Mesdames, Messieurs, faites vos jeux, says Richard Harvey. Are you feeling lucky?
Traditionally, governments have been ambivalent about gambling. On the one hand they see it as a useful source of revenue, but on the other they saddle the industry with rigid restrictions because they don’t want us to end up as down-and-outs after we’ve blown all our poppy in the betting shop.
Bizarre, then, that this government doesn’t mind behaving as the nation’s croupier when it comes to the State pension.
To wit: we oldsters now being invited to top-up our State pensions by handing over lump sums, in return for which we will receive an enhanced monthly payout.
Dodgy Maths
The official bumf quotes an example of a pensioner reaching 68 in October. He or she wants an extra fiver a week – that’s £260 a year. The Exchequer says it will happily pay out the additional £5, in exchange for an upfront lump sum of £4,135.
Er, hold on a minute. I was always a duffer at maths, but unless I’m entirely wrong, it will surely mean that the pensioner has to survive until he or she is almost 84 until they begin to see a return of an additional £5 a week they haven’t already paid for themselves?
According to the life expectancy figures quoted on the Office for National Statistics website, we male pensioners will be lucky to make it to 83, while the ladies could hang on for another couple of years or so. (A strange anomaly in the equality agenda which the chatterati rarely talk about).
So you don’t have to be Stephen Hawking to realise that you’d probably be better off splurging your top-up money on Knackered Knees in the 4.30 at Kempton.
Particularly if you live somewhere like Glasgow, where a life spent munching deep-fried Mars Bars and downing pints of heavy means you’ll be lucky to make it out of your 70s. (Note to Scottish readers: ahem, only joking).
The House Always Wins
There’s probably a calculation to be made of just how much profit the government will make from their top-up offer. Because, just like every casino in the world, there will be considerably more money coming in than going out.
Just which shady, Capone-esque character in the Treasury dreamed up this little deal? No wonder social media has erupted with scornful Tweets and Facebook postings from those who have rumbled the sort of racket which, had it been perpetrated by IFAs, would have been condemned by politicians as exploitative.
Fish Out the Rose Tinted Spectacles
Meanwhile, on another subject: With the Stock Market frothing over like a glass of the aforementioned Scottish heavy, and brighter economic times ahead (what? you mean you’re cynical about all these pre-election claims?) investors are now eyeing improved returns.
My IFA mate Nigel reckons that an annual return north of seven percent is a perfectly reasonable expectation. So, for the embattled saver, it would appear that happy days really are here again.
Providing, of course, that Putiin keeps his tanks at home. And the Eurozone doesn’t go belly up. And the incoming government doesn’t start caning the wealth creators. Glass half empty? Who – me?
