Legacy of golden age

Financial Adviser

The not totally unexpected announcement by chancellor George Osborne in his Autumn Statement raising the state retirement age, although inevitable given rising longevity, is nevertheless another push towards the fast-approaching intergenerational showdown.

The reality is that never in the history of civilisation has any generation been so pampered as baby boomers, who have been indulged from the post-war day they were born to their last day at work.

From state-subsidised cod liver oil, vitamin-enriched flour, free school milk, comprehensive education, the creation of polytechnics along with the abandoning of entry qualifications, mandatory higher education grants, generous occupational pensions to grade one state pensions.

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Never in the history of this country has any generation had it as good as the post-war baby boomers; and never before has any generation been to craven to want more and more, even at the expense of their children and grandchildren.

As their golden defined benefit pensions gave way to more risky defined contribution schemes, and as the mortgage market gets even more restrictive following the sub-prime crisis, the baby boomers have locked in to the buy-to-lets.

At the same time their grandchildren are leaving university with massive debt – of course, the baby boomers had their mandatory grants – in a work environment of declining wages, they must somehow find enough from their meagre disposable incomes to pay their rent, which of course covers mortgage repayments, not to speak of the rising capital value.

As the economy recovers we must now think of creative ways of redistributing national prosperity, of sharing the nation’s wealth. By postponing retirement it means a battle for jobs.

With the Office of Budget Responsibility revising upward gross domestic product growth for 2013, from a paltry 0.6 per cent to 1.4 per cent, and for 2014, from 1.8 per cent to 2.4 per cent, it looks overall as if the economy is returning to trend growth.

This is good news for small businesses, for the unemployed and for the employed as we go in to the festive season.

So all that is left from us here on Financial Adviser is to wish you a wonderful and exciting holiday and we look forward to returning on 9 January for a year of even more challenging developments.