Friday, December 09, 2016

The inequality between young and old is tiny compared with that between private and public sector employees

The OECD's Pension Outlook 2016 report shows that the gap between public and private sector pensions in Britain is the widest in the developed world. The gap is like "pensions apartheid" among younger workers.

UK civil servants' pension promises were so generous that an average worker joining the workforce two years ago will receive a 6% pay rise when they reach retirement.

The UK is the only country where civil servants will enjoy pensions worth more than 100% of their final salary. By contrast a private sector worker can expect a pay cut of nearly 50% with a total pension worth just over half their final salary.

All the noise that is created by the IFS, The Rowntree Foundation, The Intergenerational Foundation and above all David Willett's Resolution Foundation is about the inequality between old and young. They have been successful in ensuring that UK state pensions will be less generous in the future. What have they said about this huge inequality. Zilch. Why is that? Most of them have a background (and probably a pension) that is paid for by the state.

Does this matter to marketers? Yes it does. What group of older people should you target in the future? Think about it for a second or two. The right answer  = Retired Public Sector Employees. OK, it is a bit more complicated than that but it is not a bad starting point. Dick Stroud

No comments: