The morbid orgy of political point scoring surrounding pensions, retirement and death is of little interest to students. Manufactured visions of elderly relatives cowering by a gas fire in depressing bungalows have made the subject pretty uncontroversial- “everyone deserves a decent pension blah, blah, blah.” Although dull, pensions are very important, not just as a form of welfare but as a symbol of intergenerational relations.
Britain’s workers are currently supporting the generation that rebuilt our nation after World War 2; it would be hard to find a more deserving group of benefit claimants. Yes, they are benefit claimants, just like the ones we read about in the Daily Mail. We will all shortly begin contributing to the system through taxation until some point in the 2050s when we will retire and eventually die. But, will we be proud to support our parents’ age group? They are the generation responsible for making affordable housing an oxymoron, raising tuition fees to £9,000, and cutting the safety net of the welfare state for young people. What does our generation have to thank them for?
David Cameron has recently committed to a “triple lock” system under which the state pension will rise by at least 2.5% every year if the Conservative Party wins the next general election. With pensioners more likely to vote than any other age group, it certainly makes political sense. While it’s all well and good for Dave to get generous with other people’s money, today’s youth will have to foot the bill. As the Institute of Economic Affairs recently pointed out, pension spending will increase 42% as a proportion of national income between 2012 and 2062 if the UK adopts this system. If we are going to complain about illegitimate benefit claimants, we should be worried about pensioners. I do not use the word illegitimate with malice, but it isn’t possible to justify a final salary pension scheme for non-manual labourers that is guaranteed by the state and paid for by a poor workforce anymore. Nor is it possible to justify a state pension in its current form.
Our current pension system is designed to cater for a post-war population that typically died a few years after retirement, not droves of sixty-somethings having it large in the south of Spain. But it’s not all doom and gloom. A compulsory private pension scheme would make us the last British generation with this flawed taxation system. Pensions account for approximately half the welfare budget and most worryingly, incentivise early retirement. Rightly or wrongly, I’m not feeling particularly generous in the face of spiralling costs, an impossible job market and the prospect of buying my first property at 40.