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Welfare Reform on the Web (April 2003): Pensions - UK

'FAILING' ISAS OUGHT TO BE SCRAPPED, SAYS THINK-TANK

N. Timmins

Financial Times, February 10th 2003, p. 2

The government's key vehicle for boosting savings among low-income families should be scrapped according to the Institute for Public Policy Research. Equity-based individual savings accounts had proved no better at reaching low-income savers than the special savings accounts they replaced. The IPPR recommended abolishing ISAS and replacing them with a matching scheme that would give low-income savers £1 from the taxpayer for every £1 or £2 they save.

PENSIONS LUMP SUM AT RISK

R. Jones

Guardian, Feb 21st 2003, p. 25

The EU Occupational Pensions Directive is designed to allow employees of multinational firms to have access to cross-border employer pension schemes. Amendments to the Directive could compel people to use the lump sum they receive as part of their pension package to purchase an annuity.

PUBLIC SECTOR PENSIONS TRAIL IN SHIFT FROM FINAL SALARY

N. Timmins

Financial Times, February 18th 2003, p. 2

More public sector than private sector employers now have final salary pensions for the first time since the 1970s, according to the Government Actuary's Department. The turnaround reflects the decline in private-sector defined benefit schemes.

VALUE OF AVERAGE PENSION 'SET TO FALL BY 25%'

N. Timmins

Financial Times, February 10th 2003, p.4

The value of the average pension is set to drop by about a quarter because of falling stock markets, reduced state pensions and too little saving, according to PwC, the professional services firm. On current trends the average pension is likely to be worth only a quarter of average earnings - little more than the basic state pension was worth at its peak in the 1970s. The study says it is "highly unlikely" the government will achieve its aim of raising the share of pensioner income from private saving from 40 per cent to 60 per cent.

WARNING ON PENSIONS BENEFITS

A. Bolger and N. Timmins

Financial Times, February 18th 2003, p. 1

Existing members of final salary schemes were warned yesterday that they may be the next group to see their retirement plans curtailed by the crisis engulfing pensions. Leading pension advisors said the majority of companies had taken 'the easy step' of keeping new members out of final salary schemes.

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