T. Salter and others
London: Institute of Actuaries, 2009
Points of that the basic state pension is worth 16% of average earnings in 2009, compared to 26% in 1980. At the same time the decline in private sector pension provision, in particular the closure of 75% of final salary schemes to new members, means that people are increasingly reliant on the state pension. Many low-paid and part time workers have no access to an occupational pension scheme at all.
Daily Telegraph, Jan. 14th 2009, p. 4
A survey has shown that one third of adults think that their life expectancy will be shortened by poor retirement income, while over half lack confidence that they have saved enough for a comfortable retirement. A separate study has revealed that nearly a quarter of Britons are delaying retirement by up to five years because of the financial crisis. Meanwhile, the government is facing demands to adjust pension credit payments to reflect the sharp cut in interest rates that is hitting income from savings.
Daily Telegraph, Jan. 13th 2009, p. 2
The pension deficit of Britain's final salary schemes now stands at £195bn, up 43% on November 2008 according to the Pensions Protection Fund. Experts are warning that more companies will close their final salary pension schemes to new members as they are becoming unaffordable.
Financial Times, Jan 5th 2009, p. 3
Research by the Association of Consulting Actuaries has found that savings levels need to double in pension schemes offered by small companies (those employing up to 250 staff) to provide an adequate retirement income. It calls for the government to introduce incentives to encourage companies and individuals to contribute more. It also found 91 per cent of defined contribution pensions, including final salary schemes, in the 394 companies which took part, were now closed to new employees.
Labour Research, Jan. 2009, p. 16-18
This article reviews the evolution of the state pension in the UK since its introduction in 1909. The value of the state pension has melted away since the link with earnings ceased in 1979 and it has been uprated only in line with inflation. To plug the gap, governments have promoted various individual savings schemes, which have been largely unsuccessful.