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astor_charlie Avatar Charlie Bentley-Astor @astor_charlie on x 91.2K followers Created: 2025-07-24 07:41:41 UTC

The State Pension scheme is even worse than you suspect.

People think there is a pot with their name - like a savings account - which they pay into their whole lives and then get back at retirement.

In reality, you're NI payments pay for the retired generation right now. Your money is being transferred to someone else of retirement age at the end of each month. It is all taking place in the present with nothing being set aside for the distant future in which you yourself are retired.

Jump forward those 30,40,50 years to your retirement, it is the young people of that day who will be paying your pension.

But if; • they are in education for longer • they are unemployed • there is a lack of jobs • the wages are depressed • there are more self-employed people not paying for the NI pension • if there are less people in the country • if the birthrate is below replacement (which it currently is)

In these scenarios, there aren't as many people contributing as drawing out. We are almost at this deficit point. Some economists think we are already there. This is only ameliorated with private pensions and savings which tend to the privilege of white collar workers.

The Government have three options:

  1. borrow to meet the shortfall but depreciate the worth of that money when it is handed out

  2. Raise taxes - NI and others -to make up the shortfall but leave workers and businesses out of pocket in present

  3. Default - and people go without the pensions they payed into their whole lives

In the prevention of this deficit, they can:

  1. Raise taxes and "save" some money for the future
  2. Reduce how much pension money they pay people and promise to pay people
  3. Stop state-pension and make everyone save and go private
  4. pursue pronatalism to keep the birthrate at (or above) replacement levels
  5. artificially boost the tax-paying population by flooding the the nation with foreign workers

And if you read this you thought, you, "Jesus, this all sounds pretty awful..." you'd be right.

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