Our lost generations?

Young people today (Generation Rent) face the prospect of having to work longer, in more precarious employment, with more debt, more mental health issues, and reduced prospects of home ownership and a decent occupational pension compared with previous generations.

At the same time today’s headlines talk of ‘Deaths of Despair’ among the middle aged. The Institute for Fiscal Studies reported that deaths from suicide, drugs and alcohol are rising among middle aged Britons and now exceed deaths from heart disease in this age group.

Changes in employment, lifestyles and pensions, coinciding with the rise of a debt culture fuelled by ‘financial services’ organisations, mean future generations face the prospect of years of retirement in poor physical, mental and financial health – consuming an ever-growing proportion of central and local government resources while finding themselves less able to contribute financially. That’s bad news for all concerned, including the NHS, the government and the economy.

We’re already seeing that public health in the UK is worsening, on a generational basis. On current trends each generation will spend more years in poor health than their parents’ generation. Improvements in medical science were keeping people alive longer but this is increasingly in (expensive) poor health, with multiple medical conditions - and actuaries have identified that even the greater predicted longevity has now begun to stall. The well-publicised rise in childhood obesity (and a 40% increase in cases of avoidable type 2 diabetes in children in the last four years) are powerful indicators of what lies ahead for the health of today’s younger generations, unless radical action is taken.

So what have pensions got to do with health?

This might seem an unlikely connection but there’s a clear link between financial health and physical health. As the BBC reported today men in better off areas live, on average, ten years longer than men in more deprived areas.

And it isn’t just how long people live but how long they live in good health. People in deprived areas spend more years in poor health than people in more affluent areas. For instance, women in Tower Hamlets can expect to enjoy 14 fewer years of ‘healthy life’ compared with their more affluent counterparts in Richmond upon Thames.

We also know there’s a connection between our mental health and our physical health. So it isn’t, for example, just the reality of having to retire on a low income, in insecure rented accommodation in a deprived area that can influence your health – it is realising that this is what the future holds for you that can make a difference.

Occupational pensions should be a key element in helping achieve financial, physical and mental health in retirement. Unfortunately, occupational pensions have seen one of the biggest shifts in intergenerational fairness:

  • The number of private sector employees who can look forward to retirement on a final salary pension has fallen from some 8 million in 1967 to less than 2 million today.
  • In the public sector, final salary pensions are being replaced by career average pensions (further limited by pay freezes and pay caps and pension increases based on CPI rather than RPI).
  • In addition, the rise of the gig economy, zero hours contracts and self-employment mean many people may have no occupational pension.

This is leaving more people reliant on a modest state pension, with a falling proportion of home owners meaning fewer people have property as an alternative asset to fall back on.

The decline in occupational pensions, exacerbated by a decade of minimal returns on savings, also fuelled the rapid growth of buy to let landlords, as rental income from property became increasingly seen as the only safe remaining savings/pension option. A 2016 study for the Council of Mortgage Lenders found that pension and investment purposes dominated the reasons for becoming a landlord. Buy to let landlords, in turn, fuelled an increase in house prices (with fewer houses available for home ownership, limited supply pushes up prices) while swelling the ranks of Generation Rent.    

So what happened to occupational pensions and why?

Governments and employers have both contributed to the decline in occupational pensions:

  • The Conservative government’s 1986 Financial Services Act introduced personal pensions and stopped employers requiring employees to join an occupational pension scheme. This led to the ‘mis-selling’ scandal of the 1990’s – with people persuaded to abandon their safer occupational pensions for riskier personal pensions.
  • Some employers took a ‘holiday’ from making pension fund contributions when the Stock Market was booming (withholding £11.5 billion in pension contributions between 1995 and 2000, leaving their pension funds vulnerable when there was an economic downturn).
  • In 1997 the Labour government, also seduced by an apparently never-ending rise in the Stock Market (which would crash just a few years later) took the decision to abolish tax relief on pension fund investment earnings – which has been calculated as now costing pension funds £10 billion a year.
  • Employers have increasingly shifted pension risk from themselves as an employer to their employees, by moving from defined benefit schemes (where employees know what pension they will receive, usually based on their salary) to defined contribution schemes (where the employer puts in a smaller employer pension contribution, with no guarantee as to what the pension received will be, as this is dependent entirely on the pension fund’s performance).
  • The Pensions Act 2004 required trustees to commission a “technical valuation” of their scheme at three-year intervals. As a former Governor of the Bank of England has commented, this technical valuation is sometimes based on over pessimistic historical assumptions. As an unintended consequence, government action intended to protect pensioners in the event of a defined benefit scheme closure has resulted in the continuing closure of defined benefit schemes, as pension funds struggle to meet their ‘technical valuation’ targets.

