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Sunday, May 28, 2017

Don't fret about Brexit. These are the really scary things you should be thinking about

Over the last few weeks a few things have happened that should scare the living daylights out of those people who devise Government policy. None of events should be surprising for those of us who study the Ageing Business. It is tragic that politicians, of all sides of the political spectrum,  are not so well informed.

The Conservative Party proposed a change to the way that care is funded. After a few days it dropped the ideas because of the media backlash. You could argue that the policy was introduced in a cack-handed way, but in truth it shows the difficulty in overtly changing the rules on who pays what. and when, to fund ageing. It is much easier to change the rules that very few people understand or care about. Things like the cross subsidisation by private payers of stated funded recipients of care. Most people's eyes glaze over when you talk about this because they haven't a clue what you are talking about.

The second thing that occurred was that the World Economic Forum published a paper showing the huge gap between what is being saved to fund retirement and what is required.  To support a reasonable level of income in retirement, 10%-15% of an average annual salary needs to be saved. That is far, far higher than is achieved by most people, other than those who work for the state and who have the taxpayer funding  their retirement. (for now)

Then there is the laudable case of the person who has been asked by the government to encourage companies to employ more older people and who started a venture to publish the employment stats of its the UK's large companies. These are really scary.

The only way that it is possible to make the government funding data look half sensible is to keep increasing that age that people retire. There is now an unstoppable force that will raise the age that people receive a pension towards 70 and beyond.

This is the data for some of the UK's largest and most enlightened employers

Aviva employs 15,872 employees, of these 46 are aged between 65 and 69.
Barclays employs 52,997, of these 149 are aged between 65 and 69.
Boots employs 67,202 employees, of these 968 are aged between 65 and 69.
The Co-op employs 67,031 employees, of these 1186 are aged between 65 and 69

Just in case your maths is not too good, it means that these four companies, employ way less than 2,500 people aged 65-69. Mmmmm

See the problem?

Finally, it has just been announced that BT is having huge problems in funding its pension scheme. The result of this is that funding pensions is now impacting its day-to-day operational plans.

There is massive structural inertia that is stopping us tackling any of these mega issues. You don't pass a law, snap your fingers and it changes. Even if you really, really wanted to get people to save more of their retirement, for companies to employ more older people, or change the way pensions are paid, it is going to take 5-10 years before you see much change.

Nearly forgot. There was one other interesting item of news published last week, by the ONS, that showed the parts of the UK that are net recipients of taxpayers money. It is much easier to state the findings of the research the other way around - London and the South East of England fund the rest of the UK. It is as simple as that. Wales, Northern Ireland, Scotland and all places north of the M25 are funded by the folks down in London and the South East.

So does any of this matter to those of us employed in marketing? The simple answer is in the short-term NO - in the long-term YES. If you are only concerned about the short term then I suggest you have another coffee, glass of wine or whatever you are drinking, spend a few hours on social media stuff and all will be well.

 If you want to get a glimpse into the long term implications of these mega trends then get onto Amazon and buy my latest and final book about the Ageing Business (This I Know). Dick Stroud

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