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Welfare Reform on the Web (January 2010): Pensions - UK

Analysis: pensions

I. Naismith

Working with Older People, Vol.13, Dec. 2009, p. 41-44

Presents an overview of the current state of pension provision in the UK, looking particularly at the effects of the recession and its impact on women over 50.

Darling is forced to delay pension boost

A. Grice

The Independent, Dec. 9th 2009, p. 2

Alastair Darling is to delay a flagship scheme to allow 11 million workers to have personal pensions, aimed at ensuring low-paid workers not in a company scheme have an income in retirement on top of the basic pension. The scheme has been put on hold as the government announces pre-Budget spending cuts to protect budgets for schools, hospitals and the police.

New Labour and pension reform: security in retirement?

B. Waine

Social Policy and Administration, vol. 43, 2009, p. 754-771

The New Labour government's policy on pensions has been driven by its perception that people are not saving enough for their retirement. It has responded by developing vehicles which make saving more attractive and by improving financial education to overcome perceived financial ignorance among citizens. This article argues that these strategies are seriously flawed. Individuals and families do not have the resources to devote to long-term savings, especially in defined contribution schemes where returns are not guaranteed. Moreover, financially literate investors, having been educated to recognise the problem of investment risks, are likely to act in rational ways and opt out of personal accounts.

What is a public sector pension worth?

R. Disney, C. Emmerson and G. Tetlow

Economic Journal, vol.119, issue 541, 2009, p. F517-F535

This report presents evidence that final salary pension schemes are significantly more generous in the public than the private sector. A public sector worker could expect that 25.5 percent on top of each year's salary would effectively be put into their eventual pension pot, but the equivalent proportion for a private sector employee is only 18.9%. This would mean that a state employee earning 30,000 would see a pension pot increase of 7,650 per year compared with only 5,670 under a private sector scheme. The difference is due partly to the fact that public sector workers, except those recruited in the past two years, can retire at 60, compared to a pension age of 65 in the private sector, and to the fact that state salaries tend to increase all the way up to retirement.

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