I noticed earlier in the week that the NHS have published their Pensions Scheme contributions calculator for 2013-2014. Whilst it wasn’t quite what I expected when I started to play around with it (I thought it was going to be one of those “if we assume x, y and z, then if you continue to make your current pension contributions you’ll be living on nothing for 20 to 25 years” types of model) it did start me thinking.
What the calculator actually does is show the impact on net and gross salary of the proposed changes to contribution levels. Under the current proposals, NHS workers’ take-home pay will fall, which I’m sure many will argue is the last thing they need at the moment. Writ large in the research we conduct for Swiss Re’s industry standard Insurance Reports is that the UK public simply cannot afford to financially protect themselves at the moment, whether it be against illness, unemployment or for retirement. And with PIMCO’s latest economic outlook forecasting the Eurozone economy to contract by 1 to 1.5% over the next four quarters, should we be taking more disposable income out of people’s pockets?
But we all know it is not as simple as that, not by a long stretch. The long awaited days of auto-enrolment are with us, and surely not before time. Earlier this year, ONS forecast that around 1 in 3 babies born in 2012 would live to see their 100th birthday, which is a staggering thought. Whilst 2011 census data questions the magnitude of this forecast, it cannot be denied that longevity is an issue of fundamental importance to us, and somehow we need to provide for these extra years to a far greater extent than we are now.
Which perhaps brings me to what made me smile so much when I saw the contributions calculator – if the NHS wasn’t doing such a fantastic job in the first place, we all wouldn’t need to worry so much about putting aside a few extra pounds here and there