The broken promise
The state pension is Britain’s proudest post-war promise: work hard all your life and the state will see you through your old age. But that promise is cracking.
We are piling pressure on a shrinking workforce to prop up an ageing population. Every year the bill rises. Every year ministers tweak and tinker, nudging the retirement age, freezing thresholds, and praying the bomb doesn’t go off on their watch. The system is unsustainable. Worse, it’s unfair.
A radical alternative
We need a new deal. Imagine this: at birth, the government invests £20,000 for every child into a simple low-cost index tracker. Left untouched, compounding quietly at 6% for 67 years, that sum grows to nearly £1 million (£992,025) by the time that child hits retirement age. That’s not a fantasy spreadsheet trick – it’s the mathematics of compound interest.
Now hold that number up against the current system. The average pensioner today will receive around £210,000 over 20 years, with those on the full rate taking nearer £240,000–£250,000. My model would deliver four times more than the state pension, without relying on the taxpayer’s annual whip-round.
The crushing cost of today
The current state pension costs the taxpayer £124 billion a year – around £3,300 per income taxpayer. Over a lifetime, that’s roughly 12 times more expensive than my proposal. In other words, we’re pouring public money into a leaking bucket, propping up a system that delivers less for more.
It doesn’t have to be this way. If we built wealth from birth, we would not only give people dignity in retirement – we’d also create a nation of investors, pumping long-term capital into markets, businesses, and infrastructure. It would be both social policy and industrial strategy.
Mandatory saving, no escape
The second pillar is simple: mandatory private pensions in every workplace, no opt-outs. You can choose where to invest, but you cannot choose not to. For too long, saving for retirement has been treated as optional – a problem for future you. That mindset is toxic. It entrenches inequality. It leaves millions exposed.
Make saving universal and unavoidable, and we shift the culture. Suddenly every worker is a stakeholder. Every pay packet builds wealth. Every pound saved strengthens the economy. It’s not coercion – it’s liberation from the looming crisis of poverty in old age.
Equality through investment
The brilliance of this model is its fairness. No more postcode lottery where the financially literate and securely employed glide towards a cushy retirement while everyone else scrapes by. From the day they’re born, every citizen gets a stake. From their first payslip, every worker is building. Retirement dignity stops being a privilege and starts being a right.
The politics of courage
This requires courage. Westminster hates long-term thinking. The dividends of reform won’t show up in a single parliament, so politicians kick the can. But if we don’t act now, the crisis will explode on us later – harder, costlier, and crueller.
The simplicity is the beauty. £20,000 at birth. Mandatory pensions at work. A future where the taxpayer isn’t endlessly bankrolling a creaking relic but seeding wealth from the ground up.
A nation of stakeholders
The state pension, as it stands, is a relic – a clapped-out promise no longer fit for the modern world. My model delivers nearly four times as much for each retiree, at a twelfth of the cost. It creates a nation of savers, investors, and stakeholders, each tied into the economy they helped to build.
We can keep paying through the nose for less, or we can reform the system and give every citizen a million-pound retirement. The maths is clear. The choice is political. And the time to act is now.
