Oh dear!  It appears that I would have been as well snorting asbestos dust for the last fifty years as eating the countless bacon sandwiches I have had in that time.  It is claimed that the smell of a bacon butty is the most common reason for vegetarians to start eating meat so my heart goes out to those that have lapsed only to find that the result of going to the bacon eating “dark side” is near certain death.

It really is amazing that we are still alive given that virtually everything we put in our bodies is bad for us if you believed the press.  Bacon is the latest health bogeyman which at one time or another has included fish (mercury), eggs (salmonella), meat (mad cow), fat (but this is now good apparently) and of course another recent scourge - sugar.  However, not only are we still alive but we are all living longer and healthier than previous generations which not only contradicts the fear mongers but means we have to revisit our preconceived notions of what our future holds.

In 1963, the Japanese government decided to celebrate a citizen reaching 100 years of age by giving them a solid silver sake sipping bowl.  Nice gesture, and at the time they had only 163 citizens over that age.  This year however, there will be over 30,000 reaching this milestone and as a result the government has decided that from next year the dishes will be made from metal alloy and only be silver plated to save money.

Now before you say that is because the Japanese do not eat bacon butties, in the UK the “Centenarian” department that sends out congratulatory cards from the Queen, has grown to seven full time staff from just one official doing the job previously.  However, there is a far greater cost than mere postage stamps that the government has to worry about.

The ability of the country to continue to provide pensions to its citizens is something that successive governments have failed to tackle but the day of reckoning is fast approaching.  In the last ten years in the UK the most common age for a woman to die has risen from 85 to 89, and for men from age 81 to 86.  The statisticians suggest that this trend will continue and, in effect, the most common age for a man to die is increasing by 3 months every year.

As you are probably aware the State Pension and the majority of the Civil Service Pension is paid out of Income Tax receipts, unlike final salary pension schemes which must have a pot of money available to meet their liabilities.  The fact is the demise of final salary schemes through taxation and onerous legislation in the last twenty years has removed a safety net that over half the population had, in terms of providing guaranteed income, and it is a net that the government has no way of replacing.

I have said before that I do not expect to receive a State Pension.  In the next twenty years I expect State Pension provision to those eligible will be means tested.  In 2050, which I may be around to see if I keep off the butties, there will only be 2.1 people between 20 and 65 for every person 65 and over.  This proves the current way the Government funds their promises is unsustainable.  How much tax will the workers have to pay to meet the cost of the pensions as well as the increased health care under the current system?  Probably more than they will be earning.

No, I feel that the public should be more concerned about being unable to “bring home the bacon” in retirement than any risk involved in eating it!

Steve Forbes
Managing Director
Alan Steel Asset Management Ltd is authorised and regulated by the Financial Conduct Authority

The Financial Conduct Authority does not regulate tax advice

This letter is the personal view of Steve Forbes. Please check the appropriateness to your individual position with your adviser before taking or refraining from any action.

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