There are three main ways to provide ourselves with income when we reach later life. We can invest into a pension scheme ahead of time while at work, we can rely on future taxpayers in the form of the state pension, or we can simply carry on working for the time we are fit and able to do so.
It is dangerous to rely on just one of these types of income provision, so a mixture of all three is the ideal strategy.
The problem we have in the UK is that, for more than half a century, just half of our working population has ever been given access to company pension schemes. As a result, half the population has ended up relying entirely on the state pension if they want to give up working later in life.
While it is true those without company pension schemes available to them could have deferred income and invested it in a personal pension, it is equally the case that, in company schemes, it has been contributions by employers, not employees, that have made up the bulk of the money invested.
Deferring income through not being given access to it in the first place is clearly a more effective way of maximising long-term pension savings.
So, half the population has always earned two forms of money while at work: ready money they could spend on day-to-day living and pension scheme money they could not spend until they were older.
These people have been lucky enough to reach old age with many options available to them in terms of income and security. They have both their private pensions and their entitlement to the state pension, and they still retain the option of continuing to work to earn a further income stream.
The other half of the working population that has not had the benefit of their employers investing substantial amounts of deferred income on their behalf have been dangerously dependent on the state pension or their own ability to carry on working.
Steve Bee: “Our pensions system has lost its purpose”.
That is why the mishandling of the recent rapid increases in the state pension age have had such a devastating effect on so many women. It is women who have been (and will be) most severely affected by the equalisation of state retirement age with men and the subsequent increases in that common state retirement age.
It is hardly surprising that the Women Against State Pension Inequality (WASPI) protest movement formed as a result of such fundamental but poorly communicated and hurried reforms.
That movement will not be going away any day soon, as the next decade will see those born in the sixties affected, with many of those also finding they will need to work until their late-60s before they can retire on the state pension.
One long-standing problem remains: we are content to see half the working population reach retirement with so few options available to them.