Two-thirds of employer pension schemes have closed their doors to new members, while a tenth have stopped new accruals. Younger people, in their 20s and 30s, are making no Advertisement
provision for retirement. At that age you feel immortal and money goes on priorities that seem far greater.
Yet there is one chunk of the population snug in its pensions' cocoon: the public sector. Be they civil servants, local authority staff or soldiers, lavish resources clock in once they reach 60 or 65. They have gold-plated, tax-funded, index-linked security as the rest of us float off free and confused. It is a curious paradox that a government wanting to unite us in benevolence should create two castes: the well-pensioned and the non-pensioned.
All sorts of questions need to be asked. Not many have obvious answers. Are we seeing the complete dissolution of private sector company pensions? Will non-civil servants have to save for themselves in personal isolation? Is this not contrary to human nature? Will real penury not engulf those who live longer than anticipated?
A huge degree of risk is being imposed on those not outside the public sector. I can find no indication of coherent thinking about this from any branch of the government. The only contribution has been to tax private pension funds to make annuities even more difficult for those retiring in future. The rules for taking annuities themselves seemed locked in a past when most had expired by 70.
Pensions can represent a subtle form of serfdom. We all know friends or neighbours who have lingered in jobs they hate to maximise their pension fund. This used to be true of corporate pension schemes too, but as they close down the phenomenon of people lingering in roles they loath is becoming a distinctly public-sector feature.
Apart from marriages and mortgages, pensions are the longest-term contracts we enter into, yet it is far from easy to be responsible let alone comprehending. The nature of compound interest is such that we ought to save most early in our careers. Yet these are the years we have children and their related costs and our home loans loom large.
Those locked outside the luxury of civil service pensions suddenly panic in their 50s and try to build pots of capital to keep warm when working ceases.
There is the state pension, but that offers only a modest cushion. Britain is singular in the shrivelled nature of its state pension compared to the other European Union nations.This is probably to our advantage as continental nations face huge rises in taxes to fund the retired. Yet what are those with