in the field of international development, we write to challenge the claims that there is a consensus between the parties when it comes to tackling global poverty.

Take the issue of promises on aid. The welcome shift in Conservative policy to back the 0.7% promise in 2005 has been much vaunted by David Cameron, but despite repeated requests they have refused clearly to commit to ensure aid is not diverted for other purposes. Their commitment to the 0.7% target risks looking like political positioning rather than a serious commitment to tackling global poverty.

As concerning as how much the Conservatives will actually spend on tackling global poverty is how they suggest spending it. Access to basic services like health and education are basic rights. Conservative proposals to distribute vouchers for private schools in slums, to create an X-Factor-style competition to decide who gets aid, and a shift to private provision of healthcare, look like crude attempts to export failed ideological or populist policies, against the advice of leading practioners and aid charities.

Though we would much like there to be, there is no consensus on this issue. Instead, there is a serious choice about whether and how Britain should help the world's poorest people.

Richard Bennett CBE

Former chair, Make Poverty History

Dr Ann Pettifor

Co-founder, Jubilee 2000

Lord Joffe

Former chair, Oxfam GB

Paul Sommerfeld

Consultant in Global Health Advocacy

• This letter was amended on 20 April 2010. A name was removed at the request of the signatory, who had not agreed to appearing among those who signed.

The truth about private schools

In an interview with your newspaper, Nick Clegg correctly dismissed as rubbish the assertion that "all private schools are great and all state schools are not".

Unfortunately, Mr Clegg then went on to say that "some of the worst schools are private schools". Unless he can back this up by saying which private schools he is talking about, he should be careful in making such statements. Independent Schools Council schools are rigorously inspected by the Independent Schools Inspectorate according to standards laid down by the DCSF. Parents should not be alarmed if politicians make statements in this election campaign they may later regret.

David Lyscom

Chief executive, Independent Schools Council, London WC2

Sense on pensions at last

At last, amongst the bile and rhetoric, a journalist has risen above the lazy and ill-informed tide of effluent printed about pensions in this country ("Britain's pensions apartheid is between rich and poor", Ruth Sunderland, Business). The majority of public sector employees do not retire on "a gold-plated pension".

Like myself, a serving firefighter, we pay over 11% of our salary throughout our career into our pension, of which the government contributes not one penny. As soon as that pension is received it is subject to income tax for the rest of our lives. As your journalist says, the real problem is the disparity between rich and poor, not public or private. But why bother with inconvenient facts when "the public sector" is an easy target?

Chris Wilkinson

via email

An insult to Poles in the UK

Last week, you apparently did not find the news of the Polish air disaster worthy of front-page treatment. Yet the disaster killed the Polish president and 96 others, including the country's top leaders, an event unparalleled not only in Polish history but in the history of any European country. Poland is effectively left leaderless.

Is the Observer so obsessed with UK politics that this becomes the preferred front page news? More than a million Poles in the UK are grieving over this tragedy. Your decision to relegate the story suggests your indifference. Would your treatment have been the same had the plane contained, heaven forbid, President Sarkozy or any other European top leader?

Paul Kieniewicz

Glass, Aberdeenshire

How to make innovation pay

So many of us in this country are brilliant at innovation in computing, but sadly we've had to go to American backers as our financial system has been "constructed to provide mortgages and to trade in speculative financial instruments". So establishing infrastructure banks as Will Hutton suggests ("This country's renewal is being betrayed by cheap, paltry politics", Comment) would be a spot-on financial innovation.

Iain Houston

Bradford Abbas, Dorset

Midair defuelling

The suggestion that Ryanair passengers urinate in aeroplane aisles is an understandable response to the airline's proposed charge for using the lavatory ("Talk about a bucket seat…", Comment), but this would prove unpleasant and raise health and safety issues for fellow travellers.

Would it not be more hygienic to use empty mineral water bottles and a funnel? These used containers could be handed to crew when leaving the aircraft or perhaps left at a dedicated "We take the piss" Ryanair desk before departing the airport.

John Mulrenan

London SE13