Pension Predicament

Today’s announcement from Chancellor George Osborne has led to the rather predictable shock headlines; “work until you drop”, “wait 50 years for a pension” etc. But is it really that much of a surprise in the grand scheme of things? The current state pension was introduced by another George (Lloyd George) in 1909, when the average life expectancy for an adult was under 50. It is now 79 for men and 83 for women. Clearly something has to give.

Plainly those most impacted are the young, those either about to enter or recently entering employment; that group our Future of Britain study has named Generation Rent. Leaving aside the politicized arguments about the Baby Boomers, a generation who have taken out far more than they have put in, who benefit from winter fuel payments, free bus passes and a long and prosperous retirement (and, coincidentally, are an enormously powerful voting block), how will today’s news affect Generation Rent? Our Future of Britain study can provide some answers.

In one sense, it’s another blow for Generation Rent, and there have been a few lately. This is a group that has seen unemployment double from c10% pre financial downturn to 20% today. Meanwhile over the same time period the FTSE 100 has grown some 33%, back to where it was, there or thereabouts, pre financial crash. As consequence, Generation Rent have seen a crash of their own, but one of trust rather than finance. Trust in organisations, brands and the system at large is at an all-time low for this group of society; today’s news will merely serve to corroborate and strengthen this feeling of mistrust.



However, Generation Rent are not ones to sit back and do nothing; quite the opposite in fact. Faced with an unprecedented set of circumstances they are going it alone, blending their thirst for creativity and an entrepreneurial spirit to forge their own path. Half of 16-24s in our launch study agreed that being self-employed was more attractive than working for a big company, 49% didn’t feel that gaining a degree was a worthwhile investment and some 28% were more driven to make money as result of the downturn. And they illustrate a very level headed approach to the future of Britain.



So what does this all mean? Whilst the headlines might have been given the shock treatment, the reality is not all that shocking. Already more than one million over 65s are in work (twice as many as 20 years ago) and our Future of Britain study revealed that 13% of 16-24 year olds never expect to retire anyway. From a longer term perspective, today’s news will potentially accelerate some of the trends we are already seeing shape the future of Britain: demographics are blurring, younger people are taking longer to grow up (the NHF forecast there will be 3.7million young people still living with their parents by 2020) and older people are refusing to grow old.

Brands need to innovate their product offerings to reflect this. Virgin Money now offers a pension that can be set up by parents for their new-born and paid into by both them and grandparents. Heineken are co creating with the over 60’s, recently launching a new product range; Farenheit.

Today’s news isn’t news per se but this deep-seated shift in society is. and demands action from brands that want to prosper and grow in future Britain.


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