An impoverished retirement or one that will never happen at all

The gen-Z poor’s bucolic outlook

[I]t can’t be that bad. Let’s be clear, it is that bad. Because this was never supposed to be the deal. Regardless of one’s stance on capitalism, its basic proposal was always something like: give us your labour and time, and in exchange you get a stake in the system. Perhaps not a fair stake, but a stake nonetheless. But these days, even that meagre offer seems like a cruel joke.

Talk to most people under 40, who have spent two decades watching the economy limp from crisis to crisis while asset holders and rentiers cash in on a system designed, maintained and calibrated for their benefit, and the picture is altogether different. For them, in the context of an increasingly fragile social safety net, widening inequality and a retirement that, rather than merely being impoverished will more than likely never happen at all, the question seems to ask itself: why exactly am I giving up most of my waking hours to work, all for the dubious pleasure of handing 75% of my meagre wage to a landlord who happens to own a flat or 10 in east London that they paid five quid for at some point in the mid 1980s?

‘Secure, affordable homes are the stuff of fiction’: how young writers are responding to the UK housing crisis, by Keiran Goddard.

When I punched in the words “impoverished retirement” to the AI picture-generator here on Substack, it wasn’t without some trepidation. It can churn out a pretty good likeness of Edward Snowden, but abstract concepts like impoverishment and retirement pose difficulties for it. Here’s what it came up with:

With just a hint of J. M. W. Turner to them, none struck me as either impoverished or much to do with retirement. Bucolic is more the word that came to mind, together with a conclusion that the AI had no idea what retirement is. I wonder whether I will, either.

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A few years back, during the pandemic, I chanced upon a guy on Facebook who had been in my form at school. We had not had that much time for each other back in schooldays, but the years had softened both of us and we had some amiable exchanges on the Good Book. In a private message to me when we first became acquainted, he floored me by writing, “Graham, you had the world at your feet at the end of our schooling.”

It’s not that that wasn’t quite true that floored me: it was the fact he said it in that moment and, what’s more, had thought it at the time. The flattery would pale, however. Because who wants the world at their feet? I think, on balance, that I’d just as soon not have the world at my feet. Because that would start me wondering what they were all gathered there for, what they wanted from me, what I needed to do to assuage their ardour for my pedal extremity.

If only I had myself known what Mike Osler had perceived of me, and turned to silver all this adulation and adoration, then I’d never have needed to worry about my golden age’s income. As it is, it won’t especially keep me in the smiles one expects on the wizened visages of those depicted in life assurance adverts, let alone their yachts and bounding Irish setters, but I hadn’t quite expected my prospective pension to actually mean a boost in income for me. It’s not quite what is meant by looking forward to retirement.

My gran and her generation were the only ones really to reap a net benefit from the old-age pension. The scheme having been enacted in 1948, when she was already 60 years of age, I doubt she paid quite as much into it before she departed this world in 1973 as she drew out in terms of the widow’s pension that formed her secure retirement income.

The only generation that really got as much as they gave was my own parents’ generation. There was still a differential for them between female entitlement and male—women retiring at 60, men at 65—and my dad drew not just his state pension but also his company pension, and the investment managers were very astute at Olivetti. “Get in with a big corporation and stay with them for security,” was my father’s sage advice, who’d also worked for EMI. Just a few years later, his big Italian corporation went belly-up.

As the introductory extract from that Guardian article betrays, later generations, told candidly to branch out their pension investments into second and third pillars, were less fortunate, especially where they were in self-employment. Because the ability to pay into a pension scheme, whether private or, through an LLC structure, corporate, is entirely dependent on the continual augmentation of one’s corporate earnings and one’s own private drawings from the company. In the year that your earnings fall, with the previous year’s tax bills coming in and the amended social security contributions also being billed from that year, the wind drops out of the self-employed’s sails in a manner that is hard to recover from and can in fact tend to doldrums, for which there is no safety net in terms of unemployment benefit or other social support. The self-employed are not so called for nothing—indépendant in good French; zelfstandig (standing on their own) in more independently-minded Dutch; Freiberufler (unfettered professional …) in … almost hilarious German. Especially if the earnings begin a downward spiral, perchance aggravated by a global pandemic.

There may be small businesses that are able to survive on a sole trader basis: the newsagent that doubles as my local post office, as my local passport photo kiosk, as my local parcel pick-up point, as my local sweet shop and tobacconist, as my local supplier of computer printer ink, as my local fancy goods shop (and that’s not the half of what Benny does) kept his palette of offered services and goods wide enough to maintain a steady flow of custom into his shop, which he even expanded by taking-over a neighbouring property. Then the council came and made the street one-way. The local secondary school closed, and the bank opposite him closed. The microcosm within which Benny existed in symbiosis with other trades started to crumble. Now they’ve built a new school, where the old parish school once stood, and that makes up for some of the passing trade he had lost. But not all of it: the daftest of outside influences can destroy the context within which the self-employed believed themselves ensconced. Turf them out of that, and getting re-settled is difficult. Turf an employee out of a company, and it ain’t pleasant, but at least there’s unemployment benefit to tide them over.

I long since concluded that I’d be working till I drop from my perch. (That is, unless I get shoved off my perch before I shake off this mortal coil.) But the pension promise that was, in large part, freeloading for my gran, and became a net-zero sum for my parents, aside from their gamble at longevity, is for my generation, and especially the newer generations, in and of itself a laugh. Many of even the younger folk wonder how they will cope if they lose their jobs, their marbles, their mobility in years to come. Rather than gambling on longevity to take profit from the pension, many may lack the endurance and sheer grit to see through their period of golden-age pain. For many of them, there is not even the nominal promise of a roof over their head. Neither in terms of affordable private housing or from the public housing stock.

What looms on the social horizon is not a question concerning quality of life for the aged, but concerning life itself. This is no longer Prospero’s brave new world that emerged from World War II. With Margaret Thatcher starting selling off the family jewels in the 1980s, we thought the future held a time when we would never have it so good. We were wrong: that then was as good as it was ever going to get, but it never got much better after that, not for the cannon fodder. A hairstylist friend in Glasgow told me about fashion trends in 1990: “Anything goes,” he said. And he was right. Everything went.

I’ve paid off my mortgage and, if I need to, I can realise my capital asset to provide for myself in lean later years. But gen Z may well be scrimping and saving just to escape the trap of the rapacious landlords, before they even start thinking of pension provision.

They know it, and they know that they know it.