It’s demography stupid!

The protestors on the streets of London, New York, Madrid and Tel Aviv do not understand the economic and political problems they face.  The developed world is suffering from a demographic crisis.  Railing against financiers and the richest 1% misses the underlying cause of the crisis: the costs of paying for their own parents' and grandparents' retirements.

Generation F?

Those born in 1983 will pay on average £187,000 to the government over their lives, net of the benefits and services they receive.  Conversely, those born in 1933 will receive an average £150,000 in payments and services over their lifetime, net of benefits and services.  This was highlighted in the fiscal sustainability report recently published by the Office of Budget Responsibility (OBR).

The figure below charts how much people will give or receive from government, adjusted for inflation, over their lifetimes.  People born before 1953 are net beneficiaries.  In contrast, people born after 1953 will pay more in taxes than they receive in services and benefits.