<\/p>\n Ageing populations are hardly unique to the shores of the English Channel. In fact, France and the UK have some of Europe\u2019s more favourable<\/a> demographics. The problem is how they have been handled, and in the primacy of the pensioner in both societies.<\/p>\n In the UK, the problems are twofold. First is the trashing of both major parties\u2019 attempts to move some of the eye-watering costs of elderly care on to those most able to afford it. Britain\u2019s health and care bill for over-65s has doubled since the turn of the millennium, and absent commensurate increases in revenue is both squeezing out spending on infrastructure<\/a> and increasing borrowing.<\/p>\n <\/p>\n Second is the \u201ctriple lock\u2019\u201d on the state pension, which guarantees that payments rise each year by whatever is the highest out of inflation, wage growth or 2.5 per cent \u2014 an extraordinary deal which guarantees that pension spending growth outpaces pensioner population growth, and ensures elderly living standards increase at a faster rate than everyone else\u2019s. In addition to slowly suffocating Britain\u2019s public finances<\/a>, this has created a society where children are now more likely to live in poverty than their great-grandparents.<\/p>\n The picture across the channel is even more extreme. Not only do French pensioners receive larger cheques from the government than their counterparts anywhere else in the west, they start getting them several years earlier. The result is a situation in which over-65s now have higher average incomes<\/a> than the working age population \u2014 unique both internationally and in France\u2019s own history<\/a>.<\/p>\n <\/p>\n Even the rumour of threats to this arrangement is met with mass public outrage and opposition from left and right. Macron\u2019s proposal<\/a> to nudge the retirement age up towards the lower end of western norms was met with nationwide protests. Barnier\u2019s suggestion<\/a> of a six-month delay to the latest scheduled increase in pension payments led to the first of two collapsed governments in the past 10 months. Bayrou\u2019s refusal to scrap<\/a> the same pledges brought about the second.<\/p>\n In a particularly stunning statistic highlighted <\/a>by French political analyst Fran\u00e7ois Valentin, pensions play such an outsized role in the country\u2019s public finances that they accounted for one-sixth of the ministry of defence budget last year, and without them France would not meet Nato\u2019s 2 per cent target for military spending.<\/p>\n It is a mark of how untouchable pensions and pensioners have become that French opposition parties have instead taken to proposing ever more creative and poorly-thought-through taxes on ever smaller slivers of the population, with the hoped-for receipts<\/a> nonetheless falling short of what would be saved from barely-perceptible moderations<\/a> to pensions. In the UK, meanwhile, even the most optimistic<\/a> estimates for the proceeds of a wealth tax come in at less than the annual excess cost that the triple lock imposes over and above a pension indexed solely to earnings growth.<\/p>\n There is little sign that generational turnover will help, either. Hopes that baby boomers\u2019 grip on Britain\u2019s public finances would be weakened following Labour\u2019s victory in last year\u2019s general election \u2014 the first time<\/a> boomers had been on the losing side in a UK vote since they were born \u2014 proved naive. The chancellor was quickly forced to reverse<\/a> plans to make pensioners\u2019 winter heating subsidies means-tested, and voters declared<\/a> Labour\u2019s poor treatment of pensioners the low point of their start to government.<\/p>\n Voters often accuse politicians of fiscal sleight of hand, but here they are complicit in presuming ever larger pension cheques can be conjured like rabbits from a hat. At some point, both groups must confront mathematical reality.<\/p>\n john.burn-murdoch@ft.com<\/a>, @jburnmurdoch<\/a><\/p>\n Data sources and methodology<\/p>\n Average incomes for specific age groups refer to the median, and were calculated using disposable household income (income from all sources minus taxes and social contributions), adjusted to the individual level using the modified OECD equivalence scale<\/a> to account for differences in household size and composition. Poverty rates refer to the share of people in a particular group whose income as defined above is less than 50 per cent of the national median.<\/p>\n<\/a><\/p>\n
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