Economics class: Is the state pension really ‘a Ponzi scheme’?

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Specification:

• Fiscal Policy, Government Intervention, Labour Markets

Click to read the article below and then answer the questions:

Is the state pension really ‘a Ponzi scheme’?

• What is a Ponzi scheme?

• Who is Bernard Madoff?

• When was the ‘triple lock’ introduced?

• Explain the ‘triple lock ’

• According to the Institute for Fiscal Studies, how much additional funding must be allocated to state pension payments each year?

• Identify the two factors which mean that the government is ‘writing a blank cheque for future taxpayers to fund.

• What is the ‘grey vote’?

• What are national insurance contributions?

• Explain how the state pension is administered

• A decision on whether the state pension age will be increased even further will be made after the next election. Outline the effects on i) low-income earners; and ii) high-income earners

• What are means-tested benefits?

• ‘Is it right that a greater share of taxpayer cash goes towards funding healthcare and state pensions for boomer?’ Explain why younger workers would be particularly dissatisfied with such an arrangement

• Explain what is meant by a final salary pension scheme

• Evaluate two policies that could be used to tackle the future sustainability of the state pension

Gavin Clarke, Emmanuel College