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Steve Bee: The fake war of the generations

The myth that young people support an overly-generous pensions system should be dismissed

Jargonfree Benefits director Steve BeeThere is a supposed war between the generations in our country. What is good for old people is bad for young people and vice versa. It is in all the newspapers; they say it was a big factor in the outcome of the recent general election.

The battle lines in this unfortunate conflict of interests are drawn according to the following apparent truisms.

Old people are a burden to the rest of society as they are supported with pensions that are too generous and, on top of that, are likely to need a fortune spent on their care as they age. The people paying for this support are the young; a demographic that will never themselves benefit from such inter-generational generosity.

But just how true is this?

The state pension in the UK today is certainly worth more than it has been for many decades now. But it is hardly what anyone would describe as a generous amount to live on. Indeed, according to the OECD, the UK has one of the lowest average “replacement rate” retirement incomes in the developed world.

We have tricked ourselves into believing our old age pension is an entitlement provided through the system of National Insurance, when in reality that system is run on a pay-as-you-go basis instead. The pensions being paid today are paid for by those working today.

But that has almost always been the case with our so-called NI system. What we and our employers pay in NI contributions is nowhere near enough to provide even the relatively low pensions we expect to become entitled to later in life.

I am not sure it is true, either, that young people begrudge the fact support is provided by the state for our senior citizens. While it may suit newspapers to say so and provide politicians seeking election with a simple narrative to beguile us with, there seems to be no basis to the claim that generations within our society are at war with each other. Quite the opposite, in fact.

I would imagine the younger family members of 1950s-born parents let down by the hurried changes to the state pension age are as concerned about their parents’ financial predicament as their parents are themselves. Many young people attended the recent Waspi demonstration outside parliament in support of their mothers and fathers.

Many in the Waspi generation are already selflessly providing care for their elderly parents; care they themselves may receive from their own children one day.

And I am certain many parents are doing all they can to help their children with property purchases, childcare costs and day-to-day budgeting, as they struggle to establish themselves and their own young families in our difficult modern times.

It is easy to find plenty of evidence of intergenerational support in families up and down the land, rather than the conflict we constantly hear about via the media and the mouths of politicians. The great pity for all of us is that such natural familial concern is not made more widespread and inclusive by being properly reflected in our social legislation.

Steve Bee is director at Jargonfree Benefits

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. I am sure most of this is quite correct if not particularly profound. One area however as far as I personally can judge certainly does seem broadly to be an issue between generations. Many of the young see the EU as an ideal to be preserved and the prospect, especially for the university educated, of working in Europe if they so choose, was attractive. The perception among the younger generation appears to be that the referendum makes this less likely to be an option and that this is largely the result of us old codgers wanting to turn our backs on the EU for the sake of some illusory sovereignty (in my house we avoided conflict as the wife and I voted remain although whilst my youngest is living with us the Daily Mail is still banned).
    Otherwise the Bank of Mum and Dad still plays a major role in the maintaining of significant union between young and old.

  2. “Many young people attended the recent Waspi demonstration outside parliament in support of their mothers and fathers.”

    Steve Bee appears to be unaware of what WASPI is. WASPI’s declared aim is to restore the state pension at 60 for women born in the 1950s only – it has no interest in fathers. The clue is in the W.

    Also while it is perfectly feasible for a woman born in the 1950s to have a child who would still be classified as “young”, they would be in the minority.

    The fact that young people can be found waving banners for both WASPI and Corbyn’s 1970s headbangers just demonstrates how easily manipulated the young are by more experienced and cynical political forces.

  3. Do you honestly think that Steve Bee doesn’t fully understand what the WASPI campaign is about Sascha? And as far as your comments about cynical political forces, in your last paragraph, are concerned they totally ignore the brainwashing of various and generations by the likes of the Daily Mail, Sun and Daily Telegraph that show how easy it is to manipulate a large percentage of the population into supporting policies that are designed to damage their lives, in favour of those who want to continue to hold onto their power.

  4. You are clearly talking about the gravy-trainers in Brussels Patrick!!

    • Yes, thankfully there are no gravy-trainers in Westminster or the right-wing media…

      • Not disagreeing with about politicians and bureaucrats but you have to admit the Brussels mafia make our lot look rank amateurs! Not sure if either the left or right wing media is on the same train though? Perhaps we should put say 10% under the train to encourage the others to offer more balanced, reasoned reporting?

        • Is this the same ‘mafia’ that gave us the working time directive, clean drinking water regulations and environmental protections across an elected parliament of 750 MEPs representing 28 member states?

          Or is the one that will have the powers post brexit, to unilaterally take away all these protections and change the law, without consultation for their own benefit, then tell us we have ‘taken back control?’

  5. I think perhaps a further point has been missed. If the older generation are as property rich as the press and some financial commentators (E.G. Merryn Somerset Webb) would have us believe, then the younger generation stand to kop a fair windfall even after IHT. Far better than their parents did when the grandparents passed on.

    • Yes, and don’t our kids need it Harry, with property prices as stupid as they are. I was going to include something about that in my post but I know I can go on and on ranting occasionally.

  6. USA State Pension average $15,000+pa

  7. I believe we must damp down all this inflammatory talk regarding intergenerational fairness as it is not conducive to halting and recovering from the potential mess our society could well find ourselves in. Every generation has plusses and minuses in their ledger – some historic and some current, it is how we manage the future that counts. Perhaps it is people like us, as none of our political or chattering classes seem capable of doing so, who should establish that debate – after all we all have clients from across the generations so we are very well-placed to see the long term picture?

  8. I concur with the article in the sense that I do not believe that the “young” begrudge the “old” a decent pension and standard of living in retirement. After all, you can judge a society by how well it treats its elderly.

    However, for me, the real issue is housing. Us humans need to satisfy the first 2 of Maslow’s hierarchy of needs and that involves having a home. This nation needs to build more housing so that it is more affordable, whether via rent or purchase. Property can act as a very visual reminder to the young that the 3 bedroom semi that their grandparent(s) lives in is something that they will probably never be able to afford to buy to bring their own children up in.

    Then there’s student debt and the national debt, both of which younger generations will ultimately have to pay for.

    As for Mr Katz’s comments that people will be fine when they inherit the proceeds of their parents’ home, that might well be true (assuming your parents were able to afford to buy their home), but when you’re setting up home and starting a family, inheriting a couple of quid when you’re 60 is a bit late.

  9. Russell Bruce 7th July 2017 at 7:01 pm

    When government wants to cover up its own failings, that is all post war governments who ignored a long identified problem, the solution is to set one group against another. It clearly has not worked.

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