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

21st-century welfare: one all-purpose benefit and a pension delay

R. Bennett, J. Sherman & S. Coates

The Times, May 27th 2010, p. 6

Iain Duncan Smith, the Work and Pensions Secretary, is putting together plans to link retirement age to life expectancy. He has also asked officials to 'see how far they can get' in replacing the current 51 benefits to streamline the social security system.

The cost of public service pensions

National Audit Office

London: TSO, 2010 (House of Commons papers, session 2009/10: HC 432)

There has been much public debate about the affordability and fairness of public service pensions, i.e. pensions paid to retired public servants such as teachers, civil servants, doctors, nurses and members of the armed forces. The aim of this report is to bring greater transparency to, and understanding of, the costs of public service pensions. It covers all UK public service 'pay-as-you-go' pension schemes, sometimes known as 'unfunded' schemes, which are part of the cost of providing public services and are ultimately funded by the taxpayer. This report looks at past pension payments over the last ten years and projected payments over the next fifty years. The analysis of past payments covers the four largest schemes, which represent over three quarters of all UK public service pay as you-go pension payments. The analysis of projected payments covers all UK public service pay as-you-go pension schemes. An appendix discusses the representation of pension obligations as a single liability figure, which is especially relevant to funded (as opposed to pay-as-you-go) pension schemes. The report does not draw an overall value for money conclusion or make recommendations. The second report, to be published later this year, will do both these things.

Facing up to longevity risk

C. Senior

European Pensions, Apr. 2010, pp.22-23

This article examines how the UK pensions industry is facing up to the issue of longevity risk. It looks at the organisations and sources of information that can be consulted for advice, some of the schemes that have taken action to cover themselves against the risk, and developments in other European countries.

Most would retire later for more money


Daily Telegraph, May 12th 2010, p. 10

A survey by Prudential of people due to retire in 2010 has shown that 57% would be prepared to work longer for a higher income when they do stop. A quarter of respondents said they would be prepared to work for a further five years, and 7% would consider working for another 10 years. However, a fifth of respondents said they would not consider working past the statutory retirement age, even if not doing so left them struggling financially.

Pension at age 66 for four million workers

J. Kirkup

Daily Telegraph, May 26th 2010, p. 1

It was announced in the Queen's Speech that a Pensions and Savings Bill will be introduced to increase the basic state pension in line with earnings instead of inflation from 2012. Economists estimate that the change will cost the taxpayer an extra 2bn a year. To meet the cost, the retirement age will rise more quickly than had been planned by the former Labour government.

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