The art of husbandry appears to be dead, nothing of course to do with marriage, but more a matter of utilising our resources fully and putting something away for a rainy day, now also known as forward planning and consideration of future needs.
Our ancestors did it, even the Egyptians stored their good harvests away for when the inevitable poor ones occurred, but we lurch from crisis to crisis, never learn and blame anyone else for what happens in the bad times.
There is no better example than pensions, we all know we are growing old and will need income and care as we become frail, but expect the State to take responsibility for us at that time.
Some two thirds of the working population make no personal provision for their own retirement future; to be fair, most thought they were doing so with their National Insurance contributions, but no one queried what the State was doing with their precious savings.
Neither did the State, it went into the universal Exchequer melting pot to be lost for all time, resulting in the present “pay as you go” system, which has become a free for all welfare scheme, dependent on the earnings of those in work.
Present demographic changes are undermining this system, the number of pensioners and those on welfare, together with their needs are steadily rising, whilst the number of providers that is those in work remain the same or dropping.
This ratio, known as the dependency factor is changing rapidly, currently around 3 to 1 it is expected to drop to 2 to 1 over the next forty years and even reach 1 to1, with every person in work supporting a pensioner.
Even the time advantage is disappearing, you once worked forty to fifty years to support a pensioner who was expected to last half or even a third of that time. The result is a system which cannot be sustained and is grossly unfair with the apparent solution of all working until they die.
There is another way, which is the old one of husbandry and self sufficiency, each puts away enough to meet their retirement demands and needs, Even if the State wanted to, they will find themselves unable to do so and are in many ways responsible for the problem.
However the State could do a lot to help the situation, but will only do so if pushed hard by the general public. They could return NI contributions to a true pension scheme saving for the future by rebating part of this income to work hard, accumulate and grow.
Nest could become a full Defined Benefit Pension Scheme instead of a Loch monster, utilising all the major advantages of a group scheme running continuously through work and retirement, instead of an individual risk scheme.
The onerous pressures of levies, taxation and unrealistic liability requirements causing the demise of DB schemes could be reversed to promote their recovery. There is a growing awareness in the US of the major economic benefits of such schemes over DC and individual private ones.
Contributions to all existing schemes including State NI are currently more than adequate to meet all the needs and the growing numbers of UK pensioners. Out-dated annuities throw valuable Funds away at their peak for a return which is at least half that possible if they were to remain alive.
Just because their owner stops working, there is no logical reason why their Funds should, they have an earning potential and would fare better in a well managed group scheme and be more able to meet the changing needs of their member owners.
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