A WEEK AGO I launched my alternative election coverage — the things they are not telling you about — and got an encouragingly large postbag on the north-south divide. This week’s second instalment was intended to be about pensions.

I cannot, however, quite carry that off, for two reasons. One is that the Tories have indeed tried to make pensions an election issue, and to a certain extent succeeded. The other is that, important though the subject is, the great risk of an article about pensions is that nobody gets beyond the second paragraph, particularly in bed on a Sunday. Other temptations, such as the omnibus edition of the Archers, are simply too great.

So let me try a different tack. One theme here in recent weeks has been that the economy does not feel as good as it should, given an unbroken run of growth stretching back to 1992, when many of the voters who will be casting their ballots in 11 days’ time were still in short trousers. In fact, as far as consumers are concerned, this has been an unusually fertile period.

Roughly speaking, consumer spending should rise in line with gross domestic product. If we take the period from 1948, GDP recorded a real-terms rise of 308%, consumer spending slightly more, 326%.

In the past few years, however, consumer spending has grown nearly one-and-a-half times as fast as GDP. Since 1997, GDP has risen by 20.7%, consumer spending by 27.2%. In every year under Gordon Brown’s chancellorship consumer spending has outstripped GDP. That has never happened over such a sustained period before.

In this, Britain has been something of a “mini me” to America. Stephen Roach, chief economist at Morgan Stanley, points out that US consumer spending has been growing faster than incomes since 1995.

In Britain there have been some special reasons. The pound’s rise, which occurred just before Labour took office eight years ago, gave consumers the benefit of lower prices while making life more difficult for exporters. Business has been prey to the vagaries of the global economy; consumers have been the main beneficiaries of the low interest rates put in place to see the economy through the world’s vicissitudes. Consumers have also been able to tap into the property boom through equity withdrawal (taking out some of their gains from higher house prices).

Most of all, consumers have been able to spend more because they have saved less. The saving ratio, net saving as a percentage of disposable income, dropped from 9.7% when Labour was elected, in the spring of 1997, to just 5.6% last year. It has been even lower under Labour; the lowest quarterly figure was a mere 3.5%.

When we used to be told sternly that we were living beyond our means, the usual symptom of that was a trade deficit. Sure enough, Britain’s trade deficit in goods ballooned from £12 billion in 1997 to £58 billion last year.

But there is another important sense in which we have been living beyond our means, and this is where we come back neatly to pensions.

Goldman Sachs, in a paper entitled How Big is the UK Savings Gap?, attempts to put a figure on this. The paper, by Ben Broadbent, first estimates how much more we need to save as a nation to bring the current-account deficit (£25.7 billion last year) into balance and maintain the UK’s capital stock — in others words, to invest enough to preserve the economy’s productive capacity.

The answer to that question is that savings need to be about £17 billion a year, or 1.5% of GDP, higher. The story, however, does not end there. Broadbent then looks at what the country needs to be saving to offset the effects of an ageing population.

Because we are getting older, the working-age population is set to decline quite sharply as a percentage of the total, from 63.2% in 2008 (slightly higher than now) to 56.7% in the 2030s.

Explore Economics

• Pre-Budget Report 2008

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts