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The Generation Game

  • By Alex Sullivan
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Changing life patterns mean that retirement expectations are evolving, says Steve Bee

I was listening to the news on the radio the other day about a new report from the NAPF on the state of our private pensions in the UK. The point it was making was that we face a potential personal disaster for millions of Britons if our private pension schemes don’t deliver.

I was listening to all this and wondering what different people hear when they get this kind of news hitting them about pensions? The trouble, it seems to me, is that different generations of us have different shapes to our lives and will probably want different things from our one-size-fits-all pension system.

Years ago, I suppose, you could say a whole generation of Britons saw pensions as a way off the treadmill of work. I’m sure not everyone ever saw things that way, but that’s kind of the way pensions used to be portrayed once upon a time. The general perception was that people started work in their second decade of life, stopped work halfway through their seventh decade of life, and looked to leave the planet sometime early in their eighth decade. Sort of three score years and ten, that kind of thing.

Now that was never really real, obviously, but enough people bought into the idea to make it possible for our politicians to build a pension system around that basic perception of the ‘shape’ of our lives.

But things changed. The postwar generation that followed that first generation – a group that calls itself the Baby Boomers – started the trend whereby at least some people didn’t start work until they were in their third decade on Earth. At the same time, increases in longevity – or, at least, the declining numbers of senescent deaths – meant that many Boomers could have a reasonable expectation of still being on the planet to see some of the years of their ninth decade.

That’s not the same for everyone, of course, but there’s already enough consensus around that perceived ‘shape’ to that generation’s lives to mean that today’s politicians have the political capital to change our pension system, so as to take account of it.

The Boomers’ own children, of course, are yet another different generation – just as their own children will eventually be to them. And the Boomers’ children already accept the idea that starting work is something that happens in your third decade of life.

But unlike their parents, they also accept that ‘normal’ might now mean starting work in debt, and not with the clean financial slate that previous generations took for granted. They are being told that they can expect to see most of the years of their ninth decade. And indeed, many may well see some of their tenth decade’s years before they pop off.

And they’ll be confident that their own children in turn may well see their eleventh decades out, while still enjoying life…..

All three generations probably listened to the same radio broadcast that I was tuned into. But, like I said, I wonder what each of them heard?

October 2011