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Welfare Reform on the Web (April 2004): Pensions - UK

INCREASING LIFE EXPECTANCY 'A BIG THREAT TO PENSIONS'

N. Cohen

Financial Times, March 15th 2004, p.6

Life expectancy for retired people is on course to improve even more dramatically over the next 20 years, placing enormous strains on state and private pension schemes and insurers. A report from the Institute and Faculty of Actuaries concludes that increased life expectancy poses as great a threat to the solvency of pension schemes as falling stock markets.

(See also the full text of the report Longevity in the 21st century: the cohort effect: insights and explanations in PDF format)

MINISTERS MAY DROP INFLATION-LINK PENSION RULE

N. Cohen

Financial Times, March 25th 2004, p. 2

The requirement for people with defined contribution pensions to buy inflation-linked annuities when they retire may be dropped by the government. Inflation-linking can cut initial pension payments by nearly half and substantially reduce the lifetime payout. The reform, which Malcolm Wickes, Pensions Minister, said yesterday was under consideration, would allow those who retire to buy a much bigger initial pension. However, it would expose them to the risk of steep losses in purchasing power if inflation surged.

SIMPLICITY, SECURITY AND CHOICE: INFORMED CHOICES FOR WORKING AND SAVING

Department for Work and Pensions

London: TSO, 2004 (Cm 6111)

Sets out a strategy for breaking down barriers to saving and making sure people have the information they need to plan for retirement. It aims to:

  • enable people to make the most of pension provision and encourage availability of the right pension products;
  • raise people's awareness of options and improve financial education;
  • ensure that everyone has access to high quality and accurate information.

Government will:

  • develop mechanisms for increasing membership of occupational pension schemes;
  • strengthen the personal finance element of the national curriculum;
  • require employers to provide information about pensions in the workplace;
  • develop a web-based retirement planner.
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