Following on from A simple solution to many of our national problems, here is a straightforward idea that would sort out a lot of problem areas in one go. These areas are financing secondary education, the benefits and unemployment system and the pension system. The idea is, quite simply to bundle them all together in a personal lifetime fund, administered by a choice of private companies. Then totally get rid of the current systems in these areas.

The core of the fund is that throughout the individual’s entire life their employer will pay a minimum percentage (say 10%) of their salary into the fund. This could come from the employees gross pay or the employer could finance it. Paying a higher percentage would be optional. These contributions would be invested in the personal lifetime fund where they would earn income and accumulate.

But unlike the current system the fund could run a negative balance if necessary. So a person could use it to pay for their secondary education, then when they start work the 10% pays off the negative balance and then gets it positive.

Likewise if a person becomes unemployed or disabled, their benefits would come from their own fund. If they are unemployed or disabled for a very long time their account goes negative.

At retirement age the fund is crystallised to provide a pension, just like current personal pensions.

The government would still be paying though. They would pay the scheme companies interest on accounts that ran negative, they would also pay when someone died with a negative balance and they would still need to provide a minimum safety net for those who reach retirement having been unwilling or unable to create an adequate fund.

The advantages of the personal lifetime fund are huge:

• People would take responsibility for their own lives.
• State interference in the individual would be massively reduced.
• It allows markets to work so the most efficient use is made of resources.
• People could choose when to retire and how rich they wanted to be in retirement.
• There would be a massive disincentive to being unemployed, because you would be paying your own unemployment pay.
• Huge layers of bureaucratic state apparatus would be removed, allowing the people now employed in it to return to the private sector and contribute to the economy.
• It would create huge investment funds that would greatly enhance our economy and create growth.

The government could start this tomorrow and pump prime the accounts of people dependent on their age, this would be a non inflationary form of quantitative easing. Existing private and company pension balances would be transferred in. Public employees pensions would be transferred in.

As I have described it this is not perfect, it needs tinkering with and tuning. But the basic concept would transform British society for the better.