We all know about postcode lotteries.Â They’re journalistic shorthand for the inconsistencies in prescribing policy between one NHS Trust and another which mean thatÂ if, say, you live in Guildford and feel a bit peaky you’ll be showered with all sorts of state-of-the-art pharmaceuticals, whereas if you’re across the border in Godalming you’ll be sentÂ on your wayÂ with a packet of Nurofen.
I’ve come up with birthdate lotteries as a phrase to describe much the same sort of thing, onlyÂ to do with the effect of stock marketÂ volatility and other dramatic market movements on the value of people’ retirement savings pots.Â It’s a birthdate lottery that means anyone born in 1942 and retiring at age 65 could have cashed in their pension fund at the top of the market, whereas anyone born in 1943 would have done not much more than half as well, especially if they were foolish enough to have been born in late 1943.
In these volatile times, the birthdate lottery concept could be used to describe the inconsistency of all sorts of financial outcomes:Â whether first-time buyers are able to findÂ a mortgage, for example, or what kind of return retired people can expect from an annuity, or even the cost of maintaining a balance on a credit card.
But at some intuitive level, these examples seem somehow less lottery-like.Â Interest rates do move up and down, always have, always will:Â it’s unreasonable to complain that your date of birth exposed you to, say, the stratospherically-high rates of the early ninetiesÂ without recognising that you’re also still around to enjoy the bathyspherically-low rates of theÂ late noughties.
No, more than anything it’s the value of retirement savings, whether in a pension or in another vehicle or vehicles, that seem the most profoundly and irredeemably affected.Â If you were born in 1942 you got out on a high:Â if you were born in 1943 you watched in horror during your last months of employment as the value of your hard-earned fund fell by about half.
As I’ve written before, for ordinary people with ordinary levels of savings that are in any case inadequate to provide anything like an acceptable standard of living in retirement, that seems to me absolutely unfair, unreasonable and unacceptable.Â Hopefully, as a soundbite, the concept of the birthdate lottery will help everyone to understand that.Â Â ï¿½