It's been a while since I've blogged anything and I suppose the truth is, there's not been anything going on in the world that has annoyed (or interested) me enough to want to take time out from planning my next book (Imperium: Finale, if you are at all interested). As you get older, for me at least, I think one develops a somewhat "live and let live" approach to things and I try not to let much bother me.
Well, let's qualify that last statement a bit; people that stand still when they get to the top or bottom of an escalator, drivers that don't say thank you when you have stopped to let them through, little children that rudely answer their parents back in public, these things still piss me off.
Anyway, back to the Blog.
My old school friend Brian and I (hard to believe I've known Brian for half a century. WTF!) were having one of our semi-regular meals in Boisdales, Bishopsgate, during which he enquired when I would write another Blog. It got me a-thinking, and this is the result. It is a subject which has bothered me recently, ever since I figured out what the UK's next big existential crisis will be. I raised this with Brian, and also to my other regular drinking buddy, Richard.
Simply put, the UK is sleep-walking into a crisis that will cost trillions to put right and it will happen in our lifetimes, although, fortunately, probably right at the end of mine. What is it? Be patient, continue reading and I will tell you.
For many years now, it has become painfully obvious for those leaving school/university and starting work (and for many already doing so) that they have three big choices; namely, 1) you can pay enough into a private pension, or 2) afford to pay the rent, or 3) pay off a mortgage. People simply don't earn enough, in these days of high house prices and rent (the two are obviously connected), to be in a position to do more than one. It comes down to a binary choice for most people...put something away for your old age or have a roof over your head.
Still with me, and not bored yet? Good. Now, if we go back thirty or so years, the UK had a large and thriving stock of social housing eg Council Houses. These were great for those on a limited income or who could not afford to save for a deposit. It acted as a backstop for those who, for whatever reason, preferred to rent in the private sector, when they retired and could no longer afford the rent. The State would step in and find them a Council house at a below "market" rate. The majority of pensions were also final salary types, unlike now.
Fast forward to the present day. House prices and rents are at an all-time high. Social housing stocks at an all-time low. No more final salary schemes, virtually all replaced by money-purchase schemes dependent on what you pay in and the stock markets performance.
Now think forward twenty years or so from now, when the first generation of non-pension, non house owning, private renters start to retire. The State pension won't cover their current, commercial rent. Will the State chip in and cover the shortfall? Don't hold your breath. "You should have paid into a pension", will come the cry. "but we didn't earn enough to both keep a roof over our head and pay into one," will be the anguished response. So, these poor souls may well find themselves on the streets, with no stock of social housing for them to move into, since very few are being built and, thanks to the Right to Buy, stocks will continue to dwindle into the future.
Unless something is done now, in a relatively short time we will have a real housing crisis...one of affordability, not actual places to live in. Can the State afford to pay for the private rents of literally millions of pensioners? Somehow I doubt it.
Now, I'll be the first to admit that I'm not always right, but the more I think about this problem, the more worried I become for millions of young, and not so young, people, the vast majority of whom will have spent their lives working and contributing to the State. Surely, someone in power has identified this looming issue? If not, why not? Why isn't this top of every politician's list of things to do? Instead of poncing around debating a third runway at Heathrow or HS2, why aren't they addressing this ticking demographic time-bomb?
The mind literally boggles, especially when the answer (work it out yourselves) would also sort out numerous other problems.
Tick, tock, tick tock...
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