NIkhil Arora argues that we need to radically reform that state pension, moving from the current pay-as-you-go model (a Madoff-style ponzi scheme) to a funded system based on personal pension accounts. Basing his proposals on a plan developed for the American Social Security system by the Cato Institute, Arora suggests allowing people to divert their employee National Insurance Contributions into private accounts (surrending their right to a state pension in the process), while employer National Insurance Contributions continue to be paid in order to finance the state pensions of current retirees.
The Adam Smith Institute is the UK’s leading libertarian think tank...