The social contract

“...we find ourselves faced with a crumbling social contract. Workplace and government retirement systems are coming under increasing financial strain...”

Mike Mansfield has been responsible for developing Aegon’s response the challenges of an ageing population. Mike explains “The idea of a ‘social contract’ has been central to retirement planning in countries around the world. The traditional social contract is an arrangement involving three pillars: government, employers and individuals – each with specific set of expectations and responsibilities. Today, we find ourselves faced with a crumbling social contract. Workplace and government retirement systems are coming under increase financial strain and as a result, responsibility for funding retirement is shifting to the individual.

“Aegon’s strongly held conviction has been that no one social partner can address this challenge on their own. Existing social partners need to work together and we need to include new social partners to empower individuals not only to save for their retirement but also to adopt a healthy lifestyle and keep their skills up to date so that they can retire at a time that is right for them. We need to reimagine what we mean by retirement and rebuild our communities in a more inclusive manner. We need to build age-friendly communities.”

“In 2018, Aegon created nine essential features of a new social contract. Sustainable social security benefits still form the basis but supported by universal private savings and automatic savings schemes which embed behavioural economics. This incorporates a new guaranteed lifetime income solution with greater access to annuity options. Education, lifelong learning and access to healthcare are all essential parts of this new contract as is the need to celebrate ageing and enabling people to ‘age in place’ and make a full contribution to their community.”

For further insights please download Our Future Financial Lives report.