Future savings and pension challenges need a new system

OUR retirement savings and pension systems face unprecedented pressures.

Today’s western societies operate pension systems for lives of three score years and ten and populations with lots of young people and few retirees.

Those assumptions no longer apply. Indeed, we’re not even sure when workers in their 20s, 30s, or even 40s can expect to retire or if they will do so at all.

Much of the UK’s problems are because the state pension system is unfunded. What’s called our “National Insurance Premium” doesn’t create a fund with our names on it. The National Insurance Fund works on a pay-as-you-go basis. Today’s contributions pay today’s benefit recipients. So politicians can move the goal-posts at any time.

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