A Possible Pension-Savings Paradigm for a Sustainable Future: A Developed Country Case Study (UK)

For millennia, the percentage of the population aged sixty-five and older never exceeded 3 or 4 per cent (Dorling, 2013), while the percentage of children under the age of 5 numbered between 15 and 20 per cent. By 2050 this picture will be reversed due to various demographic mega-trends. This means that many developed nations need to rethink their assumptions regarding their existing pension-savings and accumulation paradigm and rebuild their very conceptual foundations. Some countries try infusing into the defunct current pension-savings’ model small adjustments; but what is required is an entirely new pensions funding and accumulation paradigm. The new paradigm proposed in this paper is based on ten pillars addressing the demographic and economic challenges projected ahead. Two principles guide the proposed model. One is that it must foster confidence among the citizens who will retire in mid-twenty-first century that they may have sufficient financial resources for long retirement years. The second principle is that the new pension funding system must leave them with enough available funds for social and economic development as they save for the long years of retirement.