Social Media Award Winner

Thursday, September 16, 2010

Pensions, loan sharks and mermaids

My word! the Voices of Middle England have spoken. For shame! instead of bickering why not take the best ideas of both sides of the story and forge something positive, such as a solution to the problems of individuals not saving enough, the govermnent unable to bail people out and not having enough to live on in retirement.

We had a similar experience in Mermedonia a few years back. In the early part of the 19th Century, we had a massive power cut that lasted for 40 years. This resulted in a huge shoal of Merpeople being born - the highest for centuries - and, of course, 200 years later they're all coming up for retirement.

Working past 185 is not an option for many, as by now their fins require too much medical treatment and long-term care, as we know, is a hidden cost of retirement that many individuals and the goverment of the UK are not clear enough about.

Meanwhile the industry itself is proud of its high-cost protection packages but of course neither the State nor the average individual can afford to take out this sort of protection, let alone survive on their pensions - just as in Mermedonia.

So what did the Kingdom do? Simply this. Instead of encouraging Instant Gratification - allowing loan sharks to circle the waters with ever-enticing offers of buy now, pay later and hidden interest rate hikes - we banned such pernicious creatures from our media.

Instead, we spoke about delayed gratification - the need to put away those sand dollars now in order to enjoy life to the fullest after retirement.

Instead of making pensions boring, we spoke to individuals about what they wanted out of life, and helped them to see the financial reality of what they needed to do now in order to benefit later and to fulfil their dreams.

A pipe dream you may say. A mere fantasy. Maybe not. Sun Life of Canada has just launched its Sense Check at 60 - one of the most erudite and based-on-reality pieces of research that even those with basic fiscal literacy can understand.

If the government can encourage people to save more and to explain why in words and language that they can understand, and offer better tax incentives for savers, then we won't need all these clever products. People will be saving for a purpose and will be rewarded for doing so.


Electro-Kevin said...

We used to have incentivised savings/pensions systems along those lines.

Life expectancy rocketted and governments were elected on promises to raise living standards year on year. They had to cover retirement costs, ever more sophisticated hospital treatments and - because of dwindling opportunities of manual employment - had to subsidise a burgeoning class of lower-end ability.

The first bit was easy. Throw open the borders whilst relaxing the rules on credit. This way people actually felt richer as population pressures made their houses rocket in value - they were able to tap into their equity in order to maintain a standard of living which was beyond reality.

The second bit was just as easy. Keep state pensions pitifully low and pensioners in silent poverty. Few people listen to their grumbles anyway.

Then Gordon Brown attacked private pensions (well actually Norman Lamont started it)

Post credit crunch (partly fueled by the aforementioned equity release binge) interest rates have been kept historically low.

At the heart of all this is a visceral hatred of the striving, the prudent, the boring, the careful, the modest, the sensible, the traditional ... the old

And who hates them ? Who has nothing but contempt for them ?

The shiny suits.

For most people in Britain I think that communism would be a safer alternative.

When I ask my Eastern European colleagues which political system they prefered living under, the answer isn't as direct as would be expected.

Yes they're here, yes their system collapsed - but they're not happy and I really think they miss it back home as was.

Electro-Kevin said...

And there needs to be a balance between enjoying life when one still has health.

There really is no guarantee that life will go on into retirement and many people regret - upon learning that they have a terminal illness - being too careful.

Because yes. You CAN be too careful.