Why are you focusing on occupational pensions?

Many different factors influence health in the UK. Some (like social inequality or the obesogenic environment) are significant but the result of many different factors, meaning there are probably no quick fixes. A wide range of action is needed to tackle them.

Occupational pensions are different. If most people could look forward to a reasonable occupational pension, based on their earnings, their prospects of a healthy retirement (not only financially but also mentally and physically) would be improved. This in turn would reduce pressure on the NHS and on social care, while providing a boost to the UK economy, through the enhanced spending power of pensioners.

It would also help address current tension regarding the huge disparities in incomes between those at the top and bottom of many organisations, as seen recently in media comparisons of pay and working conditions for those working for companies like Amazon and Uber, compared with the incomes of their founders – and also help address concerns regarding the growth of zero hours contracts (with no pension entitlement for lower paid workers).

If occupational pensions provide a reasonable income in retirement then there would also be less need to rely on property as an investment rather than a home to live in, helping keep houses more affordable.

The main reason occupational pensions aren’t working as they should is specific action by governments (both Conservative and Labour) and specific action by employers – and these specific actions could be reversed. This means that changes here are potentially more achievable.

Recommendations

It would seem only reasonable that, as government and employers have primarily caused the occupational pensions crisis, they should take the lead in helping redress the balance. For example, the government could:

a) Revitalise occupational pensions by reintroducing an element of tax relief on pension fund investment earnings (which would, effectively, constitute a complementary form of national insurance).

b) Set up an inquiry into employer pension contributions, to consider the level of employer and employee contribution that is fair to both.

How big a problem is obesity in the UK? Does what we know about health behaviour change improve our chances of tackling obesity?

Here are some extracts from a Q & A session with Health Action Campaign’s Director, Michael Baber, which feature in a Food Matters Live podcast.

Q: Just how bad is the obesity problem in the UK?

A: For me there are three particularly worrying aspects about obesity in the UK:

  • First, it is disproportionately concentrated in disadvantaged areas, so it is reinforcing existing, deep seated health inequalities in the UK.
  • Second, research suggests that fewer than 5% of obese adults will get back to a healthy weight, which is a pretty scary scenario.
  • Third, obese parents are twice as likely to have obese children and they are also less likely to recognise they are obese – which means that, unless we can break the cycle, obesity is going to embed itself in generation after generation here in the UK.

Q: How can behaviour change contribute to reducing the epidemic?

A: We can learn from action taken to reduce smoking. In the 1940’s a majority of adults smoked. Now it is down to less than one in five. That has been mainly due to government action to make it harder to smoke and easier not to smoke. As a result smoking is now also less socially acceptable.

This kind of approach is likely to be particularly effective when it comes to preventing obesity. There’s more of a challenge where people are already obese.

That’s because the human body is very good at self-regulating. For example, our bodies are very good at maintaining a constant temperature – they do this automatically. In the same way, when we have put on a lot of weight, whatever we might try to do to reduce that weight by dieting or exercise, behind the scenes our body will usually be trying its best to limit our weight loss.

So, behaviour change to prevent obesity should be easier. That way we can work with our body’s natural desire to self-regulate rather than against it.  

For people who are already obese – we should also encourage behaviour change but probably be realistic and recognise the main benefit is likely to be for the overall health benefits rather than significant, sustainable long term weight loss.

Q: What do you see as the biggest cultural and social challenges to behavioural change?

A: We live in a country where health is viewed as an absence of diagnosed illness, maintained primarily through medical treatment on the NHS. So people tend to underestimate factors that predispose us to illness, like obesity, and the importance of avoiding them.

The media don’t always help either. Articles and stories on obesity usually include an image of someone who is severely obese – leading people who are still obese but less severely so to be seen as simply overweight. Effectively this is hiding obesity in plain sight. And some sections of the press tend to label any action to tackle obesity and improve health as Nanny State-ism, without themselves offering any realistic solution.

Also, healthy food doesn’t get much advertising commitment compared with less healthy food. Less than 2% of food advertising is spent on fruit and vegetables. Last year the government committed £4.5 million to support the advertising of healthy snacks. That sounds a lot until you realise that a chocolate manufacturer can spend more than that advertising a single chocolate bar.  

Q: You have researched a number of international projects to tackle obesity. What do you consider the biggest determinants of success?

A: The two most successful obesity prevention projects internationally are probably EPODE (Ensemble Prevenons L’Obesite Des Enfants) in France and JOGG (Jongeren op Gezond Gewicht) in the Netherlands.

