London Briefing: "Workers of the world unite, you have nothing to lose but your pensions." Karl Marx would undoubtedly have been surprised to find that the last great battle between workers and employers would be over retirement benefits, Chris Johns

There again, pensions were not exactly common in the 19th century: Marx's thesis was essentially that workers were exploited and then died.

Thoughts of retirement - comfortable or otherwise - didn't enter into the analysis because so few people ever made the voluntary decision to stop working.

Historians reckon that the Royal Navy dreamt up the UK's first pension scheme in the 1670s. Naturally enough, that pension plan only applied to certain officers and never extended below decks - at least not for a century or two.

Nothing much happened by way of official pensions until the early years of the 20th century.

The 1908 Old Age Pensions Act introduced a means-tested payment of 10p-25p for people aged 70 or older. Elsewhere, the world's first pension scheme - invented by Count Otto von Bismarck - based on a form of national insurance, had been introduced in Germany in 1889, with 70 as the earliest possible retirement age.

This was subsequently reduced to 65 in 1916. Anyone who wonders where the magical number 65 comes from should thank the German government that was in office during the first World War.

The first tax incentives for pension saving in the UK were granted in 1921. There then followed many different pieces of legislation, steadily increasing entitlements and provisions.

This all culminated in 1946 with the National Insurance Act - a married couple was granted two pounds and 10 shillings a week from the age of 65. Many other countries have schemes modelled on these Anglo-German prototypes.

There are a couple of things to say about all of this. First, none of these schemes was designed to pay out much money. When the first German pension plan - with 70 as the retirement age - was first put in place, life expectancy was around 45.

The actuaries and pension consultants of the day thought this was a great scheme.

Similarly, that 1908 decision to award pensions to poor 70-year-olds was never going to cost much money: average UK life expectancy then was about 53 years.

By the time of the 1946 Act, life expectancy had risen to roughly 68 years. That's what started all the trouble: a pension scheme that started to pay out before people died.

Another feature of all of this is the uncomfortable fact that pensions became something quite complex, particularly when taxation and saving considerations were introduced.

Lots of finance and social security acts have progressively made the whole field unnecessarily complicated, but a great source of fees for experts of all kinds, of course.

The most important message to take away is that pensions are very modern concepts: anyone who thinks that there has been a divine right to a comfortable - and work-free - old age is delusional.

Historically, one (lucky) generation alone has had decent pension provision, the one that retired in the second half of the 20th century. In fact, the golden era for pensions was 1946 -1980.

The end of that period was marked by Margaret Thatcher's move to break the link between pensions and earnings, a connection that could no longer be afforded.

It's been downhill ever since, with successive governments wrestling with the simple fact that we can't afford people retiring at 65.

The great oddity of all of this is the persistence of the retirement age of 65 through to the present day. This is the only reason why we have a pensions "crisis".

Inevitably, that is now set to change, with the government recently announcing that the new cut-off will be 68 , but not for many years to come. Future administrations will have to raise this further. Bizarrely, under the new proposals, the link with earnings will be restored, but only "if we can afford it". I think we all know what Gordon Brown will make of that.

The idea that working men and women have always enjoyed healthy pensions through many years of retirement is a total myth. One generation of people got lucky.

The incomprehensible contortions of a government determined to promise healthy pensions without anyone having to pay for them have been a joy to watch.

But there is one key message for current and, particularly, future generations: you are on your own.

Chris Johns is an investment strategist with Collins Stewart. All opinions are personal