Thursday, 16 July 2009


I see the government is proposing to charge everyone £20k for their old-age care.

The Devil has his own take on it but as I put on his blog, there is a massive assumption about NICs - in that people think it is an insurance scheme.

It is not.

It has never been an insurance scheme. It is an assurance scheme where money paid in now is used for current expenditure not future costs.

The issue is one of titles. I was at a Politea dinner where various politicians such as Frank Field were attending.

When I got dragged into the debate about how to get people to save for a pension, I said it would never work while we have NICs.

I added: "People think they are saving up for a pension already in a vehicle called National Insurance, they don't realise the reality of the scheme. To get people to save, you have to change NICs name to something more honest - Maybe Social Security tax?"

That was 10 years ago...

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