Centre for Policy Studies, 2011
Report argues that the 'gold-plated' pensions of public sector workers are worth twice as much as those of private sector workers. It warns that the high cost of public sector pensions is unsustainable as taxpayers will have to put billions into the funds to maintain payments. Unlike private sector pensions, public sector pensions are indexed to inflation. The difference between contributions and eventual payouts was predicted to rise to about £8bn by 2016.
J. Hall and T. Ross
Daily Telegraph, Sept. 20th 2011, p. 6
The National Association of Pension Funds found in its 2011 annual survey that confidence in pensions as a savings vehicle had hit an all time low due to economic decline, fears about hidden costs and rises in the retirement age. The Association called on politicians to boost confidence in pensions, or face the prospect of people opting out.
P. Thornton and D. Fleming
Cambridge: CUP, 2011
Regulatory and market developments have transformed the way in which UK private sector pension schemes operate. This has increased demands on trustees and advisors and the trusteeship governance model must evolve in order to remain fit for purpose. This volume brings together leading practitioners to provide an overview of what today constitutes good governance for pension schemes, from both a legal and a practical perspective. It provides the reader with an appreciation of the distinctive characteristics of UK occupational pension schemes, how they sit within the capital markets and their social and fiduciary responsibilities. Providing a holistic analysis of pension risk, both from the trustee and the corporate perspective, the essays cover the crucial role of the employer covenant, financing and investment risk, developments in longevity, risk hedging and insurance de-risking, and best practice scheme administration.
Daily Telegraph, Sept. 8th 2011, p. 1 + 2
Figures from the Office for National Statistics show that more than a million workers have stopped paying into individual pension plans in the wake of the recession. The number of people contributing to personal pension plans fell from 7.6 million in 2008 to 6.4 million in 2009. There are concerns that Britons are falling into a 'vicious spiral', reducing their savings when the need to save for retirement is growing.
The Guardian, Sept. 5th 2011, p. 24
When trade union leaders and delegates meet ahead of their annual congress, staged unusually in London, much of the discussion will focus on the second stage in the battle over public sector pensions. Ministers now appear to accept that the health service has the advantage of lower average pay and a younger workforce, limiting its pension liabilities. Local government workers have a large deficit in their pension scheme, but it is partly funded by an investment pool that sets it apart from the schemes for nurses and teachers, which are paid out of workers' contributions, and when that is not enough, Treasury coffers. A dispute of titanic proportions is still possible because Alexander and Maude appear to have made few concrete concessions. Their across-the-board attack will see all schemes suffer cuts after a planned switch from pensions based on final salary to ones based on career average salary, and a downgrading of the inflation-proofing of retirement incomes by linking them to the consumer prices index rather than the retail prices index.
(See also The Guardian, Sept. 9th 2011, p. 1; The Guardian, Sept. 14th 2011, p. 8; The Guardian, Sept. 15th 2011, p. 4)
Daily Telegraph, Sept. 14th 2011, p.2
A survey of 1,600 adults by Prudential found that four in ten women and three in ten men did not have a private or occupational pension. The head of business development at Prudential warned that, as well as facing a sharp drop in income on retirement, such people were also missing out on 'significant' tax relief on pension contributions during their working lives.
The Guardian, Sept. 7th 2011, p. 23
The directors of the largest 100 British companies are in line for average annual pension payments of £224,000 each, according to a survey. The report shows 362 top directors have built up final salary pensions worth £568m and the average pension pot transfer value is at a record high - £3.91m compared with £3.8m in 2010. Directors also retire earlier than their staff. The most common retirement age for directors is 60, while for ordinary scheme members it is 65 and expected to rise. The highest paid pensioner among current FTSE 100 directors will be the former chief executive of oil group Royal Dutch Shell, who is entitled to £1.2m a year from his company scheme. Jeroen van der Veer, who stepped down from the top job in 2009 but remains on the board, has amassed a pension pot worth £21.6m, the TUC has revealed in its 9th annual PensionsWatch report.
Daily Telegraph, Sept. 12th 2011, p. 12
The pensions minister announced in September 2011 that increases in the state pension age then planned were too slow in the light of rising life expectancy. He proposed raising the retirement age to 67 as soon as 2026, a decade earlier than planned. He hinted that further increases could be linked to improvements in life expectancy.
Department for Work and Pensions
London: TSO, 2011 (Cm 8131)
The consultation 'A State Pension for the 21st century' proposed two options for reforming the state pension for future pensioners. Over three-quarters of organisations who responded favoured the single tier option in principle. This option would raise the state pension to around £140 - above the level of the current means testing threshold - and would significantly reduce the need for low income pensioners to apply for pension credit. Without reform millions would still need to apply for pension credit top ups for decades to come.
International Journal of Sociology and Social Policy, vol. 31, 2011, p. 505-516
Peter Townsend is one of the greatest social scientists of the 20th century and best known for his pioneering research into poverty. He argued for the institution of minimum income standards to underpin welfare benefit levels, ensuring that these would be sufficient for recipients to be able to afford a healthy diet. This article revisits Townsend's early work discussing the measurement of poverty and attempts to operationalise his ideas for determining minimum income standards for healthy living using social survey data relating to the older UK population aged 60 years plus. Results show that minimum income requirements for healthy living are 37% greater than the British state pension for couples and 29% for single pensioners.