Private Social Security Accounts?

To anyone who knows,

   President Bush seems to be the only one taking a seat at the table when debating personal savings accounts here in America, opposed to the 60 year social security program for guaranteeing funds at retirement.  I have heard many conservatives mentioning that the UK and Chile are a few countries who use private accounts as well from their taxed wages, but have heard that many have become disgruntled by the system, especially in Chile.  Does anyone know what the British think of the system?  I'm largely on the side that social security should not be changed, and that Bush should promote efforts to have American's invest their money outside of a $2 trillion dollar government operated private account system (say, offer tax deductions to money invested in mutual funds or something along those lines).  Any discussion would be much appreciate to how the British feel about being the model country for this system. Thanks,
~Rich

I think the British system is a bit schizophrenic itself in that people can opt-in or opt-out of State pension benefits.
There is the primary State pension benefit which is a fairly small amount that is guaranteed by the State.  There is also a State Second Pension (not sure if this is still the title) which is the part people can opt-in or opt-out of.  Years ago, the sage advise was to opt out which meant the Second State Pension would be put into funds on the stock market much like Bush wants to do.

In the past couple years they're not so sure about what people should do, their advise says that individual circumstances will dictate which way to go.  I believe this has to do with the stock market not being so good the past few years and the Second State Pension maybe not being as bad as originally thought.

Additionally, while not a pension-style vehicle, ISAs have been huge over here as tax free savings.  The difference to IRAs being that you can withdraw the money at any time and you can also open a very popular cash ISA linked to the Bank of England base rate (you can also open stocks & shares and insuranced ISAs).  IRAs are generally stuffed with equities so those not savvy with the stockmarket and mutual funds may feel overwhelmed.  I would bet that ISAs are probably one of the most popular spurs to savings for the Average Joe given that they have a good interest rate and are very easy to open and manage.  I wish they had them in the States!

Overall, ISAs aren't a substitute for a pension.  There are no rules that force you to keep the money in the account until retirement age.  The option to receive the State Second Pension from the State should be guaranteed.  I believe that at the very least Bush should give Americans the same option.  Although I have some concerns even about this method because those who aren't financially savvy may be suckered into opting out of Social Security to find that, much like Mortgage Endowment Policies in the UK, they may lose a lot of their "guaranteed" benefit and not be able to get by in retirement.  I think, ultimately, I would push for keeping Social Security as a guaranteed govenment benefit.

What Bush is pushing for sounds to me like an excuse to drive up budget deficits in that the government would no longer would be required to guarantee Social Security payments but could blame world economic conditions or the stock market on the loss of benefits.

Matt