EPODE is now in place in nearly 300 towns across four different European countries and JOGG is in place in over 100 towns and cities across the Netherlands. The main reasons for their success are probably that:

  • They understand that people haven’t changed but the environment they are living in has. So, you need to provide practical support to parents, teachers, health professionals and community organisations so they can help protect children from an obesogenic environment – and also make the environment less obesogenic where you can.
  • They employ an approach which is well thought through and structured, so it can be rolled out wherever it is needed.
  • They recognise that big problems need big solutions – so you need to put together a powerful coalition of local stakeholders to tackle them, including parents, teachers, health professionals, community organisations, local authorities and sympathetic businesses and you need resources to sustain what you’re doing – because the forces that have fuelled obesity are still alive and well and will push obesity back up if you drop your guard.

EPODE and JOGG are sometimes described as taking a ‘whole systems’ approach. This is probably technically correct but to me sounds a bit academic and not something ordinary people can relate to. The way I see it powerful forces are fuelling obesity, so you need powerful forces to push back – and that’s what these initiatives do.

 

09:59, 20 Mar 2019 by Michael Baber
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Here is our draft response to the government’s consultation. If you’re reading this, we would welcome your comments. This will help us finalise our response before the deadline of April 6th. You can send your comments to us at info@healthactioncampaign.org.uk 

 

                          DRAFT RESPONSE FROM HEALTH ACTION CAMPAIGN

At Health Action Campaign our guiding principle is that prevention is better than cure. As the government’s 2018 vision paper on Prevention identified:

  • Prevention means stopping problems arising in the first place; focusing on keeping people healthy, not just treating them when they fall.
  • There is role for government to create the environment that makes healthy choices as easy as possible, and to address the conditions that lead to poor health.

Our own research has identified that eating too much food high in sugar, salt and saturated fat:

  • Increases the risk of people becoming overweight or obese but undernourished, with what we eat and how much (rather than physical inactivity) being the single biggest cause of obesity.
  • Increases the risk of diabetes, heart disease, stroke, some cancers and depression and may weaken the body’s immune system.

This research includes our 2015 report Healthy and Wealthy? which explored the health and economic implications for the UK of mass-producing food high in sugar, salt, saturated fat and refined carbohydrates.

In this context we very much welcome the Government’s consultation on restricting the promotion of food and drink which is high in sugar, salt and fat. We see this as a positive step towards the Government’s ambition of halving childhood obesity by 2030.

Making healthy choices the easy choices

To achieve the changes in food consumption necessary to improve public health it will be important to make healthy choices the easy choices. We therefore agree that action needs to be taken in relation to each part of the food and drink marketing mix i.e.

Product

We consider the 2004/5 Nutrient profiling model (NPM) developed by the Food Standards Agency for Ofcom provides a recognised and established way of defining products high in sugar, salt and fat. It was specifically designed to determine whether individual products should or should not be advertised to children and is therefore particularly relevant in the context of prevention being better than cure.

The Nutrient Profiling Score is derived by comparing the 'healthy' content of a food product (protein + dietary fibre + fruit and vegetables) with the 'less healthy' content (energy + saturated fat + sugar + sodium). We consider this to be an appropriate approach.

Price

Retailers should be required to ensure that all their volume-based price promotions on food and drink (including BOGOF) are on products which are low in sugar, salt and fat.

This means these price promotions should not apply to pre-packaged products which fall into the categories included in Public Health England’s (PHE) sugar and calorie reduction programmes and in the Soft Drinks Industry Levy (SDIL), and are classed as high in fat, sugar or salt (HFSS).

This means that such price promotions should not apply to:

  • Breakfast cereals, yoghurts, biscuits, cakes, confectionery, morning goods (e.g. pastries), puddings, ice cream, sweet spreads, fruit-based drinks and milk based drinks with added sugar.
  • Ready meals, pizzas, meat products, savoury snack products, sauces and dressings, prepared sandwiches and composite salads.

Place

We support restricting the promotion of food and drinks high in sugar, salt and fat from prominent locations typically chosen to boost sales by encouraging impulse buying and pester power i.e. shop entrances, aisle ends and checkouts.

Promotion

Less than 2% of food advertising in the UK is currently for fruit and vegetables. It is now time to begin to redress the balance, including by limiting the promotion of food high in sugar, salt and fat - which is currently the main focus of foood advertising in the UK.   

To ensure a level playing field and avoid the exploitation of loopholes we believe that restrictions on the promotion should apply across the board, including:

  • to all retail businesses in England that sell food and drink products, including franchises
  • to retailers that do not primarily sell food and drink, for example newsagents
  • to online shopping

 15th March 2019