Not a day passes without some reference to the ageing population and the problems created, it is used as an excuse for austerity measures on care provision, longer working, increased contributions and cutting back services generally. It is accepted widely with large increases in over 65’s and even more in 90’s and 100’s.
Yet no one questions the statistics, why is this happening?; where are the instant miracle drugs to give immortality within 25 years? Rapid advances are occurring in gene therapy and stem cell research, but trials will take that long before being available and even then will not stop the high mortality rates from 65 on.
There has been little reported study on the over 65 population and apparently no cost calculations, otherwise the problem would be tackled properly instead of the short term penny pinching policy being followed, which can only cause untold misery with no final gain or solution.
If you accept the projections and do the sums, then you would find that our present State, Public Sector and many private schemes, together with elderly care provision cannot survive without drastic and far reaching changes. We simply cannot afford the taxation levels required either individually or State-wise.
The UK population has been increasing steadily at a rate of 0.5% per year, this is projected to continue in the under 65’s but increase fivefold in those over 65. Life tables show that in females 90% will survive to 65, with males catching up, as close to immortality as we are likely to get with modern hazards. Births exceed deaths but will take 80 to 100 years to replace the population and the major mortality occurs in the over 85’s.
The problems therefore arise from the greater accumulation of population reaching 65 and retiring and not the numbers surviving thereafter, their increased life expectancy can be readily catered for in annuity and pension scheme payment calculations.
The real long term solution is self-provision, we each need to carry our own adequate pension pot into retirement, which the State needs to protect as personal savings and give every help to allow us to save it.
The way forward is to break the dependency on those in work for both pensions and benefits, which can only be achieved by self sufficiency. In pensions this requires individual savings at a modest level over the main 40 year work period from 25 to 65 combined with transfer of part of the National Insurance taxation to individual pension funds.
A possible scheme has been outlined in previous blogs, which uses the automatic pension scheme which all in work will have to pay in a year’s time as the basis for a Universal Pension Scheme. At an affordable 4% contribution it will be doubled by employer and tax relief and then doubled again by a NI rebate to give a good contribution level of 16%.
This will give a minimum pension of £140 per week to all in work, with the aim of doubling this with the personal contributions, to a comfortable pension of £14,500 per year for an average wage of £20,000 p.a., even the part time worker on £10,000p.a. should equal this wage in pension income replacement.
Benefits are more difficult of course and require clear separation of students and the disabled from those capable of work, which require greater faith in the medical profession. We need to re-create a job culture by ensuring work is available to all, with possibly a return to the work house-mentality, which of course would be greeted by outrage from the idealists.
The present money saving approach of redundancy is counter productive as is the open to all immigration policy, all should contribute to Society or suffer the consequences with more emphasis on social rights rather than human rights.
There is enough that needs doing in this country to keep all busy and in overtime, it is a matter of good planning and priorities plus a return of internal economics, our lives are dominated by Commercial pressures and interests, which needs to change. Pension change offers the new source of investment capital to do this.
Creating worthwhile work is essential, whether it be in construction, transport, education or medical, social and community care, even a return to some form of community National Service after say six months on the dole could offer a solution and incentive to find work as an alternative to idleness.
We need to take firm control of our future and return to reality, nothing comes to those who sit and wait except boredom and frustration. I’m sounding off again!
Savings Annuities Public Sector NHS Teachers Police Local Government State Work Benefit Social Education
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