For an average person earning £30,000, about £1,000 of their tax money goes towards the state pension. The state pension was first introduced in 1909 and was only available to individuals over the age of 70 who had an income below a specific amount. Since then, however, the state pension has undergone several changes to become the system it is now. Every individual who has made enough national insurance contributions will receive pension payments once they reach the age of 66.

A Ponzi Scheme works by first taking money from an individual and promising them a return on their money. After that, money is taken from a second individual to provide the promised returns to the first individual. Further money is taken from another individual to provide the promised returns on the second individual, and so on. The state pension functions in the same way. Money is taken from the working people to give to old people. Once these working people become old, money will be taken from the new workforce and given to the old people. The issue with Ponzi schemes is that when more money is being taken out of the system than the amount being put in, the system collapses. As the UK population is ageing, more money will be coming out of the pension system. Due to the Ponzi-like nature of the state pension, an ageing population means that changes will need to be made to the pension system, such as increasing the pension age or introducing means-testing. However, I have a better idea. The whole system should be abolished.

Imagine a 26-year-old struggling to make ends meet but having to pay £1,000 so that the government can fund the retirement of people over the age of 66. If people want to retire, they should’ve saved enough money during their working years to be able to do so. If a person cannot afford to retire, they should keep working unless they physically can’t – even if they’re in their 80s. No one else should be forced to fund their retirement. If a person cannot physically work, they can get disability benefits.  

Another big issue with the state pension is its socialist nature. No matter how much national insurance contributions you pay over the years, every individual who is eligible for the state pension gets the same money back. The government is essentially taking money from people who have worked hard for it and giving it to individuals who have not worked so hard and do not deserve it. It is theft, plain and simple.

You may be thinking that abolishing the state pension will cause massive problems as many old people are relying on the money. Well, as I said before, if these people are able to work, they should get a job and work. Other working people should not be funding their retirement. There is the argument that these old people are entitled to the pension payments as they paid national insurance contributions. While this is somewhat of a valid argument, the alternative is to prolong a system that takes money from people who worked hard to earn it. The other reason we should abolish the state pension now is that it will eventually collapse anyway – with even worse consequences.

The triple lock system increases the state pension annually based on the highest of the following three measures: inflation, average wage increase, or by 2.5%. The obvious issue with the triple lock system is that it will keep increasing the amount of money coming out of the system. The only way to keep up with it will be to raise taxes on the working people. Eventually, the working people will not want their taxes increased anymore and the system will collapse. Except this time, the pensioners will have contributed more to national insurance contributions than our current pensioners.

As Bernie Madoff found out the hard way, Ponzi Schemes eventually collapse. And when they do, a trail of misery tends to be left behind. The state pension will most likely stay for quite a while, increasing year by year, with working people being forced to contribute more of their hard-earned money towards it — until it reaches its inevitable end.