Tuesday, 23 June 2015

A Golden Age?

Just considering our life here in Cyprus, and knowing we have friends in the UK who might well follow in our footsteps, I was wondering in years to come whether this will be seen as a golden age. A golden age of what, you might ask? The answer ... pensions, of course.

We, and many others in their 60s and older, have (in many cases) final salary pensions which are both relatively generous and index-linked. In addition the State Retirement Pension adds a welcome bonus to our income, even though I have to wait another thirty-one months to receive mine. Not that I am counting the days but it will be nice ...

And yet, when we look at the UK's working population, the final salary pension scheme has all but been withdrawn, and public service pensions are being savaged by the government for the simple reason that there is the most enormous black hole staring them in the face with an ageing population. I never countenanced going on strike in my entire working life, but tens of thousands of teachers are now faced with the prospect of paying more for their pensions, receiving less and having to work longer than they thought. As a former teacher I understand where the anger is coming from.

Before people start coming out with all the old clich├ęs about long holidays and short working days (oh if only that had been true), we should remember that it was compulsory for teachers to be part of the teachers' pension scheme. The terms of the contract between the government and the teachers were what you had to sign up to, and now the government are unilaterally changing the conditions of the contract. In any other situation, people would be reaching for their lawyers.

It is the same for many other public sector employees, with compulsory pension enrolment, and the anger and possible industrial action will cost the country dear.

But back to the golden age ... I cannot see the State Retirement Pension existing in decades to come and for people in their 20s and 30s they will have to fund their retirement privately. The possibility that some people may have to work until they drop is truly frightening. And so, we who are comfortably provided for, can sit by the swimming pool wondering whether to have another gin and tonic. And this is truly a golden age but in ten or twenty or thirty years I wonder how many people will be able to fund a life in the sun.

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