
Originally Posted by
Andy BB
True, although you could reverse that, and say its due to people living longer! In the UK, when the State Pension was introduced, at the time it was only expected to be paid a couple of years on average before the recipient died (retire at 65, die at 67). The lifespan is now considerably longer than 67, and getting bigger all the time. This is particularly a problem in the UK where the State Pension is funded out of current revenue, not capital. In short, the money you pay in taxes and social security contributions is used to pay Old Fred his pension this tax year, not put into a fund for your own, future use. So if the UK was forced to declare its actual liabilities in the same way as those companies with private pensions liabilities have to under national and international accounting laws, our national debt would literally be in the trillions of pounds.
So we need lots of little Jonnies and Marys to pay taxes to provide our state pension in our old age. THe problem is that Jonny and Mary need jobs first, otherwise they'll be on the dole, sucking money out of "our" pension funds....