Chase your passion, not your pension
In discussion with a colleague from another country yesterday we strayed into the ground of demographics and the impact this was having on our respective labour markets. I know what you’re thinking. Is he really going to write about demographics? Well no…….and yes. Stay with me on this one?
The age for receiving a state pension is to increase to 66. The average life expectancy in the UK for someone born in 2008 is projected to be 79.9 years. Which doesn’t sound to shabby and fits with the headlines about living longer etc. But hang on for a second. What are we missing here? Well that life expectancy won’t play out until 2088….at which point our current crop of two-year olds will be pondering pushing up the daisies. If you go back to someone born in 1960, then the average figure falls to 71.1 years. Which means 5 years of pension for all those years of National Insurance contributions and years of hard work…sounds like a good deal right?
And on top of that they are talking about increasing the pension age further to 70….
But before you young pups get cocky, if you were born in 1980, your average life expectancy is only 73.7 years, which means when you finally get to pull a state pension in 2050 (should the pension age increase to 70) you will only have an average 3 and a half years to enjoy bunions and varicose veins before you are worm fodder. And only then if they haven’t increased the retirement age yet even further.
Because people don’t want to retire right? They want to keep on working. We hear it all the time. Well no, those that are in their late 50s and 60s probably don’t, because they are sitting on a nice final salary pension. And it doesn’t feel so bad when you have a choice but when you have to work until you are three years away from rigor mortis….doesn’t sound so compelling anymore now does it?
I know, I know. We are all going to make our fortunes and those nice little private pensions we have are going to out-perform the market and we will be sitting in the sun laughing in our 50s…..you think? But what about the average working class man born in 1960. You leave school to work at 16. You work until you are 70 and retire. You’ll have spent about 76% of your life in work and of the remaining 24% over 93% of that “free” time was spent as a child.
Gives you something to look forward to, no? Or maybe it is time to reassess…….