What a Welfare System We Have

The aim and idea of old age pensions and the like, when they were first introduced, was to provide a form of insurance. Insurance against outliving your savings. That's why eligibility ages were set at around the average life span. It's not unreasonable to expect people to save for forseeable events: that you will live to the average age of the previous age cohort.

But of course, given the very nature of averages, half will live longer than this. So the whole system of provision of money and care for the aged was, and arguably should be, based on this idea. Insurance, being in that half who live longer than it might be reasonably assumed you will save for, rather than assurance, the idea of something that will happen.

Of course, as we know, life spans have increased dramatically since the beginnings of these schemes.  Running on memory here, from something like 60 or so (average) to the current 77 or so. We now get things like this:

A 103-year-old woman will be thrown out of a nursing home unless she can find an extra £100 a week.

Esme Collins pays around £400 a week to stay at the Abbeymoor Nursing Home in Worksop, Notts, where she has spent the past 10 years.

Now she has been given 28 days to quit if she can't find the extra cash to pay for he special needs. Her 84-year-old daughter Esme Simpson said: "Moving her will be a death sentence."

Living to 103 is clearly unforseeable, a suitable case for that social insurance. However, these days, living to 70 or 75 is not unforseeable: in fact, it's highly likely, more likely than not in fact. So those in those age groups are not suitable candidates fo the system of social insurance.

So, in order to pay for those who should indeed be getting it, we should reduce the payments to those who should not. Raise the pension age to 75 and free up the funds from the system for it to be what it was always supposed to be: a system of insurance, to guard against you outliving your savings.