From http://curmudgeonlyramblings.blogspot.com/:
Default settings this time - and this one's hot off the presses. I've just come from a brief session at Bannatyne's and I overheard 2 chaps talking in the changing room about subscriptions for the over 60's. Mmm, I thought - must enquire at reception on my way out - and I did.
"Oh yes, sir, we do have special rates for over 60's - are you interested in signing up?" No, says I - I'm already a member - and I have been for several years now - and I'm 63. What's available, says I? "Over 60's have restricted hours, sir" - but I'm already on restricted hours. "Oh", she says.
It turns out that I can get longer hours than I'm on now - including getting in from 6:30 in the morning - and pay less subscription! Why wasn't I offered this automatically when I became 60? "Well, sir, not everyone likes the change in hours". What's not to like about getting more hours than I'm currently on (I currently can't go in before 9:30 am) - and paying less?
There is an analogy here with another of my favourite rant topics - banks. Whenever they offer special savings deals, they are usually time limited, but do they contact you at the end of the period and offer you something else? Of course not - that would be too reasonable and fair, wouldn't it? No, what they do is automatically transfer your money to one of their default funds, always attracting lower rates of interest.
Default settings - the cheats' and lazy person's charter.
Friday, 8 June 2012
Thursday, 7 June 2012
Pet Hate No. 5
From http://curmudgeonlyramblings.blogspot.com/:
Why don't people understand simple demographics? This may be seen as a political rant, but it's not - it's just simple maths/arithmetic. Since the early post-war (WW II) years, we've heard a lot about the so-called "baby boomers" - my generation that had their teens in the "Swinging Sixties".
We've also all heard the statistics on life expectancy and how much they've improved over the years.
So why are so many people in denial about the urgent need for pensions reform? In the UK, when state pensions started over a century ago, the average working man (generally, women didn't go out to work then) would leave school at 14, find a job and work there until he was 65, when he could retire and collect his state pension - which he would enjoy for just 18 months or so, as life expectancy was so much lower then.
It was a relatively simple matter for the state to fund pensions then - they had more than 50 years of collecting contributions from employees and employers, and only had to pay out for 1.5 years. Surely even the less numerate amongst us can understand that this only requires an annual contribution of less than 3% to fund this? (I always work on the basis that interest earned on savings is negated by inflation).
Compare and contrast with more recent times, where there's been a squeeze at both ends - people want to retire earlier and they live longer. This means we are now looking at a model of virtually equal working and pension life - say, 30 years each. I'll let you do the maths, but I can assure you that, saving for your pension at a single figure percentage rate doesn't buy you many years of happy retirement. 30 years at, say, 5% contribution buys just 18 months of your full salary at retirement - or 3 years if you're willing to live on half what you previously earned. What are you going to do for the other 27 years of retirement?
That's the reality - but, of course, everyone, especially those in the public or private sector who are still fortunate enough to have Final Salary schemes in place, thinks this is none of their concern - after all, it's their "right" to receive a fully-funded pension - and they don't care who pays for it - as long as it's not them.
Certainly, in the public sector, the Government can't go on funding Civil Service pensions at the current rate, but sensible proposals to pay a bit more in contributions and lower the benefits a little are met with scorn and derision. Why, even those apparently intelligent Doctors working in the NHS are now threatening to go on strike over this!
This is not the fault of the current coalition Government, nor even the one before, but it's a subject that successive generations of politicians have studiously chosen to ignore - flying in the face of the blatant demographic evidence in front of their very eyes. Of course, we can blame them, but, at the end of the day, it's all of us who have to face up to the issue of how - and when - to pay for this. Do we just carry on regardless and let future generations try and sort out the mess, or do we act responsibly now? It may already be too late, but surely we've got to try?
And I haven't even started yet on the other potential time-bomb of nursing care for the elderly - how on earth is this going to be funded as increasing numbers live on in to their 90's - and beyond?
Why don't people understand simple demographics? This may be seen as a political rant, but it's not - it's just simple maths/arithmetic. Since the early post-war (WW II) years, we've heard a lot about the so-called "baby boomers" - my generation that had their teens in the "Swinging Sixties".
We've also all heard the statistics on life expectancy and how much they've improved over the years.
So why are so many people in denial about the urgent need for pensions reform? In the UK, when state pensions started over a century ago, the average working man (generally, women didn't go out to work then) would leave school at 14, find a job and work there until he was 65, when he could retire and collect his state pension - which he would enjoy for just 18 months or so, as life expectancy was so much lower then.
It was a relatively simple matter for the state to fund pensions then - they had more than 50 years of collecting contributions from employees and employers, and only had to pay out for 1.5 years. Surely even the less numerate amongst us can understand that this only requires an annual contribution of less than 3% to fund this? (I always work on the basis that interest earned on savings is negated by inflation).
Compare and contrast with more recent times, where there's been a squeeze at both ends - people want to retire earlier and they live longer. This means we are now looking at a model of virtually equal working and pension life - say, 30 years each. I'll let you do the maths, but I can assure you that, saving for your pension at a single figure percentage rate doesn't buy you many years of happy retirement. 30 years at, say, 5% contribution buys just 18 months of your full salary at retirement - or 3 years if you're willing to live on half what you previously earned. What are you going to do for the other 27 years of retirement?
That's the reality - but, of course, everyone, especially those in the public or private sector who are still fortunate enough to have Final Salary schemes in place, thinks this is none of their concern - after all, it's their "right" to receive a fully-funded pension - and they don't care who pays for it - as long as it's not them.
Certainly, in the public sector, the Government can't go on funding Civil Service pensions at the current rate, but sensible proposals to pay a bit more in contributions and lower the benefits a little are met with scorn and derision. Why, even those apparently intelligent Doctors working in the NHS are now threatening to go on strike over this!
This is not the fault of the current coalition Government, nor even the one before, but it's a subject that successive generations of politicians have studiously chosen to ignore - flying in the face of the blatant demographic evidence in front of their very eyes. Of course, we can blame them, but, at the end of the day, it's all of us who have to face up to the issue of how - and when - to pay for this. Do we just carry on regardless and let future generations try and sort out the mess, or do we act responsibly now? It may already be too late, but surely we've got to try?
And I haven't even started yet on the other potential time-bomb of nursing care for the elderly - how on earth is this going to be funded as increasing numbers live on in to their 90's - and beyond?
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