Not enough babies – too many grandparents!

Posted on August 18, 2023 by henry tapper

I’d like to help out – but sadly I’m past it. I’ll have a word with the kids.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to Not enough babies – too many grandparents!

  1. jnamdoc says:
    August 18, 2023 at 7.32

    Why this on a pension blog?

    Of course, it is all related. In reply to one of your earlier blogs I’d challenged blog readers to consider what is the end-game unwind of the TPR anti-growth model, and its resulting exodus from investment into govt debt?

    A pension system and an economy invested ostensibly in its own govt debt, is relying on the future generations to actually service that debt, which can only be done via economic growth or increased taxation. Yet, that same model sucks investment and productivity out of the economy, and under invests in education and our young folks, with the result that they leave education laden with debt, a future of higher taxes and with little prospects of building up their own capital and without the confidence to start a family. Its of little wonder they’re choosing to defer or avoid procreation.

    But, and follow the model through, if we have an under invested low growth future, with falling birth rates – how can we fund the gilts? How comfortable will the baby-boomers and Gen-Xers feel that their pensions, underpinned by gilts, will remain sustainable for the duration?

    Regardless of the bits of a paper we built around it, a pension is quite simply a prioritised hypothecation of a share of the economic output.

    Economic output depends on the future generations, and so to that extent the pension becomes a gift from one section (the economically, physically active) of the population to another (the non-working elderly).

    We seek to contractualise that gift through laws (ie making it a conditional promise) with the trade off for the gift being that we (the expectant recipients of said pensions) will invest to support the economy – and so in the youth, the future generations.

    We’re hitherto breaking our part of the promise through acceptance of a low growth low “risk” TPR induced model. Can we really expect future generations to keep their part?

    Reply
    • Peter Wilson says:
      August 18, 2023 at 7.32

      Or just invest outside the country – there’s a whole world out there. Those with pensions invested outside the UK economy bring wealth through growth back into the country and avoid the need for an unsustainable ever growing population, through immigration or otherwise. There are plenty of countries around the world that have a young population and often high unemployment.

      Reply
      • jnamdoc says:
        August 18, 2023 at 7.32

        LOL. Yes, although that does feel like a baby-boomer response. It would provide some element of growth and return for a while, but if you invest and enrich only out with your base economy you end up feeding a brain drain.
        The answer is of course, that you need both. Inward and outward investment in a diversified (but not overly) portfolio.

  2. Brian G says:
    August 18, 2023 at 7.32

    Also makes it all the more narrow minded and ignorant when people object to immigration.

    Reply
  3. Dr Robin Rowles says:
    August 18, 2023 at 7.32

    This is good news!!! The UK like the rest of the world, is grossly over-populated and cannot cope with the excessive demands on food resources as global warning is showing. Yes, people will have to get used to working later in life, but in the end it may mean the survival of the earth as we know it, which is not likely with current levels of population, let alone current levels of population growth!

    Reply

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