'I am Spartacus', 'No I am Spartacus'

So it seems that this will be the general election of doom with each party attempting to outdo the other with their prophecies of impending hardship, plagues and general armageddon.

The rhetoric from the various party conferences all assured us that the only way to prevent this, is to offer ourselves to the sword of sacrifice and ‘hard choices’, as Brown and Cameron engaged in a game of one-upmanship as to who could be the more deserving martyr.

One of the issues involved in this was which party would make us work the longest with various headlines screaming that we would now have to ‘work to 68’ and the ensuing groans of angst from the workforce at large could be heard up and down the country.

The problem with this, is that it is the biggest misrepresentation of a statement of fact since we last obtained a quote from a ‘low cost’ airline.

What it actually means is not that you wont be able to retire until three years later than expected, but that you wont receive your state pension until then. Lets put this into perspective. The current state pension is £95.25 per week, or £152.30 if you are a couple. That’s not a lot to pay gas, electric, water, phone, council tax, insurance etcetera, oh and food and clothing every now and again as a treat.

Consequently, unless you have made serious private pension provision or are one of the last few left who has an employers scheme, then it matters little whether the state pension age is 68 or 108. Either way you are likely to be getting measured up for a big orange apron and taking a crash course in DIY power tools in order to make ends meet.

It was also with bittersweet irony that this all happened in the same week that the courts ruled that an employer has no legal obligation to employ someone beyond age 65. That means that between the ages of 65 and 68 you will have no right to work and no right to retire. Consequently, Eastern Europe may need to beef up its border patrols as all our pensioners will be hanging under a truck trying to claim asylum in Poland.

To go slightly off subject we would like to bring a certain Charles Ponzi into the discussion. In 1920 the Italian immigrant started selling postage coupons to unsuspecting investors with the promise of substantial returns. Unfortunately the monies were never invested and the incoming cash was used to pay out wonderfully high returns. Hence the term ‘Ponzi’ scheme that refers to any scam that uses new investor money to pay out fake investment returns to existing investors.

There have been many versions of the Ponzi scheme over the years however they always fail because they run out of new investors and eventually collapse, as Bernie Maddoff and 'Women Empowering Women' will tell you.

Fear not though because our heavily regulated pension industry has strict rules which mean that all pensions must have enough assets in them at all times to meet all of their liabilities. If they fall short at any point then the employer is obliged to plug the gap.

This legislation was introduced after the Maxwell affair in which the Daily Mirror owner ‘borrowed’ substantial funds from the pension scheme to prop up his ailing companies, which subsequently failed leaving thousands of employees without their pensions.

There is only one pension scheme that is exempt from these robust regulations that exist to protect the public. It is allowed to operate without any assets or investments and it uses the cash it receives from new investors, to repay existing investors just like Charles Ponzi did. The name of this scheme? The State Pension.