Quite a few years ago now I got very interested in all aspects of gambling. I calculated probabilities, odds, combinations and permutations. I even devised a football pools plan that got barred by Littlewoods.
The numbers and percentages and the calculations I found very interesting and still do (I make use of the betting exchanges nowadays for matched-betting opportunities).
What I could never work out, even with my reasonable understanding of maths, was the notion of pensions and the concept of insurance. Even with a very simple and basic approach, the numbers do not add up.
For example, I earn £100 a week and pay out £10 per week into my pension 'pot' and my boss matches my payment, hence £20 a week is set aside for my future.
If we assume that I started the job when I was 20 and retire when I am 65 then we have approximately £45,000 on retirement - nice! However, this money has to replace my wage and tide me over so to speak and at £100 a week will last about 9 years - great unless I live for another 10 years or more?
BUT, people argue. Your pension payments are invested into pension funds and stock markets and buildings and currencies etc., so the total amount will always work out more than the £45000 because of the interest earned on these investments. That, is the problem. There is simply no guaranteed investment that can give any level of interest - it will always be a gamble. If there was a guaranteed way of making 10% profit each and every year - we would not need to work at all.
The money that is the pension system is the money that is in the pension system and there will be no more. In effect every year you work is to provide a week's worth of pension and in today's climate, you may not be able to work for a whole year.
As people are living longer and working less and less - that dream of happy retirement is fast disappearing.
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